Note: This situation report acts as KSG's routine monthly update on these inextricable conflicts. The last public release in the series was on 22 December, 2024 (assessment link). The full series is reserved for our C-GIA members.
Key Takeaways:
A six-week ceasefire agreement between Israel and Hamas was secured on January 15th. KSG assesses Hamas is unlikely to launch attacks in 2025 due to degraded capabilities, though Israeli airstrikes may continue.Â
Israeli Prime Minister Netanyahu's coalition faces imminent collapse, with the right wing parties expected to withdraw by February 2025 over ceasefire opposition. KSG assesses that new Knesset elections are likely before the July recess, and Israeli Defense Force demobilization will remain gradual.
Syria's transitional government faces security challenges, with attacks against religious minorities undermining promises of inclusivity. KSG assesses Syria's business environment will remain poor for 6 months with sanctions continuing due to lack of political progress.
KSG assesses that Iran will likely engage with the West on nuclear negotiations under Trump's presidency, while reducing Houthi support. KSG assesses the Red Sea maritime-commercial situation will remain unstable for 6-12 months despite the Gaza ceasefire.
Gaza Ceasefire
A ceasefire agreement between Israel and Hamas was agreed on 15 January, and signed by Israel’s cabinet on 18 January, brokered by US, Qatari and Egyptian officials. According to the US State Department, the deal will halt the fighting in Gaza, allow for the delivery of humanitarian assistance to Palestinian civilians, and secure the release of the remaining Israeli hostages still held by Hamas.
The agreement followed heavy pressure from US President-elect Trump, who had warned that ‘all hell will break out’ if a deal was not agreed by his inauguration on 20 January. The ceasefire will see a multi-phase agreement. The first phase will be a six-week ceasefire and the release of 33 Israeli and 95 Palestinian hostages, followed by the continuation of negotiations that will focus on the release of the remaining 65 Israeli hostages and the role of the Israeli Defense Forces in Gaza.
Syria
Hay'at Tahrir al-Sham (HTS) and its leader Ahmed al-Sharaa (al-Sharaa, also known as Mohammad al-Julani) has established a transitional government and continues attempts to absorb rival factions to consolidate its control over Syria. Al-Sharaa stated that the transitional government will remain in place until 1 March 2025, but has yet to announce a long-term political roadmap. HTS is still struggling to establish effective security control, with reports of attacks against members of the Christian and Alawite minorities undermining guarantees by al-Sharaa to create inclusive political structures.
ISIS has made attempts to exploit Syria’s delicate security structure, with Syrian intelligence announcing they had foiled an ISIS bomb attack of a Shia shrine in Damascus. Commander of US Central Command General Michael Erik Kurilla visited Syria on 16 January to assess the ongoing campaign against remaining ISIS cells and strengthen coordination with regional partners.
Foreign states continue to engage cautiously with Syria’s transitional government led by al-Sharaa, with the German & French Foreign Ministers visiting Damascus on 3 January.Â
The US has allowed international organisations and NGOs to conduct transactions with Syria, but has not suspended its sanctions regime against Syria entirely. EU foreign ministers will meet in Brussels on 27 January to discuss relaxing Syria sanctions.Â
Lebanon
Lebanon’s parliament elected General Joseph Aoun to the Presidency on January 9. Aoun has received backing from the UN, the US and Saudi Arabia, and came ahead of Hizbullah’s preferred candidate, Suleiman Frangieh, who withdrew.
Following the ceasefire between Israel and Hizbullah, Lebanon’s army started to occupy positions previously held by the IDF. These positions are located below the Litani river in southern Lebanon and display the Lebanese Armed Forces’s goal of establishing their presence in areas traditionally dominated by Hizbullah.Â
Forward Look
Gaza
KSG assesses that Hamas is unlikely to launch attacks in 2025 due to its severely degraded military capabilities and desire to maintain the ceasefire agreement. Continued Israeli airstrikes in the Gaza Strip will likely continue to hinder Hamas’s attempt to rebuild its capacity and influence.
KSG assesses that the first phase of the ceasefire agreement will likely hold, apart from sporadic Israeli action against Hamas in Gaza. Further negotiations on later phases of the ceasefire will face continued pressure from right wing factions of the Knesset.Â
Israel
KSG assesses opposition to the ceasefire agreement amongst right-wing members of Israeli Prime Minister Netanyahu’s cabinet will lead to the withdrawal of the Religious Zionist Party and Otzma Yehudit between mid and late February.Â
KSG assesses that the IDF will demobilise reservists gradually, maintaining pressure on labour shortages.
Lebanon
The election of Aoun reflects Hizbullah’s declining influence over Lebanon’s political process , and by extension Iran’s. KSG assesses that Hizbullah will struggle to exert pressure upon Lebanon’s political process in the next two years. This will allow the new Lebanese government to focus on political reforms and economic reconstruction, whilst establishing a more cooperative relationship with Israel.Â
KSG assesses that Saudi Arabia will support Aoun’s government with political and economic support in order to stabilise the country. Sustained Lebanese peace will likely provide high risk opportunities in the hospitality, banking, and construction sectors. Given the high proportion of damaged infrastructure from the Israeli-Hizbullah conflict, reconstruction will be a key focus of Aoun’s government. KSG assesses opportunities for Emirati and Saudi construction companies like the Al-Habtoor Group, Arabtec Holding, and the Saudi Binladin Group.
Iran
KSG assesses that Iran will not increase military and economic support for the Houthis beyond current levels. Iranian President Pezeshkian has stated his country is ‘ready to re-engage’ with the West over its nuclear deal and sees Donald Trump’s second presidency as an opportunity to reassess relations.
KSG assesses that the Israel-Gaza ceasefire is unlikely to improve the environment for maritime commerce in the Red Sea. A prolonged period between 6 months to 1 year without hostilities is required for the maritime-commercial situation to improve, which KSG considers unlikely given the likelihood of continued Israeli strikes in Gaza.Â
Türkiye
KSG assesses that the likelihood of attacks carried out by the Kurdistan Workers' Party (PKK) will decrease over the next 3 months as Türkiye pursues diplomatic efforts to resolve tensions with Kurdish groups. This will increase confidence in the ‘Middle’ or Trans-Caspian trade route as a reliable transit route for goods from central Asia and bolster Eurasian supply chains.Â
SyriaÂ
HTS’ and al-Banaa are unlikely to have set a date for national elections before the stated end of the Transitional Government until 1 March 2025, and are likely to cite Syria's precarious security situation as their reason.Â
KSG assesses that Syria’s business environment will not improve in the next 6 months. A lack of political progress for a post-transitional government will see the US and EU not lift the full set of sanction measures still in place.