Vowing retribution but urged to show restraint, Israel has yet to agree on its response to an expansive drone and missile strike carried out on its territories by Iran on Saturday.

A Monday meeting of Israel’s five-person war Cabinet, headed by Prime Minister Benjamin Netanyahu, concluded without comment on whether the Jewish state will honor its pledge to “exact a price” from Tehran or concede to calls for a measured response from international leaders.

The prolonged deliberation came after the Israeli military said that Iran on Saturday fired more than 300 drones and missiles at its soil. It claimed that it and international allies eliminated 99% of these attacks as part of its now-dubbed “Iron Shield” operation.

The U.S., U.K., France and Jordan assisted in intercepting these threats. Tehran said its assault was in response to an Israeli strike that killed several top commanders at an Iranian consulate in Damascus, Syria, on April 1 — an offensive for which Israel has yet to claim responsibility.

Iran said the Saturday hostilities have “concluded” its retaliation — and Israel is now left to consider next steps.

The Israeli war Cabinet is set to meet again Tuesday, according to Reuters. The prime minister’s office and Foreign Ministry did not immediately respond to a CNBC request for comment.

Speaking after the Cabinet’s Monday gathering, an Israeli official said that the country’s decision-makers believe it is important for any potential response to closely follow the attack, and that such a gesture would be coordinated with Washington, NBC News reports.

Concerns are mounting that the conflict — rooted in the Oct. 7 terror attack undertaken by Palestinian militant group Hamas and Israel’s retaliatory war campaign in the Gaza Strip — will seep into the broader Middle East region. Since October, Israel has traded fire with a spate of other Iran-supported factions, such as Lebanon’s Hezbollah, Yemeni Houthis and Bashar Assad’s Syrian administration.

Global markets have also been rattled by the hostilities. Oil prices have been bolstered by the potential for disruptions from heavyweight crude producer Iran, and international maritime trade has faced delays and suspensions amid Houthi attacks in the Red Sea.

“There are those in the war Cabinet now who will be pushing for a wider campaign in Lebanon against Hezbollah, against Iran itself to take advantage of this moment,” Julien Barnes-Dacey, director of the Middle East and North Africa program at the European Council on Foreign Relations, said Tuesday on CNBC’s “Street Signs Europe.”

Netanyahu, who has previously battled fraud and corruption charges and civil protests over his proposed judicial reforms, faces domestic pressure to assume a hard line against Iran – and international ones to stand down.

In a Google-translated social media post, Israel’s foreign minister, Israel Katz, said he is mobilizing a “diplomatic offensive” against Iran, noting that he has sent 32 world figures a letter “calling for calling for sanctions to be imposed on the Iranian missile project and that the Islamic Revolutionary Guard Corps be declared a terrorist organization.”

The Israeli military has also signaled its readiness to respond: “Iran will face the consequences for its actions. We will choose our response accordingly,” IDF Chief of General Staff Herzi Halevi said Monday night in a video address.

Yet U.S. officials say a potential Israeli retaliation could be restricted in scope to strikes against Iranian military forces and Iranian-backed proxies outside of Iranian territory, four U.S. officials told NBC News, with three sources adding that Washington does not intend to participate in such an offensive.

CNBC could not independently verify these reports.

“All that is left of “Mr. Security” is a village of ruins from Bari to Kiryat Shmona, and a complete loss of Israeli deterrence,” Israeli opposition leader Yair Lapid said of Netanyahu on social media, according to a Google translation. “It’s election time, now.”

But Ehud Olmert, former Israeli prime minister, told CNBC’s Dan Murphy that the absence of casualties and limited damage resulting from the Saturday attack means Israel may now “act in a quieter and more restrained and more reserved manner to somehow bring to a halt a direct confrontation with Iran.”

He acknowledged that Netanyahu is under strain from right-wing groups within the cabinet that are demanding a very “tough and painful reprisal” against Israel, but stressed “it’d be a mistake to attack Iran now. We defeated Iran on Saturday night.”

He added, “[U.S. President Joe] Biden wants to contain the situation, not to allow it to expand, and we all are in the same page with President Biden.”

The U.S. leader, who previously vowed “ironclad” commitment to Israel, has told Netanyahu that the White House would not join offensive operations against Iran, a senior administration official told NBC News.

