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Military And Security Developments
Sep 25.
KEY DEVELOPMENTS
IRAN
• Iranian Supreme Leader Ali Khamenei has explicitly ruled out further negotiations with the US, meaning that UN sanctions will almost certainly be re-implemented in the coming days.
• Iran’s efforts to re-develop its nuclear and missile programmes will sustain the risk of a resumption in Israeli airstrikes in the medium-to-long term.
ISRAEL
• A second Houthi drone strike in Eilat (Southern district) in seven days highlights the elevated security risks facing the city (and wider district).
PALESTINIAN TERRITORIES
• GAZA STRIP: The IDF’s intensification of its military operations in Gaza City will elevate the risks for hospitals and other humanitarian facilities.
• GAZA STRIP: US President Donald Trump has reportedly discussed a new post-war governance plan for Gaza, though the prospects for the establishment of a ceasefire in the short term remain low.
• WEST BANK: BANK: The closure of the Allenby Bridge border crossing will elevate economic and security risks in the West Bank.
IRAN
• Iranian Supreme Leader Ali Khamenei has explicitly ruled out further negotiations with the US, meaning that UN sanctions will almost certainly be re-implemented in the coming days. On 22 September, Khamenei gave a televised address in which he emphasised his opposition to further negotiations with the US, stating that further engagement would harm Iran’s national interests. As such, the resumption of talks with the US – i.e. the E3’s (France, Germany and the UK) key condition for an extension of sanctions relief for Iran – is highly unlikely in the coming days. The reimplementation of UN sanctions is therefore highly likely after the current sanctions-relief guarantees expire on 30 September. This will include the re-imposition of a weapons embargo on Iran, as well as asset freezes, travel bans and financial sanctions targeting specified Iranian entities and individuals associated with Tehran’s nuclear and ballistic missile programme (see Sibylline Special Report – 28 August 2025). The re-imposition of sanctions would significantly increase compliance concerns and sanctions-exposure risks for regionally engaged firms, particularly in the shipping, logistics and technology industries. Increasing economic pressure on Iran would also likely trigger an escalation in hybrid threat activity targeting states that enforce UN sanctions, while also elevating the risk of further cyber attacks, vessel hijackings in the Persian Gulf and intensified espionage campaigns in the coming months.
• Iran’s efforts to re-develop its nuclear and missile programmes will sustain the risk of a resumption in Israeli airstrikes in the medium-to-long term. On 22 September, the head of Iran’s Atomic Energy Organization (AEOI) travelled to Russia to discuss nuclear co-operation. They signed an agreement to build at least eight additional nuclear power plants, including four plants at the Russian-built Bushehr Nuclear Power Plant (Bushehr province). Considering Iran’s repeated threats to withdraw from the Non-Proliferation Treaty (NPT) in the event of the reimplementation of UN sanctions, co-operation with Russia will sustain concerns that Iran seeks to leverage its expanding civilian nuclear programme to advance its weaponisation capabilities without international oversight. On 23 September, the Associated Press published satellite imagery indicating that Iran has begun reconstructing solid-fuel missile-manufacturing sites at the Parchin (Tehran province) and Shahroud (Semnan province) military complexes. Taken together, these developments will likely compound international concerns regarding the status of Iran’s nuclear programme, particularly as international access to nuclear facilities remains extremely restricted. Such concerns and the redevelopment of Iran’s ballistic missile-production capacities will sustain elevated regional tensions, as well as the risk of resumed Israeli airstrikes targeting nuclear and military facilities in the medium-to-long term.
ISRAEL
• A second Houthi drone strike in Eilat (Southern district) in seven days highlights the elevated security risks facing the city (and wider district). On 24 September, an explosives-laden Houthi drone struck the Club Hotel Eilat, injuring over 20 people. According to initial investigations, Israeli air defences detected the drone only after it successfully infiltrated Israeli airspace, likely due to its low flight altitude. Its altitude also negated the effectiveness of fighter jets and likely prevented two Iron Dome interception missiles from countering the ordnance. This is the third Houthi drone to penetrate Israeli air defences in the past month; one drone crashed near the Jacob Eilat Hotel (Eilat) on 18 September, while another hit Ramon Airport (ETM) on 7 September (both Southern). These incidents highlight the Houthis’ growing capacity to evade air defences in southern Israel, and therefore the elevated security risks facing personnel and assets in the area. Following the latest incident, local media reported on 25 September that the Israel Defense Forces (IDF) will deploy its new laser-based air defence system (‘Light Shield’) in Eilat (see Sibylline Middle East Crisis Update – 29 May 2025). However, despite this new deployment, security risks stemming from Houthi ordnance and shrapnel will remain elevated across the district – and particularly Eilat – in the coming weeks. In addition to the deployment of Light Shield in the coming weeks, Israel is likely to lower its threshold even further for triggering warning sirens in southern Israel, increasing their frequency (and exacerbating operational disruption as a result). Furthermore, the latest attacks will increase the likelihood of event and travel cancellations during the Jewish High Holidays, driving financial losses for businesses in the hospitality and tourism sectors operating in southern Israel (and particularly Eilat).
