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Military And Security Developments
Dec 12.
- Middle East, North Africa and Turkey: Increased Hamas-linked cyber espionage risks for public sector. On 11 December, the cyber security company Palo Alto reported that a Hamas-affiliated cyber threat group (‘Ashen Lepus’) has consistently targeted government entities in the Middle East, North Africa and Turkey region in cyber espionage operations since the onset of the Israel-Hamas war in late 2023 at least. The group deploys social engineering techniques to distribute a PDF file that tricks victims into downloading and opening a file archive. The archive contains a malicious loader that ultimately executes the main payload (‘AshTag’) onto compromised systems via a multi-phase process. AshTag acts as a backdoor to perform system reconnaissance, maintain prolonged persistence and execute remote commands likely for espionage. In recent operations, Ashen Lepus has used new domains which mimic legitimate services to allow their command-and-control (C2) infrastructure to obfuscate malicious traffic. Consequently, we assess that government entities in the region will face increased security and cyber espionage risks from the continued expansion of Ashen Lepus’ operations.
- Israel-Lebanon: US warning highlights possible strikes in Lebanese capital Beirut in January 2026. On 11 December, Lebanese Hizballah (LH)-affiliated media reported that US envoy Morgan Ortagus has warned of Israeli strikes in the Beqaa Valley and the capital Beirut’s Dahieh suburb if LH fails to hand over its drones and precision missiles by 1 January 2026. This highlights Israel and the US’ increasing pressure and hostile rhetoric in response to the Lebanese government’s perceived lack of progress towards LH disarmament. The warning comes despite announcements by officials in the UN Interim Force in Lebanon (UNIFIL) that LH disarmament south of the Litani River is at 90% and will be finalised by the end of the year. We assess that Israel will likely intensify and increase the frequency of its strikes in early 2026, expanding their range and targets including into the Beqaa Valley (north of the Litani River). Furthermore, we assess that strikes in southern Beirut’s Dahieh suburb are a realistic possibility, elevating the risk of armed conflict. Nevertheless, the immediate collapse of the ceasefire with LH remains unlikely.
- Israel-Lebanon: US warning highlights possible strikes in Lebanese capital Beirut in January 2026. On 11 December, Lebanese Hizballah (LH)-affiliated media reported that US envoy Morgan Ortagus has warned of Israeli strikes in the Beqaa Valley and the capital Beirut’s Dahieh suburb if LH fails to hand over its drones and precision missiles by 1 January 2026. This highlights Israel and the US’ increasing pressure and hostile rhetoric in response to the Lebanese government’s perceived lack of progress towards LH disarmament. The warning comes despite announcements by officials in the UN Interim Force in Lebanon (UNIFIL) that LH disarmament south of the Litani River is at 90% and will be finalised by the end of the year. We assess that Israel will likely intensify and increase the frequency of its strikes in early 2026, expanding their range and targets including into the Beqaa Valley (north of the Litani River). Furthermore, we assess that strikes in southern Beirut’s Dahieh suburb are a realistic possibility, elevating the risk of armed conflict. Nevertheless, the immediate collapse of the ceasefire with LH remains unlikely.
- Israel-Palestinian Territories: Storm Byron will continue driving disruption, humanitarian risks. On 11 November, Storm Byron made landfall in Israel and the Palestinian Territories, causing widespread disruption in Israel and undercutting humanitarian conditions in Gaza. At least one person has died in Israel and one individual is reported missing. In Gaza, at least 12 people have died, with several buildings collapsing and informal shelters flooding. The heavy rains and strong winds are likely to continue until at least 13 December. The flooding on roads will increase disruption to overland transport and raise the risks of injuries and collisions from debris caused by damaged infrastructure. The increased disruption to supply chains will possibly affect aid deliveries to Gaza and complicate aerial military operations within the territory, reducing the outlook for helicopter and drone support. Furthermore, the flooding will heighten the risk of water contamination and the spread of infectious diseases, which will likely compound the already elevated health threats and humanitarian conditions across the strip. Power outages are likely across Israel, Gaza and the West Bank in the coming days, increasing energy security risks and business disruption.
Dec 10.