World leaders across Europe, Asia-Pacific and the Middle East have widely called for calm, with Saudi Arabia — a now reconciled former foe of Iran — urging “the utmost levels of restraint.”

Iran rained a deluge of drones and missiles on Israel on Saturday night in response to a suspected Israeli strike that killed top Iranian officials in Syria, in a deep escalation of Middle East tensions.

Israel said it identified 300 “threats of various types” and eliminated “99%” of those bound for Israeli soil, according to an update from an Israel Defense Forces spokesperson, Rear Admiral Daniel Hagari. He said a 10-year-old girl was “severely injured by shrapnel” but reported no additional casualties, adding that “several launches” were also made toward Israel from Iraq, Yemen and Lebanon.  

Last night marked the first instance of a direct attack on Israel from Iranian territory. Iran-backed factions – such as Palestinian militant group Hamas, Lebanon’s Hezbollah, Yemeni Houthi and Bashar al-Assad’s Syrian administration – have engaged militarily with the Jewish state.  

Earlier on Saturday, Iran’s Revolutionary Guards had seized a cargo ship in the Strait of Hormuz, claiming a connection to Israel.

Iran’s chief of staff of the armed forces, Major General Mohammad Bagheri, said that Tehran’s operation had now concluded and would involve no further actions, in comments carried by Iran’s state-owned Islamic Republic News Agency.

“At this juncture, the Islamic Republic of Iran has no intention of continuing defensive operations, but if necessary, it will not hesitate to protect its legitimate interests against any new aggression,” Iran’s Foreign Minister Hossein Amir-Abdollahian said on social media on Sunday, according to a Google translation.

Israel and Iran have been on the cusp of direct conflict since the start of Israel’s military campaign in the Gaza Strip, which came in response to Hamas’ terror attack of Oct. 7. Iran vowed revenge after a suspected Israeli strike on an Iranian consulate in Damascus, Syria, on April 1, which killed several top Iranian military commanders.

“We will not be able to comment on the claims regarding a strike in Damascus,” an Israeli foreign ministry spokesperson told CNBC by email, adding, “Iran’s attack on Israel on the night of April 14th is a direct attack on a sovereign nation, its use of proxies for the last decades and the destabilizing effect of the Ayatollah regime in the region and beyond must end.”

Israel’s Ambassador to the U.N., Gilad Erdan, has also called an emergency meeting of the U.N. Security Council and “demanded that they condemn Iran’s attack on Israel and designate the Iranian Revolutionary Guard Corps as a terror organization.”

The European Union has blasted Tehran’s offensive: “The EU strongly condemns the unacceptable Iranian attack against Israel,” EU High Representative Josep Borrell said late Saturday on social media. “This is an unprecedented escalation and a grave threat to regional security.”

U.S. President Joe Biden also denounced the Iranian strike on Saturday as “unprecedented” and asked to convene G7 leaders to “coordinate a united diplomatic response to Iran’s brazen attack,” according to a White House statement.  

“While we have not seen attacks on our forces or facilities today, we will remain vigilant to all threats and will not hesitate to take all necessary action to protect our people,” he added.

Relations between stalwart allies Washington and Israel had appeared to slightly chill in recent weeks, with Biden warning further support would hinge on Israel taking steps to protect civilians and humanitarian aid workers in the Gaza enclave.

But the U.S. – alongside the U.K. and France, according to Israeli military – intervened to mitigate last night’s Iranian attack and the assault could reignite urgency to pass a key $95 billion bill including funding for Israel and Ukraine, which has passed the Senate but stagnated on Republican opposition in the U.S. House of Representatives.

“In light of Iran’s unjustified attack on Israel, the House will move from its previously announced legislative schedule next week to instead consider legislation that supports our ally Israel and holds Iran and its terrorist proxies accountable,” said House leader Steve Scalise on social media.

“Congress must also do its part. The national security supplemental that has waited months for action will provide critical resources to Israel and our own military forces in the region,” Mitch McConnell, Senate Republican leader, said in a statement. “We cannot hope to deter conflict without demonstrating resolve and investing seriously in American strength.”

Oil futures prices are in focus after intermittently swelling in recent months on trade disruptions and delays caused by Red Sea maritime attacks from Yemen’s Houthi, who claim solidarity with the Palestinian people.

Iran is also home to vast oil resources, which it has been largely routing toward China since the U.S. reimposed sanctions during Donald Trump’s administration.

