Officials and diplomats say proposals covering security arrangements, humanitarian relief and civilian administration have taken shape, but implementation depends on a broader political agreement, reliable security guarantees and sustained international funding.

Security remains the central point of contention. Israel maintains that Hamas must disarm before meaningful progress can be made, while Hamas insists it will not relinquish its weapons until Israeli forces withdraw from Gaza and a Palestinian governing authority is established.

An official from the Board of Peace, created by U.S. President Donald Trump to help prepare for Gaza’s postwar transition, told AFP that planning was continuing even if negotiations failed to produce an agreement on Hamas’ disarmament.

The official said the Board’s strategy was based on preparing for the worst-case scenario, including plans for a pilot humanitarian zone in the southern city of Rafah that would move forward regardless of the outcome of political talks.

Among the proposals under discussion is the creation of an International Stabilization Force to help maintain security in Gaza during a transitional period. According to the Board of Peace official, Morocco, Kosovo, Albania and Kazakhstan are actively participating in the initiative.

The official said a logistical base near the Kerem Shalom crossing on the Israeli side of the border was close to completion and would initially accommodate about 500 troops before any deployment into Gaza. Preparations are also underway for a Palestinian police force, with roughly 20,000 applications received.

Diplomatic and security sources, however, told AFP that progress has largely stalled. One diplomatic source said police training had not yet begun and that Israel had rejected the current list of recruits after a vetting process, arguing that a proposed force of 5,000 officers would be too large.

Although a ceasefire has been in place since October 2025, violence continues across Gaza. Israel has carried out strikes that it says target violations of the truce by Hamas and other Palestinian armed groups.

Humanitarian challenges remain equally daunting. The United Nations estimates that rebuilding Gaza will require tens of billions of dollars and take years to complete, with shortages of construction materials and equipment continuing to hamper recovery efforts.

While international donors have pledged significant financial support, the Board of Peace said much of that funding has yet to be released. The Board is currently planning a pilot humanitarian zone in Rafah that would accommodate tens of thousands of vetted Palestinians.

Governance arrangements also remain unresolved. Hamas has announced its intention to transfer administrative responsibilities to the National Committee for the Administration of Gaza, a body established by the Board of Peace and composed of Palestinian technocrats responsible for managing civilian affairs during a transitional period.

However, Palestinian and diplomatic sources told AFP that the committee has not entered Gaza because Israel has prevented its members from doing so. Israel has maintained that replacing Hamas’ administrative structures does not address its longstanding demand that the group’s military capabilities be dismantled.

The future role of the Palestinian Authority remains another unresolved issue. Internationally recognized as the official Palestinian governing body, the Authority is expected by European officials to work alongside the transitional committee.

Several observers cautioned that any interim administration could find itself responsible for delivering public services while lacking authority over security forces and border crossings, leaving it dependent on international backing and vulnerable if Hamas retains all or part of its military infrastructure.

According to the Palestine News Agency, the vote will be held across the Occupied Palestinian Territories, including the Gaza Strip, the West Bank and East Jerusalem.

The parliamentary election will be the first since January 2006, when Hamas won a surprise victory over the rival Fatah movement. The prolonged absence of legislative elections has left the Palestinian political system without a renewed parliamentary mandate for almost 20 years.

Presidential elections are expected to be scheduled during the first quarter of 2027. Abbas, 90, has led the Palestinian Authority since the death of Yasser Arafat in 2004 and was elected president in 2005 for a four-year term that formally expired in 2009.

The election announcement comes as the Palestinian Authority faces mounting calls to reform its political institutions while confronting growing challenges in the occupied West Bank and the continuing humanitarian crisis in the Gaza Strip stemming from the war between Israel and Hamas that began in late 2023.

The Palestinian Authority exercises partial administrative control in parts of the occupied West Bank, while the political divide between Fatah and Hamas has persisted since the latter took control of Gaza following the 2006 legislative elections.

In April, Palestinians voted in municipal elections covering the West Bank and one governorate in the Gaza Strip, although turnout was reported to be low.

Previous efforts to hold parliamentary elections were abandoned in 2021 after Abbas postponed the vote, saying Israeli authorities had refused to permit voting in East Jerusalem, which the Palestinian Authority regards as the capital of a future Palestinian state.

The planned Nov. 28 vote is expected to include polling in the Gaza Strip, the West Bank and East Jerusalem, according to the official announcement.

