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Military And Security Developments
Jul 31.
KEY DEVELOPMENTS
IRAN
- Nuclear negotiations between Iran and the E3 (France, Germany and the UK) are unlikely to progress substantially in the coming weeks, increasing regional tensions and the likelihood of UN sanctions.
- The US continues to expand sanctions targeting Iranian oil exports and smuggling networks, underscoring sustained compliance concerns for global energy, financial and shipping firms.
ISRAEL
- Israel has reportedly threatened to begin annexing parts of Gaza unless Hamas accepts a ceasefire proposal in the coming days; however, rapid annexation or settlement re-establishment remains unlikely.
- A march supporting the Israeli settlement of Gaza will elevate sanctions and reputational risks for Israeli-affiliated businesses and individuals in the coming months.
PALESTINIAN TERRITORIES
- The IDF’s planned restrictions on the funeral of a prominent Palestinian activist in the West Bank will increase domestic unrest risks in the coming days.
- US sanctions targeting officials in the Palestinian Authority and the Palestine Liberation Organization (PLO) will drive compliance risks for affiliated businesses.
- Despite efforts to improve aid distribution in Gaza, reports of continued shooting incidents and looting underscore the critical threats to civilians and NGO staff.
- Canada, Malta, Portugal and the UK announced that they would move to recognise an independent Palestinian state in the coming months, though conditions in the Palestinian Territories are unlikely to improve in the short term.
IRAN
- Nuclear negotiations between Iran and the E3 (France, Germany and the UK) are unlikely to progress substantially in the coming weeks, increasing regional tensions and the likelihood of UN sanctions. On 28 July, a spokesperson for Iran’s foreign ministry indicated that Iran would not be willing to engage in nuclear talks that include discussions regarding limitations of its ‘defence capabilities’. The announcement comes after Iranian representatives met with the E3 on 24 July to discuss the possible re-implementation of UN sanctions in the coming months (see Sibylline Middle East Crisis Update – 28 July 2025). Following the talks, however, France’s Foreign Minister Jean-Noel Barrot stated that the E3 seeks to facilitate negotiations on a ‘more comprehensive’ multi-lateral nuclear agreement, which would include limitations to Iran’s missile development programme and support for regional proxies. The contrasting statements highlight increasing tensions between Iran and the E3, despite efforts to establish some form of agreement before the expiration of the Joint Comprehensive Plan of Action (JCPOA)’s snapback clause in October (see Sibylline Middle East Crisis Update – 17 July 2025). Representatives for the E3 have repeatedly stated that the states would consider initiating measures to re-impose UN sanctions on Iran unless nuclear negotiations between the US and Iran progress substantially by the end of August. Disputes regarding the scope of negotiations will likely prevent demonstrable progress towards an interim agreement in the coming weeks, elevating risks of sanctions re-imposition and regional tensions significantly escalating in Q3.
- The US continues to expand sanctions targeting Iranian oil exports and smuggling networks, underscoring sustained compliance concerns for global energy, financial and shipping firms. On 30 July, the US sanctioned over 115 entities, individuals and vessels associated with Iran’s oil smuggling network. The sanctions apply to entities and vessels listed in states including Dominica, Iran, Iraq, India, Turkey, Singapore, Switzerland and the UAE, underscoring elevated compliance concerns and due diligence requirements for locally engaged firms, particularly in the global shipping and financial sectors. Sanctions exposure risks will also be particularly acute for firms engaged in Iraq’s oil and shipping industries, amid increasing US scrutiny of Iranian oil smuggling and blending in via Iraqi ports and pipelines. Over the coming weeks, the US will highly likely continue expanding sanctions on Iranian-linked entities and individuals as part of the ‘maximum pressure’ campaign, sustaining significant socio-economic health concerns within Iran. As in previous rounds of talks, the US will also highly likely continue enforcing and expanding sanctions targeting Iranian entities, regardless of potential re-engagement in nuclear negotiations, sustaining governance concerns and associated bilateral tensions.
ISRAEL
- Israel has reportedly threatened to begin annexing parts of Gaza unless Hamas accepts a ceasefire proposal in the coming days; however, rapid annexation or settlement re-establishment remains unlikely. On 29 July, local media reported that Israel had delivered a document to ceasefire mediators in reply to Hamas’ response to a ceasefire proposal issued last week. The document reportedly details Israel’s red lines regarding troop withdrawal and prisoner releases during any potential ceasefire period. Israel has stated that it will not leave the Philadelphi corridor along the Egypt-Gaza border or the buffer zone established within the Gaza border area. Additionally, Israel will not allow the Rafah Crossing to open and will not agree to far-reaching concessions on prisoner releases. Reports also indicate that Israel has threatened to begin annexing parts of Gaza unless Hamas agrees to a ceasefire deal in the coming days. The reported threats come as far-right elements within the Israeli government and domestic society have progressively increased pressure to re-establish Israeli settlements within Gaza (see below). Despite this pressure, however, Israel is unlikely to begin annexing Gaza or re-establishing settlements in the immediate term. Such efforts would highly likely trigger significant international criticism and possible sanction implementation and would also likely increase tensions with the US. Even so, military occupation of territory in Gaza will remain a realistic possibility in the coming months in order to pressure Hamas into a ceasefire agreement (or in response to the collapse of such an agreement).