The Iranian currency fell to a record low of 705,000 rials / USD on the unofficial market around 10:30 a.m. local time on Sunday, according to data from foreign exchange monitoring site Bonbast.

The Tel Aviv Stock Exchange’s flagship index, the TA-35, was down 0.38% at 10:23 a.m. London time.

In aviation, several airlines grounded or diverted service through the Middle East, following the Iranian attack. Jordan, Iraq and Lebanon have reopened their airspaces after brief closures on Saturday in the wake of the offensive, Reuters reports.

— CNBC’s Emma Graham contributed to this report

French President Emmanuel Macron has doubled down on the possibility of sending troops into Ukraine, a day before a key summit with Germany, which is staunchly opposed to the idea.

“We cannot exclude options,” Macron said in a joint interview with TF1 and France 2 TV on Thursday, when asked to revisit controversial comments made in late February. At the time, the French leader refused to rule out the prospective deployment of Western troops into Ukrainian territory — resulting in scorn from Russia and a backlash from Macron’s NATO allies.

“What we are doing is giving ourselves red lines,” the French premier continued on Thursday, in comments translated by CNBC, noting that the international community has placed “too many limits in our vocabulary” regarding the war.

“If we decide today to be weak, if, in the face of someone who has no limits, who has crossed all the limits we have given him, if we naively tell him: ‘I will not go farther than this or that.’ In that moment we don’t decide peace, we decide defeat.”

The French leader declined to specify how he envisages a potential troop deployment into Ukraine, stressing instead that “the security of Europe and the security of the French people is at stake here.”

In response to the comments, Kremlin Spokesperson Dmitry Peskov said, “France is already involved in the conflict in Ukraine and is not averse to increasing its involvement,” according to Google-translated remarks reported by Russian state news agency Tass.

The latest statements by Macron once again risk pitting him against NATO allies, who distanced themselves from the possibility of their own national military deployment in Ukraine in February.

The alliance members face separate pressure to increase their defense spending to a previously agreed target of 2% of their national GDP, with two-thirds of members set to meet this objective this year, according to the latest projections.

“We have the capacity to give Ukraine what it needs. Now we need to show the political will to do so,” NATO Secretary-General Jens Stoltenberg stressed during a press briefing.

NATO member contributions have so far been used to supply ammunition and military equipment and maintenance to Ukraine, rather than sending troops into Ukrainian territory — a move that would position the alliance closer to war with Russia. Foreign volunteers have assisted both Russia and Ukraine in the war so far, but not as part of any formal military deployment.

Macron on Friday is meeting with German Chancellor Olaf Scholz in Berlin for talks that many hope could silence simmering tensions over Ukraine. Polish Prime Minister Donald Tusk will also join them, in a rare meeting of the Weimar Triangle — a regional coalition between the three countries, born in 1991.

Berlin has fought to shrug off its image as a slow responder to the conflict in Ukraine, after stalling approval to send Kyiv its Leopard-2 tanks. It now faces similar calls to deliver its Taurus missiles, which Scholz says would require the involvement of German soldiers to operate.

In February, Scholz joined the chorus of NATO leaders starkly opposing Macron’s position of potentially sending troops into Ukraine, insisting on social media: “It is clear: there will be no ground troops from European countries or NATO. That applies.”

Tusk, whose country has staunchly backed Ukraine in the war, comes fresh from a White House engagement earlier this week, during which he, Polish President Andrezj Duda and U.S. President Joe Biden committed “continued support of Ukraine’s self-defense against Russia’s war of aggression,” according to a readout.

“True solidarity with Ukraine? Less words, more ammunition,” Tusk said on social media on Friday.

India is seeking the release of its nationals who have been “duped” into serving in the Russian army, a spokesperson for the Indian Ministry of External Affairs said Friday, in a rare rift from Moscow.

“Several Indian nationals have been duped to work with the Russian army. We have strongly taken up the matter with the Russian government for early discharge of such internationals,” said spokesperson Randhir Jaiswal. “A case of human trafficking has been registered against several agents.”

He appealed to Indian nationals to “not be swayed by offers made by agents for support jobs with the Russian army. This is fraught with danger and risk to life,” stressing that New Delhi remains “committed to early release of our nationals serving as support staff with the Russian army and the eventual return home.”