The court directed the state to respond within two days to a petition filed in April by Physicians for Human Rights Israel (PHRI), which seeks the release of 14 Palestinian doctors held without charge and raises specific concerns about Abu Safiya’s physical and psychological condition.

Elias Abu Safiya, the doctor’s son, said the family hoped the court order would compel Israeli authorities to provide official information about his father’s condition after more than 18 months in detention.

Speaking to Arab News from Kazakhstan, Elias Abu Safiya said the family wanted clear confirmation that his father was alive and safe. He said they remained deeply concerned after receiving reports from the family’s lawyer describing a significant deterioration in the doctor’s health.

According to attorney Nasser Odeh, who visited Abu Safiya on Thursday, the pediatrician and former director of Kamal Adwan Hospital had been held in prolonged solitary confinement and repeatedly assaulted while in custody. Odeh alleged that his client had suffered severe injuries, struggled to remain conscious during the meeting and had been denied adequate food, water and medical care.

PHRI said the lawyer’s account indicated that Abu Safiya’s life was in imminent danger and urged immediate judicial and medical intervention. The rights group submitted its petition to the Supreme Court on April 30, but proceedings were delayed several times after the state sought extensions before the court ordered a response by Tuesday.

Abu Safiya has been held by Israeli authorities since Dec. 27, 2024, after refusing military evacuation orders at Kamal Adwan Hospital, then the last functioning hospital in northern Gaza.

He is being detained under Israel’s Unlawful Enemy Combatants Law, which allows prolonged detention without formal criminal charges or the public presentation of evidence for renewable six-month periods.

After a district court in Be’er Sheva extended his detention on April 28, Abu Safiya appealed to the Supreme Court. The appeal was rejected last month while he remained in solitary confinement.

According to Odeh, Abu Safiya told him he had been beaten daily after being transferred to the Rakefet interrogation facility at Nitzan Prison on June 24 and had repeatedly lost consciousness without receiving appropriate medical treatment.

Israeli authorities have accused Abu Safiya of involvement in terrorist activities and of holding a position within Hamas that made Kamal Adwan Hospital a militant stronghold during the war. His family and lawyer have denied those allegations.

The doctor’s detention has drawn criticism from international human rights organizations, United Nations bodies and medical professionals, who have called for his release and expressed concern over reports of his treatment while in custody.

Elias Abu Safiya appealed to the international community to intervene urgently, saying he hoped efforts would help safeguard his father’s life and improve conditions for other Palestinian detainees held in Israeli prisons.

The Israeli government had not publicly responded to the allegations at the time of publication, with the Supreme Court’s deadline for its submission due on Tuesday.

State television broadcast aerial footage showing large crowds gathering along major avenues in central Tehran as the coffins of Khamenei and four members of his family were carried through the capital on a truck. Firefighters sprayed water over the procession to help people cope with the summer heat.

As the convoy moved through the city, some mourners threw stones at a billboard depicting U.S. President Donald Trump. The billboard accused the United States of responsibility for Khamenei’s death and carried slogans demanding retribution.

Participants also waved Iranian national flags and red banners bearing slogans calling for vengeance, reflecting a recurring theme throughout the official mourning ceremonies.

The funeral forms part of a week-long series of commemorations following the deaths of Khamenei and four relatives in Israeli airstrikes on Feb. 28, which Iranian authorities say were carried out with U.S. intelligence support.

Authorities established extensive security measures during the ceremonies, including concrete barriers separating mourners from the coffins, in an effort to prevent crowd surges similar to those that disrupted the 1989 funeral of Ayatollah Ruhollah Khomeini.

The ceremonies also serve as a demonstration of political continuity after five weeks of war with Israel and the United States. Iranian leaders have emphasized public participation as evidence of support for the country’s leadership following the conflict.

Parliament Speaker Mohammad Bagher Ghalibaf, who has emerged as one of the country’s most prominent political figures in the post-Khamenei period and serves as Iran’s chief negotiator with the United States, praised what he described as the unity displayed by mourners paying tribute to the late leader.

The funeral procession in Tehran will be followed by additional ceremonies in the religious city of Qom on Tuesday and in the Iraqi holy cities of Najaf and Karbala on Wednesday before Khamenei is buried in his hometown of Mashhad on Thursday.

Three of Khamenei’s sons appeared publicly during funeral prayers on Sunday, while his successor, Mojtaba Khamenei, did not attend. Iranian officials have said Mojtaba was wounded in the airstrikes that killed his father but have not disclosed the extent of his injuries.