New Iraq government
Key points
- A government led by current Prime Minister Mohammed Shia al-Sudani is the most likely outcome following Iraq’s parliamentary elections. However, there remains a possibility that a less contentious candidate from within the Coordination Framework (CF) alliance will be selected. Negotiations are likely to delay the formation of a government for two months.
- This delay will substantially disrupt investment, impeding access to government and bureaucratic services, while the possible success of an Iran-backed candidate will raise policy risks and the prospect of more stringent US sanctions.
- There has not been a meaningful decline in Shia cleric Muqtada al-Sadr’s influence, despite limited engagement with his election boycott. He will continue to use his position to augment anti-government protests, particularly over economic issues, as he attempts to burnish his credentials as an alternative authority figure.
Context
On 18 November, Iraq’s Independent High Electoral Commission (IHEC) announced that the Reconstruction and Development Coalition (RDC), led by the current caretaker Prime Minister Mohammed Shia al-Sudani, had secured 46 seats out of the 329 seats, making the largest party in the legislature (see Figure 1). Sizeable blocs were also won by the Progress party (Taqadum), led by Sunni former parliamentary speaker Mohammed al-Halbousi, and the State of Law coalition, led by Shia former prime minister Nouri al-Maliki. Notably, voter turnout significantly exceeded levels in the 2021 polls, reaching 56.11% despite a boycott by the Sadrists, the prominent Shia political and religious movement led by Muqtada al-Sadr. However, no party or bloc secured enough support to form a government, compelling an inevitable coalition-building process as we previously forecast (see Sibylline Situation Update Brief – 4 November 2025). Subsequently, the ruling Shia-led CF alliance (which includes the RDC) declared that it constituted the largest parliamentary bloc, positioning itself as a central force in government formation and parliamentary negotiations. By 28 November, the CF had already initiated the long process of nominating a candidate for the premiership.
Forecast
Despite al-Sudani’s relatively strong position, resistance from within the CF to the extension of his tenure will likely prolong government formation talks for the next two months. Al-Sudani’s role as head of the largest party within the CF will likely ensure his authority within the alliance and see him form the new government. However, the growth of significant rifts between him and other prominent Shia figures in the CF over the last three years will drive the possibility that the CF ultimately chooses another, less contentious political figure from within the alliance. The most prominent alternatives to al-Sudani are likely former prime minister Nouri al-Maliki; Basim al-Badri, head of the Accountability and Justice Commission; and the powerful Basra Governor Asaad al-Eidani, who was previously marketed by the CF as a reformist technocrat. An attempt to replace al-Sudani as head of the government is also likely to be supported by Iran, given al-Sudani’s attempts to limit the power of several Iranian proxy groups. However, there is a limited possibility that al-Sudani will mitigate this by seeking an arrangement with Tehran and its Iraqi proxies by appointing Iran-backed figures to strategic ministries (such as energy and finance). In any case, ongoing rifts within the CF, Iranian influence and the threat of US sanctions are likely to extend government formation talks to around two months. A prolonged government formation process will increase policy risks and disrupt business engagement with state services until the end of January 2026, impacting the flow of new foreign investment
Prolonged government formation negotiations, compounded by simultaneous talks among the Sunni and Kurdish blocs to choose the parliamentary speaker and the country’s president, respectively, will drive policy risks and disrupt business engagement with the state bureaucracy until at least the end of January 2026. Such conditions are likely to impact foreign direct investment (FDI) flows, partially delaying new deals and/or market entry attempts throughout the next two months and thereby increasing socio-economic pressure on the caretaker government. This delay in new FDI, as well as compliance risks for existing foreign investors, will significantly increase if the CF selects an Iran-backed figure to form a new government or appoints Tehran’s allies to strategic ministries and public companies. There is an increasing risk that the US will apply sanctions to any new Iran-backed government officials in 2026, as well as local companies in the energy, finance and logistics sectors, where Iran’s proxies still hold significant influence. Any new sanctions will likely impact Iraq’s energy exports, undercutting the new government’s primary source of revenues and, in turn, increasing the risk of domestic unrest and instability throughout 2026. However, a government led by al-Sudani will partially mitigate such risks, as he is highly likely to establish a balanced approach between Iranian and US interests in Iraq. This will likely be achieved by reducing the autonomy of the Iran-backed militias through a mix of institutional incentives and selective coercion, while also increasing Iraq’s security co-ordination with the US.