Late on Thursday, the Central Bureau of Investigation of India said it had raided several “major human trafficking networks” that were “targeting gullible youths” with offers of lucrative jobs abroad. The CBI identified at least “35 instances” of Indian citizens being sent abroad as a result of these operations.

“These traffickers have been operating as an organized network and were luring Indian nationals through social media channels like Youtube etc and also through their local contacts/agents for highly paid jobs in Russia,” the CBI said in a statement.

Following their recruitment, Indian nationals were “trained in combat roles and deployed at front bases in Russia-Ukraine War Zoen against their wishes, thus, putting their lives in grave dangers.”

“It has been ascertained that some of these victims also got grievously injured in the war zone,” the agency said.

It comes amid a domestic labour crisis that has incentivized Indian nationals to seek jobs abroad.

India’s unemployment rate climbed to 8% in February from 6.8% in January, according to the Centre for Monitoring Indian Economy (CMIE), an independent think tank, as the country’s economic expansion sharply outpaces job creation.

Moscow and Kyiv have been locked in a more than two-year war of attrition on Ukrainian territory, with Russia introducing strict drafting laws and increasing its maximum age of conscription. Volunteer foreign fighters have joined both sides of the conflict.

Indian and international news outlets have carried reports of Indian citizens being stranded fighting for the Russian army. Reuters on Thursday said Mohammed Asfan from India’s Hyderabad city died while fighting in the Ukraine war, after travelling to Russia to work as an army “helper.”

“We have learnt about the tragic death of an Indian national Shri Mohammed Asfan. We are in touch with the family and Russian authorities. Mission will make efforts to send his mortal remains to India,” the Indian embassy to Russia said on March 6 on social media. It did not state whether Asfan had died while fighting for Russia or on Ukrainian territory.

CNBC has reached out to the Russian Ministry of Foreign Affairs for comment.

The request for the release of India nationals fighting for Russia pits New Delhi at rare odds against Moscow.

Defying the U.S., India has adopted a staunchly neutral position following Russia’s invasion of Ukraine, abstaining from voting on successive resolutions put to the U.N. Security Council, U.N. General Assembly and U.N. Human Rights Council that denounced Moscow.

India has also offered a rare outlet for Russian seaborne crude volumes, bereft of EU and G7 buyers since sanctions prohibiting its purchase were enforced in late 2022.

The two countries also share close ties as partners in the BRICS economic coalition of emerging markets.

Russia appears to be relishing the gaffe French President Emmanuel Macron made this week in suggesting that NATO countries discussed the possibility of Western ground troops being deployed in Ukraine, saying such an eventuality could not be “ruled out.”

Macron’s suggestion was widely — and very publicly — rejected by NATO member countries Tuesday. The United States, Germany, the U.K., Spain, Poland and NATO Secretary-General Jens Stoltenberg were among those denying that sending ground troops into Ukraine was an option.

The Kremlin was quick to seize upon the comments Tuesday, warning that any move to put Western boots on the ground in Ukraine would lead to an “inevitable” conflict between NATO and Russia. Since then, state-run Russian media has been dominated by Russian officials relishing the obvious division in NATO, and Macron’s apparent misreading of the NATO mood music.

Dmitry Medvedev, former Russian president and prime minister, said Macron had suffered a bout of verbal “incontinence” while Russian State Duma Chairman Vyacheslav Volodin said Macron’s “loud statements … horrified the residents of his country and the leaders of a number of European states.”

“To maintain personal power, Macron came up with nothing better than to spark a third world war. His initiatives are becoming dangerous for French citizens,” Volodin said on Telegram, comparing the French president to French leader and military commander Napoleon Bonaparte, whose invasion of Russia in 1812 is widely recognized as a military disaster for France that led to a massive number of casualties.

“Before making such statements, Macron would do well to remember how it ended for Napoleon and his soldiers, more than 600,000 of whom were left lying in the damp earth,” Volodin said, referring to the muddy conditions that hampered France’s invasion. 

Russia’s Foreign Ministry claimed Wednesday that Ukraine is facing a “catastrophic” situation at the front — Russia is currently enjoying a spate of small territorial gains in eastern Ukraine — and that Macron’s statement had not helped the country.

“The situation at the front for the Kyiv regime is monstrous, catastrophic,” Russian Foreign Ministry spokesperson Maria Zakharova told the Sputnik radio station, the Tass news agency reported.