Also attending the ceremonies were Ahmad Vahidi, the newly appointed commander of the Islamic Revolutionary Guard Corps, and Esmail Qaani, commander of the Quds Force, both making prominent public appearances following the recent conflict.

Several mourners interviewed during the ceremonies called for those responsible for Khamenei’s killing to be punished, echoing official rhetoric that has stressed revenge and accountability since the attack.

Iranian authorities are also using the funeral to reinforce domestic support after nationwide protests earlier this year. Rights groups have alleged that those demonstrations were met with a crackdown that killed thousands of people.

Although fighting has paused under a ceasefire and an initial agreement between Tehran and Washington, both governments have warned that military operations could resume if tensions escalate. Iran has continued to portray the funeral ceremonies as both a national act of mourning and a demonstration of resilience amid heightened regional tensions.

Khamenei led the Islamic Republic for more than three decades and oversaw a foreign policy that maintained confrontation with the West while supporting armed groups across the Middle East, including Hamas and Hezbollah, both of which sent delegations to the funeral ceremonies.

The decision marks a significant political development for the Palestinian Islamist movement, which has governed Gaza since seizing control of the enclave from the rival Fatah movement in 2007 after winning the 2006 Palestinian legislative elections.

Ismail Al-Thawabta, head of Hamas’ government media office, said Mohammed Al-Farra, who led the government’s emergency committee, had formally submitted his resignation and dissolved the committee to facilitate the transfer of administrative responsibilities to the National Committee for the Administration of Gaza (NCAG).

The NCAG, headed by Palestinian technocrat Ali Shaath and based in Cairo, was established by the Board of Peace created by U.S. President Donald Trump following the ceasefire agreement brokered in October 2025.

Hamas spokesman Hazem Qassem said the movement had decided to relinquish responsibility for governing Gaza in an effort to remove what it described as obstacles cited by Israel while reaffirming its willingness to transfer governmental duties to the technocratic committee.

According to a Hamas official, the movement informed other Palestinian factions of its decision during recent talks in Cairo, where the move was welcomed as a step toward enabling the NCAG to assume administrative authority in the territory.

Ali Shaath said the committee was prepared to undertake its national responsibilities once the necessary resources and operational capacity became available. However, the NCAG has remained in Cairo for several months, reportedly because Israel has objected to its entry into Gaza.

Despite the announcement, analysts said the principal obstacle to implementing a broader political transition remains unresolved.

Mkhaimar Abusada, a Gaza-based political analyst, described the move as largely symbolic, arguing that negotiations continue to hinge on Hamas’ refusal to agree to disarmament. He said the question of the group’s weapons remains the central issue preventing progress toward the second phase of the ceasefire.

Diplomatic sources involved in mediation efforts said Hamas viewed the dissolution of its governing committee as a demonstration that it was advancing the political process while shifting attention to what it regards as Israel’s failure to implement its obligations under the ceasefire agreement.

The first phase of the ceasefire included the release of the remaining Israeli hostages held by Hamas in exchange for Palestinian prisoners detained by Israel.

Negotiations over the second phase, which envisages Hamas’ disarmament, a gradual withdrawal of Israeli forces from Gaza and the establishment of a new governing administration, have remained stalled for months.

Hamas has said it will consider relinquishing its weapons only after a Palestinian governing authority is established, while Israel has rejected both a continued Hamas role in Gaza and an immediate return of the Palestinian Authority to govern the territory.

Both Hamas and Israel continue to accuse each other of violating the ceasefire.

According to Gaza’s health ministry, at least 1,072 Palestinians have been killed since the ceasefire came into effect. The ministry operates under Hamas administration, and its casualty figures have generally been regarded as reliable by the United Nations.

The Israeli military says five of its soldiers and one civilian contractor have been killed in Gaza during the same period as military operations continued despite the truce.

Khamenei, who led the Islamic Republic from 1989 until his death at the age of 86, was killed in an airstrike on February 28 during the opening day of the U.S.-Israeli war with Iran. His funeral has become one of the largest state ceremonies in the country’s recent history.

Prayers at Tehran’s Grand Mosalla complex were led by Grand Ayatollah Ja’far Sobhani, the 97-year-old Shiite cleric and religious scholar based in the holy city of Qom. The ceremony formed the centerpiece of the second day of national mourning after Khamenei’s body lay in state at the vast religious complex.

Mojtaba Khamenei, the late leader’s son and designated successor, did not appear publicly during the prayers. According to reports, he has not been seen in public since being named supreme leader and is believed to have been injured in the February 28 strike. Khamenei’s other sons—Masoud, Mostafa and Meysam—attended the ceremony.