Muqtada al-Sadr will remain an influential figure, capitalising on governmental instability to bolster his image as an alternative source of authority, driving risks of unrest and sporadic intra-Shia clashes
Muqtada al-Sadr’s Sadrist political organisation and its military wing, Saraya al Salam (SAS), will likely ensure that he remains a prominent figure in Iraqi politics. Regardless of who leads the new government, al-Sadr will continue to position himself as an alternative source of national authority with cross-sectarian popularity in Iraq. His influence will likely primarily be exercised through calls for further protests against the new government as well as through associated Iranian proxies, in particular seeking to amplify socio-economic disruption by unions, students and public workers, which is likely to continue in 2026. Al-Sadr will also continue to widen his political base by demanding to abolish the Muhasasa power-sharing system, which distributes cabinet positions among the three main ethno-religious communities (Kurdish, Shia and Sunni) based on their share of parliamentary seats. Such unrest risks will likely be particularly elevated if the CF chooses an Iran-backed government in the coming months. This will drive the risk of intra-Shia political violence, including clashes, particularly around SAS offices and headquarters in Baghdad, as well as in Basra, Diyala and Najaf governorates.
KEY DEVELOPMENTS
IRAN
- The Iranian rial (IRR) fell to a record low on 8 December, underscoring increasing threats to socio-economic health and government stability.
- The trial of an unidentified European national in Iran underscores the persistent risk of surveillance, harassment and detention for foreign nationals.
ISRAEL
- A car ramming of ultra-Orthodox protesters highlights the elevated ethno-religious tensions and increased risk of violence.
PALESTINIAN TERRITORIES
- GAZA STRIP: Storm Byron will degrade humanitarian conditions further across the strip, driving population health and environmental impact risks.
- WEST BANK: The Israeli police raided the offices of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) in East Jerusalem, underscoring risks of further scrutiny and operational restrictions targeting the agency.
- WEST BANK: The Israeli government’s proposed 2026 budget underscores increasing pressure on the implementation of the Oslo Accords amid broader efforts to bolster the IDF’s presence in the northern West Bank.
- WEST BANK: The Israeli government’s budget allocations for settlement expansion will likely embolden settlers in pursuing violent confrontations with Palestinian communities in the northern West Bank.
- PALESTINIAN TERRITORIES: The resumption of commercial deliveries from Jordan via the Allenby Bridge will moderate disruption to trade in the West Bank, though it is unlikely to improve humanitarian conditions in Gaza substantially.
Dec 09.
- Yemen: STC operation raises government stability, conflict escalation risks; PLC collapse is possible. On 8 December, the UAE-backed Southern Transitional Council (STC) announced that it had expanded its presence across all of Yemen’s southern provinces, including Aden (Aden governorate), which is the seat of the internationally recognised government. Furthermore, thousands of STC-aligned troops have reportedly advanced into Al-Mahrah governorate in recent days, following a STC operation in eastern Hadhramaut governorate targeting Arabia Saudi-backed tribal forces. The local officials have reported that the Saudi-led coalition briefly closed Yemen’s airspace on 8 December; this was likely intended as a warning to STC separatists and to signal the possibility of third-party intervention. The STC has claimed that senior figures from other factions within the Presidential Leadership Council (PLC) have left Aden. If this information is accurate, this will heighten government stability risks, driving the PLC’s possible collapse and the emergence of the STC as southern Yemen’s dominant governing and military force. Such a development will significantly increase the likelihood of Yemen progressing towards partition, heightening conflict escalation risks among southern factions, as well as between southern factions and the Iran-backed Houthis in north-western Yemen.