PALESTINIAN TERRITORIES
• GAZA STRIP: The IDF’s intensification of its military operations in Gaza City will elevate the risks for hospitals and other humanitarian facilities. Earlier on 25 September, the IDF confirmed that it conducted airstrikes against more than 170 targets across Gaza over the past 24 hours, while Divisions 98 and 162 continue their advance deeper into Gaza City. Additionally, on 24 September, the IDF published footage of militants firing live rounds from within the Shifa Hospital in Gaza City. The publication points to the elevated risk of IDF strikes targeting the hospital in the coming days, as well as likely ground operations in the coming weeks. These will significantly increase security risks for medical and NGO personnel (as well as patients within the hospital compound) due to misidentification, misfire and the impact of blasts. Security risks will also remain elevated at other hospitals and humanitarian facilities within Gaza – particularly those within Gaza City – in the coming weeks.
• GAZA STRIP: US President Donald Trump has reportedly discussed a new post-war governance plan for Gaza, though the prospects for the establishment of a ceasefire in the short term remain low. On 23 September, President Donald Trump met with the leaders of eight Arab and Muslim-majority countries to discuss a proposal to end the Israel-Hamas war and establish a post-war governance framework for Gaza. Details of the proposal have not been publicly disclosed. However, reports indicate that it centres on establishing a permanent ceasefire in Gaza in exchange for the release of all remaining Israeli hostages, a phased IDF withdrawal, the deployment of a joint Palestinian-Arab-Muslim-majority state security force and the establishment of a new administration with limited involvement from the Palestinian Authority (PA). Trump also reportedly stated that he will not allow Israel to annex the entirety of the West Bank, amid increasing concerns that Israel will retaliate to growing international recognition of an independent Palestinian state (see Sibylline Situation Update Brief – 19 September 2025). The meeting underscores the Trump administration’s increasing efforts to broker a ceasefire in Gaza. However, Hamas is unlikely to agree to the proposal, as Israel will likely condition its acceptance of a permanent ceasefire on Hamas agreeing to disarm and demobilise. As such, we assess that Israel will almost certainly continue to intensify ground operations in Gaza (particularly Gaza City) in the coming weeks.
• WEST BANK: The closure of the Allenby Bridge border crossing will elevate economic and security risks in the West Bank. On 23 September, the Israel Airports Authority announced the closure of the Allenby Bridge (King Hussein Bridge) border crossing until further notice. The closure follows a shooting attack at the crossing on 18 September, which killed two Israeli soldiers (see Sibylline Middle East Crisis Update – 18 September 2025). The key crossing is the only connection between the West Bank and Jordan; as such, the closure will highly likely impact Palestinian businesses in the West Bank, particularly those in the agriculture and retail sectors. The closure will likely further increase socio-economic pressure on the PA, exacerbating existing economic and security risks. Furthermore, reduced economic activity (and employment potential) will elevate radicalisation risks among the local Palestinian population, particularly younger demographics, driving the risk of attacks as long as the crossing remains closed. The closure of the Allenby Bridge crossing will also increase travel disruption at other crossings from Jordan into Israel due to the diversion of trucks, increasing supply chain delays and further disruption. In Jordan, partial disruption to several fresh produce imports from the West Bank is almost certain, likely prompting the government to increase imports (slightly) from other regional markets (particularly Egypt and Lebanon) at a higher cost. However, this is unlikely to impact Jordan’s economy or market significantly.
RED SEA
• An intensification of Israeli strikes against Houthi targets in Yemen is almost certain in the coming days; pre-strike warnings are unlikely. Earlier on 25 September, Israel conducted intense strikes against several Houthi targets in Sanaa (Yemen) in response to the Houthis’ drone attack in Eilat (see above). Previously, Israel would typically publish an evacuation warning between one and three hours before the strike; by contrast, there was no prior warning for the latest strike. It is almost certain that Israel will continue to intensify its strikes against Houthi targets in the coming days. Further strikes without prior warning in the coming days are also possible, particularly against targets in Sanaa and other population centres. Israeli strikes are likely to target critical and dual-use infrastructure, including factories, fuel depots, logistic hubs, ports, power stations and warehouses within Houthi-held territory. There is a realistic possibility that any such strikes would also target government facilities, elevating collateral risks for personnel in Houthi-held territories due to blasts, building collapses, shrapnel and stampedes during evacuations. Long-term power cuts are also likely, as is deteriorating food security due to supply chain disruption.
• An attack against a vessel off the Yemeni coast highlights the persistently elevated security risks across the Gulf of Aden and Red Sea. On 23 September, UK Maritime Trade Operations (UKMTO) reported an attack against a vessel located approximately 120 nautical miles (222km) east of Aden (Aden governorate, Yemen). The crew of the unnamed vessel reported an explosion in their vicinity, though they were able to proceed safely to the next port of call. No group took responsibility for the attack, which comes amid a sustained threat of attacks against shipping in the Red Sea by the Iranian-backed Houthis (underscoring their likely involvement). The attack highlights the continued elevated risks facing vessels, cargo and crew in the Gulf of Aden and the Red Sea, sustaining supply chain disruption risks and elevated financial costs for shipping companies operating in the area.