Iran declared Sunday a public holiday to enable nationwide participation in the funeral events. Authorities said Khamenei’s coffin would later be transferred from the Grand Mosalla in preparation for a public procession through Tehran on Monday.

AFP journalists reported that the religious complex and surrounding streets were filled with mourners carrying Iranian flags and portraits of the late leader. With temperatures exceeding 35 degrees Celsius, volunteers distributed refreshments to people making their way to the venue.

President Masoud Pezeshkian attended the prayers alongside senior officials, including Parliament Speaker and Iran’s chief nuclear negotiator Mohammad Bagher Ghalibaf, according to state television.

Khamenei’s coffin, draped in the Iranian national flag and topped with his traditional black turban, was placed beside the coffins of four family members who were also killed in the February airstrikes, including an infant granddaughter.

Iranian authorities have said they expect more than 10 million people to participate in the funeral ceremonies taking place in Tehran over several days.

The funeral comes after a five-week conflict between Iran, Israel and the United States that has since paused under a ceasefire and an initial agreement with Washington, although both Tehran and Washington have indicated they remain prepared for renewed hostilities if negotiations fail.

Speaking on Saturday, Pezeshkian described the public turnout as evidence of Khamenei’s standing among Iranians and accused Israel of acting as a destabilizing force in the Middle East. He also said Muslims would not submit to oppression.

Khamenei’s decades-long leadership was defined by confrontation with Western powers and sustained support for regional armed groups aligned with Tehran, including Hamas in the Palestinian territories and Hezbollah in Lebanon.

State media reported that delegations from Hamas and Hezbollah met Foreign Minister Abbas Araghchi on Saturday. Representatives of Yemen’s Houthi movement and the Palestinian Islamic Jihad also attended the funeral ceremonies.

Following Monday’s procession in Tehran, Khamenei’s coffin is scheduled to travel to Qom on Tuesday, then to neighboring Iraq on Wednesday, before burial on Thursday in his hometown of Mashhad in northeastern Iran.

Authorities have deployed extensive security measures throughout the capital and warned mourners of the risks posed by large crowds. Organizers have also introduced heat-mitigation measures, including water misting systems, as temperatures in Tehran are forecast to approach 40 degrees Celsius in the coming days.

According to Iranian state media, envoys from the Lebanese armed group Hezbollah and the Palestinian group Hamas were among foreign delegations participating in ceremonies honoring Khamenei, who was killed on February 28 in a U.S.-Israeli strike that also claimed the lives of several members of his family and senior Iranian officials.

Iran has for years backed Hezbollah, Hamas and Yemen’s Houthi movement as part of a regional network it refers to as the “Axis of Resistance.” The United States and several Western countries designate Hezbollah, Hamas and the Houthis as terrorist organizations, and Iran’s support for those groups has contributed to longstanding international sanctions against Tehran.

Hezbollah said its delegation was headed by senior official and former Lebanese minister Mohammed Fneish. The group added that the delegation also included officials as well as relatives of members who had been killed or wounded.

Hamas said its delegation was led by Mohammed Darwish, head of the group’s political bureau, and included senior bureau members, among them Bassem Naim.

Representatives of other Iran-aligned groups also attended the ceremonies. Iranian state television reported that Palestinian Islamic Jihad Secretary-General Ziyad Al-Nakhalah and senior Houthi official Dhaif Allah Al-Shami were present in Tehran.

The funeral comes nearly two years after the killing of Ismail Haniyeh, Hamas’s then political leader, who died in Tehran in July 2024 in an Israeli operation after attending the inauguration of Iranian President Masoud Pezeshkian.

Most foreign officials and dignitaries paid their respects on Friday, while public funeral ceremonies continued on Saturday at Tehran’s Grand Mosalla religious complex, where large crowds gathered to honor Khamenei.

Khamenei served as Iran’s supreme leader from 1989 until his death at the age of 86, exercising ultimate authority over the country’s major political, military and strategic decisions throughout his tenure.

The funeral ceremonies have drawn domestic supporters, senior Iranian officials and foreign delegations from groups aligned with Tehran, reflecting Iran’s continued ties with regional allies despite months of heightened conflict across the Middle East.

Sovereign Arab governments pursuing dialogue appeared, at least symbolically, to receive verses carrying rebuke or exhortation.