She claimed NATO countries’ denials that they planned to send their ground troops into Ukraine showed the West had “betrayed Ukraine and will continue to use and betray it,” repeating Moscow’s baseless claims that Western countries are using Ukraine to destroy Russia.

Macron’s controversial comments came Monday evening, after he had hosted European heads of state and representatives from the U.K., U.S. and Canada for talks in Paris on how best to help Ukraine.

After the conference, Macron said discussions had also covered the possibility of deploying ground troops, although he said there was no agreement on the issue.

“There is no consensus today to officially, openly, and with endorsement, send troops on the ground. But in terms of dynamics, nothing should be ruled out,” Macron said at a news conference Monday evening, adding that allies “will do everything necessary to ensure that Russia cannot win this war.”

French opposition lawmakers rounded on Macron for making the comments, with the leader of the hard-right National Rally party Marine Le Pen stating on X that by “affirming that sending ground troops was not excluded, Emmanuel Macron took a further step towards co-belligerence.”

French Foreign Minister Stephane Sejourne attempted to ease tensions in France’s parliament on Tuesday without rowing back on Macron’s comments, saying French troops could take on non-combat roles rather than actively battle in Ukraine.

“We must consider new actions to support Ukraine. These must respond to very specific needs, I am thinking in particular of mine clearance, cyberdefence, the production of weapons on site, on Ukrainian territory,” he told lawmakers, Reuters reported.

“Some of its actions could require a presence on Ukrainian territory, without crossing the threshold of fighting. Nothing should be ruled out. This was and still is the position today of the president of the Republic,” he said.

France was left looking increasingly isolated throughout the day Tuesday, with the White House also distancing itself from Macron’s comments.

U.S. National Security Council spokesperson John Kirby told reporters yesterday that any decision to deploy ground troops was a “sovereign decision,” but that it was not one the U.S. would be taking in Ukraine.

When asked about Macron’s comments, Kirby said “well, that’s a sovereign decision that every NATO ally would have to make for themselves. You heard [NATO] Secretary General Stoltenberg say himself he had no plans or intentions of — certainly under NATO auspices — of putting troops on the ground. And President Biden has been crystal clear since the beginning of this conflict. There’ll be no U.S. troops on the ground in a combat role there. In Ukraine.”

Russia analysts have said Macron’s comments were a gift to the Kremlin, and would be fully exploited by Russia’s propaganda machine at home — and abroad.

The Elysee Palace sought to clarify and defend France’s position on the matter further Tuesday, with a spokesperson stating that “we want to avoid escalation. Let me remind you that we’re not at war with the Russian people, but we can’t let Russia win in Ukraine.”

Timothy Ash, emerging markets strategist at BlueBay Asset Management, was among those questioning “French foreign policy sense on anything to do with Russia/Ukraine.”

“Literally idiotic comments from Macron,” Ash said in emailed comments Tuesday. “Ukraine does not need Western boots on the ground — it needs Western military kit to do the job themselves of defeating Russia.”

Ash said that “talk of Western boots on the ground is so damaging” as “it plays to the Putin narrative of NATO expansion East, and that this is a NATO war with Russia” and “plays up to similar narratives being plied in the Global South,” referring to countries often described as “developing” economies with whom Russia would like to develop ties.

He noted the comments would also likely be “seized on by Putin’s allies in the GOP [the Republican Party] to stall in agreeing military support/financing for Ukraine.”

“What the U.S. public do not want is U.S. boots on the ground in another foreign conflict. But the beauty of Western support for Ukraine thus far is that it has not required Western boots on the ground, but through a modest financial outlay has had a devastating impact on Russian military capability,” Ash said.

MUNICH, Germany — NATO members on Saturday weighed the U.S.’ possible withdrawal from the military alliance if Donald Trump returns to the White House, with Hillary Clinton saying he would waste no time in quitting if re-elected.

Clinton urged delegates at the Munich Security Conference to take her one-time presidential rival’s tough talk “literally and seriously” as anxiety mounts over the future of the U.S.-led pact.

“He will pull us out of NATO,” Clinton told attendees during a lunchtime session.

Trump stoked fresh concerns over the U.S.’ commitment to NATO last weekend when he said he would “encourage” Russia to attack any member that doesn’t meet its spending targets. He has long criticized the alliance’s failure to ensure members make good on their obligation to contribute 2% of gross domestic product to defense.

