Key Takeaways:
Hamas and allied factions submitted a unified response to the Gaza peace roadmap on June 13, but mediators in Cairo see little chance of a breakthrough before Israeli elections this fall, according to diplomats involved in the talks.
Hamas and multiple Palestinian factions submitted a unified response to the US-backed Gaza peace roadmap on June 13, yet three mediating countries see little chance of a breakthrough before Israeli elections this fall, according to diplomats involved in the talks.
"The closer we get to elections, the harder it gets to convince Israel to even respond to requests, let alone accept them," a senior Middle Eastern diplomat involved in the negotiations said, speaking on condition of anonymity.
The response, delivered to Board of Peace envoy Nickolay Mladenov after a week of meetings in Cairo with Egypt, Qatar and Turkey, demands full implementation of the ceasefire's first phase — including humanitarian aid delivery, an end to "all forms of aggression" and complete withdrawal of Israeli troops. The 20-point US plan, which the Board of Peace is tasked with implementing, conditions reconstruction on Hamas disarmament, a step the group has resisted.
The impasse carries direct implications for energy markets. The Strait of Hormuz, which handles about 21% of global oil trade, remains a flashpoint as the separate US-Iran conflict has disrupted Persian Gulf shipments. A breakdown in Gaza talks could reignite hostilities and push crude prices higher, while a deal would remove a key geopolitical risk premium.
Disarmament Deadlock
Hamas has argued it should not be expected to execute the second phase of Trump's plan — which envisions a gradual handover of weapons — if Israel has failed to uphold conditions of the first phase, including reopening Gaza's main crossing, pulling back troops and halting strikes. Mladenov has countered that Hamas should only expect Israel to adhere to those commitments if the group gets on board with the disarmament requirement, the Times of Israel reported last month.
The Board of Peace's 15-point disarmament plan envisions a reciprocal process: Israel would withdraw from areas where Hamas agrees to give up its weapons. But Israeli officials have indicated that even if Hamas agreed to begin disarming, Prime Minister Benjamin Netanyahu is unlikely to authorize troop pullbacks with elections looming in September or October, three diplomats from the mediating countries said.
The last time Israel faced a similar electoral dynamic during active Gaza negotiations was in 2019, when two rounds of elections within months stalled any meaningful diplomatic progress and preceded a cycle of escalation. Netanyahu's opponents are already attacking him for failing to deliver "total victory" in Gaza after more than two years of war, making territorial concessions politically toxic.
Plan B Emerges
If Hamas cannot accept the disarmament proposal, the Board of Peace is preparing to implement point No. 17 of the 20-point plan, which allows reconstruction to proceed in areas controlled by the Israel Defense Forces. The so-called "green zone" strategy would begin rebuilding on the ruins of the southern Gaza city of Rafah, though Egypt has pushed back on this choice amid fears that Israel may try to push Palestinians across the border into the Sinai.
The US official acknowledged that the effort would become more challenging as Israeli elections approach but said Washington does not intend to wait through the fall. "The status quo in Gaza wouldn't be maintained in the interim. It could well get worse," the official said.
Broader Regional Context
The Gaza negotiations are unfolding against the backdrop of a potential US-Iran deal to end their separate conflict. Pakistan's Prime Minister Shehbaz Sharif said on June 13 that the two countries had agreed on the wording of an agreement, with Iranian Foreign Minister Abbas Araghchi confirming that "peace has never been this close." That deal, if finalized, would include provisions for reopening the Strait of Hormuz and begin the process of removing Iran's highly enriched uranium over a 60-day period.
A successful US-Iran agreement could reduce the regional risk premium embedded in crude prices, while a simultaneous breakdown in Gaza talks would leave two major Middle Eastern flashpoints unresolved. The last time both the Gaza front and the Iran nuclear file were in simultaneous crisis — during the 2023-2025 war — Brent crude averaged above $90 a barrel for sustained periods.
This article is for informational purposes only and does not constitute investment advice.
