An Israeli strike was carried out on a building in the Chiyah district of Beirut's southern suburbs, Lebanon. Reuters
An Israeli strike was carried out on a building in the Chiyah district of Beirut's southern suburbs, Lebanon. Reuters
An Israeli strike was carried out on a building in the Chiyah district of Beirut's southern suburbs, Lebanon. Reuters
An Israeli strike was carried out on a building in the Chiyah district of Beirut's southern suburbs, Lebanon. Reuters

Lebanon and Israel gear up for ceasefire amid fears of last-minute collapse


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Lebanon and Israel are awaiting a much-anticipated deal to stop the war with Hezbollah, fearing a last-minute collapse as both sides escalate attacks and Israeli extremist ministers voice opposition.

According to a senior Lebanese official, Beirut has been informed that a ceasefire agreement to end the conflict is expected to be announced on Tuesday. Brokered by the US and France, the deal aims to end Israeli ground invasion and air strikes that have killed thousands and devastated large parts of Lebanon in the past two months.

The Israeli government is set to discuss the ceasefire deal and probably vote on it during a session later on Tuesday, Sharren Haskel, Deputy Foreign Minister, confirmed, while Lebanon's state news agency said the Lebanese government would hold a session on Wednesday morning.

Israel pounded south Lebanon on Tuesday morning and killed several people. It also struck buildings in Beirut's southern suburbs and claimed it had killed a senior Hezbollah commander. At least 22 people were killed on Monday in Israeli attacks on Lebanon, the country’s Health Ministry announced.

In Israel, medics said on Tuesday morning that they were treating a woman and a man after evacuating them from an apartment building that was hit in a strike. The attacks came hours after Israel’s military tightened restrictions in several areas in the north of the country in anticipation of ramped-up Hezbollah attacks. The new restrictions closed some schools across the region and banned large public gatherings.

The attacks on both sides added to tensions surrounding the upcoming deal, which, despite many reports of optimism in diplomatic circles, is still vulnerable.

Members of Prime Minister Benjamin Netanyahu’s coalition criticised the deal, saying more had to be done to restore security in northern Israel and that tens of thousands of evacuated residents felt safe enough to return.

Far-right National Security Minister Itamar Ben-Gvir said that the agreement would be “a big mistake” and a “historic missed opportunity to eradicate Hezbollah”. Senior opposition politician Benny Gantz called on Mr Netanyahu to give more detail on the nature of the deal, saying that Israel’s northern residents “and the soldiers and citizens of Israel have the right to know”.

Residents of northern Israel slammed their government. Eitan Davidi, from Margaliot, told Israeli broadcaster Kan that residents were being “led like sheep to the slaughter”. Kiryat Shmona mayor Avichai Stern described the agreement as a “surrender deal” in a post on Facebook.

A civil defence member and people stand near a damaged site after an Israeli strike in Beirut's Basta neighbourhood. Reuters
A civil defence member and people stand near a damaged site after an Israeli strike in Beirut's Basta neighbourhood. Reuters

In Beirut, Lebanese officials involved in the negotiations stressed the need for caution, despite the optimism that has emerged after US envoy Amos Hochstein's visit to Beirut and Israel last week.

“The experience with [Israeli Prime Minister Benjamin] Netanyahu does not inspire confidence in this matter,” a Lebanese official told The National. “The most important point for Lebanon is to ensure that there is nothing that allows Israel to freely attack us.”

Zero trust

The ceasefire proposal outlines a truce under which Israel would withdraw its troops from southern Lebanon within days, while Beirut posts troops to the border and Hezbollah fighters retreat, enabling thousands of displaced Israelis to return to their homes in the north. A US-led committee would be established during this period to oversee a permanent ceasefire involving UN peacekeepers in Lebanon, Lebanese and Israeli officials and representatives from other countries such as France.

Mr Hochstein’s talks in Beirut and Tel Aviv between Tuesday and Thursday focused primarily on clearing the remaining hurdles, particularly Israel’s insistence on maintaining the right to freedom of action against Hezbollah after the war, a demand Lebanon firmly rejects. According to three officials and diplomats who attended meetings or were briefed on the matter, Lebanon asked Mr Hochstein, before his departure to Israel, to get clarification on the nature of US “guarantees” that would ensure Israel respects the agreement.

One proposed solution to address the “right to self-defence” clause – which could provide Israel with a pretext to attack Lebanon without warning – was for Israel to lodge its complaints with the committee. The committee would then relay the complaints to the Lebanese Army and Unifil, setting a deadline for action before Israel intervenes, the sources said, adding that this solution is under discussion.

Lebanon's foreign minister Abdallah Bou Habib hoped a ceasefire to end fighting between Israel and Lebanese armed group Hezbollah would be agreed later on Tuesday. He added that the Lebanese army would be ready to have at least 5,000 troops deployed in southern Lebanon as Israeli troops withdraw, and that the United States could play a role in rebuilding infrastructure destroyed by Israeli strikes.

Meanwhile, Israel's Defense Minister Israel Katz told the UN Special Envoy for Lebanon Jeanine Hennis-Plasschaert his army will respond to any threat from Lebanon even after a ceasefire. “Every house in southern Lebanon that is rebuilt and in which a terrorist base is established will be demolished, every rearming and regrouping by terrorists will be attacked, every attempt to smuggle weapons will be thwarted, and every threat to our forces or Israeli citizens will be immediately destroyed," he claimed.

Emergency vehicles are seen at the site of a rocket impact in Nahariya, Israel, November 26, 2024. REUTERS
Emergency vehicles are seen at the site of a rocket impact in Nahariya, Israel, November 26, 2024. REUTERS

Last week, Lebanese officials involved in the ceasefire talks were informed of “extensive” co-ordination between US President Joe Biden and president-elect Donald Trump’s teams to secure a deal, with more hurdles addressed in recent days, officials and diplomats told The National last week.

During meetings in Beirut, US officials and western diplomats conveyed the message that gave Lebanese officials hope a ceasefire could soon be achieved through the mediation efforts of Mr Hochstein, which have brought an agreement within reach. Regional diplomats and officials close to the talks understand the Biden administration is pushing to end the war to secure a diplomatic achievement before the end of his term after a period of perceived setbacks, while Mr Trump is eager to see a deal finalised before he takes office.

“We are very close, but we have zero trust in the Israeli side. Anything could happen to derail the deal. However, we are hopeful it will conclude today or tomorrow,” a Lebanese official involved in the negotiations said.

Four reasons global stock markets are falling right now

There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:

1. Rising US interest rates

The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.

Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”

At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.

2. Stronger dollar

High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.” 

3. Global trade war

Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”

4. Eurozone uncertainty

Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.

Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”

The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”

Updated: November 26, 2024, 1:46 PM