Amid such rhetoric, the U.S. Congress passed a bill in December aimed at preventing any U.S. president from unilaterally withdrawing from the alliance without congressional approval.

U.S. Republican Senator Jim Risch, ranking member of the Senate Committee on Foreign Relations, on Saturday dismissed talk of the U.S. quitting NATO, saying: “We have answered that question.”

“It would take a two-thirds vote in the United States Senate to get out — that is never going to happen,” he told CNBC in Munich.

Clinton said, however, that Trump could actually just refuse to fund the alliance. “The U.S. will be there in name only,” she said.

Concerns over the U.S. and Europe’s continued military coordination have dominated discussions at this year’s annual defense summit in Germany, as the specter of a second Trump presidency looms large and a contentious aid package for Ukraine hangs in the balance in the U.S. House of Representatives.

Dutch Prime Minister Mark Rutte earlier Saturday referenced constant “moaning and whining” at the event about the future of NATO under Trump.

“Stop moaning and whining and nagging about Trump,” he said.

He was one of many European voices, including that of German Chancellor Olaf Scholz and Danish Prime Minister Mette Frederiksen, who said that Europe needed to become self-sufficient in the face of a more uncertain future with its closest diplomatic ally.

“No matter what happens in the U.S. … we have to be able to protect ourselves,” Frederiksen said.

Indeed, Germany’s defense minister said that his country’s commitment to spend 2% of GDP on defense should be just the start, noting that the threshold could rise to 3.5% if necessary.

NATO Secretary-General Jens Stoltenberg struck a more sanguine tone on transatlantic coordination, however, saying that believes the U.S. will remain “a staunch and committed NATO ally” whatever happens in the upcoming election.

“I expect that regardless of the outcome of the U.S. elections in November, the U.S. will remain a staunch and committed NATO ally,” he told CNBC’s Silvia Amaro. “It is in the security interests of the United States to have a strong NATO.”

Stoltenberg acknowledged Trump’s frustration with member spending, but said “that is now changing.” On Wednesday, NATO announced that 18 of the alliance’s 31 members will meet the 2% spending target this year.

NATO member countries first committed to minimum spending targets in 2006, but by 2014 only three had met the threshold.

The alliance will mark its 75th anniversary this year at an annual summit to be held in Washington in July. Senator Risch said he would like to see all members committing to meeting their target by that point.

“Talk about it happening years in the future isn’t now, and we’re always interested in now,” he said. “That’s helpful to the relationship: everybody keeping the commitments that they made.”

Russian President Vladimir Putin said he preferred Joe Biden as the next U.S. president over Republican frontrunner Donald Trump, who fell under intense scrutiny for his relationship with the Kremlin during his presidency.

“[Biden] is more experienced and more predictable. He is an ‘old school’ politician. But we will work with any US leader, elected by the people of America,” Putin told journalist Pavel Zarubin late Wednesday, according to Russian state-controlled news outlet Tass.

The Trump and Biden presidential campaigns did not immediately respond to CNBC’s requests for comment.

Putin’s comments followed a week of international controversy over Trump’s recent NATO remarks and mounting tensions between U.S. Democrats and Republicans over a $95 billion aid package that includes military aid to Ukraine.

The Kremlin head of state will stand in his own election on 15-17 March, but is widely expected to clinch another presidential mandate after leading Russia as prime minister or head of state since 1999.

In the same interview, Putin also appeared to dismiss recently mediatized concerns over Biden’s mental acuity after Department of Justice special counsel Robert Hur said the White House leader “willfully retained and disclosed classified materials” and exhibited poor memory during a relevant interview. Biden has disputed the claims.

Referencing their meeting in Geneva, Switzerland, in 2021, Putin said he had noticed no signs of incapacity from Biden. “Yes, he was peeking at his notes from time to time, but, frankly speaking, I was peeking at mine as well,” Putin said, adding that there were “reports of [Biden] banging his head on the helicopter while leaving it, but who didn’t?”

Despite these apparently favorable comments, Putin stressed ongoing disagreement with Biden’s politics, saying “the incumbent administration’s approach is most harmful and erroneous.”

Biden assumed office roughly one year before Moscow’s ongoing full-scale invasion of Ukraine in February 2022. His administration has staunchly backed Kyiv with military and financial aid, and Biden has led the White house through a period of deteriorating relations with the Kremlin.

