Fresh hope for a Gaza truce

The standoff between Israel and Iran could spur talks on a truce in Gaza. [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. A week has passed since Iran and its proxies pledged [major reprisals against Israel]( for the back-to-back assassinations of Hezbollah and Hamas leaders. While the lag may be due to target selection or the element of surprise, some see a chance to defuse the crisis with a Gaza cease-fire. Conditions within the battered Palestinian enclave appear ripe. Exactly 10 months into the war, Hamas’ rule has been reduced to an insurgency. The Islamist faction’s local leader, Yahya Sinwar, [succeeded politburo chief]( Ismail Haniyeh, who was slain in Tehran — gaining an even more dominant role in the Qatari- and Egyptian-mediated negotiations with Israel. Bringing even temporary quiet to Gaza would swiftly calm the fronts with Lebanon, Syria, Iraq and Yemen, across which other Iranian-aligned factions have been firing at Israel in solidarity with Hamas. Tehran would have to shelve the [promised retaliation]( — as would its Beirut client Hezbollah — and may do so with little regret given the risk of an exasperated Israel lashing out. All this is well-known to US President Joe Biden, who has both [beefed up naval detachments]( in support of Israel and [redoubled calls]( on its prime minister, Benjamin Netanyahu, to forge a truce. Netanyahu is open to the talks — but on improved terms. His religious-nationalist government pledged to demolish Hamas, so he wants to limit replenishment of the Palestinian arsenal and personnel during any suspension of hostilities, and to retain the right to resume fighting. The Israelis are also trying to increase the number of live hostages freed by Hamas up-front, knowing a deal could be short-lived. While the chance of a reprieve may appeal to Hamas, it has so far balked at these terms. It may reconsider, however, if urged to by Iran, with the assurance that the “Axis of Resistance” [will take up arms]( against Israel another day.— [Dan Williams]( WATCH: Hamas named Yahya Sinwar as its new political leader following the death of Ismail Haniyeh in Iran last week. Bloomberg’s Paul Wallace reports. Source: Bloomberg Global Must Reads US Vice President Kamala Harris’ running mate, Minnesota Governor Tim Walz, is the first person on a presidential ticket since George H. W. Bush to [have lived in China]( where he taught English in 1989 and 1990. His experience [could help inform]( a potential Harris administration’s approach to the world’s second-biggest economy, but may also spell trouble with leaders in Beijing and Republicans back home. Bangladesh is pinning its hopes on one of the nation’s most acclaimed intellectuals to bring stability to a country scarred by coups and political upheaval. Muhammad Yunus, whose work alleviating poverty won him a Nobel Peace Prize, was [named the head]( of a new interim government yesterday following the sudden ouster of Sheikh Hasina as prime minister. Muhammad Yunus. Photographer: Fabeha Monir/Bloomberg Fighting continued for a second day in what Russia called [an incursion]( into its Kursk region involving at least 300 Ukrainian troops backed by tanks. Russia deployed artillery and aircraft to fight Ukrainian formations and called up reserves of troops to the border region, the Defense Ministry in Moscow said. At least five people have been killed and 28 wounded, Russian media reported. UK police deployed extra officers and said they were [ready to arrest]( hundreds more far-right activists if they go ahead with plans to converge on immigration centers today. The recent disorder has been fueled by online misinformation since an attack a week ago left three young girls dead in Southport in northwest England. Far-right activists falsely claimed the suspect was a Muslim asylum-seeker in an effort to stoke anti-immigrant and Islamophobic sentiment. Thailand’s Constitutional Court ordered the dissolution of the nation’s largest opposition party, Move Forward, after [finding it guilty]( of breaching election rules with its campaign to amend a stringent royal defamation law. The ruling risks triggering a fresh spell of political unrest, with the same court also set to decide next week on a petition to oust Prime Minister Srettha Thavisin for an alleged ethical breach. The US, Philippines, Australia and Canada said they’ll hold [joint maritime drills]( within the Southeast Asian nation’s exclusive economic zone starting today as tensions with China linger. The US charged a Pakistani man, who allegedly has ties to Iran, with attempting to [carry out assassinations]( of American politicians. Sri Lanka’s ruling Podujana Peramuna party named Namal Rajapaksa, a scion of the powerful clan, [as its candidate]( for the Sept. 21 presidential election. The German drugstore chain Rossmann said it will [no longer purchase]( Tesla vehicles for its fleet, citing Elon Musk’s support for Donald Trump. Washington Dispatch US Representative Cori Bush lost a bitter primary battle driven by Democratic divisions over Israel, [further shrinking]( the so-called “squad” of House progressives. Bush with pro-Palestinian students outside the US Capitol in May. Photographer: Allison Robbert/Bloomberg An outspoken critic of Israel’s handling of the war in Gaza, the Missouri Democrat was defeated by St. Louis County Prosecuting Attorney Wesley Bell, according to results from the Associated Press. Bell benefited from $9.5 million in ad spending from pro-Israel groups, according to AdImpact. Bell implored voters to “stand with Israel,” drawing a sharp contrast with Bush, a two-term Democrat who has accused Israel of committing war crimes in its response to the Oct. 7 attack on Israeli civilians by Hamas. The US and European Union deem Hamas a terrorist organization. One place to watch today: Eau Claire, Wisconsin, where Harris and Walz and Trump’s running mate, JD Vance, are due to [attend separate events](. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day Affluent Switzerland is in the midst of a heated debate about inheritance taxes on the super-rich. A proposal to take half of any inherited wealth above 50 million francs ($58 million) has prompted warnings from business-owning multi-millionaires and billionaires that they’ll go elsewhere. Under Switzerland’s system of direct democracy, the proposal will go to a national vote, expected in about two years. But even airing such an idea is feeding into a sense that the country’s identity, notably its reputation as a low-tax, business-friendly location, is [being gradually eroded](. And Finally On the Chinese holiday island of Hainan, workers at Linglong One are finishing what will become [by the end of next year]( the world’s first small modular nuclear reactor built for commercial purposes. It’s part of a national fleet of atom-­splitting plants that aim to wean the country off coal and imported fuel. The scale and speed of Beijing’s nuclear crusade is hard to overstate — in an age when few new reactors are built at all, China has 30 under construction. It approved its first nuclear power station in 1981 and BloombergNEF expects the country to leapfrog France and the US by 2030. The Linglong One reactor under construction in 2023. 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