- A march supporting the Israeli settlement of Gaza will elevate sanctions and reputational risks for Israeli-affiliated businesses and individuals in the coming months. On 30 July, hundreds of ultra-nationalist pro-settlement activists began marching from Sderot (Southern district) towards Gaza’s northern border. The march was organised by the Nachala organisation, which advocates for the Israeli settlement of Gaza. The Israel Defense Forces (IDF) blocked the march before it could reach Gaza’s border. The march comes amid increasingly vocal support from far-right ministers within Israel’s coalition government for such initiatives. Pro-settlement demonstrations and increased ministerial support will possibly embolden far-right, pro-settlement activists to engage in further marches or border infiltration attempts. This would increase the risks of clashes with IDF soldiers along the Israel-Gaza border. Escalating pro-settlement activism will also increase risks of sanctions targeting Israeli individuals and organisations (as well as associated businesses) in the coming months, driving reputational and compliance risks for locally engaged and affiliated firms.
PALESTINIAN TERRITORIES
- The IDF’s planned restrictions on the funeral of a prominent Palestinian activist in the West Bank will increase domestic unrest risks in the coming days. On 28 July, an Israeli settler shot Awdah Hathaleen, a Palestinian activist, during a clash between Israeli settlers and Palestinians near the Israeli settlement of Carmel (Hebron governorate). Hathaleen was evacuated to Soraka medical centre in Beersheba (Southern district), where he died of his wounds; his body remains in Israel. Since his death, the IDF has issued several ordinances limiting the number of attendees permitted at Hathaleen’s funeral and banning activities such as flying flags and chanting inciting statements during the event. The IDF has also mandated that the funeral take place in Umm al-Khair (Hebron governorate), rather than in territory over which there is a dispute between Palestinian communities and Israeli settlers in the area. Although the orders likely aim to mitigate radicalisation risks, they will likely compound ethno-religious tensions and domestic unrest risks around Carmel and Umm al-Khair in the coming days. This will increase risks of further clashes and violence between Palestinians, Israeli settlers and the Israeli security forces, as well as risks of attacks targeting Israeli settlements and vehicles in the West Bank.
- US sanctions targeting officials in the Palestinian Authority and the Palestine Liberation Organization (PLO) will drive compliance risks for affiliated businesses. On 31 July, the US announced it would sanction PA and PLO officials based on allegations that the organisations are undermining the peace process. The US alleges that the PA and PLO have violated prior bilateral agreements and commitments to adhere to UN Security Council resolutions relating to support for designated terror organisations and operatives. The sanctions target all members of the two organisations and deny them visas to travel to the US. The sanctions likely aim to pressure the PA to more actively address issues such as the incitement and glorification of violence targeting Israel (particularly through textbooks) and benefits payments to families of Palestinian militants. In the coming months, risks of the US issuing further sanctions targeting the organisation will increase, particularly targeting assets and banking facilities. Such sanctions will increase compliance risks for firms in the financial services sector that service the PA, PLO and associated organisations.
- Despite efforts to improve aid distribution in Gaza, reports of continued shooting incidents and looting underscore the critical threats to civilians and NGO staff. On 29 July, the UN’s Integrated Food Security Phase Classification (IPC) platform stated that two of three famine thresholds have been reached in Gaza. Yet despite Israel’s announcements regarding tactical military pauses and the designation of secure transit routes for aid convoys, security conditions within Gaza continue to undermine efforts to distribute aid rapidly and improve humanitarian conditions therein. Numerous aid agencies have stated that escalating food insecurity has also triggered a substantial escalation in looting against aid convoys, underscoring the threats to NGO staff, particularly drivers and security contractors. Additionally, the Hamas-run Civil Defence agency announced that a shooting incident near the Erez West (Zikim) border crossing involving IDF personnel resulted in the deaths of at least 50 civilians who approached an aid convoy on 30 July. The IDF stated that its personnel fired warning shots to disperse the crowds, but that it was ‘not aware of any casualties’. In the coming days, humanitarian conditions will likely continue to deteriorate; further looting and shooting incidents will sustain critical threats to life for locally engaged staff and disrupt broader aid-distribution operations. Conditions in Gaza will also likely continue to exacerbate regional tensions, increasing the risk of pro-Palestine demonstrations in the broader region, as well as in major cities across Australia, Belgium, Canada, France, Germany, the Netherlands, the UK and the US. Israeli-linked firms also face increasing risks of targeted protests and activism in the coming weeks, particularly those engaged in the defence, shipping and construction sectors, elevating corporate governance and operational disruption risks.
