US-Iran Escalation Revives Lebanese Fears of War

First responders inspect the wreckage of a car reportedly targeted by an Israeli strike in Nabatieh on July 6, 2026. (AFP)
First responders inspect the wreckage of a car reportedly targeted by an Israeli strike in Nabatieh on July 6, 2026. (AFP)
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US-Iran Escalation Revives Lebanese Fears of War

First responders inspect the wreckage of a car reportedly targeted by an Israeli strike in Nabatieh on July 6, 2026. (AFP)
First responders inspect the wreckage of a car reportedly targeted by an Israeli strike in Nabatieh on July 6, 2026. (AFP)

Renewed escalation between the United States and Iran has raised fears in Lebanon that conflict could spread to its southern border, as implementation of a framework agreement between Lebanon and Israel remains stalled and Israeli military operations continue.

Washington has resumed strikes on Iran, while Tehran has responded by targeting US bases in the region.

The developments have shifted attention to the possible impact of US-Iranian tensions on Lebanon, where the violence has been contained in recent months despite continued Israeli airstrikes, assassinations and demolitions. Israel has insisted on remaining in what it calls a “security zone” in southern Lebanon.

Retired Brigadier General Hassan Jouni said the escalation did not necessarily signal the collapse of the US-Iranian agreement or a permanent halt to negotiations.

He said it could represent a period of mutual pressure before the two sides return to the agreement after addressing disputed points.

“The United States used military force more than once and on a wide scale over about 40 days, and this is the result that force produced,” Jouni told Asharq Al-Awsat.

He said the outcome could encourage both sides to continue maneuvering within the agreement’s limits rather than abandon it entirely.

Jouni said the Lebanese front was directly tied to the conflict involving Iran, the United States and Israel.

“If war resumes between Iran and the United States, I do not think Hezbollah will remain on the sidelines,” he said.

He added that the current situation in southern Lebanon did not serve Hezbollah’s interests and that the group could view a renewed confrontation as an opportunity to alter the existing balance.

“If the agreement between Washington and Tehran is disrupted and war returns, Hezbollah is likely to return to confrontation as well, in an attempt to restore its gains or improve its position in any later settlement,” he said.

Retired Brigadier General Naji Malaeb also said the latest US-Iranian developments did not necessarily mean the collapse of the path toward an understanding.

He said the escalation remained contained, while Washington appeared increasingly focused on implementing the agreement concerning Lebanon.

“Talk of the agreement with Iran being over does not necessarily mean that it has fallen apart permanently, because Tehran itself has an interest in preserving room for an understanding if conditions allow,” Malaeb told Asharq Al-Awsat.

He said the responses had so far remained measured.

A woman smokes a cigarette as she stands on the balcony of a building damaged in an Israeli airstrike, while Hassan Hejazieh carries bricks as he walks amid the rubble, attempting to rebuild his home after returning home following displacement during the war, following the Israel-Lebanon deal, in Tyre, southern Lebanon, July 5, 2026. (Reuters)

Concerning Lebanon, Malaeb said growing official frustration with the outcome of negotiations reflected a belief that the results had fallen short of Lebanese expectations and that US guarantees had been insufficient.

He said Lebanon’s initial refusal to attend the next round of negotiations in Rome was linked to the meeting’s format.

“It was not acceptable for it to appear as a direct Lebanese-Israeli meeting with low-level US representation,” he remarked.

Lebanon changed its position after Washington said the meetings would be held at the US Embassy in Rome and managed by US officials, Malaeb said.

He added that Lebanon tied its participation to the implementation of the first part of the agreement, particularly the pilot arrangement in two areas, before meetings scheduled for July 15 and 16

Malaeb note the recent US activity showed direct interest in the Lebanese file, citing the US ambassador’s meetings with Lebanese officials, a lengthy meeting with Parliament Speaker Nabih Berri – a key Hezbollah ally - and a visit by US Central Command chief General Brad Cooper.

He said the appointment of US General Joseph Clearfield to oversee the agreement’s implementation, along with reports that he would move to Lebanon and work from the US Embassy, was a further sign of US seriousness.

Malaeb said Iran knew it would not receive permanent guarantees and would therefore continue to preserve its regional allies for as long as possible.

He stressed Hezbollah’s tougher position reflected Iran’s stance.

“I do not expect a major development unless Iran instructs Hezbollah to move outside the ceasefire framework and continue resisting the Israeli presence,” he added.



