US and allies strive to douse Israel-Hamas flare up, Iran issues warning

As risks of the Hamas-Israel war engulfing the entire region mount, the United States (US) and its allies step up their efforts to douse the flare-up, as they remain concerned about a potential Iranian intervention in the conflict.

 White House National Security Advisor Jake Sullivan said Sunday the US couldn’t rule out Iran intervening either directly or via Hezbollah, the Lebanon-based militia group that it sponsors.

Citing a person familiar with the negotiations, the US has asked Qatar to tell Hezbollah not to open up a second front to the war.

US Secretary of State Antony Blinken urged China’s Foreign Minister Wang Yi to deploy Beijing’s influence in the region toward the same goal.

Meanwhile, regional governments are uniting to try to stop the spreading of the conflict, a person familiar with Gulf efforts said. 

In response to this, Iran’s Foreign Minister Hossein Amir Abdollahian warned, “Iran will not remain an observer in this situation and has informed Israel via its allies if its crimes in Gaza continue 'tomorrow will be too late'.”

The Iranian Foreign Minister also met Hezbollah leader Hassan Nasrallah in Beirut on Friday to discuss a response to Israel’s actions, according to the state-run Iranian IRNA news service.

So far, more than 2,300 Palestinians have died in Israel’s retaliatory bombing of Gaza, raising concerns that the attack will spark a humanitarian catastrophe, per Bloomberg.

Market implications

Risk sentiment remains fragile, despite an uptick in the US S&P 500 futures, limiting the renewed weakness in the US Dollar across the board. Meanwhile, Gold price consolidates Friday’s massive surge, trading at around $1,921, as of writing.