- Canada, Malta, Portugal and the UK announced that they would move to recognise an independent Palestinian state in the coming months, though conditions in the Palestinian Territories are unlikely to improve in the short term. On 29 July, the UK announced that it would move to recognise a Palestinian state at the UN General Assembly in September unless Israel ends the ongoing Israel-Hamas war, improves humanitarian conditions in Gaza, commits to refraining from annexing the West Bank and works to establish ‘a long-term, sustainable peace’ in the form of a two-state solution. On 30 July, Canada also announced that it would recognise a Palestinian state in September if the Palestinian Authority (PA) commits to substantial governance reforms. Malta and Portugal (both EU member states) also announced plans to recognise a Palestinian state in the coming months. The announcements highlight increasing efforts by Western states to pressure Israel into improving humanitarian conditions in Gaza and address escalating Israeli settler activity and violence in the West Bank. However, Israeli Prime Minister Benjamin Netanyahu has broadly characterised statements regarding the recognition of a Palestinian state as a ‘reward for Hamas terrorism’, while US President Donald Trump indicated that Canada’s announcement would possibly undermine ongoing trade negotiations. As such, statements regarding the recognition of a Palestinian state are unlikely to alter Israel’s policies vis-à-vis the Palestinian Territories, rendering demonstrable improvements to security and governance within Gaza and the West Bank highly unlikely in the short term. Rather, efforts to pressure Israel into pursuing a two-state solution are highly likely to exacerbate bilateral tensions (including those with the US), increasing operational disruption and compliance risks for locally engaged firms.
RED SEA
- The Houthis’ capture of crew members underscores sustained kidnapping risks and increasing threats to vessels transiting the Red Sea. On 28 July, the Iranian-backed, Yemen-based Houthis published footage indicating that they had detained the ten missing crew members of the Greek-operated vessel Eternity C, which the group sank in the Red Sea earlier in July. The footage also featured interviews in which crew members called for an end to the ongoing Israel-Hamas war. The announcement underscores elevated kidnapping and detention risks facing crew members working on vessels targeted by the Houthis (see Sibylline Middle East Crisis Update – 10 July 2025). This will also drive significant physical and psychological threats to staff. The announcement comes after the Houthis stated on 27 July that they would target any ships belonging to companies that do business with Israeli ports. Taken together, the announcements underscore the increasing threats to shipping in the Red Sea, which will particularly affect vessels associated with Israel through their ownership and/or operational structures. As Israeli military operations continue in Gaza, the frequency and intensity of Houthi attacks against vessels in the Red Sea will likely increase, sustaining global supply chain and operational disruption as well as financial risks for reliant businesses.
REGIONAL DEVELOPMENTS
- Region: The Arab League has called for Hamas to disarm, but the move is unlikely to significantly impact the group’s engagement with regional mediators. On 29 July, the 22 members of the Arab League (including Egypt and Qatar), the EU and 17 other countries backed a declaration condemning the 7 October 2023 attacks and calling for Hamas to disarm and relinquish power in Gaza. The declaration also stated that governance, law enforcement and security competencies across all Palestinian territory must lie solely with the Palestinian Authority (PA), with international support. Notably, the signees also proposed the deployment of ‘a temporary international stabilisation mission’ under the aegis of the UN and upon invitation by the PA. Despite support for calls to disarm Hamas, the declaration is unlikely to undermine the group’s engagement with the Egyptian and Qatari mediators during the ceasefire and hostage release talks. Even so, the declaration also comes amid increasing tensions between Cairo and Hamas, as one of the latter’s senior officials blamed Egypt in part for the humanitarian crisis in Gaza. Nevertheless, the declaration also signals the political intent of regional powers to actively engage in post-war planning for Gaza. This will increase the risk of further tensions with Israel in the coming months, particularly regarding the PA’s potential engagement in governance functions.
- Tunisia: Union strike will increase transport disruption, security risks. On 30 July, the General Transport Union, under the umbrella of the Tunisian General Labour Union (UGTT), began a three-day strike, halting transport services across Tunisia. Strikers are demanding higher wages and improved working conditions. In the coming days, the strike will likely increase the use of private vehicles, driving congestion and transport disruption in major cities, including Sfax (Sfax governorate), Sousse (Sousse governorate) and the capital Tunis. Further strikes will be likely in the coming weeks, as the Ministry of Transport indicated it cannot meet the union’s demands. This week’s strike comes amid broader efforts by the UGTT to secure labour rights across multiple sectors, as Tunisia’s government adopts increasingly centralised measures to sideline union influence. As such, we assess that anti-government protests and heavy-handed responses from the authorities will likely increase in the coming weeks, driving risks of sporadic clashes and elevating security risks for proximate bystanders.
- Libya: Airstrikes will increase bystander, security risks in western districts. On 30 July, the Tripoli-based Government of National Unity (GNU) announced that it would carry out precision airstrikes against criminal groups in Libya’s western region. Notably, the government did not specify the areas it would strike, though it urged residents to distance themselves from locations and organisations engaging in smuggling and human trafficking, which would be targeted in the air campaign. We assess that there is a realistic possibility that the GNU will target organised crime hotspots in the desert and coastal areas close to the Tunisian border, as well as parts of the cities of Sabratha and Zawiya (both Zawiya district). This will significantly increase security and bystander risks in most areas west of the capital Tripoli over the coming days. Nevertheless, the airstrikes are unlikely to significantly disrupt mobility along the coastal highway linking Tripoli to the Tunisian border.
