MENA Strategic Bulletin

Threat of Israeli strike raises stakes for stalling US-Iran talks

Despite US President Donald Trump’s suggestion last week that a nuclear agreement with Iran was “close”, the prospects for a deal appear increasingly slim, with both Washington and Tehran showing no signs that they will compromise on the issue of uranium enrichment. Meanwhile, Israel is manoeuvring to capitalise on the impasse, escalating preparations for a potential military strike on Iran’s nuclear infrastructure.

On May 20, Iran’s Supreme Leader Ayatollah Ali Khamenei dismissed US demands for an end to uranium enrichment as “excessive and outrageous”, casting doubt on whether upcoming negotiations will bear fruit. Tehran remains firm on its right to enrich uranium, a position it argues is protected under the Nuclear Non-Proliferation Treaty.

American officials, meanwhile, have sent conflicting messages about whether any future deal would permit Iran to maintain domestic enrichment capabilities. White House envoy Steve Witkoff reiterated on Sunday that the US has a non-negotiable “red line” on enrichment. “We cannot allow even 1% of an enrichment capability,” he stated.

The fifth round of US-Iran talks is taking place this Friday in Rome. While optimism briefly grew after a US proposal was delivered during the previous round, hopes for progress have since dimmed.

Stakeholder and regional impact

Should negotiations fail to result in an agreement, Israel may look conduct a strike on Iranian nuclear facilities. Reports from sources close to US and Israeli intelligence indicated that the Israel Defence Forces have been engaged in extensive training and exercises in preparation for a potential strike.

Israel’s Prime Minister Benjamin Netanyahu is reported to have convened a confidential meeting with top ministers and intelligence officials to discuss the nuclear talks. According to Israeli sources, he is closely watching the outcome of the discussions, prepared to act should the Trump administration become disillusioned with the negotiations.

While Netanyahu said on Monday that the interests of the US and Israel overlap “almost completely”, the Trump administration is reportedly concerned Israel may proceed unilaterally, heightening tensions at a delicate moment in the negotiations.

Any strike will have serious implications for regional security and stability, especially if, as has been suggested, it is not a one-off hit but part of a military campaign lasting a week or more. Saudi Arabia, the United Arab Emirates and Jordan helped to defend Israel from missile and drone attacks by Iran in April 2024, but that might not be the case should Israel choose to strike this time.

One consequence of the mooted Israeli strike is already evident in the energy market. A CNN report on Tuesday evening citing preparations for a potential Israeli strike led to a surge in oil prices: US crude rose 1.1% on Wednesday morning to $62.70 per barrel, while Brent crude climbed 1% to $66 per barrel.

What’s next?

As the next round of talks gets underway in Rome, the potential for an Israeli strike has raised the stakes. Should nuclear talks fail, Israel appears increasingly ready to shift the dynamic through direct military intervention. Any Israeli strike could prompt a retaliatory response from Iran, potentially disrupting oil supply lines and driving prices even higher. The risk of broader regional involvement, particularly from actors such as  Jordan and the Houthis, is also growing.

Netanyahu vows to ‘take control’ of Gaza as UK, France and Canada warn of consequences

Israeli Prime Minister Benjamin Netanyahu has declared his intention to “take control” of the entire Gaza Strip, even as key international allies condemned what they described as a disproportionate escalation of military operations and ongoing restrictions on humanitarian aid.

In a joint statement, the United Kingdom, France and Canada criticised Israel’s military campaign and blockade, warning of “intolerable” conditions in Gaza and pledging to take “concrete” measures should Israel’s actions continue unchecked.

“We will not stand by while the Netanyahu government pursues these egregious actions,” the statement read. “If Israel does not cease the renewed military offensive and lift restrictions on humanitarian aid, we will take further concrete actions in response.”

On the same day, Israel’s military designated an entire city in Gaza a combat zone, with airstrikes reportedly killing over 60 people. Finance Minister Bezalel Smotrich further escalated rhetoric, vowing that the Israeli army would “wipe out” what remains of Palestinian Gaza.

Stakeholder and regional impact

By Tuesday May 20, the UK had suspended trade talks with Israel, imposed sanctions on West Bank settlers and summoned Israel’s ambassador in response to the ongoing offensive. These are the strongest measures the UK has directed at Israel in recent history.

The European Union is also re-evaluating its relationship with Israel. Following a meeting on Tuesday 20 May, EU foreign policy chief Kaja Kallas announced that the bloc will assess whether Israel has breached its human rights obligations under article 2 of the EU-Israel Association Agreement, which governs trade and diplomatic ties. The review follows a proposal introduced by Dutch Foreign Minister Caspar Veldkamp, with 17 out of 27 EU foreign ministers expressing support. Belgium, Finland, France, Ireland, Luxembourg, Portugal, Slovenia, Spain and Sweden had all publicly backed the proposal in advance of the meeting.

For Netanyahu, this growing international pressure adds to mounting political scrutiny at home. A growing rift with US President Donald Trump – who has floated the idea of US administration in Gaza – adds another layer of complexity. Any compromise on Gaza’s governance could risk the collapse of Netanyahu’s coalition, as ministers including Itamar Ben-Gvir have threatened to resign if a ceasefire is reached or if full military control is relinquished.

Meanwhile in Gaza, the humanitarian situation continues to deteriorate. On Wednesday, May 21, the United Nations warned that up to 14,000 infants could die within 48 hours if humanitarian aid is not delivered immediately. While the UN confirmed that 90 aid trucks entered Gaza on April 22, the Palestinian Red Crescent reported that supplies had yet to reach their destinations.

Humanitarian experts stress that this figure is far from adequate: more than 600 trucks per day are required to begin addressing the crisis. According to new data from the Integrated Food Security Phase Classification, over 93% of Gaza’s approximately 1 million children are at critical risk of famine.

What’s next?

Despite mounting humanitarian and diplomatic warnings, the Israeli government has shown little indication it will ease restrictions on aid deliveries. The next stage of the humanitarian crisis will hit Gaza’s water supply, with the UN warning that water and sanitation facilities will shut down imminently unless fuel is delivered.

Politically, the suspension of the UK’s free trade agreement negotiations with Israel could serve as a bellwether for EU policy. The UK had already frozen 30 arms export licences last year, citing “clear risk” of complicity in serious breaches of international humanitarian law. Additional arms suspensions and coordinated sanctions from the UK, France and Canada are likely to follow if the situation in Gaza deteriorates further.