The News
A ceasefire deal between Israel and Lebanese militant group Hezbollah, brokered by the US and France, took effect on Wednesday, as Lebanese civilians began returning to their destroyed homes.
Under the initial 60-day agreement Israeli troops will withdraw from southern Lebanon, and Hezbollah will move its forces and heavy weaponry further away from the Israeli-Lebanon border.
“This is designed to be a permanent cessation of hostilities,” US President Joe Biden stressed while announcing the ceasefire at the White House on Tuesday.
International leaders largely praised the deal, which Reuters described as ”a rare feat of diplomacy,″ while Lebanon’s caretaker prime minister urged Israeli forces to comply with the agreement, expressing hope for a “new page” for Lebanon including the election of a new president.
SIGNALS
Ceasefire not expected to bring long-lasting peace
The casefire is not expected to bring lasting peace, experts agreed. Israel has reserved the right to attack again in the event of any breach of the terms, which could reignite hostilities, CNN noted, while The Jerusalem Post added Hezbollah may already be rebuilding its forces, and could make a comeback in the next few years. One difference with previous peace agreements is the introduction of a US-led system meant to identify and call out violations of the terms, the Financial Times’ Middle East editor noted, though its functioning remains unclear. Ultimately, “it is likely to be a tenuous peace — a band aid that could come unstuck at any moment,” he wrote.
For Gaza, achieving a ceasefire may be tougher
A Hamas official expressed hope that the ceasefire would make way for efforts toward peace in Gaza, and with 55 days left in office, Biden is “racing against the clock of history” to make it happen, The New York Times noted. “No one has any idea what will happen after Jan. 20, so I think the time is right,” one former senior administration official told Politico. “This is a golden opportunity and we should not let it slip by.” But peace in Gaza appears “more elusive than ever,” Euronews noted. Earlier this month, officials from Qatar, one of the primary peace brokers between Israel and Hamas, withdrew their mediation efforts, formalizing what was already clear to some analysts: “There simply isn’t that will to have a breakthrough.”
Markets rally on ceasefire announcement
After taking a hit over fears for US President-elect Donald Trump’s tariff plan, markets soared on the ceasefire announcement as geopolitical risks lowered, Bloomberg reported. The S&P 500 hit a high for the 52nd time this year. Oil and gold prices have also gone down this week as investors showed hope that geopolitical tensions would reduce, including between Israel and Iran, a major energy producer. The US is also likely to reduce sanctions on oil coming from Iran following the ceasefire, which could further impact prices, an analyst said in a note reported by Reuters.