Jul 29.
- Israel-Palestinian Territories: UN conference on two-state solution will increase compliance risks. On 28 July, foreign ministers attended the first meeting of a three-day UN conference in New York City (New York, US) convened by France and Saudi Arabia on advancing the two-state solution. Neither Israel nor the US are attending the conference, which will limit the prospects for formal progress. However, the conference will likely include statements condemning Israeli military operations in the Gaza Strip (Palestinian Territories) and the expansion of settlements in the West Bank (Palestinian Territories), increasing reputational risks for Israeli-linked firms. The conference will also likely call for states to sanction Israel due to deteriorating humanitarian conditions within Gaza, including through the suspension of trade and co-operation agreements. Any such moves made by Western states would almost certainly aggravate bilateral tensions with Israel, while increasing regulatory and compliance risks for businesses operating in Israel, especially in the defence and technology sectors. In the coming months, we assess that states such as Australia, Canada and the UK are likely to face increasing domestic and international pressure to recognise a Palestinian state, though formal progress remains unlikely as the ongoing Israel-Hamas war continues at pace.
- Yemen-region: Houthis’ capture of vessel crew underscores security risks gripping Red Sea area. On 28 July, the Iranian-backed and Yemen-based Houthis announced that they had rescued ten missing crew members from the Greek-operated vessel Eternity C (which the group sank in the Red Sea earlier in July). The group released footage that appeared to show militants pulling crew members from the water; it also featured interviews of crew members calling for an end to the ongoing Israel-Hamas war. The announcement highlights the substantial kidnapping and detention risks facing crew members working on vessels targeted by the Houthis, compounding critical physical and psychological threats to staff. The announcement also comes after the Houthis stated on 27 July that they would target any ships belonging to companies that do business with Israeli ports. Taken together, the announcements underscore the increasing threats to shipping in the Red Sea, particularly those vessels associated with Israel through their ownership and/or operational structures. As Israeli military operations continue in Gaza, we assess that the frequency and intensity of Houthi attacks against vessels in the Red Sea will likely increase, significantly disrupting global supply chains and driving operational disruption and financial risks for reliant businesses.
Jul 28.
IRAN
- Iran announced earlier on 28 July that it would meet with a delegation from the International Atomic Energy Agency (IAEA) in the next two weeks, though failure to engage in negotiations with the US will sustain the risk of the UN reimplementing sanctions.
- A separatist militant attack in Sistan and Baluchistan province has underscored the elevated security risks in eastern Iran; further attacks are likely to aggravate tensions with Pakistan.
ISRAEL
- The withdrawal of the Israeli delegation from negotiations signals that Israel is possibly preparing for a breakdown in ceasefire talks.
PALESTINIAN TERRITORIES
- An Israeli settler attack on a Palestinian village and threats against another underscore the elevated intercommunal violence risks present throughout the West Bank.
- The Israel Defense Forces (IDF) announced it would implement tactical pauses in Gaza amid a partial policy shift vis-à-vis humanitarian aid, though food security conditions will remain extremely sensitive to backsliding.
- France announced that it would recognise an independent Palestinian state in the coming weeks; this comes amid broader efforts to accelerate global diplomatic engagement with the two-state solution.
IRAN
Iran announced earlier on 28 July that it would meet with a delegation from the International Atomic Energy Agency (IAEA) in the next two weeks, though failure to engage in negotiations with the US will sustain the risk of the UN reimplementing sanctions. The announcement comes after Iran engaged in talks with the E3 (Germany, France and the UK) in Istanbul (Turkey) on 24 July, with the parties announcing they had agreed to further talks in the coming weeks. Reports suggest that the E3 indicated they would be willing to delay triggering the 2015 Joint Comprehensive Plan of Action (JCPOA)’s snapback clause if Iran agrees to restore IAEA access to all nuclear sites and re-engages in negotiations with the US. However, Iran is unlikely to restore comprehensive IAEA access rapidly in the short term, sustaining international anxiety regarding oversight of Iran’s nuclear activity. Such concerns will increase the likelihood of the E3 triggering the clause, particularly as neither Iran nor the US have announced plans to re-engage in talks to date. Unless negotiations resume by mid-to-late August, the E3 will likely initiate efforts to trigger the snapback clause and reimplement UN sanctions. Such efforts would almost certainly increase regional tensions, while also compounding sanction-exposure risks and compliance concerns for regionally engaged firms, particularly those operating in the aviation, financial, shipping and technology sectors.