Renewed US-Iran Conflict Narrows Egypt’s Economic Growth Prospects

 A traditional market in Egypt’s Giza Governorate. (Asharq Al-Awsat) 
 A traditional market in Egypt’s Giza Governorate. (Asharq Al-Awsat) 
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Renewed US-Iran Conflict Narrows Egypt’s Economic Growth Prospects

 A traditional market in Egypt’s Giza Governorate. (Asharq Al-Awsat) 
 A traditional market in Egypt’s Giza Governorate. (Asharq Al-Awsat) 

The renewed US-Iran conflict in the Middle East is expected to further curb Egypt’s economic growth prospects as global oil prices are forecast to rise again, while several sectors of the economy continue to grapple with the effects of months of conflict, analysts say.

In its latest World Economic Outlook report released days ago, the International Monetary Fund (IMF) lowered its forecast for Egypt’s economic growth in fiscal year 2026-27 to 4.4 percent, down from the 4.8 percent projected in April. The IMF cited “the continuing impact of the Iran conflict — particularly the closure of the Strait of Hormuz — on the Middle East, weaker investment, higher financing costs, and persistent uncertainty.”

Economist Wael El-Nahas said the downgrade is “not limited to Egypt but reflects the global economy as a whole in light of the conflict’s repercussions,” describing the revision as both natural and expected.

Speaking to Asharq Al-Awsat, El-Nahas noted that the current period of skirmishes between the two sides could be viewed as a period of tacit understandings, allowing oil supplies to keep flowing while limiting sharp increases in food prices and other commodities. However, he warned that a renewed conflict would bring “a much worse period.”

Financial markets researcher Mohamed Mahdy Abdulnabi told Asharq Al-Awsat that geopolitical tensions are the main driver behind the weaker growth outlook.

He said Egypt faces several challenges under the current circumstances, including higher borrowing costs, greater reluctance among lenders to extend new financing, declining foreign investment, stagnation in the private sector, and continued losses at the Suez Canal.

President Abdel Fattah al-Sisi has previously estimated the canal’s losses at $10 billion, citing regional tensions and their impact on Red Sea shipping.

Abdulnabi warned that if the conflict persists, pressure on Egypt’s economy will intensify. “When global oil prices fell below $70 a barrel, the Egyptian government did not cut domestic fuel prices. But as soon as prices began rising again, discussion resumed over the automatic fuel pricing mechanism and the need to increase fuel prices,” he remarked.

The government raised fuel prices by between 14 and 30 percent last March, just 10 days after the US-Iran conflict erupted, amid rising energy import costs.

El-Nahas warned that global oil prices could climb above $100 a barrel, noting that Egypt’s current state budget is based on an assumed oil price of about $75 a barrel. Any increase, he said, would raise the country’s energy import bill and widen the budget deficit. He also cautioned that it could trigger another round of fuel price hikes, further worsening the cost-of-living crisis.

Egypt’s annual inflation rate stood at 14.3 percent in June, down slightly from 14.6 percent in May.

Despite the risks, El-Nahas stressed that some sectors, particularly tourism, still have strong growth prospects despite the renewed US-Iran conflict.

 

 


Iraqi Judiciary Opens Door to 'Conditional Settlements' to Recover Corruption Funds

 Iraqi Prime Minister Ali al-Zaidi receives Supreme Judicial Council President Faiq Zaidan in Baghdad. (Government press office)
Iraqi Prime Minister Ali al-Zaidi receives Supreme Judicial Council President Faiq Zaidan in Baghdad. (Government press office)
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Iraqi Judiciary Opens Door to 'Conditional Settlements' to Recover Corruption Funds

 Iraqi Prime Minister Ali al-Zaidi receives Supreme Judicial Council President Faiq Zaidan in Baghdad. (Government press office)
Iraqi Prime Minister Ali al-Zaidi receives Supreme Judicial Council President Faiq Zaidan in Baghdad. (Government press office)

Iraq’s Supreme Judicial Council announced Friday that it is coordinating with the government on legal mechanisms aimed at combining accountability for corruption with the recovery of public funds.

The proposal could allow reduced legal measures or lighter sentences for defendants who voluntarily return embezzled money under amendments to the General Amnesty Law.

Meanwhile, the recent security operation, dubbed Dawn Assault, has exposed divisions within the ruling Coordination Framework, according to political sources and public statements.

In a statement, the council said its objective is to both hold perpetrators of financial and administrative corruption accountable and recover state funds, adding that these goals could be achieved by easing legal procedures or reducing sentences “within constitutional and legal limits.”

