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Israel strikes Gaza after Trump calls for stop to bombing

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Israeli airstrikes continued in Gaza, causing further casualties, even as Hamas agreed to release all Israeli hostages and negotiate on President Trump's peace plan. While Israel expressed readiness to implement the plan's initial phase for hostage release, military operations persisted, and Prime Minister Netanyahu reiterated the goal to disarm Hamas "the easy way or the hard way," indicating continued regional instability despite a potential diplomatic opening for de-escalation.

Analysis

Israeli airstrikes hit the Gaza Strip on Saturday, local authorities said, hours after President Donald Trump called to halt the bombing, saying that Hamas was ready for peace. Gaza’s Ministry of Health said Saturday that Israeli strikes killed at least 66 people and injured over 250 in the preceding 24 hours. Dr. Muhammad Abu Salmiya, the director of Al-Shifa Hospital, told NBC News that the bodies of 54 people had been brought to hospitals across the Gaza Strip since Saturday morning, including 45 in Gaza City. He said some were killed in ongoing strikes, while others were shot as they tried to return to their homes in conflict areas or as they waited for aid. The attacks came after Hamas said Friday it has agreed to release all Israeli hostages, alive or dead, and expressed willingness to negotiate through mediators on Trump’s 20-point plan for peace. In a Truth Social post Saturday, Trump called on Hamas to “move quickly, or else all bets will be off.” A senior Hamas official later told NBC News that a delegation will travel to Cairo on Sunday, ahead of negotiations scheduled for Monday. They will be joined by special envoy Steve Witkoff and the president's son-in-law Jared Kushner, a senior White House official told NBC News. Israel Prime Minister Benjamin Netanyahu’s office said early Saturday that Israel was preparing “to immediately implement the first phase of Trump’s plan for the immediate release of all hostages.” "It is not yet final. We are working on it vigorously, and I hope, God willing, that in the coming days, during the Sukkot holiday, I will be able to announce to you the return of all our hostages, both living and dead, in one fell swoop, while the IDF remains deep in the Gaza Strip and in the areas it controls," Netanyahu said in an address, referencing the Jewish holiday held between Oct. 6 and Oct. 13. Residents of Gaza, which has largely been destroyed in the nearly two-year war and faces a serious humanitarian crisis, responded to the developments with optimism. “It’s happy news. It saves those who are still alive,” Saoud Qarneyta, 32, told Reuters. But Israeli attacks on the enclave have continued, and the Israel Defense Forces said Saturday they continued to surround Gaza City, and that “attempting to return to it poses a significant risk.” “The area north of Wadi Gaza is still considered a dangerous combat zone,” Avichay Adraee, the IDF’s Arabic-language spokesman, said in a post on X, referring to a river valley that is considered an informal divider between the northern and southern halves of Gaza. One strike killed four people in a house in Gaza City while another killed two others in Khan Younis, authorities said. Gaza’s Ministry of Health said Saturday that the total death toll in the enclave had passed 67,000 after the addition of more than 700 people whose data had been verified. The health ministry, which is part of the Hamas-run government, does not say how many of those killed were civilians versus combatants, but the United Nations and other independent experts consider its figures to be reliable. It was unclear how many of the most recent deaths took place after Trump’s announcement. The Ministry of Health reported two deaths of children due to famine and malnutrition in the past 24 hours, bringing the total number of deaths from malnutrition to 459, including 154 children, it said. The U.N. aid agency for Palestinians, known as UNRWA, called on Israel to allow the flow of humanitarian aid to resume through the U.N. The potential breakthrough with Hamas provides “a rare window of hope” to address the suffering of more than 2 million people “with unspeakable needs,” UNRWA Commissioner-General Philippe Lazzarini said in a post on X. On Saturday, Netanyahu warned that Hamas would be disarmed "the easy way or the hard way." "In the second phase, Hamas will be disarmed and the Strip will be demobilized," the prime minister said. "This will happen either through a diplomatic path according to the Trump plan or through a military path by us." Tuesday marks the second anniversary of the start of the Israel-Hamas war, which began on Oct. 7, 2023, with the Hamas-led terrorist attacks on Israel in which 1,200 people were killed and 251 abducted. Of the 48 hostages remaining in Gaza, Israel believes 20 are still alive. Under the plan proposed by Trump, Hamas would have three days to release them. The geopolitical situation presents a highly uncertain scenario, characterized by a stark divergence between diplomatic overtures and ongoing military conflict. While Hamas has reportedly agreed to a peace plan and the release of all hostages, prompting Israel to prepare for the plan's first phase, Israeli airstrikes have continued unabated, resulting in at least 66 deaths in the preceding 24 hours. This contradiction is encapsulated by Prime Minister Netanyahu's dual messaging: expressing hope for the hostages' return while simultaneously vowing to disarm Hamas "the easy way or the hard way." This signals that even a successful hostage release may not conclude the conflict, leaving significant long-term instability. The backdrop is a severe humanitarian crisis in a "largely destroyed" Gaza, with a total death toll now exceeding 67,000 and famine-related deaths increasing. The market's moderately negative sentiment and low impact score reflect a cautious, wait-and-see approach, acknowledging the "rare window of hope" but heavily discounting it due to the high probability of execution failure and the entrenched nature of the nearly two-year war.

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Market Sentiment

Overall Sentiment

moderately negative

Sentiment Score

-0.40

Key Decisions for Investors

  • Investors should closely monitor the outcome of the scheduled Cairo negotiations, as a diplomatic breakthrough could temporarily reduce the geopolitical risk premium in crude oil, whereas a failure would likely reinforce bullish trends for energy and defense sector assets.
  • Given the stark contrast between peace overtures and continued military action, it is prudent to maintain hedged positions or limit exposure to assets with high sensitivity to Middle East stability until a more definitive de-escalation is confirmed.
  • The Israeli government's stated long-term goal of disarming Hamas, irrespective of a near-term hostage deal, suggests that underlying regional tensions will persist, warranting caution against interpreting any initial ceasefire as a permanent resolution to the conflict.