REGIONAL AND GLOBAL DEVELOPMENTS
Israel-Italy-Spain: The presence of Italian and Spanish naval vessels escorting the Gaza flotilla will exacerbate existing diplomatic tensions with Israel; however, confrontation with the IDF is highly unlikely. On 24 September, the Italian navy sent two ships to escort the Global Sumud Flotilla (GSF), hours after a claim by its organisers that a drone attacked the Gaza-bound vessels south of Crete (Greece). The alleged attack caused minimal damage to five vessels (and no injuries). The Italian defence minister, Guido Crosetto, stated that the primary goal of the naval force is to assist Italians aboard the flotilla; he urged activists to abandon plans to breach the Israeli blockade on Gaza. Similarly, Spain also announced on 24 September that it sent a ship to escort the flotilla. Nevertheless, while these moves will increase the ongoing tensions between Israel and the two EU members (particularly Spain), we assess that a confrontation between the IDF and the naval ships escorting the flotilla is highly unlikely. We assess that the Italian and Spanish naval vessels will likely cease their escort prior to reaching Gaza to avoid a significant escalation with Israel. Meanwhile, earlier on 25 September, the GSF warned of an imminent threat from the IDF against its vessels over the next 48 hours, underscoring the heightened risk of IDF interception in the coming days. While the IDF will likely attempt to conduct such an operation peacefully, the possibility of misfire and fatalities remains.
• Lebanon: Security and bystander risks will significantly increase in the capital Beirut during the 18-day commemoration of Hassan Nasrallah’s assassination. Earlier on 25 September, local media reported tensions between the government and Lebanese Hizballah (LH) over the group’s controversial plans to commemorate the anniversary of the assassinations of its former leaders Hassan Nasrallah and Hashem Safieddine. LH had previously announced that it would hold a series of memorial ceremonies between 27 September and 12 October, including major gatherings at Nasrallah’s burial site in Beirut and Safieddine’s grave in Deir Qanoun En Nahr (South governorate). Hundreds of thousands of Shia supporters are highly likely to attend the main LH event in Beirut on 27 September. The largest crowds are likely to congregate in the southern suburbs of the capital, particularly the Bourj el-Barajneh area (where Nasrallah is buried) and possibly also in the area around the Camille Chamoun Sports City Stadium. This is highly likely to cause widespread mobility disruption across Beirut, particularly along Ziad Rahbani Avenue, which links Beirut-Rafic Hariri International Airport (BEY) with the capital’s downtown area. We also assess that there is a realistic possibility of sporadic clashes and altercations between LH members and the Lebanese security forces, particularly if LH elements attempt to organise an armed parade through the city. The risks will be heightened until 12 October (though they will reduce after 27 September). Furthermore, during the 18-day commemoration period, bystanders’ exposure to the security forces’ use of crowd-control tactics will remain elevated near large Shia gatherings in LH strongholds in Ballebek-Hermel, Nabatieh and South governorates.
• Divestment from Israeli state-controlled assets underscores increasing corporate governance risks amid the ongoing escalation of operations in Gaza and the West Bank. On 24 September, Denmark’s AkademikerPension fund announced that it will exclude Israeli sovereign and state-linked securities, citing ‘human rights concerns’ relating to Israeli settlement expansion in the West Bank and the ongoing humanitarian crisis in Gaza. The USD 24.75 billion pension fund, which manages the pensions for staff in Denmark’s education sector, previously held approximately USD 22 million in assets in Booking Holdings and Alstom, two Israeli firms identified in a 2023 UN Human Rights Office report as supporting Israeli settlements in the West Bank. The announcement comes several months after AkademikerPension’s beneficiaries backed a motion calling for a total divestment from Israeli assets due to human rights concerns. The divestment underscores increasing corporate governance and ESG concerns for institutional investors with exposure to Israeli equities, bonds and related interests. In the coming months, scrutiny from beneficiaries and shareholders will increase pressure on high-profile businesses to divest from Israeli-linked interests. This is particularly pertinent for technology firms tendering contracts with the Israeli government, as well as agricultural entities sourcing produce from the West Bank and construction firms supplying Israel’s security forces with demolition and construction equipment. Increasing isolation will likely undermine investor confidence in Israel’s economy more broadly, elevating the risk of capital flight and exacerbating socio-economic pressure in the coming months.
• Israel-Yemen: Retaliatory Israeli action in Yemen is almost certain following Houthi strike on hotel. On 24 September, a Houthi drone strike near the Club Hotel Eilat (Eliat, Southern district, Israel) injured over 20 people. In the past three weeks, a Houthi drone successfully hit Ramon Airport (ETM, Israel) on 7 September while another crashed near the Jacob Eilat Hotel on 18 September (both Eilat). These incidents highlight the Houthis’ growing capacity to evade air defences in southern Israel, and therefore the elevated security risks facing personnel and assets in the area. This will increase the likelihood of event and travel cancellations in and around Eilat during the Jewish High Holidays, driving financial losses in the hospitality and tourism sectors. In the coming days, intense Israeli retaliation against Houthi facilities in Yemen is almost certain. We assess that strikes will target critical infrastructure such as ports and power stations, including in the capital Sanaa. This will heighten security risks for NGO personnel in the country; it will also significantly increase energy security risks, disrupt supply chains and degrade already critical humanitarian conditions in Yemen.
