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The Fraying of the Trump-Netanyahu AllianceThe latest flare-up in hostilities between Israel and Iran has exposed what some observers say is the most significant crack yet in the relationship between Israeli Prime Minister Benjamin Netanyahu and United States President Donald Trump, revealing increasingly divergent interests between the two leaders.The pair once appeared politically inseparable, with Netanyahu describing Trump as the "greatest friend Israel has ever had in the White House." Trump returned the praise. During a 2025 appearance in Israel, he joked, "He's not easy – not the easiest guy to deal with – but that's what makes him great."Trump is no longer joking. Last week, he reportedly called Netanyahu "f***ing crazy" during a phone call, accused him of undermining US diplomacy and warned that Israel's military escalation risked derailing peace talks with Iran.The tensions became apparent when Iran launched a volley of missiles towards northern Israel on Sunday, following an Israeli strike in Beirut's southern suburbs on June 7 – despite US assurances just days before that this would not happen. The missile attack, the first by Iran since a fragile, Pakistan-brokered ceasefire reached two months earlier between the US and Iran, threatened to unravel months of negotiations."He will have no choice," Trump told the Financial Times when asked about the likelihood of Netanyahu approving a possible peace agreement with Iran. "I call the shots. I call all the shots. He doesn't call the shots."Diverging Political Interests in the Iran ConflictUltimately, observers say, the two leaders are driven by their own political interests which are on a collision course. In the US, the war with Iran is deeply unpopular, so Trump needs to reach a deal with Iran to end the war. Netanyahu, on the other hand, could benefit politically at home if it were to continue.In fact, as soon as Trump and Netanyahu jointly launched missile strikes on Iran at the end of February, their objectives began to drift apart.Israel's leadership had suggested the conflict could deliver a rapid victory, potentially weakening or even toppling Iran's government while crippling its nuclear and ballistic missile programmes.But Yossi Mekelberg, a Middle East analyst at Chatham House, said any such assumptions underpinning the campaign quickly collapsed. "The war didn't go the way they wanted it to go," he told Al Jazeera."The biggest failure was assuming it would be nice and quick and would achieve its objectives. They thought it would bring regime change and that, by extension, it would end Iran's nuclear programme and ballistic missile programme. Obviously, that was a complete failure."The conflict also created economic consequences that threatened Trump's own domestic political interests. When Iran effectively closed off the Strait of Hormuz, through which one-fifth of the world's oil and liquefied natural gas (LNG) supplies are shipped during peacetime, global energy markets were rattled and oil prices surged.The Strategic and Economic CalculusMekelberg said Washington had appeared unprepared for a scenario many analysts had long warned was inevitable. "The United States didn't appear to think strategically about how it would keep the Strait of Hormuz open. It shows an inability to think strategically in this administration."With fuel prices soaring and Democrats eyeing gains in November's mid-term congressional elections, Trump has a strong incentive to secure a quick deal, and has little appetite for a prolonged Middle East crisis while preparing to host football's World Cup.Ultimately, despite the longstanding relationship between Israel and the US, Trump's relationship with Netanyahu remains fundamentally transactional, said Mekelberg."Trump is egotistical and self-absorbed," he said. "It's a transactional relationship. It depends on how good the transaction is, and when it doesn't work for you – as we see with Trump, this is his method. 'I'm your friend' until it no longer serves his interests."But, on a deeper level, there is a serious issue, which is that they have unravelled the Middle East. Now, because their interests diverge, and because each side is pursuing its own interests, they clash in a very asymmetric way."US Military Aid and Diplomatic LeverageAs Israel becomes increasingly isolated internationally over its conduct in Gaza, the West Bank and across the region, the US remains its most important diplomatic protector and its main military supplier and financial backer. This has become increasingly important as Israel's traditional European allies have begun distancing themselves from Netanyahu's government.Washington provides Israel with at least $3.8bn