Putin has in turn distanced Moscow from Western countries — which have overwhelmingly sanctioned Russia and its officials — and sought fresh ties with various emerging markets, especially China and Iran.

Putin’s apparent stance of distancing himself from Trump is notable given historical questions over the strength of the pair’s relationship. Trump was probed during a nearly two-year special counsel investigation of Russian interference in the election that he won. The former president repeatedly denied claims that he had fallen under the Kremlin’s influence.

During a campaign rally in South Carolina late last week, Trump signaled that he would “encourage” Russia “to do whatever the hell they want” to a country member of the NATO military coalition that did not meet its defense spending commitments — triggering widespread international outrage and criticism from NATO chief Jens Stoltenberg that his comments are undermining the security of all NATO allies.

Biden characterized Trump’s comments as “dumb,” “shameful,” “dangerous” and “un-American,” suggesting a close connection between the former U.S. president and the Russian head of state, and introducing distance between himself and Putin. 

“Can you imagine? A former president of the U.S. saying that? The whole world heard it. The worst thing is he means it. No other president in our history has ever bowed down to a Russian dictator. And let me say this as clearly as I can: I never will,” Biden said.

The broader Republican party’s support of Ukraine faces an imminent test after a $95 billion bill passed by 70-29 in the Democrat-led U.S. Senate earlier this week. The aid package — which includes assistance for Ukraine, Israel and Taiwan — must win support from the Republican-helmed House of Representatives before becoming law.

The immediate ban on nearly all Palestinian workers to enter Israel following the Hamas-led terror attack of Oct. 7 has dealt a shock to the Israeli economy, the country’s central bank chief said at the World Economic Forum in Davos.

“We’re working in a very uncertain environment, as you can tell, and I would say there are two types of shocks: there is a supply shock,” Bank of Israel governor Amir Yaron told CNBC’s Dan Murphy. “And it’s primarily in the construction industry where … a third of that industry is Palestinians from the West Bank, and now they’re not coming in to work.”

“It’s also affecting agriculture, where they are in, and there are other foreign workers,” Yaron said. “So that will take a little bit, that’s a negative supply shock, and it could affect prices going up towards the second half of the year.”

He said that the bank must monitor these price developments, adding, “On the other hand, we’ve seen negative demand shock, obviously in a war. And so far that negative demand shock has been the most dominant one. And we will have to monitor that as well, as we go forward with how we are thinking about continuing with monetary policy.”

Before Oct. 7, more than 150,000 Palestinian workers from the occupied West Bank entered Israel daily for work in a range of sectors, predominantly in construction and agriculture.

The ban on most of these workers returning to their employment in Israel has dramatically hurt the economy of the West Bank. It has also contributed to anger and rising unrest over Israel’s decades-long occupation and its relentless bombardment of the Gaza Strip, which Palestinian health authorities say has killed more than 24,000 people. The Israeli offensive began after Hamas militants from Gaza launched a surprise attack on southern Israel that killed some 1,200 people and took another 240 hostage, of which 136 people remain in captivity.

In late December, Israel’s finance ministry warned that the ban on Palestinian workers could cost Israel’s economy billions of shekels per month.

“We calculated what the economic damage would be if Palestinians do not go to work…and it is estimated at approximately NIS 3 billion ($830 million) per month,” a representative of the finance ministry told Israel’s parliament, the Knesset, at the time, according to local media.

Business and factory owners in December pressured lawmakers to allow between 8,000 and 10,000 Palestinian workers to return to their jobs in Israeli settlements and businesses in the West Bank.

In comments reported by the Times of Israel, Raul Sargo, president of the Israel Builders Association, had told the Knesset: “We are in very dire straits … The industry is at a complete standstill and is only 30% productive. Fifty percent of the sites are closed and there is an impact on Israel’s economy and the housing market.”

Israel’s agriculture sector is also heavily dependent on foreign labor, in particular workers from Thailand — at least 10,000 of whom have left the country after the October attack, during which many Thai farm workers were killed and taken hostage.

Asked about what tools the bank has at its disposal to respond to a potential expansion of the war to Israel’s northern border with Lebanon, Yaron stressed the focus on preventing financial instability.

