Trying to ease US-Israeli tensions

US and Israel look to ease their strained relations [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Joe Biden and Benjamin Netanyahu are trying to put a stop to the damage the war in Gaza is causing to US-Israeli relations. The two leaders [spoke for the first time]( in more than a month yesterday. The rising death toll among Palestinians and the dire humanitarian situation — a United Nations-backed report says [a potential famine looms over northern Gaza]( — has strained ties between Israel and its closest ally. The rancor culminated in Chuck Schumer, the highest-ranking Jewish member of the US Congress, saying Israel should hold early elections and that Netanyahu’s coalition was no longer fit to rule the country. Biden, a fellow democrat, called it a “good speech,” while Netanyahu said it was “totally inappropriate.” Biden, under pressure from many voters ahead of November’s election to make Israel stop fighting, got a concession on the call: Netanyahu agreed to send officials to the US to talk about Israel’s planned ground assault on the city of Rafah. But it may be only a minor win for the president. There’s no guarantee Netanyahu will be persuaded against sending forces into Rafah, a move he insists is necessary because it’s the last bastion of Hamas, designated a terrorist organization by Washington and others. Netanyahu leads the most right-wing government in Israel’s history and he’s under plenty of pressure not to cave in to any demands. He and his ministers are also loath to accept calls from the US, European and Arab states for Israel to make steps toward a [two-state solution]( with the Palestinians. There’s little sign Israel is ready to improve ties with the Palestinians following Hamas’s Oct. 7 attack. That’s evident from its [refusal to allow back in]( the roughly 150,000 people from the West Bank who used to work in Israel, the majority of them on building sites. Nearly six months into this crisis, everyone appears stuck. —[Paul Wallace]( An Israeli bombardment in Gaza yesterday. Photographer: AFP/Getty Images Global Must Reads Donald Trump said Jews who support the US Democratic Party “hate Israel” and their religion, repeating an attack he made as president. Jewish groups and Democrats condemned Trump’s comments made on an online radio show, which [play on an antisemitic trope]( that Jewish Americans share a dual loyalty to Israel — a theme Trump has touched on for years. Antony Blinken criticized China’s “provocative actions” in the South China Sea on a visit to Manila, as he reaffirmed Washington’s [security commitment]( to the Philippines. The US and other nations have rallied to Manila’s support after Chinese vessels blocked, closely shadowed and used water cannons on Philippine vessels in the disputed waterway, actions the US secretary of state says the world sees as a violation of international law. The trial of former Vitol oil trader Javier Aguilar has shone an unprecedented light on wrongdoing in the global commodity trading industry. As this compelling [Big Take]( reports, the case brought to life the inner workings of a modern-day bribery scheme in more detail than ever before, in a world that’s long been known for backhanders and brown envelopes. An artwork called “Cash Flow” at Vitol’s US headquarters in 2018. Source: Bloomberg The European Union has drafted legislation to provide Ukraine [with profits]( generated by frozen Russian sovereign assets as early as July. As Alberto Nardelli reports, the proposals, which require backing from all member states, would apply a windfall tax on income generated by the immobilized reserves, aiming to use an estimated €3 billion ($3.3 billion) a year to fund weapons supplies to Ukraine and boost its defense industry. Brazilian President Luiz Inacio Lula da Silva is pressuring top aides to boost spending, gin up faster economic growth and [turn around his sinking approval ratings](. That’s why he ordered state-run oil company Petroleo Brasileiro to withhold a $9 billion dividend to investors and pump the cash into priority energy projects, and it explains the push to replace the head of mining giant Vale with a leader more focused on creating jobs. Both moves have shocked investors. Congressional leaders and the White House reached a handshake deal [to fund the US government]( through September after six months of bitter ideological clashes delayed finishing an annual spending plan, sources say. The International Monetary Fund is lending near a record amount to almost 100 countries, evidence of its [growing role as a backstop]( against the financial and political dangers of the post-pandemic world. Trump lost his bid to prevent testimony from a porn star and a Playboy model at the former president’s criminal trial in New York, where [he’s accused of falsifying business records]( related to hush-money payments before the 2016 election. Washington Dispatch Defense Secretary Lloyd Austin and General Charles Brown, the chairman of the Joint Chiefs of Staff, are in Germany today for a meeting of the Ukraine Defense Contact Group, just days after Russian President Vladimir Putin [claimed a sweeping mandate]( in an election that was tightly controlled by the Kremlin. With legislation providing US military assistance ensnared in Congress over a partisan border policy dispute, the Ukrainian armed forces have had to ration ammunition on the battlefield. That has led American officials to urge congressional leaders to approve the aid and find other ways of providing weapons and ordnance in a conflict that Putin is determined to pursue. For instance, $300 million in military assistance announced by the White House last week “was made possible through presidential drawdown authority,” according to the Defense Department. Representatives of some 50 countries will join Austin and Brown for the 20th gathering of the Ukraine Defense Contact Group at Ramstein Air Force Base. In Kyiv yesterday, Senator Lindsey Graham, a South Carolina Republican, said he told Ukrainian President Volodymyr Zelenskiy that Trump’s “idea of turning aid from the United States into a no-interest, waivable loan is the most likely path forward.” One thing to watch today: Federal Reserve policymakers begin two days of meetings. [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 Only 10 countries and 9% of global cities had air quality that met World Health Organization guidelines for harmful fine-particle pollution last year, [according to a new analysis](. Bangladesh, Pakistan, India, Tajikistan and Burkina Faso ranked as the five countries with the most polluted air, according to the report by IQAir, a Swiss air-quality technology company. Capitals with the worst air were New Delhi; Dhaka, Bangladesh; Ouagadougou, Burkina Faso; Dushanbe, Tajikistan; and Baghdad. And Finally South Africa is facing a potential breakdown in the water supply to its industrial heartland and most populated region, adding to the woes of an economy battered by power outages, congested ports and a broken freight-rail system. Rand Water Services notified three municipalities including Johannesburg that are home to more than 13 million people that its system was on the [verge of collapse](. Like its power plants and transportation networks, South Africa’s water-supply systems have deteriorated because of inadequate maintenance, poor planning, mismanagement, corruption and political infighting. Residents protest against water shortages in Johannesburg on March 12. 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