The Conversion of Saint Paul, Adam Eisheimer, c1598, oil on copper, Städel Museum, Frankfurt.

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ISRAEL. IRAN. Goad to Damascus

A proxy war gets a little more direct.

Iran blamed Israel Monday for a strike on its Syrian embassy, which killed seven military advisers, including three top IRGC officials. Israeli media Sunday said Iran was stoking protests in Jordan that could result in a pro-Hamas coup.

INTELLIGENCE. Beyond Yemen, Iran and its proxies have been largely cautious in responding to Israel’s reprisals in Gaza. The strike in Damascus, which follows an attack in Aleppo, killing 38, could change this. It’s a signal Israel is increasingly confident it has crushed Hamas and is coming next for Hezbollah and Iran’s other allies. Warnings over Jordan are likely overblown, but Amman’s Israel-friendly government could be a soft target should Tehran respond.

FOR BUSINESS. Irrespective of how or when a final assault is made on Gaza’s southern city of Rafah, Israel is nearing an end to the war with its military ties to the US intact, though its reputation has taken a hit. Benjamin Netanyahu’s government is also damaged, facing a storm over Haredi conscription and the biggest protests since the war began. But while escalation with Iran is the last thing Israel needs, it would at least reduce calls for an early election.

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TURKEY. Basted

The ruling party is thrashed in local elections.

Recep Tayyip Erdogan vowed reform after his Justice and Development (AK) Party suffered its worst defeat in 20 years. Istanbul's mayor, whose Republican People's Party (CHP) edged out the AKP, said "the era of one-man rule” was over.

INTELLIGENCE. The CHP beat the AKP by two points nationwide, not only winning liberal cities but AKP strongholds in the Anatolian heartland. This solidifies Istanbul’s Ekrem Imamoglu as Erdogan’s key rival, but presidential polls aren’t due until 2028, and Erdogan isn’t running. Further, while the CHP has capitalised on municipal frustrations like poor construction standards, high costs, and corruption, the AKP’s foreign policy positions remain largely unopposed.

FOR BUSINESS. The only hit to Erdogan on foreign affairs came from the Islamist New Welfare party, which wanted a harder stance on Israel. As for Erdogan’s balancing act on Russia and the West, as well as its neo-Ottoman policies in the Middle East, these tend to be popular and would probably remain under a CHP government, as would Erdogan’s recent tilt towards a more conventional monetary policy. The lira and Turkish stocks changed little in Monday’s trade.

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CHINA. PAKISTAN. Belt erode

Militants may force Beijing to reroute its ambitions.

Prime Minister Shahbaz Sharif promised the "best possible" security for Chinese citizens Monday following the deaths of five workers and their driver in a bombing last week. A third attack was mounted on Pakistani troops in Balochistan.

INTELLIGENCE. The terrorist attacks, at a Chinese-funded hydro project in the north, and near the Chinese-built port of Gwadar in the south, come as Pakistan's reconstituted military-backed government struggles to cement its political authority and calm fiscal uncertainty. The attacks, aimed at Islamabad’s chief benefactor, further call into question Pakistan’s economic viability, just as Washington said it would oppose the construction of a gas pipeline to Iran.

FOR BUSINESS. Though poor in energy and hard currency, Pakistan is too big to fail. Its allies will ensure it limps along, even if its potential is unrealised. For its own ambitions of Eurasian dominance and access to the Indian Ocean, Beijing may need to look elsewhere. And with its other key Belt and Road corridor, Myanmar, mired in civil war, that may be via Iran and Central Asia. Yet here too, terrorism looms, particularly with a resurgent ISIS across the region.

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SERBIA. Balkan of worms

Vucic appoints an ultranationalist prime minister.

President Aleksandar Vucic nominated ex-defence minister and Serbian Progressive Party (SNS) chief Milos Vucevic as prime minister Saturday. Vucic last week warned of a "strong" reaction if Kosovo joined the Council of Europe.

INTELLIGENCE. Belgrade remains committed to EU membership and on issues like Kosovo, Vucevic isn't radically different from predecessor Ana Brnabic. Yet temperamentally, the change could be stark, particularly as Serb nationalists in Kosovo and Bosnia speak with a louder voice and Russia seeks to deepen regional divides. In February, Belgrade received another arms delivery from Moscow. On Friday, Vucic said he might attend Russia’s BRICS summit.

FOR BUSINESS. Replacing Brnabic, who has gone on to become parliamentary speaker, may hurt the SNS’s chances at mayoral elections in cosmopolitan Belgrade, to be held before June after an abortive vote in December. Yet nationwide polls aren’t due until 2027 and Vucic remains popular. Serbia’s economy has defied an EU downturn and though scandals have rocked Belgrade – including a construction deal involving Jared Kushner – most are better off.

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PERU. Watch this space

The branches of government go to war.

Six ministers resigned Monday following raids on the home and office of President Dina Boluarte, who is under investigation over a collection of Rolex watches. The resignations may harm a customary legislative vote of support.

INTELLIGENCE. Boluarte’s prime minister was already in danger of losing the opposition-held congress’s support. With a third of the cabinet now replaced, further instability may ensue, deepening a growing rift between the executive, legislature, and judiciary. Changing the cabinet, or indeed the unpopular president, won’t solve Peru’s problems, which appear increasingly structural. Peru’s last elections, in 2021, led to a choice between the far-left and far-right.

FOR BUSINESS. Peru’s instability is beginning to harm its reputation with investors.Last month's decision to revoke the exclusivity rights of the Chinese-built Chancay port, nearing 70% completion, may also damage confidence and endanger a visit by Xi Jinping. Chancay was recently touted as a Pacific gateway for Brazilian farm exports, with roads across the Andes duplicating the Interoceanic Highway from the Amazon to the port of Matarani in the south.

Israel, Iran: Goad to Damascus