Israel Latest: Israel at Risk of Moody’s Debt Rating Downgrade

Israel’s debt rating was put on review for downgrade at Moody’s Investors Service as the violent conflict with Hamas escalates.

(Bloomberg) — Israel’s debt rating was put on review for downgrade at Moody’s Investors Service as the violent conflict with Hamas escalates.

The US is seeing stepped-up drone attacks in Iraq and Syria, the Pentagon said Thursday, while an American destroyer in the Red Sea intercepted cruise missiles and drones fired toward Israel by Houthi rebels in Yemen. The uptick in activity, which targeted US bases in Syria and Iraq, has resulted in minor injuries but prompted fresh concerns that Israel’s war with Hamas might ignite a wider conflict and pull in the US. 

Israeli Finance Minister Bezalel Smotrich said the government was planning a wartime stimulus program “larger and wider” than the support provided to the economy during the coronavirus pandemic, with the budget deficit possibly widening this year to 3.5% of gross domestic product

Egypt’s border crossing with Gaza will open Friday, an Egyptian broadcaster reported, potentially allowing vital aid into the besieged territory and fulfilling a demand of Arab nations, the US and Europe. 

Israel’s A1 Credit Rating Placed Under Review (12:25 a.m.) 

Moody’s placed Israel’s A1 long-term foreign-currency and local-currency issuer ratings on review, according to a Thursday statement. Previously, the credit assessor’s outlook for the nation was stable.

Israel has never been downgraded by any of the major ratings companies, even through conflicts and global economic crises. But its rating was already under pressure before the recent military activity, with credit assessors taking an increasingly dim view of the government’s efforts to weaken the power of the judiciary. The Moody’s warning follows a similar move by Fitch Ratings, which placed the nation’s credit score on a negative watch earlier this week. 

Biden Speaks With Zelenskiy Before Speech (12 a.m.)

Hours before he was to address the nation on Thursday night, President Joe Biden spoke with the Ukrainian leader Volodymyr Zelenskiy. They discussed the continued US commitment to supporting Ukraine against the Russian invasion, according to the White House. 

Zelenskiy said on X, the former Twitter, that he thanked Biden for for the first-ever delivery of ATACMS missiles. Biden, in his speech, plans to talk about Ukraine as well as the US response to the attack on Israel by Hamas, the White House said.

Drones Target US Bases in Syria, Iraq (11:30 p.m.)

The uptick in activity, which targeted US bases in Syria and Iraq, has resulted in minor injuries but prompted fresh concerns that Israel’s war with Hamas may spark a bigger conflict and pull in the US. The Pentagon is also sending more forces to the region, including fighter jets.

“You have to look at these individually — we’re taking them seriously and responding appropriately,” Brigadier General Pat Ryder, a Pentagon spokesman, told reporters Thursday. “Our focus is on deterring a broader regional conflict, and right now this conflict is contained between Israel and Hamas.”

Israel Plans Stimulus to Support Economy During War (7:25 p.m.)

Speaking at a briefing in Jerusalem, Israeli Finance Minister Bezalel Smotrich said 1 billion shekels ($247 million) will be spent on a directorate that will handle the rebuilding of southern settlements as well as assistance to victims of this month’s attack by Hamas, a group designated as terrorists by the US and European Union. Authorities are also set to provide compensation grants to small and medium-sized businesses all across Israel for the first time during war.

Smotrich said the government is planning a wartime stimulus program “larger and wider” than the support provided to the economy during the coronavirus pandemic, with the budget deficit possibly widening this year to 3.5% of gross domestic product.

Israel Tells Some Diplomats to Leave Turkey Over Security (7:10 p.m.)

Israel asked some of its diplomats in Turkey to leave the country on security grounds, according to a person familiar with the matter. The decision comes after Israel raised travel warning to Turkey to the highest level. The Israel Foreign Ministry said it wouldn’t comment about the security of its diplomats.

Israel is also evacuating embassies in other Middle Eastern countries, according to public broadcaster KAN TV.

Egypt Calls for Uninterrupted Distribution of Aid to Gaza (7:06 p.m.)

Distribution of aid to Palestinians in the Gaza Strip should be “uninterrupted” and continuous, Egypt’s foreign minister said Thursday, saying there’s no alternative to a two-state solution for the Israeli-Palestinian conflict.

The idea of relocating Palestinians to other countries is “not an option,” Sameh Shoukry said, speaking in a joint press conference with United Nations Secretary-General Antonio Gutteres in Cairo. The UN chief said both Israel and Hamas must halt fighting and that, among other steps by both sides, Hamas should immediately and unconditionally release the hostages it’s taken. 