annually under a 10-year military assistance agreement running from 2019 to 2028. That package includes $3.3bn through the Foreign Military Financing programme and another $500m for joint missile-defence programmes.An Al Jazeera investigation recently found that 42 percent of weapons entering Israel originated from the United States.Gideon Levy, the Israeli journalist and author, told Al Jazeera that dependence on the US leaves Netanyahu with little room to manoeuvre. "Israel is not in a position to say no to Donald Trump, and Netanyahu is not in a position to say no," Levy said. "Israeli dependence on the US right now has reached an unprecedented stage, and Israel cannot take on Iran without the United States."The reality on the ground is that whatever Trump tells Netanyahu, he will have to do exactly as Trump phrased it."Netanyahu's Domestic Political PredicamentTrump's push for a ceasefire collides with Netanyahu's domestic ambitions. The war with Iran has proved popular inside Israel, where public support for military action remains overwhelming.Levy noted that polling shows support for the attack on Iran stands at roughly 93 percent. "Traditionally in Israel, you can much easier get consensus for a major majority by launching another war, rather than any diplomatic agreement," Levy said.With elections due before the end of October, some analysts say continued confrontation would therefore serve Netanyahu's political interests. The problem is that Washington increasingly appears committed to pursuing a diplomatic settlement with Tehran.The negotiations between the US and Iran are taking place indirectly, via Pakistani mediators, but without Israeli participation at all. Reports suggest any future agreement would leave Iran's government intact while permitting a restricted but continuing nuclear programme.Tehran has also reportedly demanded that any deal prevent Israel from launching future military operations against Hezbollah in Lebanon. Under such a deal, an Israeli strike on Beirut could risk provoking Iranian retaliation without guaranteed US backing – a scenario Netanyahu would not be happy about."Netanyahu is in a certain deadlock," Levy said. "The project of his life was Iran and the belief that Iran can be defeated by force. This was proven false in the last two rounds in Iran."The Future of US-Israel RelationsMany analysts doubt the apparent rift between Israel and the US represents any sort of meaningful shift in relations between the two.Phyllis Bennis, a fellow at the Institute for Policy Studies in Washington, DC, and international adviser to the activist group Jewish Voice for Peace, argued that Trump's criticism had not been matched by action."The words could be significant if they were matched by actions," she told Al Jazeera. "What we see now are a set of words – 'You better be careful; you'll find yourself acting alone' – that are not backed up by actions."Bennis noted that Washington continues to provide billions of dollars in military assistance, to shield Israel from accountability at the International Court of Justice (ICJ) and ICC, and to keep weapons flowing.She compared Trump's approach to that of former US President Joe Biden during the first stages of Israel's war on Gaza."The leadership would say, 'Please stop killing so many Palestinians,'" Bennis said, "while continuing to supply weapons and funding … The words just don't mean very much."

The Lead Despite international claims of a ceasefire, Palestinians in affected areas are left to inspect and cope with the aftermath of Israeli strikes, highlighting the ongoing tensions in the region. The Aftermath of Recent Strikes Residents in targeted areas have been surveying the damage to homes and infrastructure following Israeli military operations. The destruction comes despite assertions from diplomatic channels that a ceasefire had been established between the conflicting parties. Humanitarian Impact Assessment The continued violence has exacerbated an already dire humanitarian situation in Palestinian territories. Reports indicate civilian casualties, displacement, and significant damage to essential services, including water and electricity infrastructure. International Response and Diplomatic Efforts World leaders and international organizations have expressed concern over the apparent contradiction between ceasefire announcements and on-the-ground realities. Diplomatic efforts are reportedly underway to establish a more durable peace agreement. Future Outlook for Peace Process Recent developments cast doubt on the viability of current peace initiatives, with analysts suggesting that a return to substantive negotiations addressing core issues may be necessary to achieve lasting stability in the region.

