According to Bloomberg, Israel is potentially days away from a ceasefire deal with Lebanon’s Hezbollah. This follows a new round of shuttle diplomacy by a senior envoy for the outgoing Biden administration. Michael Herzog, Israel’s ambassador to the US, told Israel’s Army Radio that the two sides are close to a deal and it could happen within days.
While there have been similar predictions by other Israeli and US officials in recent weeks, it remains unclear if Hezbollah will accept a deal. The Iran-backed group has been severely weakened after two months of increased Israeli sabotage, airstrikes, and ground incursions in southern Lebanon. However, it is still able to fire rockets into Israel on a daily basis and put up resistance against Israeli ground forces.
On Sunday, Hezbollah fired at least 250 rockets and drones into Israel, wounding several people, and the Israeli air force struck targets in Lebanon.
Amos Hochstein, a White House envoy for the Middle East, was in Lebanon and Israel last week to try to clinch a ceasefire before President Joe Biden hands over to the next president in January.
According to Army Radio, once the Israeli government of Prime Minister Benjamin Netanyahu signs off on a truce, Washington will take it to Beirut, where government officials have been serving as intermediaries for Hezbollah. Last week, Lebanese House Speaker Nabih Berri, a key Hezbollah ally, said there was progress but there were still “technical details” to resolve.
The US-drafted proposal entails an initial 60-day suspension of hostilities during which Hezbollah fighters would move north of the Litani River, about 30 kilometers (19 miles) away from the Israeli border.
Israel also wants the Lebanese army, which is separate from Hezbollah, to deploy in the south of Lebanon, beefing up a contingent of United Nations peacekeepers and helping to ensure the militant group doesn’t operate there.
The Israeli government wants the right to resume strikes in Lebanon in the event of infractions by Hezbollah. The Lebanese government and Hezbollah have pushed back at that demand.
Around 2,500 people have been killed in Lebanon by Israeli strikes and the ground offensive in the past two months, while 1.2 million — more than a fifth of the population — have been displaced. About 50 Israeli troops have been killed in combat in southern Lebanon.
Tens of thousands of civilians have been displaced from both sides of the Israel-Lebanon border. Netanyahu’s cabinet has made enabling the return of northern Israelis to their homes a priority, something that can’t happen without an end to fighting with Hezbollah.
Talks between Israel and Hamas over a ceasefire in Gaza have stalled for months. Though the conflicts are connected, there’s little sign a deal over Lebanon would increase the chances of a truce in Gaza.
Hezbollah initially said it wouldn’t stop attacking Israel until there was a ceasefire in Gaza, but it softened its position as it suffered military losses.
Original post From Bloomberg
Economic Analysis:
The news of a potential ceasefire between Israel and Hezbollah could have a positive impact on global financial markets, particularly gold prices. Gold is seen as a safe-haven asset during times of political and economic uncertainty. A reduction in tensions in the Middle East could lead to a decrease in demand for gold as a safe haven, potentially putting downward pressure on its price.
However, it is important to note that other factors also influence gold prices, including:
- Interest rates in developed countries
- Global inflation rates
- The value of the US dollar
- Demand for gold in the jewelry and technology industries
Therefore, it is difficult to predict the exact impact of the ceasefire news on gold prices, and we will need to wait and see how the market reacts to this development.
