Summary:
Israel’s attacks on Lebanon were expected and have escalated the conflict between Israel and Iran’s proxies: Hamas, Hezbollah, and the Houthis. There is tremendous uncertainty as to how a broader conflict might play out. But Israel, or at least Mr. Netanyahu, seems set on significantly diminishing if not eliminating Hamas and Hezbollah. As of this writing, we continue to believe neither Israel nor Iran wants a direct military exchange, and thus, conflict impacting the Gulf countries remains unlikely.
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