The Drone Assault on Russia's Second CityResidents of Saint Petersburg were instructed to remain indoors as a large-scale Ukrainian drone attack targeted Russia's second-largest city at the conclusion of a three-day international economic forum. Russia's defense ministry reported that air defenses successfully intercepted 376 Ukrainian drones overnight, with attacks intensifying on both sides of the conflict as no clear resolution appears imminent.Scale and Targets of the Drone OperationsRussia claimed the drones were downed over 16 areas and regions, including Saint Petersburg, Crimea, and over the Azov and Black seas. Aleksandr Drozdenko, governor of the Leningrad region, reported that 86 drones were specifically shot down in his jurisdiction, which includes Saint Petersburg and key Baltic ports.Ukrainian President Volodymyr Zelenskyy confirmed that Kyiv's drones traveled approximately 1,000 kilometers to reach the St Petersburg region, targeting "the enemy navy's arsenals and a base in Kronstadt." He also stated that Ukraine's long-range drones struck an oil depot in the Krasnodar region, about 500 kilometers inside Russian territory.Economic Forum Amid Escalating ViolenceThe St Petersburg International Economic Forum (SPIEF), which concluded on Saturday, had attracted some 20,000 guests from more than 130 countries. The event became a backdrop for the escalating conflict, as Ukrainian drones had already struck an oil complex and naval base in the city on the first day of the summit.The juxtaposition of international economic discussions and military strikes highlighted the continuing impact of the war on global affairs and regional stability.Casualties and Reciprocal AttacksIn Ukraine, the conflict continued to take lives. Zaporizhzhia regional governor Ivan Fedorov reported finding the bodies of two men who had been unaccounted for after a Russian attack. Additionally, one person was killed and three others wounded in Russian drone and artillery attacks in Dnipropetrovsk, according to regional governor Oleksandr Ganzha.Diplomatic Stalemate PersistsThe military escalation comes amid diplomatic deadlock. In a rare move, Zelenskyy had appealed directly to Putin on Thursday, proposing "a meeting" to end the war through direct engagement. However, speaking at the economic forum on Friday, Putin rejected the proposal, stating there was "no point" in such a meeting."It only makes sense for the Ukrainian side to stop the advance of our armed forces. That's it. And we need agreements," Putin said, suggesting that experts should develop solutions first before any potential meeting.Future Outlook: No End in SightThe positions of both sides remain fundamentally opposed. Russia has indicated it will only agree to end the war if it retains territory it has taken from Ukraine, while Ukraine has stated it will only accept a peace agreement once all its territory is returned.With drone attacks intensifying and diplomatic efforts stalled, the conflict shows no signs of abating, with both sides signaling their determination to continue military operations until their respective objectives are met.

The OECD's Warning The Organisation for Economic Co-operation and Development (OECD) has issued a stark warning that if the Middle East conflict drags on into 2027, it could have severe consequences for the global economy. According to the organisation's latest Economic Outlook, a 'prolonged disruption' scenario would reduce global GDP growth to 2.1% this year, from 3.4% in 2025. The Prolonged Disruption Scenario In this scenario, the OECD forecasts that some economies would be pushed into or close to recession, with emerging economies hit hardest. Oil and gas shortages would result in 'enforced rationing' of energy for businesses, while the price of fertilisers and other affected inputs into industrial processes would also rise. The Data Analysis The OECD's forecasts paint a grim picture: Global GDP growth would be reduced to 2.1% this year, from 3.4% in 2025. Emerging economies would be hit hardest. Oil and gas shortages would lead to 'enforced rationing' of energy for businesses. The Impact Analysis The OECD's warning highlights the significant risks associated with a prolonged conflict in the Middle East. The organisation's chief economist, Stefano Scarpetta, described the Iran conflict as 'the dominant force shaping the global economic outlook.' The consequences of a prolonged disruption would be felt globally, but could prove especially severe for developing economies with limited energy reserves, higher shares of energy and food in household consumption, constrained fiscal capacity, and weak social safety nets. The Prediction The OECD presents an alternative, less catastrophic scenario, in which progress towards a durable peace agreement allows oil prices to decline over the coming weeks and months. In this scenario, global GDP growth would be 2.8% – a downgrade on last year but significantly stronger than in the 'prolonged disruption' case. However, the OECD's warning serves as a reminder of the urgent need to diversify energy sources and reduce reliance on fossil fuels to mitigate the impact of future shocks.