- A separatist militant attack in Sistan and Baluchistan province has underscored the elevated security risks in eastern Iran; further attacks are likely to aggravate tensions with Pakistan. On 26 July, the secessionist Sunni-Baloch militant group Jaish al-Adl (JaA) conducted a small arms attack against a courthouse in Zahedan (Sistan and Baluchistan). Militants killed at least six individuals and injured 28 others, marking the province’s highest casualty attack since October 2024. In the coming days, the Iranian security forces will likely initiate a significant crackdown on JaA activity in eastern Iran, increasing the risk of arbitrary detention for ethnic-Baloch civilians nationwide and disrupting operational and supply chain continuity in the province. The crackdown will possibly trigger an uptick in anti-government protests in Chabahar, Zabol and Zahedan (all Sistan and Baluchistan) in the coming weeks, elevating the risk of localised unrest. The Iranian authorities will likely claim that Israel is instigating unrest and facilitating JaA activity, which will in turn elevate the risk of surveillance, harassment and detention for individuals assumed to maintain connections with Israel and/or the US, such as foreign nationals, NGO staff and anti-government activists. Despite any such crackdown, JaA militants are highly likely to continue conducting ambush attacks targeting security and police force convoys in rural areas in the coming months. JaA will also likely attempt to launch higher-capacity attacks targeting state installations in major cities in October to mark the anniversary of the 2022 Zahedan Massacre (see Sibylline Extremism Watch – Baloch Militancy). Escalating JaA activity will possibly disrupt operations at the Chabahar free port (Sistan and Baluchistan); it will also likely aggravate bilateral tensions with Pakistan (though major and direct escalation remains unlikely at present).
ISRAEL
- The withdrawal of the Israeli delegation from negotiations signals that Israel is possibly preparing for a breakdown in ceasefire talks. On 24 July, Israel withdrew its delegation from ceasefire negotiations in Qatar after Hamas issued another unsatisfactory response to the current ceasefire proposal put forward earlier that day. Hamas’ responses have been criticised by mediators (Egypt, Qatar and the US). Comments by both US President Donald Trump and US Special Envoy Steve Witkoff suggest they believe the group is acting in bad faith. These developments come after Israel agreed on 26 July to allow an increase in humanitarian aid into Gaza, including through aid drops. On 27 July, Israel also announced a daily tactical pause during its military operations in certain areas of Gaza (see below). Israel’s approval of these measures (both of which relate to key subjects within the ceasefire talks) likely signals that it wants to restore international credibility as a ‘good faith’ negotiator before a possible complete breakdown in talks (and the associated rise in military operations that would likely come thereafter). There is a realistic possibility that these actions, including Trump’s threatening comments, reflect a last-ditch brinkmanship effort designed to pressure Hamas into accepting the ceasefire proposal. As such, an agreement remains possible in the coming two weeks. However, if no breakthrough is achieved during this period, we assess the risk of a breakdown in negotiations will increase, in turn exacerbating the risk of armed conflict.
PALESTINIAN TERRITORIES
- An Israeli settler attack on a Palestinian village and threats against another underscore the elevated intercommunal violence risks present throughout the West Bank. Overnight on 27-28 July, Israeli settlers set fire to two Palestinian cars in Taybeh (Ramallah and al-Bireh governorate) and scrawled threatening graffiti in the nearby al-Mughayyir (Ramallah and al-Bireh). The incidents come against the backdrop of increasing Israeli settler violence targeting Palestinian villages in the West Bank and a continued failure by the Israeli security forces to investigate and prosecute those responsible. In the coming weeks, further clashes are likely to break out between Palestinian and Israeli settlers (as well as between the security forces and settlers) in the vicinity of al-Mughayyir. Furthermore, elevated ethno-religious tensions will increase radicalisation risks, driving the likelihood of attacks against Israeli targets (civilian and military) across the West Bank, particularly within Ramallah and al-Bireh. A heightened security force presence around al-Mughayyir is also likely, increasing travel disruption and arbitrary arrest risks along proximate roads in the coming days.
- The Israel Defense Forces (IDF) announced it would implement tactical pauses in Gaza amid a partial policy shift vis-à-vis humanitarian aid, though food security conditions will remain extremely sensitive to backsliding. On 27 July, the IDF announced the launch of ‘local tactical pauses of military activity’ in densely populated areas of Gaza, including areas in al-Mawasi, Deir al-Balah and Gaza City (see Figure 2). The pauses will occur daily from 1000hrs to 2000hrs (local time) until further notice, during which time the IDF will not conduct airstrikes or ground operations in locations where ground troops are not already operating. The tactical pauses will likely improve security conditions within designated areas during daylight hours and facilitate humanitarian operations therein. The announcement comes after the IDF authorised the resumption of aid drops on 26 July, with Israel, Jordan and the UAE subsequently delivering several tonnes of aid by air. Also on 26 July, the IDF announced it would establish ‘secure routes’ within Gaza to facilitate aid deliveries by UN agencies; the routes will be designated between 0600hrs and 2300hrs and will likely ease critical logistical bottlenecks. The IDF has repeatedly stated that NGOs have failed to collect hundreds of aid pallets at the Erez West (Zikim) and Kerem Shalom border crossings in recent weeks. Conversely, NGOs have stated that convoys have been unable to take possession of aid supplies due to a lack of secure transit routes. If sustained, increased aid deliveries are likely to relieve acute food insecurity conditions in the immediate term. However, we assess that the IDF is highly likely to resume targeted operations and/or airstrikes within the designated zones and routes if it detects (or claims to detect) Hamas activity therein, particularly if Hamas attempts to launch rockets towards Israeli territory. This will sustain significant security and bystander-exposure risks for locally engaged staff, as well as the risk of further disruption to aid operations. Sustained disruption will likely trigger rapid backsliding into critical food insecurity, prolonging significant humanitarian concerns regarding conditions in Gaza.
