Israel Rejects US Proposal for Humanitarian Ceasefires, Calls for Release of Hostages As Priority; IDF Targets Hamas Tunnels

Israel opposed the U.S. proposal for humanitarian pauses in Gaza, insisting that they should be contingent upon Hamas releasing the hostages from there.

Israeli President Isaac Herzog spoke with U.S. Vice President Kamala Harris, reiterating Israel’s commitment to upholding international humanitarian law while defending itself against an enemy that uses civilian populations as cover. He also noted Israel’s commitment to allowing humanitarian aid into Gaza, while highlighting that Hamas obstructed the Red Cross from visiting the hostages.

In response, Harris emphasized the importance of addressing the humanitarian situation in Gaza. However, the U.S. does not want these humanitarian pauses to be dependent on the captives’ release, according to officials from both countries as reported by The Times of Israel on Tuesday.

Here are the latest updates on Tuesday:

• Prime Minister Benjamin Netanyahu spoke to the nation from the Kirya military headquarters in Tel Aviv, marking the one-month anniversary since the Hamas’ attacks on Oct. 7. The Israeli Prime Minister asserted the Israeli Defense Forces (IDF) has penetrated deeper into Gaza than Hamas anticipated. He also issued a stern warning to Lebanon’s Hezbollah, cautioning that it would commit a grave error if it were to initiate a new full-scale conflict.

• CNN reported The White House reiterated on Tuesday it opposed the idea of Israeli forces reoccupying Gaza, despite Netanyahu’s statement that Israel will have “overall security responsibility” in Gaza for an “indefinite period” after the war concludes.

• State Department spokesperson Vedant Patel emphasized the Palestinians should be leading the way in making decisions regarding Gaza. He reiterated that Gaza is Palestinian territory and will continue to be Palestinian land.

• According to five Israeli security sources who spoke to Reuters, Israel’s military initiated the next phase of its ground campaign against Hamas, focusing on targeting the Islamist group’s complex network of tunnels and command centers in northern Gaza. This operation is expected to be extensive and may span several months, as Reuters reported.

• IDF Spokesman Rear Adm. Daniel Hagari stated there would be no ceasefire, as the military continued to advance with its ground offensive in the Gaza Strip.
  
• A member of Hamas’s political bureau, Ghazi Hamad, expressed strong opposition to any efforts to exclude Hamas from future governance in Gaza, following remarks by U.S. National Security Council spokesperson John Kirby that suggested Hamas should not be part of Gaza’s governance equation, as reported by Al Jazeera. Hamad criticized the U.S. stance, stating, “Americans are dreaming a lot,” highlighting past failures in Afghanistan, Iraq and Somalia.

Market Reactions

Israeli-related stocks rose for the seventh straight session on Tuesday, with the iShares MSCI Israel ETF EIS had a 1.8% surge, rising to levels not seen since Oct. 10.

The Israeli shekel also strengthened for the fifth straight session, up 0.8% against the U.S. dollar.

Cathie Wood’s ARK Israel Innovative ETF IZRL held steady, remaining 7% lower compared to pre-Hamas’ attacks levels.

U.S. stocks advanced, as the SPDR S&P 500 ETF Trust SPY extended its winning streak to seven consecutive days, while the tech-focused Invesco QQQ Trust QQQ notched its eighth straight day of gains. This marked the longest winning streak for both in over two years.

Bonds also surged, with the US Treasury 10 Year Note ETF UTEN up 0.6%.

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