The Race for a $1 bn Balkan Gas PipelineAAFS Infrastructure and Energy is close to winning a concession to construct and operate a trans‑Balkan pipeline that would transport US‑sourced fossil gas, replacing Russian supplies. The project, valued at over $1 bn, is being pitched as “the most important infrastructure project ever in Bosnia and Herzegovina” by senior Bosnian officials.Financial Scope and Contractual MilestonesConcession value: $1 bn+Pipeline length: multiple hundred kilometres across Bosnia, Croatia, Serbia and Montenegro (exact figures not disclosed)Projected timeline: negotiations ongoing as of May 2026Trump‑Linked Personal Networks Behind AAFSThe firm’s leadership includes a Washington lawyer who has represented the Trumps in political cases and the brother of former national‑security adviser Michael Flynn. Both individuals were active in the 2020 effort to overturn the US presidential election, linking the venture directly to the former president’s inner circle.Geopolitical Ripple Effects in the Former YugoslaviaUS backing for the pipeline could undermine the 1995 Dayton peace agreement that ended the Bosnian war, raising concerns among regional ethnic leaders. American officials have signaled that the Trump administration expects a green light for the project, while EU diplomats warn of potential diplomatic fallout.What Comes Next for the Balkan Energy Landscape?If AAFS secures the concession, the pipeline could shift the Balkans’ energy dependence from Russia to the United States, altering trade flows and political alignments. Analysts anticipate heightened scrutiny from the EU and possible legal challenges from rival energy firms, while the Trump‑linked network may leverage the contract to expand its influence in European infrastructure projects.

The Lead-Up to Ethiopia's Elections Ethiopia will head to the polls on June 1 for its first nationwide elections since the formal end of the Tigray war, a devastating two-year conflict from 2020 to 2022 that concluded with a peace agreement between the Ethiopian federal government and the Tigray People’s Liberation Front (TPLF). Ethiopia at a Glance Ethiopia is a landlocked country in the Horn of Africa, covering an area of 1,104,300sq km (426,400sq miles) and bordered by Eritrea, Sudan, South Sudan, Kenya, Somalia and Djibouti. The country has sustained notable economic growth over the past two decades, with the IMF projecting a 9.2 percent expansion in 2026, the highest on the continent. Yet persistent challenges remain, including high inflation (11.7 percent as of April 2026), foreign exchange shortages, and the costly burden of post-war reconstruction. Ethiopia's Ethnic Groups The East African country is one of the most ethnically diverse countries in the world, with more than 80 distinct groups. The Oromo are the largest, making up about 35 percent of the population, concentrated largely in the south and central regions. The Amhara are the second-largest, about 24 percent, and have historically been the politically dominant group. Other significant groups include the Somali (7 percent), in the east; the Tigrayan (6 percent), concentrated in the northern Tigray region; and the Sidama (4 percent), in the southern highlands. Armed Violence Across the Country Ethiopia has been in near-continuous conflict since 2020, across several fronts: Tigray (2020-22): Ethiopian forces (ENDF) and their allies, including Eritrean forces, fought the Tigray defence forces (TDF). Oromia (2019-present): Conflict between Oromia regional forces, the ENDF, and the Oromo Liberation Army (OLA) has killed thousands of civilians. Amhara (2023-present): Amhara militias fought alongside federal troops in the Tigray war, but that alliance collapsed when the federal government reached a peace deal with the TPLF. According to Armed Conflict Location & Event Data (ACLED), an independent conflict monitor, between January 1, 2022 and May 15, 2026, more than 7,400 attacks have been recorded across the country.

Investors priced in the possibility of a cease‑fire between the United States and Iran, sending the world’s key oil benchmarks lower and sparking a broad rally across Asian stock markets.Oil Prices Slide as Peace Draft Sparks Market OptimismThe market reaction followed a draft peace agreement circulated by Donald Trump and reported by Axios, which suggested a 60‑day extension of the cease‑fire. Analysts at Deutsche Bank noted “mounting optimism about an end to the conflict,” shifting sentiment away from stagflation concerns.Price Movements: Brent Down 1.3% and WTI Down 1.4%Brent crude futures fell 1.3% to $91.54 a barrel, on track for a 17% monthly decline since early May.West Texas Intermediate (WTI) dropped 1.4% to $87.64 a barrel, 7% below the week’s peak of $94.70.Regional Market Reactions: Asian Gains and European StabilityJapan’s Nikkei 225 rose 2.5%.South Korea’s KOSPI climbed 3.6%.Hong Kong’s Hang Seng gained 0.9%.China’s CSI 300 slipped 0.45%.UK’s FTSE 100 opened 0.1% higher; the broader Stoxx Europe 600 up 0.3%.U.S. S&P 500 had risen 0.6% the previous day, pushing the index to a new record high.U.S. 10‑year Treasury yields fell to 4.45%, supporting bond price gains.What the Next Weeks Could Hold for Energy MarketsIf the tentative cease‑fire holds, oil demand forecasts could be revised upward, limiting further price declines. However, lingering uncertainty over the strait of Hormuz and Iran’s nuclear ambitions means volatility may persist. Traders will watch for official confirmations from the U.S. vice‑president JD Vance and any concrete steps to reopen the strait, which could stabilize supply and temper market swings.