Egypt-Gaza Border to Open Friday, Broadcaster Says (7 p.m.)

Egypt’s border crossing with Gaza will open Friday, according to a social media posting on X by Egyptian broadcaster Al-Qahera News.

The Rafah border crossing is the only official entry point into Gaza that isn’t controlled by Israel. Al-Qahera News, which often reflects the thinking of Egyptian authorities, cited people it didn’t identify and didn’t give further details.

Germany’s Top Diplomat Phones Palestinian Counterpart (6:48 pm)

German Foreign Minister Annalena Baerbock started her two-day trip to the region by speaking by phone with her counterpart of the Palestinian Territories Riyad al-Maliki. “We see the suffering of the Palestinians,” Baerbock told him according to a social media post on X. “Hamas does not represent the Palestinian civilian population.”

Baerbock also discussed the Israel-Gaza conflict with her Jordanian counterpart Ayman Safadi in Amman. On Friday she plans to travel on to Israel and Lebanon.

Israel’s Gallant Says Troops to See Gaza From the Inside Soon (6:40 pm)

Israel has said it’s preparing for significant ground operations in Gaza against Hamas, the group behind the Oct. 7 attack that’s designated a terrorist organization by the US and the European Union. Now, Israel’s defense minister reinforced that message.

“You see Gaza from far away now, but soon you will see it from the inside,” Yoav Gallant told troops gathering in southern Israel, close to the border with Gaza.

Germany Calls on Citizens to Leave Lebanon, West Bank (6:20 p.m.)

The German Foreign Office urged citizens to leave Lebanon and the West Bank immediately.

“A further deterioration of the situation and an expansion of the conflict cannot be ruled out,” it said on its official travel and security advice website.

Missiles, Rockets Launched From Lebanon Bring Response (6 p.m.)

Iran-backed Hezbollah targeted five Israeli sites with guided missiles, according to the group’s Al-Manar TV. Palestinian militant group Hamas said it fired 30 rockets from south Lebanon into Nahariya and Shlomi in north Israel, the television station said.

Israel said it responded to the source of fire after 20 launches from Lebanon, including five that fell in open areas and one that was intercepted by aerial defenses.

Israel Receives US Cargo Plane Shipment of Armored Vehicles (5:24 pm)

Israel received an initial shipment of armored vehicles to replace those damaged during the war, according to the Israeli Ministry of Defense.

The delivery is part of a large-scale procurement operation that will include armored ambulances, operational armored vehicles, tactical trucks and mechanical engineering equipment. Hundreds of vehicles have already been delivered, with several hundred more currently en route to Israel.

Hamas Calls for ‘Day of Rage’ Protests Against Israel (2:20p.m.)

Hamas called for a “Day of Rage” across the Islamic world, encouraging Muslims to stage mass protests against Israel on Friday.

Last week, following a similar call by the militant group, thousands took to the streets in the Middle East and other countries for demonstrations in support of Palestinians living in Gaza.

Meta, TikTok Added to EU Illegal Content Probe (1:46 p.m.)

The European Commission sent formal requests for information to ByteDance Ltd.’s TikTok and Meta Platforms Inc., further escalating EU attempts to rein in harmful content on social media a week after it asked Elon Musk’s X for similar answers.

The EU gave Meta and TikTok until Oct. 25 to respond about how they’re tackling election disinformation and the spreading of “terrorist and violent content and hate speech” respectively, following the Hamas-Israel conflict. X’s answers were due Wednesday.

China’s Xi Calls for Cease-Fire (1:04 p.m.)

Chinese President Xi Jinping called for an immediate ceasefire in the Israel-Hamas war, his first public comments since the conflict broke out on Oct. 7.

China is willing to step up coordination with Egypt and other Arabic countries “to push for a comprehensive, just and lasting solution to the Palestinian issue as soon as possible,” Xi told visiting Egyptian Prime Minister Mostafa Madbouly in Beijing Thursday, according to a transcript from the foreign ministry. 

China has been facing increasing pressure for failing to condemn Hamas, which Europe and the US have designated a terrorist group. There was also pressure on Beijing to provide assistance, especially as Xi seeks to play global peacemaker.


Biden to Address Nation on Thursday (12:15 a.m.)

Biden will deliver a speech from the Oval Office Thursday at 8 p.m. Washington time “to discuss our response to Hamas’s terrorist attacks against Israel and Russia’s ongoing brutal war against Ukraine,” the White House said.

Biden returned to Washington after a visit to Israel on Wednesday lasting about eight hours. He is considering a supplemental request to Congress of about $100 billion that would include defense assistance for Israel and Ukraine, along with border security funding and aid to nations in the Indo-Pacific, including Taiwan, according to people familiar with the matter.

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