The Arab delegations arrived in Tehran expecting the solemn rituals that accompany the funeral of one of Imam Ali Khamenei. Instead, many left at the center of an unexpected controversy.

There were no public diplomatic snubs, no fiery speeches directed at visiting dignitaries, and no visible confrontations. The message came in a subtler form—through carefully chosen verses of the Qur’an.

As foreign delegations filed through the reception line at the funeral of Iran’s Supreme Leader, each was reportedly greeted with a different Qur’anic verse. But the selections were far from uniform.

While Iran-backed armed groups such as Hezbollah, Hamas and Yemen’s Houthis were welcomed with verses praising sacrifice, steadfastness and divine honour, several Arab governments that have spent recent years repairing relations with Tehran were reportedly assigned verses interpreted by many as carrying warnings, admonitions or calls to repentance.

Whether intentional diplomatic messaging or ceremonial symbolism, the contrast was impossible to ignore. Across the Arab world, the footage quickly shifted attention away from the funeral itself and toward a larger question: what was Iran really trying to say?

A Tale of Two Messages

Videos circulating widely on social media, supported by regional media reports, indicate that Saudi Arabia’s delegation was associated with Qur’an 3:13, a verse describing the encounter between believers and disbelievers in battle. Saudi Arabia was indirectly termed as “disbelievers”.

Turkey reportedly received Qur’an 4:95, which elevates those who strive in battle above those who remain behind.

Lebanon’s delegation was linked to Qur’an 66:7—”Do not make excuses today”—while Qatar was reportedly greeted with Qur’an 66:8, calling for sincere repentance.

The symbolism became even more striking when compared with the verses reportedly assigned to Iran’s closest regional allies.

Hezbollah received Qur’an 3:139: “Do not lose heart or grieve; you shall have the upper hand if you are believers.”

Hamas was welcomed with Qur’an 33:23, honouring believers who fulfilled their covenant and those still waiting to do so.

Yemen’s Houthis were reportedly associated with Qur’an 3:146, praising believers who fought alongside prophets without weakening in the face of hardship.

Iran has not officially explained the reported selection of verses, nor has it published an official protocol assigning them to specific delegations. Yet in a region where religious symbolism is inseparable from politics, perception often carries as much weight as official clarification.

Diplomacy Overshadowed by Revolutionary Symbolism

The timing made the episode particularly sensitive.

Only three years ago, Saudi Arabia and Iran restored diplomatic relations after a Chinese-mediated breakthrough ended seven years of estrangement. Oman has consistently served as a trusted mediator between Tehran and its rivals, while Qatar has maintained channels of dialogue even during periods of heightened regional tension. Across the Gulf, the prevailing strategy has shifted from confrontation toward cautious engagement.

Against that backdrop, the reported ceremonial messaging appeared out of step with the diplomatic efforts that Arab capitals have invested in rebuilding trust.

Rather than emphasising reconciliation, the funeral protocol seemed to reinforce the ideological hierarchy that has long defined the Islamic Republic’s regional strategy.

Sovereign Arab governments pursuing dialogue appeared, at least symbolically, to receive verses carrying rebuke or exhortation. Meanwhile, non-state actors aligned with Tehran’s so-called “Axis of Resistance” were honoured with verses celebrating sacrifice and perseverance.

For many observers, the contrast reflected a familiar pattern in Iranian foreign policy: revolutionary allies continue to occupy a privileged place, even as Tehran simultaneously seeks improved relations with neighbouring governments.

Faith, Politics and Regional Perceptions

Iran’s state is built upon Twelver Shi’a Islam, although mainstream Twelver scholarship generally recognises Sunni Muslims as fellow Muslims and does not collectively declare them unbelievers. At the same time, critics have long argued that segments of Iran’s revolutionary establishment have adopted exclusionary religious rhetoric called as “Takfeer” toward political opponents, reinforcing sectarian divisions across the Middle East.

Whether the reported funeral verses were intended as theological statements, political signals or carefully crafted symbolism, their reception has mattered more than their explanation.

State funerals are meticulously choreographed affairs. Every image, every protocol and every gesture is designed to communicate something beyond the ceremony itself. In Tehran, the message many in the Arab world believed they saw was not one of regional reconciliation, but of ideological preference.

For governments that have extended diplomatic openings to Tehran—including Saudi Arabia, Qatar and Oman—the images served as a reminder that while embassies may reopen and negotiations may resume, the Islamic Republic’s extremist narrative continues to place extraordinary emphasis on its network of allied militias.

