Attacks on Israel: What’s at risk

The attacks from Gaza are a violent test for plans for greater regional integration between Israel and its Mideast neighbors [View in browser]( [Bloomberg]( Welcome to a special edition of Balance of Power on the attacks on Israel. If you haven’t yet, sign up [here](. When the sirens pierced the early morning calm in Israel at 6:30 a.m., it seemed that once again there were rockets coming in from Gaza. But it quickly became clear that something much more ominous was under way — a multifront attack by the Palestinian group Hamas, including dozens of infiltrations by land, air and sea in an operation that could upend a series of delicate regional negotiations. Prime Minister Benjamin Netanyahu, who like much of the country was on vacation on the Jewish Sabbath and the holiday of Simchat Torah, called up thousands of reservist soldiers and declared the country “at war.” Sirens and booms were heard up to Tel Aviv and Jerusalem all day, flights were canceled and along Gaza, infiltrators held Israelis hostage with others in sealed shelters. Rockets fired from Gaza City toward Israel today. Photographer: Mahmud Hams/AFP/Getty Images Israeli [fighter jets bombed Gaza](. There were dozens of deaths in Israel and scores in Gaza. President Joe Biden called Netanyahu [to offer support](. Defense Secretary Lloyd Austin said the US would “work to ensure that Israel has what it needs to defend itself,” without elaborating. US-brokered negotiations aimed at Saudi normalization with Israel in a deal [involving American security guarantees for Riyadh]( will likely be put on hold. A Saudi statement said the violence can be traced to Israel’s occupation, provocations and depriving Palestinians of their rights. Israeli officials said Iran was behind this through its sponsorship of Hamas, which rejects Israel’s right to exist. The Saudi deal is supposed to include Israeli concessions for the Palestinian Authority. Iranian Foreign Ministry Spokesman Nasser Kanaani congratulated the attacks by Hamas, saying they “opened a new page in resistance and armed operations.” Netanyahu has been under siege at home by the center and left for his efforts to curb the power of Israel’s judicial branch. This surprise attack could inflict more political damage if he’s blamed for leaving the nation divided and unprepared. Or it could unify the country behind him and his counterattack. Either way, his plans for greater regional integration with Arab and Muslim neighbors are facing a severe test. — [Ethan Bronner]( WATCH: Dozens of rockets launched from the Gaza Strip struck Israel today. Source: Bloomberg Global Must Reads The Hamas attack is a violent veto of the [grand strategy slowly taking shape]( between the US, Saudi Arabia and Israel, writes Bloomberg Opinion columnist Andreas Kluth. It has ended the tenuous ceasefire between Israelis and Palestinians, and the pressure on the Saudis and others to sympathize with their fellow Arabs will pause any further warming with Israel. Meanwhile, Biden’s plan to reshape the Middle East has been singed, if not torched. History doesn’t repeat itself, but it often rhymes, writes Bloomberg Opinion columnist Javier Blas. On the eve of the 50th anniversary of the world’s first oil crisis, the parallels between October 2023 and October 1973 are easy to draw: a surprise attack on Israel and oil prices rising. [But the resemblance ends there](. The global economy isn’t about to suffer another Arab oil embargo that would triple the price of a barrel of crude. Yet, it would be a mistake to downplay the chances that the world faces higher-for-longer oil prices. WA Palestinian holds a flag on an Israeli tank in Gaza City. Photographer: Anadolu Agency/Getty Images The conflict adds yet even more pressure on Israel markets, which traditionally have been seen as a stable spot in the Middle East. That has changed this year as Netanyahu pushed ahead with efforts to weaken the judiciary, helping send the shekel to near seven-year lows. As some local markets start to re-open on Sunday, eyes will be on Israel's central bank, and whether [it will let the shekel weaken further]( — and potentially break through the 4.00 per dollar barrier — before stepping in. Stay tuned to Bloomberg’s [latest updates on the attacks on Israel](. More from Bloomberg - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it's here, it's on the Bloomberg Terminal. 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