• Iraq: Election campaigns will increase risk of sporadic clashes in coming weeks. On 24 September, limited clashes erupted in Abu al-Khasib district (Basra governorate) between the Iranian-backed Asa’ib Ahl al-Haq and the Saraya al-Salam militia; the latter is the military wing of the Sadrist movement. The clashes injured several individuals. Local media reported that the fighting took place over the placement of campaign posters for candidates running in the upcoming parliamentary elections in November. We assess that further sporadic clashes between Iranian proxies and the Sadrists are likely during the campaign period over the coming weeks, despite the latter not participating in November’s elections. Notably, intra-factional clashes between elements of the Iranian-backed Popular Mobilization Forces (PMF) are also likely; ongoing political rifts and internal competition inside the umbrella group will exacerbate this risk. Such clashes would, in turn, increase security risks in the vicinity of Iranian proxies’ headquarters and electoral events in the capital Baghdad and most major Iraqi cities in October. However, we assess that such altercations are unlikely to evolve into a wider civil conflict.
Sep 23.
• Syria: Memorandum of understanding highlights growing global integration. On 21 September, the Central Bank of Syria and Mastercard signed a memorandum of understanding that establishes a framework for future collaboration on digital payment infrastructure and the issuance of bank cards. The memorandum is non-binding, emphasising the ongoing hesitation of international banks and payment networks to commit fully to investing in the Syrian economy. The Syrian state’s and financial sector’s access to a fully digitalised payment system would possibly facilitate the country’s smoother integration within global financial networks, driving foreign direct investment (FDI). It would also support the growth of the formal economy and encourage the establishment of new international business operations. Over time, we assess this will reduce money laundering, as well as regulatory and compliance risks in Syria. However, the political and security environment remain two key factors that will continue to challenge this trend; their stabilisation will remain necessary for reducing and avoiding said challenges.
• Iraq: Energy deal will reduce socio-economic pressure despite insecurity, political instability. On 22 September, Iraq and the Kurdistan Regional Government (KRG) reached a deal with oil firms to resume Kurdish crude oil exports to Turkey via the Kirkuk-Ceyhan Oil Pipeline following a two-year pause in operations. The Iraqi cabinet is highly likely to grant final approval in the coming hours. However, local media reported that two oil firms have not yet fully agreed to the deal; they are demanding compensation from the KRG over the shutdown. While we assess that the oil pipeline will resume operations within 72 hours, continued political uncertainty in the KRG will sustain threats to the deal, particularly relating to revenue sharing with Baghdad. Nevertheless, the resumption in oil exports will partially reduce socio-economic pressure while also increasing the willingness of foreign companies to invest in this sector in 2026. However, persistent security risks – particularly attacks targeting Kurdish oil fields – will continue to drive market fluctuation and instability in the key sector.
• Italy: Clashes during pro-Palestine general strike highlight persistent ethno-religious tensions. On 22 September, violent unrest broke out in several towns during one of Europe’s largest nationwide pro-Palestine demonstrations. Tens of thousands of people participated in a 24-hour union-led strike demanding the suspension of Italy’s commercial and military ties with Israel, causing widespread cross-sector disruption (including for education, transport and public services). In Milan (Lombardy region), at least ten people were arrested after clashes erupted outside Milano Centrale station. Protesters armed with batons reportedly threw smoke bombs, bottles and stones at the police, who responded with tear gas. The Italian news agency ANSA reported that 60 police officers were injured. Similar clashes occurred outside Naples Centrale station (Campania region) and at a roadblock along the A14 near Bologna (Emilia-Romagna region). Further supply chain disruption has stemmed from dockworkers blocking operations at key shipping ports (including Genoa, Livorno, Venice and Trieste) in an effort to deny the use of Italian ports for arms transfers to Israel. Unlike several other Western European leaders, Prime Minister Giorgia Meloni has ruled out recognising a Palestinian state. As such, we assess that the risk of (smaller) pro-Palestine demonstrations will remain elevated, possibly driving physical risks for Israeli businesses and/or personnel.
• Lebanon- Disarmament plans
Key points
• The disarmament of Palestinian refugee camps will likely continue without major resistance through Q4 2025, though sporadic clashes with radical elements will remain possible.
• The Lebanese Armed Forces (LAF) will likely continue the disarmament of Lebanese Hizballah (LH) south of the Litani River without facing resistance.
• LH will likely resist disarmament north of the Litani River, elevating domestic unrest risks in LH strongholds, particularly in the capital Beirut.
• The LAF will possibly extend the disarmament timeline for LH to avoid major unrest, reducing risks of civil war but elevating tensions with Israel; this will sustain risks of airstrikes, though a ceasefire collapse will remain unlikely.