The council noted that the approach was first adopted in the Tax Deposits case, widely known as the “Heist of the Century.” The case centers on the fraudulent withdrawal of tax deposits lodged by foreign companies with the General Commission for Taxes as guarantees for project implementation.

The funds were allegedly siphoned off through irregular procedures involving brokerage firms, including Al-Qant and Al-Mubdeoon Oil Services Company, owned by businessman Noor Zuhair, with the help of government employees.

According to the council, the head of the Supreme Judicial Council and then-Prime Minister Mohammed Shia al-Sudani agreed, with the approval of the investigating judge, to release Zuhair on bail in exchange for repaying the money in installments and receiving a reduced sentence.

The arrangement led to the recovery of 365 billion Iraqi dinars (about $252 million) out of 1.618 trillion dinars (about $1.12 billion) owed by the two companies. Overall, about 3.831 trillion dinars (roughly $2.64 billion) were withdrawn from Rafidain Bank through multiple companies.

According to the council, Zuhair later left Iraq, bringing repayments to a halt. He was subsequently tried in absentia, sentenced to 10 years in prison, and became the subject of extradition proceedings through Arab and international police channels.

Following amendments to the General Amnesty Law, Zuhair’s lawyer requested that his client be covered by the legislation in exchange for repaying the remaining funds. The court sought the Finance Ministry’s opinion, as the injured party, on the proposed repayment mechanism but has yet to receive a response, leaving the request pending.

The council added that 12 employees of the General Commission for Taxes have been sentenced to prison for facilitating the withdrawals and may qualify under the amended amnesty law after paying compensation determined by the Finance Ministry.

An photo released by the Iraqi judiciary shows cash seized inside boxes and bags marked with the Iraqi Central Bank's seal.

It also noted that an investigation into former Prime Minister Mustafa al-Kadhimi, whose government was in office when the crime occurred, was closed for lack of evidence.

The same approach could also be applied in the North Refineries Company case involving detained suspect Adnan al-Jumaili and several current and former lawmakers, provided the alleged offenses predated the amended amnesty law and the outstanding funds are repaid.

Crimes committed after the law took effect are not eligible for amnesty.

The judiciary is now coordinating with Prime Minister Ali al-Zaidi on a constitutional and legal “roadmap” aimed at recovering public funds while easing legal measures against those who voluntarily return them.

Separately, the June 28 Dawn Assault operation inside Baghdad’s Green Zone, which resulted in the arrest of dozens of corruption suspects, triggered criticism within the Coordination Framework.

An informed source told Asharq Al-Awsat that several alliance leaders were caught off guard by the operation and the deployment of tanks and armored vehicles, raising concerns that military force could be used more broadly in the future.

The source added that al-Zaidi defended the measures during his first meeting with Coordination Framework leaders after the operation, arguing that the armored deployment was necessary to seal off the Green Zone while the arrests were carried out.

The source also said several lawmakers managed to leave the Green Zone minutes before the operation began, some of them affiliated with armed factions.

The absence of any response from those groups during the operation further heightened concerns among some Coordination Framework leaders.

Legal expert Jamal al-Asadi told Asharq Al-Awsat that Iraqi law has no provision allowing financial settlements in corruption cases or other criminal offenses.

He noted, however, that the amended General Amnesty Law includes specific provisions covering those convicted of embezzlement or squandering public funds, subject to prescribed legal conditions.

In televised remarks, leading member of the Coordination Framework Amer al-Fayez said all alliance leaders except former PM al-Sudani criticized the government for failing to notify them in advance of the operation.

While backing efforts to pursue corruption suspects, he objected to the use of tanks during the arrests, arguing that although the prime minister was under no obligation to disclose operational details, the Coordination Framework, as “the state’s highest governing authority,” should have been informed.