- Syria: Strike will increase operational disruption risks in coastal region throughout this week. On 8 December, ethnic-Alawites in several Alawite-majority areas of Latakia and Tartus governorates and across rural towns in Hama governorate launched a general strike, prompting several commercial businesses to close. The five-day strike was called by Alawite cleric Al-Sheikh Ghazal to denounce violence against the ethno-religious community, following clashes with government-aligned tribal groups in November and amid nationwide celebrations of Liberation Day beginning on 8 December (marking one year since former president Bashar al-Assad’s ousting). Groups from additional sectors are likely to join the strike in the coming days, including logistics and the public sector. As such, there is a realistic possibility of partial operational disruption in the port of Tartus (Tartus governorate) this week, particularly impacting the logistics and transportation sectors. We assess that this disruption risk and the security instability in Tartus and Latakia governorates will increase in the coming days. Clashes between Alawite and pro-government demonstrators remain a realistic possibility during Liberation Day celebrations, which are likely to continue into mid-December. Furthermore, violent clashes will likely prompt an extension of the strike, though it is currently unlikely.
Dec 08.
- Syria: Visa’s return will increase investment confidence, though socio-economic pressure will persist. On 4 December, Syria’s central bank signed an agreement with Visa to resume its operations in the country after a decade-long pause. Visa stated that it will implement a roadmap designed to help Syria rapidly integrate into the modern global digital economy, including issuing payment cards and enabling digital wallets. Visa also announced that its immediate priority in Syria will be to help licensed financial institutions develop a robust and secure payments foundation. Notably, the move comes months after a similar agreement with Mastercard and the return of SWIFT operations to Syria, underscoring the authorities’ ongoing efforts to rebuild the financial ecosystem. These developments are a positive sign of economic recovery and will likely increase investor confidence. However, we assess that the country’s major security instability and persistent armed conflict risks in north-eastern and southern areas will likely sustain a highly volatile Syrian market throughout the first half of 2026. This is likely to partially hinder the flow of foreign capital to Syria throughout this period, sustaining overall socio-economic pressure
- Tunisia: Anti-government protests highlight democratic backsliding, business reputational risks. On 6 December, hundreds of protesters in the capital Tunis demonstrated against President Kais Saied’s crackdown on opposition politicians, journalists and civil society groups. Protesters accused the president of using the judiciary and police to suppress his opponents; the demonstration came days after (28 November) authorities sentenced 40 opposition politicians to between five and 45 years on highly likely politicised charges. As the crackdown persists, further protests are likely in major urban centres such as Tunis, Sfax (Sfax governorate) and Sousse (Sousse governorate), increasing domestic unrest risks and the likelihood of sporadic clashes between the authorities and protesters. Additionally, Tunisia’s largest trade union, the Tunisian General Labour Union (UGTT), has called for a nationwide strike over repression and wages on 21 January, prolonging unrest risks. The security forces are likely to arbitrarily detain protesters, raising exposure risks to nearby personnel. Further detentions of opposition figures and journalists are possible in the coming weeks, heightening regulatory and compliance risks for businesses and individuals in the media sector. This will also raise reputational risks for state-associated businesses, increasing their exposure to boycotts and diminished consumer interest.
(Source: Sibylline)
06 Dec 25. UAE-Backed Forces Claim Full Control of Southern Yemen. The UAE-backed Southern Transitional Council (STC) claims full control of southern Yemen, including Aden, the seat of the internationally recognized government. STC official Amr al-Bidh said its forces now oversee all eight southern governorates and are consolidating power to stabilize the region and counter the Houthis.
“We are concentrating on unifying the operational theatre of our armed forces to enhance coordination and readiness to reinforce stability and security in the south, as well as combatting the Houthis should there be a willingness to head in this direction,” al-Bidh said.
Reports say the move could pave the way for the South to declare independence, potentially restoring Yemen to two separate states for the first time since 1990. Yemen’s Presidential Council head Rashad al-Alimi, who briefed diplomats in Riyadh on Sunday, said Monday that the STC’s actions in the south “undermine the legitimacy of the internationally recognised government” and breach power-sharing agreements. A UAE official told Reuters on Monday that the country’s position on Yemen “is in line with Saudi Arabia in supporting a political process” based on Gulf-backed initiatives and United Nations resolutions. The official did not comment directly on the STC’s actions in southern Yemen. (Source: https://www.sofx.com/)
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