Are Israel, Hamas entering the second phase of the ceasefire?

The first phase of the Gaza ceasefire has been repeatedly undermined: Israel has reportedly breached the truce over 590 times since Oct. 10, with at least 360 Palestinians killed, only a partial troop pullback to an ambiguous “yellow line,” and humanitarian access far below agreed levels (UN agencies report nearly 9,300 children under five with acute malnutrition). Hamas is expected to hand over the last Israeli captive’s body and has signaled conditional willingness to “freeze” weapons to enter a second phase, which Israel’s Benjamin Netanyahu says would be difficult but could begin this month. The US-backed phase-two blueprint envisions technocratic governance overseen by a multinational “Board of Peace” and an international stabilization force to enable demilitarization and reconstruction, but Hamas and other Palestinian groups reject foreign guardianship and the relevant UNSC steps. Political frailty around Netanyahu, active US (Trump) involvement and ongoing Israeli strikes leave the outlook highly uncertain, raising continued security, humanitarian and reconstruction risks for the region and investors.

Analysis

Since the ceasefire began on October 10, the first phase has been widely undermined: the article reports Israel breached the truce more than 590 times, with at least 360 Palestinians killed during the phase and a cumulative Gaza death toll above 70,000 over two years. Israel has only partially pulled back behind an ill-defined “yellow line,” continues strikes and restricts humanitarian access well below agreed levels, and aid agencies report nearly 9,300 children under five with acute malnutrition.

Hamas has signaled limited willingness to facilitate a second phase by handing over the last Israeli captive’s body and discussing a conditional “freeze” of weapons, while Prime Minister Netanyahu said a second phase could begin this month but would be difficult to achieve. The U.S.-backed phase-two framework envisages technocratic governance, a multinational Board of Peace and an International Stabilisation Force, but Hamas and other Palestinian groups reject foreign guardianship and the relevant UNSC measures.

Political fragility—Netanyahu’s domestic position and active U.S. (Trump) involvement—plus ongoing strikes and humanitarian shortfalls create high uncertainty. The provided sentiment is strongly negative (score -0.6) with a modest market impact score (0.35), implying elevated regional risk, potential volatility in related assets and delayed reconstruction timelines until security and governance terms are definitively settled.

Key Decisions for Investors

• Reduce or hedge exposure to Israeli- and Gaza-adjacent assets and regional risk-sensitive positions until clear, verifiable progress on phase two delivers sustained reductions in hostilities
• Prioritize liquidity and defensive assets (cash, high-quality sovereigns, and gold) to manage near-term volatility given the strongly negative sentiment and ongoing humanitarian and security shocks
• Monitor four specific triggers before increasing risk: formal confirmation of a weapons freeze by Hamas, verified Israeli troop withdrawal beyond the yellow line, material, sustained increases in humanitarian access, and definitive commitments to the multinational stabilisation framework
• Defer allocating to reconstruction, infrastructure or long-duration regional recovery positions until an operational Board of Peace and an International Stabilisation Force are established and accepted by principal Palestinian factions