Aoun Rejects Linking Lebanon to Iran Talks, Says Hezbollah Must Prove it Prioritizes Lebanon

Lebanese President Joseph Aoun meets with Army Commander Gen. Rodolphe Haykal to discuss ongoing preparations for implementing the provisions of the framework agreement in the pilot areas. (Lebanese Presidency)
Lebanese President Joseph Aoun meets with Army Commander Gen. Rodolphe Haykal to discuss ongoing preparations for implementing the provisions of the framework agreement in the pilot areas. (Lebanese Presidency)
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Aoun Rejects Linking Lebanon to Iran Talks, Says Hezbollah Must Prove it Prioritizes Lebanon

Lebanese President Joseph Aoun meets with Army Commander Gen. Rodolphe Haykal to discuss ongoing preparations for implementing the provisions of the framework agreement in the pilot areas. (Lebanese Presidency)
Lebanese President Joseph Aoun meets with Army Commander Gen. Rodolphe Haykal to discuss ongoing preparations for implementing the provisions of the framework agreement in the pilot areas. (Lebanese Presidency)

Lebanese President Joseph Aoun rejected attempts to tie Lebanon’s future to the Iranian negotiations, declaring that “we are now separate from the Iranian situation and the Islamabad agreement.”

He also urged all parties to give the US-sponsored framework agreement between Lebanon and Israel a chance, accusing both Tehran and Tel Aviv of trying to undermine it. Hezbollah has also rejected it.

Aoun warned that if Hezbollah refuses to cooperate with efforts to end the war in South Lebanon, “it will bear responsibility for its decision” and prove that it places Iran’s interests above Lebanon’s.

The Lebanese state is pressing ahead with US-mediated negotiations with Israel despite Hezbollah’s continued rejection and insistence on retaining its weapons.

The diplomatic track has won broad international backing and growing support among Lebanon’s Christian parties. On Friday, the Lebanese Forces reiterated that “there is currently no alternative to negotiations.”

Speaking to journalists on Friday, Aoun said war had proved futile and that negotiations, backed by US guarantees, offered the best path forward.

He noted that Hezbollah’s stated objectives — an Israeli withdrawal from southern Lebanon, the return of bodies, and reconstruction — are the same goals Lebanon has pursued in talks with Israel under US mediation.

“The difference is the means,” Aoun said, reiterating that war “is not a good option.”

He urged all parties to give the agreement a chance while warning that Israeli Prime Minister Benjamin Netanyahu “always wants to complicate matters,” adding that Iran is doing the same.

Turning to Hezbollah’s weapons, Aoun said: “As long as the party’s choice is Iranian, there will be no point. Matters will be resolved only when its choice becomes Lebanese rather than Iranian.”

He stressed that Hezbollah cannot be dealt with by force because it is not just an armed groups “but also a social constituency.”

Trump meeting

Ahead of his July 21 meeting with US President Donald Trump in Washington, Aoun said he would present “the true reality in Lebanon today,” seek continued US support for the Lebanese Armed Forces, and call for an international conference to support Lebanon.

He described Trump’s invitation to the White House as a “golden opportunity” to tell the US administration that “America’s credibility is at stake” in implementing the framework agreement.

He added that resolving Hezbollah’s weapons issue requires cooperation with the group rather than simply talking about “disarmament,” noting that the weapons are concealed in numerous locations rather than stored in identifiable military barracks.

Aoun also revealed that Lebanon has yet to appoint its representative to the committee established under the Washington-Tehran memorandum of understanding following the Islamabad negotiations, pending a formal US request, particularly since Iran has not yet named its own representative.

He stressed that he, Prime Minister Nawaf Salam, and Parliament Speaker Nabih Berri “do not want sedition or internal fighting,” adding: “We are now separate from the Iranian situation and the Islamabad agreement.”

At the same time, he cautioned that any broader regional conflict would inevitably spill over into Lebanon.

On the border issue, Aoun said talks with Israel would be confined to the 13 disputed border points. He also disclosed that Lebanon had sent Syria a border file and was still awaiting a response.

Geagea

Meeting a delegation from the Lebanese Forces led by party chief Samir Geagea, Aoun pledged not to retreat from negotiations, saying the framework agreement could restore Lebanon’s rights through diplomacy, provided Israel respects it.

He argued that criticism of the process stems from attempts to place the Lebanese file back in Iran’s hands.

Geagea endorsed the negotiating track, saying Lebanon cannot function without “one army and one set of arms.”

Decisions on national issues and the Israeli presence must be made by the Lebanese state, not by any political party, he urged.

“None of us is enamored with the agreement, but at present we have no alternative but negotiations,” he remarked.

In contrast, Hezbollah MP Hussein Hajj Hassan dismissed the agreement as one imposed by the United States on both Israel and Lebanon’s authorities, which he said lack negotiating experience and represent only part of the Lebanese people.

Rejecting what he described as threats to bring in foreign forces to disarm Hezbollah, he said neither foreign troops nor the Lebanese authorities would succeed in stripping the “resistance” of its weapons.