Context
On 13 September, the Lebanese Armed Forces (LAF) reported that local Palestinian factions based in the refugee camps of Ain al-Hilweh (South governorate) and Beddawi (North governorate) had handed over five truckloads of weapons. The handover is part of a plan to implement a state monopoly over all arms in the country by the end of 2025. Notably, on 5 September, the government approved a disarmament plan targeting Lebanese Hizballah’s (LH) arsenal, despite persistent rejection by LH’s leadership and its cabinet ministers. While details and the exact timeline of the plan have not yet been disclosed, the LAF said that its implementation will depend on available capabilities (which are still limited in terms of logistics, as well as material and human resources).
Forecast
Major unrest within Palestinian camps is unlikely, though small-scale clashes between rogue radical Islamic groups and the LAF will remain possible throughout the disarmament process
We assess that the disarmament of Palestinian refugee camps inside Lebanon will largely remain peaceful. In the coming weeks, the Palestinian Authority (PA) and prominent factions (including Fatah and Hamas) will likely sustain high-level co-ordination with the LAF, mitigating risks of major unrest and clashes. The Lebanese government will possibly allow local camp administrations to keep small arms for policing in their jurisdictions, albeit under strict supervision by the new government. Despite overall co-operation, there is a realistic possibility that small Islamic groups inside these camps (indirectly affiliated with Islamic State and/or al-Qaeda) will reject the disarmament process. This will elevate the risks of sporadic clashes with the LAF and other Palestinian factions, particularly in Ain al-Hilweh and Nahr al-Bared (Akkar governorate).
LH will likely continue to reject full disarmament, prompting its members and supporters to protest in Beirut, increasing bystander and security risks in the coming weeks
Throughout Q4 2025, LAF will likely primarily focus on disarming Palestinian camps, though activities to confiscate LH weapons south of the Litani River (Nabatieh and South governorates) will likely continue. Despite LH’s overall resistance to its disarmament, we assess that the Iran-backed group will seek to retain the current ceasefire with Israel, foregoing resistance to LAF disarmament activities south of the Litani River. However, LH will highly likely continue to reject the full disarmament of its arsenal and military capabilities in regions north of the Litani. The organisation will likely exercise particularly strong resistance in its strongholds in Baalbek-Hermel governorate, Beirut and in regions bordering Syria. As such, LAF is unlikely to conduct major disarmament measures in LH strongholds without a voluntary agreement with the group, mitigating the risks of a major armed conflict and a civil war.
Even so, during the next three months, protest activity by LH members and Shia supporters in the southern suburbs of Beirut will highly likely increase. Such protests will elevate mobility disruption risks near Beirut-Rafic Hariri International Airport (BEY) and the Dahieh area of the capital in the coming months. Smaller protests will be highly likely in cities in Baalbek-Hermel, Beqaa, Nabatieh and South governorates, increasing risks of broader operational disruption. During these events, LH members will possibly attempt a show of force and demonstrate with small arms, increasing risks of altercations with the security forces and/or anti LH factions. As such, LH will highly likely use these protests as a political tool to pressure the government during talks, elevating risks of further unrest and social instability.
The Lebanese government and the LAF will possibly extend the disarmament timeline to between 12 and 18 months, sustaining risks of further tensions and border disputes with Israel until mid-2026
We assess that the government and the LAF will possibly extend the disarmament timeline to between 12 and 18 months to mitigate risks of broad conflict with LH and major unrest. This extension would increase the risks of misfire and elevated tensions between the LAF and Israel in southern Lebanon. Nevertheless, armed conflict between the LAF and Israel is unlikely; the ceasefire between LH and Israel will likely remain in place over the coming six months.
During this period, any initial agreement between LH and the government will highly likely be conditioned upon an Israeli withdrawal from sites in southern Lebanon and/or international guarantees of such withdrawal, as well as the halt of Israeli attacks targeting LH. These demands will likely be the main challenge to any prospective disarmament deal; Israel is unlikely to accept them without significant guarantees and/or pressure from the US. This will sustain risks of Israeli airstrikes in southern Lebanon, but is unlikely to lead to the collapse of the current ceasefire between Israel and LH.
Any disarmament deal with LH will highly likely focus initially on several heavy weapons arsenals in the Beqaa Valley (Beqaa governorate) and Baalbek-Hermel governorate. Later phases of the plan will likely focus on dismantling LH-affiliated smuggling networks along the border with Syria in Akkar, Baalbek-Hermel and Beqaa governorates. This will increase the risks of armed clashes with groups within these networks, increasing bystander security risks in areas near the Lebanon-Syria border. In turn, this will drive elevated operational and supply chain disruption risks, particularly to logistics firms and NGOs relying on movement between Lebanon and Syria. If the government focuses on LH’s heavy weapons and smuggling networks, there is a realistic possibility that it will allow LH to retain its small arms arsenal in Beirut. In this case, the government would likely postpone the handover of this arsenal until after the 18-month period.
Sep 22.
KEY DEVELOPMENTS
IRAN
• The UN Security Council (UNSC) rejected a resolution that would have permanently removed UN sanctions on Iran, underscoring the likely re-imposition of sanctions in the coming weeks.
• Iran tested a medium-range ballistic missile, underscoring the long-term risks of resumed Israeli strike action targeting nuclear and military facilities within Iran.
ISRAEL
• Israel will possibly respond to the international recognition of a Palestinian state by partially annexing the West Bank, increasing compliance, financial and reputational risks for Israeli-linked entities.