- France announced that it would recognise an independent Palestinian state in the coming weeks; this comes amid broader efforts to accelerate global diplomatic engagement with the two-state solution. On 24 July, French President Emmanuel Macron announced that France would recognise an independent Palestinian state at the UN General Assembly meeting in September. The announcement reflects increasing bilateral tensions between France and Israel amid the deteriorating humanitarian conditions within Gaza. Macron characterised the announcement as part of France’s efforts to support regional de-escalation. The announcement is highly unlikely to impact conditions demonstrably within Gaza or to improve governance, security or socio-economic conditions within the West Bank. The announcement came ahead of a three-day UN ministerial conference convened by France and Saudi Arabia to discuss advancing the two-state solution, which began earlier on 28 July. Although the conference will likely trigger further statements from regional parties calling for progress towards the formation of a Palestinian state, neither Israel nor the US will attend, significantly limiting the prospects for formal progress. Nonetheless, the conference will possibly increase pressure on countries such as Australia, Canada and the UK to recognise a Palestinian state in the coming months; statements indicating support for such an initiative are likely to compound tensions with Israel. In the medium-to-long term, those states that announce any such recognition will possibly encounter reduced prospects for future bilateral initiatives and projects with Israel, while defence and technology firms will possibly face elevated regulatory and compliance risks. Nevertheless, Israel is highly unlikely to engage in broader negotiations with the Palestinian Authority (PA) amid its ongoing operations within Gaza, limiting the prospects for formal engagement and progress towards the formation of a Palestinian state in the short-to-medium term.
RED SEA
- On 27 July, the Yemen-based Houthis launched the fourth phase of their naval blockade against Israel, expanding the risk of attacks in both the Red and Arabian seas. As part of this phase, the Houthis announced that they will now target any merchant ship belonging to companies that conduct business with Israeli ports, regardless of their destination and nationality. Despite claiming this to be a ‘new’ phase, the modus operandi outlined within the announcement matches our previous assessment in early July following two Houthi attacks in the Red Sea (see Sibylline Middle East Crisis Update – 10 July 2025). Even so, the official announcement made by the Houthis underscores that the group is ready to increase the frequency of its attacks against commercial shipping in the coming weeks. While attacks in the Red Sea are more likely, there is also a realistic possibility of the Houthis conducting attacks on vessels in the Gulf of Aden and the Arabian Sea.
- The detention of a livestock carrier by the Yemeni coast guard highlights the non-Houthi-related risks in the Red Sea against the backdrop of elevated tensions. On 24 July, the UK Maritime Trade Operations office confirmed that the Yemeni coast guard temporarily detained a Comoros-flagged and Greek-owned livestock carrier named Merinos Livestock. This came shortly after a wooden boat approached the vessel, approximately 35 nautical miles (65km) to the south-west of Hudaydah Port (al-Hudaydah governorate). According to reports, the small boat opened fire and instructed Merinos Livestock to proceed to Mokha (Taiz governorate), where the Yemeni coast guard briefly detained the vessel. Mokha is controlled by the internationally recognised government of Yemen, which has increased its efforts to intercept weapons shipments heading to the Houthis over the past month (see Sibylline Middle East Crisis Update – 17 July 2025). The coast guard likely detained the ship because its automatic identification system (AIS) was turned off (likely in an effort to mitigate against the risk of Houthi attacks), which in turn would have prompted the authorities to suspect that the vessel was being used for smuggling. The incident highlights the elevated security and operating risks facing maritime vessels in the Red Sea, particularly those that turn off their AIS in an effort to avoid Houthi attacks. As such, further incidents involving arbitrary detention, misidentification and misfire (as well as longer delays and elevated fuel costs) remain possible in the coming weeks, sustaining the overall increased security risks in the Red Sea.