The Lead: Asian Markets React to Diplomatic DevelopmentsAsian stocks are rising today amid hopes of a US-Iran peace deal and the potential reopening of the Strait of Hormuz, a critical shipping route that has been impacted by regional tensions. The positive market sentiment comes as US President Donald Trump has circulated a draft peace agreement among allies, including Israel, which could significantly alter the geopolitical landscape in the Middle East.The Event Details: US-Iran Peace Proposal TermsPresident Trump has shared a draft peace agreement for the war with Iran, similar to proposals circulating throughout the Middle East. The key provisions include:Opening the Strait of Hormuz to commercial shippingLifting the US blockade of Iranian portsProviding Iran with access to up to $12 billion (£9 billion) in frozen assetsTargeting the return of commercial shipping in the strait to pre-war levels within 30 daysAnticipating negotiations lasting up to 60 days on Iran's nuclear programThe Data Analysis: Market Performance and Oil ImpactAsian markets are showing strong gains across the board:Japanese Nikkei: +2.65%Hong Kong's Hang Seng: +0.9%South Korean Kospi: +3.6%TSMC (chip maker): +2.6%Samsung Electronics: +6%SK Hynix: +0.6%Concurrently, oil prices have declined, with Brent crude falling approximately 1% to $93.02 per barrel. The price drop reflects investor calculations about the potential impact of the Strait of Hormuz reopening on global oil supplies.The Impact Analysis: Regional and Global Economic ImplicationsThe potential peace deal between the US and Iran could have far-reaching implications for global markets and regional stability. The reopening of the Strait of Hormuz, through which approximately 20% of global oil trade passes, could significantly impact energy markets and shipping routes. Additionally, the lifting of port blockades and access to frozen assets could stimulate Iran's economy and create new trade opportunities in the region.The rally in Asian tech stocks, particularly semiconductor manufacturers, suggests that while geopolitical tensions are easing, enthusiasm for artificial intelligence and related technologies continues to drive market sentiment in the region.The Prediction: Market Trajectory and Upcoming Economic IndicatorsAs diplomatic negotiations progress, markets will likely continue to react to developments in the US-Iran peace process. The coming weeks will be critical as the 60-day negotiation period on Iran's nuclear program unfolds. Investors should also monitor upcoming economic indicators that could influence market sentiment:French inflation report (7.45am BST)Spanish inflation report (8am BST)Andrew Bailey speech at the Reykjavik 2026 economic conference (9.20am BST)Germany inflation report (1pm BST)Canadian Q1 2026 GDP (1.30pm BST)The interplay between geopolitical developments and economic data will likely shape market direction in the coming weeks.

The Diplomatic Pivot in the Middle EastIn a significant development for regional stability, the United States and Iran have reportedly agreed to a 60-day truce outlined in a Memorandum of Understanding (MoU). This agreement represents a potential de-escalation of tensions that have defined the geopolitical landscape, though its longevity remains uncertain pending high-level political validation.Negotiating a 60-Day Ceasefire FrameworkThe core of this breakthrough lies in the Memorandum of Understanding, which establishes a temporary cessation of hostilities. This 60-day window is designed to provide a breathing space for diplomatic negotiations, allowing both nations to assess the feasibility of a more permanent peace agreement.60-day timeline set for de-escalation and negotiation.Mou signed between US and Iranian representatives.Hostilities expected to pause during this period.The Critical Role of Executive RatificationWhile the diplomatic groundwork has been laid, the agreement faces a significant hurdle: the pending approval of Donald Trump. This condition implies that the MoU is not yet a binding executive order but rather a proposal requiring political sign-off. The delay or rejection of this approval could immediately unravel the fragile truce.Geopolitical Ramifications and Future OutlookThe outcome of this diplomatic maneuver will have profound implications for the Middle East. If ratified, the truce could stabilize markets and reduce regional volatility. However, if political disagreements stall the process, the region risks returning to heightened tensions. Analysts suggest that the next 48 hours will be critical in determining whether this MoU translates into a lasting peace or remains a temporary diplomatic maneuver.