PALESTINIAN TERRITORIES
• GAZA STRIP: Israeli military operations in Gaza City will likely continue to intensify in the coming days; sporadic rocket launches against Israeli population centres remain likely.
• GAZA STRIP: The increasing prominence of Israeli-backed, anti-Hamas militant groups will highly likely further undermine security conditions within Gaza.
• GAZA STRIP: Although the Allenby Bridge border crossing has re-opened for general use, the suspension of aid deliveries from Jordan to Gaza will exacerbate food insecurity and the risk of looting targeting aid operations within the enclave.
• WEST BANK: Escalating militant efforts to produce and launch rockets will increase security risks in central areas of the West Bank and likely trigger intensified IDF operations.
• WEST BANK: The increasing international recognition of a Palestinian state will elevate risks of domestic unrest and attacks in the West Bank.
IRAN
• The UN Security Council (UNSC) rejected a resolution that would have permanently removed UN sanctions on Iran, underscoring the likely re-imposition of sanctions in the coming weeks. On 19 September, the UNSC rejected a resolution that would have provided permanent sanctions relief to Iran from 30 September onwards by terminating the pre-Joint Comprehensive Plan of Action (JCPOA) sanctions regime. Unless the UNSC adopts a resolution to extend existing sanctions relief by 30 September, the pre-2015 sanctions regime on Iran will come back into effect. In the coming week, diplomatic efforts to resolve deadlock over Iran’s nuclear programme will almost certainly intensify as regional tensions remain significantly elevated. However, on 20 September, Iran’s Supreme National Security Council (SNSC) announced that the UNSC decision would ‘effectively suspend the path of co-operation’ with the International Atomic Energy Agency (IAEA). The E3 (France, Germany and the UK) have conditioned extending sanctions relief on Iran co-operating with the IAEA, re-entering nuclear negotiations with the US and accounting for its stockpiles of enriched uranium. As such, a breakthrough and subsequent extension of sanctions relief remain unlikely in the coming days. The re-implementation of UN sanctions would substantially increase pressure on Iran’s economy, triggering a further devaluation of the Iranian rial (IRR) and increasing the risk of hybrid Iranian retaliation targeting nations that enforce sanctions. Such retaliation would possibly include measures such as the detention of foreign nationals associated with enforcing countries, vessel hijackings in the Persian Gulf and economically motivated cyber attacks targeting private and public sector entities (see Sibylline Middle East Crisis Update – 18 September 2025).
• Iran tested a medium-range ballistic missile, underscoring the long-term risks of resumed Israeli strike action targeting nuclear and military facilities within Iran. On 18 September, Iran conducted a missile test at the Semnan Space Centre (Semnan province). During the Iran-Israel war, Israel conducted airstrikes targeting this facility due to its close association with the Islamic Revolutionary Guard Corps’ (IRGC) missile-development programme. At the time of writing, the type of missile that Iran tested remains unclear, though footage indicates that Iran possibly tested components of the domestically produced Sejjil-class system, a medium-range ballistic missile capable of reaching Israel. The test comes amid increasing concerns that Iran intends to re-develop its ballistic missile production capabilities rapidly following the Iran-Israel war (see Sibylline Situation Update Brief – 15 July 2025). Further Iranian missile tests and demonstrations of medium- and long-range ballistic missile capabilities will increase the risk of resumed Israeli strike action targeting Iranian nuclear and military facilities in the long term, though rapid escalation into sustained regional conflict remains unlikely.
ISRAEL
• Israel will possibly respond to the international recognition of a Palestinian state by partially annexing the West Bank, increasing compliance, financial and reputational risks for Israeli-linked entities. Following announcements by Australia, Canada and the UK regarding the recognition of an independent Palestinian state (see below), Israeli Prime Minister Benjamin Netanyahu stated that Israel’s response would be ‘forthcoming’. We assess that Israel will likely issue a formal response to growing international recognition after Netanyahu meets with US President Donald Trump on 29 September. In the coming days, hard-right parties within Netanyahu’s coalition government will likely call for the annexation of the West Bank; however, full annexation would severely harm Israel’s diplomatic standing, particularly with Arab nations (including signatories of bilateral peace agreements and the multi-lateral Abraham Accords). Total Israeli annexation of the West Bank would also likely harm the US’ standing in the region and is unlikely to gain substantial support from the Trump administration. As such, we assess that Netanyahu is unlikely to announce the imminent and total annexation of the West Bank. Even so, there is a realistic possibility that Israel will announce plans for a partial annexation of the West Bank, possibly in the Jordan Valley. While partial annexation would reduce the risk of a complete breakdown of Israel’s accords and agreements with regional states, it would almost certainly trigger significant diplomatic backlash from regional and international parties. Retaliatory measures would possibly include limits to bilateral trade with Israel, which would especially impact Israel’s agriculture, chemical and defence industries. Regional states would also possibly move to adopt broader sanctions targeting Israel, including measures targeting Israeli government officials and Israeli-affiliated entities, among other associated individuals. These measures would substantially increase operational and supply chain disruption risks for entities operating within Israel and the West Bank, while also compounding broader compliance, financial and reputational risks for Israeli-linked entities. Increasing international isolation would also increase the risk of capital flight from Israeli markets, impacting the profitability of local companies and Israel’s long-term socio-economic health.