REGIONAL DEVELOPMENTS
- A recent announcement concerning elections in Syria has underscored concerns over democratic processes, exacerbating security risks in the country’s southern and eastern governorates. On 27 July, Syria’s electoral commission announced that the country’s first parliamentary elections under the new administration are expected to go ahead between 15 and 20 September. The number of seats in the legislature will also increase from 150 to 210, with a third (70 seats) appointed by President Ahmed al-Sharaa. Officials stated that areas outside government control, including regions in eastern Syria controlled by the Syrian Democratic Forces (SDF) and the Druze-majority Suwayda governorate, would continue to operate with seats that are allocated based on the population of those regions. Al-Sharaa stated that the international community and independent election monitors will be invited to oversee the polls, likely in response to concerns over their transparency and legitimacy. The announcement comes amid a surge in violence between Sunni Bedouin tribes and the Druze community in southern Syria, which prompted intervention by Israel (see Sibylline Situation Update Brief – 16 July 2025). As the elections approach, ongoing tensions in the south and east of the country will likely act as flashpoints for further violence, possibly undermining the legitimacy of the democratic process. The displacement of thousands of Druze civilians will highly likely undermine voter registration and electoral planning in Suwayda, exacerbating sectarian divisions and increasing the risk of violence. This will elevate bystander security risks for business and NGO personnel in southern governorates, while increasing conflict risks arising from potential Israeli intervention. Meanwhile, in SDF-controlled areas in the east, particularly Deir ez-Zor (Deir ez-Zor governorate), tensions will possibly escalate between local governance structures, armed militias and the central government (the latter continues to allocate electoral seats despite enjoying limited influence in the region).
- Recent clashes in Iraq underscore the government’s limited control over militant groups; further clashes are likely in the run-up to November’s elections. On 27 July, armed clashes erupted between the Iraqi police and fighters from the Popular Mobilization Forces (PMF) in the capital Baghdad’s Karkh district. At least one police officer was killed, while several other people were wounded. The authorities claimed that militants stormed a Ministry of Agriculture building during the swearing-in of a new director and allegedly attempted to reinstate another official by force. The security forces arrested 14 members of the 45th and 56th brigades of the PMF that are associated with Kata’ib Hezbollah, a US-designated terror organisation. The group has stated that it does ‘not want to escalate’ the situation, moderating immediate conflict and security risks in the capital. Prime Minister Mohammed Shia’ al-Sudani has ordered an investigative committee to assess the incident, which has underscored the government’s limited control over PMF factions (many of which are aligned with Iran and operate outside full state authority). With national elections scheduled for November, rising sectarian and factional tensions will likely exacerbate existing political rifts, including within the PMF. As such, we assess that further violent confrontations between state security forces and PMF factions are likely in the coming months, driving security risks for NGO and business personnel, especially in Baghdad. Escalating violence will possibly drive international pressure on Baghdad to dismantle Iranian-backed groups in Iraq, sustaining the risk of sanctions (which would likely impact the logistics and banking sectors and drive operational disruption risks for the energy sector).
- Iran: Separatist attack underscores security risks in eastern provinces, tensions with Pakistan. On 26 July, the Baloch secessionist militant group Jaysh al-Adl (JaA) conducted a small arms attack on a courthouse in Zahedan, the capital of Sistan and Baluchistan province. Militants killed at least six individuals and injured 28 others, marking the province’s highest casualty attack since October 2024. The attack underscores JaA’s capacity to launch sporadic attacks targeting judicial, police and security force installations within the province’s major cities, despite a moderate decrease in attack frequency in recent months. In the coming weeks, JaA militants will highly likely continue conducting ambush attacks targeting security and police force convoys, increasing threats to staff during overland movement through rural areas. In October, JaA will also likely attempt to launch higher-capacity attacks targeting state installations in major cities to mark the anniversary of the 2022 Zahedan massacre (see Sibylline Extremism Watch – Baloch Militancy). We assess that escalating JaA activity will possibly disrupt operations at the Chabahar free port (Sistan and Baluchistan) and will also likely aggravate bilateral tensions with Pakistan, though major escalation remains unlikely at present.
- Iraq: Clashes underscore government’s limited control over militant groups; further clashes are likely. On 27 July, armed clashes erupted between the Iraqi police and fighters from the Popular Mobilization Forces (PMF) in the capital Baghdad’s Karkh district, killing at least one police officer. The authorities said militants stormed a Ministry of Agriculture building during the swearing-in of a new director. The security forces arrested 14 members of two PMF brigades associated with Kata’ib Hezbollah, which the US has designated as a terror organisation. The incident underscores the government’s limited control over PMF factions, many of which are aligned with Iran and operate outside full state authority. With national elections scheduled for November, rising sectarian and factional tensions will likely exacerbate existing political rifts, including within the PMF. As such, further violent confrontations between the state security forces and PMF factions are likely in the coming months, driving security risks for NGO and business personnel, especially in Baghdad. We assess that escalating violence will possibly drive international pressure on Baghdad to dismantle Iran-backed groups, sustaining the risk of sanctions against Iraq this year.
Jul 25.