The San Francisco jury found each of the seven defendants guilty of six misdemeanor offenses, including false imprisonment, obstruction of a thoroughfare and unlawful assembly, according to a statement issued by San Francisco District Attorney Brooke Jenkins.

Jenkins said one defendant was also convicted of an additional misdemeanor charge of refusing to disperse. The defendants are scheduled to be sentenced in August and could face prison terms of up to five years in county jail.

Jurors, however, remained deadlocked on the most serious allegation of felony conspiracy, which prosecutors said involved an agreement between two or more individuals to commit a crime accompanied by an overt act. A conviction on that charge could have carried a sentence of up to 15 years.

“At this time we will evaluate our options and consider next steps,” Jenkins said after the verdict.

The protest took place during a wave of demonstrations across the United States in 2024 calling for an end to Israel’s military campaign in Gaza and opposing continued U.S. support for Israel. Many demonstrations also urged universities to divest investments linked to companies supporting Israel.

During the trial, defense attorneys argued that the protesters acted from a deeply held moral conviction in response to the humanitarian consequences of the war in Gaza and U.S. backing for Israel. They told the court that participants turned to blocking the bridge only after peaceful efforts, including writing letters and contacting elected representatives, had failed to produce meaningful change.

Prosecutors argued that the demonstration shut down traffic on one of California’s busiest transportation links for approximately four hours, creating significant disruption and posing risks to public safety by delaying emergency access and trapping motorists.

Nuha Abusamra, who represented one of the defendants, described the jury’s decision not to convict on the felony conspiracy charge as a positive outcome for the defense, according to local media outlet KQED.

“Taking a bridge and blocking traffic for a few hours years ago is the bare minimum that we should be doing as American citizens while our tax dollars continue to fund the mass genocide of Palestinians,” Abusamra said.

The war in Gaza began after Hamas-led militants attacked southern Israel in October 2023, killing about 1,200 people and taking more than 250 hostages, according to Israeli authorities.

Israel says its military campaign is an act of self-defense aimed at dismantling Hamas. The conflict has killed tens of thousands of people in Gaza, displaced much of the territory’s population and contributed to severe humanitarian conditions. United Nations inquiries, human rights experts and some scholars have characterized Israel’s actions as genocide, while Israel rejects that characterization.

The verdict marks one of the most closely watched criminal cases stemming from the nationwide pro-Palestinian protest movement that spread across the United States during 2024, leading to demonstrations on university campuses, public roads and other high-profile locations.

In a report released on Wednesday, the IMF said Israel’s economy has demonstrated resilience despite repeated external shocks but warned that conflicts involving Iran, Hezbollah and Hamas continue to cloud the outlook. The institution said renewed escalation across the region remains the principal downside risk to growth.

The revised projection follows estimated economic growth of 2.9% in 2025. The IMF expects the Israeli economy to expand by 4.4% in 2027, while forecasting inflation to remain close to 2% in both 2026 and 2027 after a temporary increase driven by higher energy prices and supply constraints.

The IMF noted that inflationary pressures are expected despite the shekel appreciating to its strongest level against the U.S. dollar in more than three decades. It said elevated energy costs and supply disruptions are likely to offset some of the disinflationary effects of the stronger currency.

Israel’s economy contracted at an annualized rate of 3.8% during the first quarter of 2026. Following the conflict involving Iran in March and April, the Bank of Israel reduced its own 2026 growth forecast to 3.8%, while the Finance Ministry continues to project economic expansion of as much as 4% this year.

The IMF said its assessment was based on economic data available through June 10.

The Washington-based lender urged Israeli authorities to pursue prudent macroeconomic policies to preserve economic stability while advancing structural reforms aimed at strengthening long-term growth. It recommended rebuilding fiscal buffers through higher government revenue and broader fiscal consolidation to help offset increased defense expenditures associated with ongoing military conflicts.

The IMF also called for a moderately tight monetary policy stance, saying higher energy prices could generate additional inflationary pressures. It said the Bank of Israel should continue monitoring the effects of the conflict on labor supply, the transmission of higher energy costs into domestic prices, exchange-rate movements and the impact of the central bank’s most recent interest rate cut on financial conditions and domestic demand.

The report said policymakers should remain prepared to adjust monetary policy if incoming economic data or heightened geopolitical risks result in renewed inflationary pressures.

The IMF noted that a ceasefire reached in recent weeks between the United States and Iran has contributed to lower global oil prices, although it cautioned that regional uncertainty continues to pose significant risks to Israel’s economic performance.