PALESTINIAN TERRITORIES
• GAZA STRIP: Israeli military operations in Gaza City will likely continue to intensify in the coming days; sporadic rocket launches against Israeli population centres remain likely. On 21 September, Gaza-based militants launched two rockets from northern Gaza, triggering sirens in Ashdod (Southern district, Israel). The Israel Defense Forces (IDF) intercepted one rocket while the other fell in an open area without causing any material damage. The launches come amid the ongoing intensification of IDF operations in Gaza. Division 99 is operating in northern Gaza. Divisions 36, 98 and 162 are operating in Gaza City. Division 143 is operating in southern Gaza. In response to advancing IDF operations, militants will likely attempt to use their hidden arsenal before the IDF discovers and destroys it, increasing the risk of sporadic rocket launches in the coming days. However, rocket launches are unlikely to pose significant security risks for Israeli population centres in southern Israel and are unlikely to reach major population centres in central Israel, moderating the risk in cities such as Tel Aviv (Tel Aviv district). In the coming weeks, the IDF will likely continue deepening and intensifying its operations in Gaza City, possibly prompting Hamas to issue renewed ceasefire proposals. However, Israel is unlikely to stop its operations in the short term and is unlikely to agree to engage in negotiations without significant pressure from the US, which remains unlikely.
• GAZA STRIP: The increasing prominence of Israeli-backed, anti-Hamas militant groups will highly likely further undermine security conditions within Gaza. On 18 September, a former member of the Palestinian Authority (PA)’s security agency, Hussam al-Astal, announced the formation of an anti-Hamas armed group in the Khan Yunis area. The announcement comes amid increasing reports from regional media outlets regarding the Israeli-backed formation and mobilisation of several anti-Hamas militant groups within Gaza, such as the Popular Forces (an anti-Hamas militia led by Yasser Abu Shabab). On 17 September, the Haaretz media outlet reported that the IDF and Shin Bet have recently engaged various Gaza-based militant groups to carry out military operations in exchange for pay and territorial control. Although the mobilisation of anti-Hamas militias will possibly contribute to broader IDF efforts to undercut Hamas’ militant and civil enforcement capabilities in the medium term, the devolution of security operations to local militant groups will increase the risk of proliferating inter-militant clashes throughout Gaza. Decentralised and localised clashes between Hamas and anti-Hamas militant groups would increase the risk of attacks and bystanders’ exposure to intense conflict in areas that have not been issued with evacuation orders as well as within the al-Mawasi humanitarian zone (southern Gaza). The increasing prominence of anti-Hamas groups would also increase the risk of Hamas-ordered executions targeting individuals alleged to have ‘collaborated’ with Israel, as reported on 20 September. Such conditions would increase critical threats to life for locally engaged NGO staff and disrupt the continuity of aid supply chains, contributing to the broader deterioration of security conditions throughout Gaza.
• GAZA STRIP: Although the Allenby Bridge border crossing has re-opened for general use, the suspension of aid deliveries from Jordan to Gaza will exacerbate food insecurity and the risk of looting targeting aid operations within the enclave. Following a shooting attack at the Allenby Bridge border crossing (see Sibylline Middle East Crisis Update – 18 September 2025), the IDF Chief of Staff Eyal Zamir announced the indefinite suspension of aid deliveries from Jordan to Gaza via the border crossing. Although deliveries from Jordan accounted for less than 7% of aid deliveries into Gaza from 1 August to 18 September, the suspension will further disrupt aid supply chains and distribution within Gaza, compounding critical food insecurity conditions therein. The resumption of aid deliveries via the Jordan-West Bank-Israel-Gaza corridor would possibly trigger a resumption of anti-aid protests by the hard-right Tsav 9 activist group, increasing the risk of vandalism targeting aid convoys and proximate vehicles transiting this route. Within Gaza, looting and attacks targeting aid convoys remain widespread. UN data indicates that of the approximately 63,000 aid pallets collected from border crossings since 1 August, approximately 50,000 have been intercepted during transit. Such conditions are highly unlikely to improve in the coming weeks, sustaining critical threats to locally engaged NGO staff and compounding the risk of scrutiny for Israeli-linked firms operating worldwide.
• WEST BANK: Escalating militant efforts to produce and launch rockets will increase security risks in central areas of the West Bank and likely trigger intensified IDF operations. On 19 September, the IDF discovered dozens of rockets (without warheads), IEDs and other explosive materials in Ramallah and al-Bireh governorate (West Bank). This comes amid growing efforts by militants in the West Bank to produce rockets and launch them towards Israeli population centres. On 11 September, militants conducted a test launch of a rocket (without a warhead) from Kafr Ni’ma (Ramallah and al-Bireh), which fell near Route 443 (without causing damage). On 15 September, IDF operations in Kafr Ni’ma located an additional rocket (without explosive materials). These developments underscore the increasing risk of rocket launches from the West Bank, particularly during the upcoming Israeli holidays (22-24 September, 1-2 October and 6-14 October). Even so, such rocket launches will almost certainly be limited and sporadic, meaning they are unlikely to present significant security risks for Israeli population centres. However, possible rocket malfunctions will increase security and bystander risks within proximate Palestinian population centres and major thoroughfares within the West Bank. Militant rocket launches are also almost certain to prompt an intense Israeli military response in the surrounding area, including house searches, military cordons, increased checkpoints and limits on transport. Such measures would likely lead to localised travel and operational disruption, while possibly triggering clashes between security personnel, militants and/or suspected perpetrators.