- Yemen: Security risks to vessels will persist throughout coming months. On 24 July, the UK Maritime Trade Operations office confirmed that the Yemeni coast guard temporarily detained the Comoros-flagged and Greek-owned livestock carrier Merinos. This came shortly after armed men in a wooden boat fired at the vessel, 35 nautical miles (65km) south-west of Hudaydah Port (Al Hudaydah governorate). The ship was originally heading to the Saudi port of Jeddah but was rerouted towards the Yemeni port of Mokha (Taiz governorate) and later released by Yemeni naval forces. The coast guards likely detained the ship because its automatic identification system (AIS) tracking was turned off. It is still unclear whether the armed men who opened fire against the vessel are part of the coastal guard forces or local pirates. Nevertheless, the incident underscores persistent threats to vessels traversing Yemeni waters, including in non-Houthi-controlled regions. We assess that these risks are particularly high along alternative routes outside of the established maritime security corridor through Bab-el-Mandeb Strait. Furthermore, despite a decrease in Houthi hostilities against commercial vessels, risks of hijacking, misfire and collateral damage will remain elevated throughout the coming months. (Source: Sibylline)
29 Jul 25. UK surrenders maritime security role in the Middle East. London recently acceded to the US-Bahrain C-SIPA agreement but will now reportedly reduce its presence in the Middle East. In mid-June, the UK formally acceded to the Comprehensive Security Integration and Prosperity Agreement (C-SIPA), a framework aimed at fostering cooperation in the Middle East, with defence and security its first-listed priority. However, reports, including recently by The Telegraph, persist in claiming that the Royal Navy’s current forward-deployed Type 23 frigate in Bahrain, HMS Lancaster, will head back to UK waters following the completion of its deployment, without replacement. Would this be the case, it would bring to an end a decades-long presence of a major UK surface combatant in the region, first through the Armilla Patrol and latterly via Operation Kipion. In that eventuality, the UK Royal Navy’s presence in Bahrain and its function in the region, would have all but ended in a practical sense. The 2024 collision of two Royal Navy mine countermeasures vessels (MCMV) and subsequent withdrawal from Bahrain, and the departure of the landing platform dock RFA Cardigan Bay, has left the UK with a single vessel, the Hunt-class MCMV HMS Middleton, alongside at UK Maritime Component Command, the UK’s naval headquarters in the region. On the reported departure of HMS Lancaster from the region without replacement, a UK Ministry of Defence (MoD) spokesperson told Naval Technology that Operation Kipion was the country’s “long standing presence in the Gulf”.
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“We remain steadfast in our commitment to promoting stability and peace in the Middle East by working closely with our allies and partners to strengthen regional security through enhanced defence integration and interoperability,” the MoD spokesperson said.
What did UK warships do in the Middle East?
Usually a general-purpose variant, the deployment of a Type 23 frigate to the Middle East offered the UK the opportunity to interoperate with the US Fifth Fleet, also based in Bahrain, where the Royal Navy’s MCMV force was also highly valued by US commanders. Indeed, while it was accepted the US did not require the presence of a UK surface combatant in the region, the capability of the Royal Navy’s mine hunting force would see it take the lead in countering any action by Iran to close the strategic Strait of Hormuz via such means. Rather, the Type 23 served as a contributor for the Combined Maritime Forces in the region, a multinational structure performing a range of missions in the Gulf, Arabian Sea, and Indian Ocean. This includes drug busts, with HMS Lancaster performing two such intercepts during its deployment, destroying tens of ms of pounds worth of narcotics bound for the global market.
A secondary benefit was the frigate’s ability to conduct port visits in friendly GCC countries such as Oman, entertaining diplomatic guests on regular port visits.
Should HMS Lancaster return to UK waters without replacement, these combined hard and soft powers will be gone.
What is the C-SIPA?
According to the US State Department, the C-SIPA is intended to form a framework to bolster mutual deterrence against “external threats” and expand cooperation to advance security and stability in the region. Originally signed by the US and Bahrain in September 2023, C-SIPA provided the ability to add in new signatories, of which the UK became a party in June 2025. The US State Department, in a 17 July media note, stated the three parties of C-SIPA “reaffirmed their desire” to strengthen strategic cooperation under the agreement’s three pillars: defence and security; economic, commercial, and trade; and science, technology, and network security. The US, UK, and Bahrain would begin to form working groups to determine how best to fulfil the goals of the agreement. Sans a regional naval component, the UK could struggle to offer anything meaningful when it comes to maritime security. If the ending of major UK naval presence in the Middle East has been long planned, then the UK government’s December 2024 statement claiming to be a “reliable partner standing with the US and Bahrain” appears less than credulous.
Is the UK’s global influence finished?
However, the signing of C-SIPA by the UK comes at a time of diminishing military presence overseas and at home. The UK Armed Forces are at their smallest for hundreds of years, with the Royal Navy below the threshold for what was previously considered the minimum viable force. The British Army is similarly reduced, and recently revealed to have given up its entire AS90 155mm artillery force. Hundreds, potentially thousands, of military vehicles, including tanks, have also been gifted to Ukraine. Clearly, the UK’s defence and security contribution to C-SIPA, while only one part of the wider mission, has nearly vanished in the naval domain as vessels are called back to home waters for disposal or to prioritise homeland security tasks. Absent a clear indication from the UK about the future of composition of its naval deployment to the Middle East, London’s position as a viable partner for regional countries and US forces may well be called into question. (Source: naval-technology.com)
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