• WEST BANK: The increasing international recognition of a Palestinian state will elevate risks of domestic unrest and attacks in the West Bank. In the coming weeks, the increasing recognition of a Palestinian state (see below) will likely trigger celebratory demonstrations in large cities, particularly Ramallah (Ramallah and al-Bireh governorate), as well as temporary transport and operational disruption. However, this growing international recognition of a Palestinian state will likely exacerbate already-elevated ethno-religious tensions within the West Bank. Among Palestinian communities, the risk of radicalisation and militant recruitment will increase in the coming weeks, as will the risk of attacks targeting Israeli targets in the West Bank and Jerusalem areas. The risk of such attacks will also remain elevated in Israel, though they will be comparatively lower. Among Israeli settlers in the West Bank and pro-settlement extremists within Israel, the risk of attacks targeting Palestinian civilians and population centres will also increase. The Israeli security forces’ efforts to intervene in ongoing attacks will increase the risk of clashes between right-wing extremists and Israeli security personnel. Such clashes would increase the risk of pro-settler protests within Israel (particularly in Jerusalem), as well as domestic unrest affecting IDF bases in the West Bank, exacerbating localised travel disruption and security risks.
REGIONAL AND GLOBAL DEVELOPMENTS
• Israel-global: The growing diplomatic trend of recognising Palestine will increase compliance and reputational risks for global entities dealing with the IDF and Israeli government in Q4 2025. On 21 September, Australia, Canada, Portugal and the UK announced their formal recognition of an independent Palestinian state. French President Emannuel Macron also announced France’s impending recognition on 22 September. We assess that the growing number of Western countries that confirm their recognition of Palestine is highly likely to increase compliance and reputational risks for global entities dealing with the Israeli military and/or Israeli settlers (see above and Sibylline Situation Update Brief – 19 September 2025). Similar risks apply to global businesses already operating in Israel and/or those Israeli firms with which they are partnered, particularly in the shipping, technology, pharmaceuticals and retail sectors. We also assess that IDF operations in Gaza and the possibility of Israel annexing parts of the West Bank (see above) will possibly prompt additional European states to review and amend their trade and co-operation relationships with Israel in the coming weeks, widening the scope of these compliance risks for further European companies dealing with Israel. These companies (particularly those in the defence and/or shipping sectors) will also likely face increasing scrutiny from pro-Palestine activists, increasing the risk of supply chain sabotage, operational disruption and vandalism of assets by radical elements.
• Israel-Palestinian Territories: Western recognition of Palestinian state will drive security risks. On 21 September, the governments of Australia, Canada, Portugal and the UK formally recognised a Palestinian state. Belgium and France are also likely to announce their recognition at the United Nations General Assembly (UNGA) over the course of this week. Israel’s Prime Minister Benjamin Netanyahu stated that he would respond following his meeting with US President Donald Trump on 29 September. The response will likely include withholding funds from the Palestinian Authority (PA), exacerbating its ongoing fiscal crisis and elevating socio-economic health risks in the West Bank. Israel is also likely to accelerate its approval of settlement expansion in the coming weeks, driving diplomatic escalation with its Western partners. We assess that Western recognition of a Palestinian state and subsequent Israeli responses will increase the risk of domestic unrest, sole-perpetrator attacks and militant activity targeting the West Bank in the coming weeks. Furthermore, there is a realistic possibility that Western states will impose sanctions on an increasing number of Israeli entities, possibly disrupting supply chain integrity and raising reputational risks for companies operating in Israel.
• Iran: Possible resumption of sanctions will trigger socio-economic instability, regional tensions. On 19 September, the UN Security Council (UNSC) voted against a draft resolution to permanently lift sanctions on Iran. Consequently, unless Iran meets the criteria laid out under the Joint Comprehensive Plan of Action (JCPOA), the UNSC will reimpose snapback sanctions on 28 September. There remains a possibility in the coming days that the Iranian government would convince the UNSC powers to delay the re-imposition of sanctions in favour of further negotiations. However, there is a realistic possibility of sanction resumption, which will increase compliance and operational disruption risks for financial, technology and shipping firms dealing with the Iranian government, government-linked individuals and private entities. Furthermore, we assess that any re-implementation of sanctions is highly likely to increase Iran’s socio-economic instability through currency devaluation of the Iranian Rial (IRR) and substantial supply chain disruption to imports. In this scenario, Iran will likely withdraw from its recent agreement with the International Atomic Energy Agency (IAEA), increasing regional tensions and risks of resumed Israeli airstrikes in the coming months. (Source: Sibylline)
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