“We all hope it doesn’t happen. In case it does, then your mindset becomes financial stability,” the banker said. “That means the whole view on interest rate process … expansionary monetary policy probably stops, and you use the types of tools we’ve used so far, like the FX or things like that, and we hope we don’t need to go there.”

Yaron added that he was optimistic about his country’s ability to deal with shocks, given its familiarity with wars over the decades.

“I think we still have to remember, Israel is a dynamic economy,” he said. “It’s resilient, it has shown it can bounce back … pretty much over every military event, it has shown that it can come back and grow fast. I would say, actually, Homeland Security, economics has demand for that has grown. And hopefully, if there is a day after in which there’s a better environment with moderate states, those will bring in also new opportunities.”

TAIPEI — Taiwan’s ruling Democratic Progressive Party won an unprecedented third-straight presidential term, as incoming leader Lai Ching-te pledged to stay open-minded in his approach toward governance, while committing to forging consensus in a split legislature.

The outcome of the presidential election on Saturday riled Beijing, which has repeatedly labeled Lai as a “stubborn worker for Taiwan independence” and a dangerous separatist. There are also fears this could in turn influence frosty China-U.S. relations and security in the broader Indo-Pacific region, with China having escalated military activity in the Taiwan Strait and other nearby waters.

“As president, I have an important responsibility to maintain peace and stability in the Taiwan Straits,” Lai said in a press conference, in an official party translation of his comments in Mandarin. He added though that he is also “determined to safeguard Taiwan from threats and intimidation from China.”

“I will act in accordance with our democratic and free constitutional order, in a manner that is balanced and maintains the cross-Straits status quo,” he added. “Under the principles of dignity and parity, we will use exchanges to replace obstructionism, dialogue to replace confrontation, and confidently present exchanges and cooperation with China.”

The Chinese Communist Party has refused to engage with outgoing President Tsai Ing-wen since she assumed office in 2016. Tsai did not stand at this election because she has served the maximum two presidential terms.

The DPP has not accepted the so-called “1992 Consensus,” disputing the tacit agreement for “one China” between the then-KMT government and Chinese Communist Party officials, which Beijing assumes as the basis for cross-Straits engagement.

Still, in his post-election comments in Mandarin, Lai invoked the official name of Taiwan — the Republic of China — at least twice.

DPP’s Lai — Taiwan’s current vice-president — won more than 40% of the popular vote in Taiwan’s eighth presidential election. DPP is the first party to win the presidential office three times in row since direct presidential elections were introduced in 1996. Beijing had framed the election as a choice between “peace and war, prosperity and decline.”

Kuomintang or KMT, Beijing’s preferred political partner, gained roughly 33% of the vote with Hou You-yi at the top of its ticket. Ko Wen-je — the surly, straight-talking former Taipei mayor who ran under the banner of the Taiwan People’s Party that was formed only in 2019 — received just over 26% of the vote.

Voter turnout appeared to be the second-weakest since direct presidential elections started in Taiwan in 1996. This year, 71.9% of all eligible voters cast their ballots for the presidential election, according to preliminary data from Taiwan’s Central Election Commission.

China dismissed the outcome of Taiwan’s Saturday elections, saying its ruling Democratic Progressive Party does not represent the mainstream public opinion.

“Taiwan is China’s Taiwan,” Chen Binhua, the spokesperson for the Taiwan Affairs Office of the State Council, said on Saturday shortly after DPP’s Lai emerged as the winner.

“This election cannot change the basic pattern and the development of cross-Strait relations, nor can it change the common desire of compatriots on both sides of the Taiwan Strait to draw closer,” Chen added, according to a CNBC translation of a report from Xinhua, the official state news agency.

China has never relinquished its claim over Taiwan — which has been self-governing since the Chinese nationalist party, or Kuomintang, fled to the island following its defeat in the Chinese civil war in 1949.

Chinese President Xi Jinping regards reunification with the mainland “a historical inevitability.”

The U.S. response starkly differed, but was broadly consistent with its past positions.

“We … congratulate the Taiwan people for once again demonstrating the strength of their robust democratic system and electoral process,” U.S. Secretary of State Antony Blinken said in a statement.

“The United States is committed to maintaining cross-Strait peace and stability, and the peaceful resolution of differences, free from coercion and pressure,” he added.

The outcome of the race to control Taiwan’s 113-seat legislature though is far less clear, with the DPP losing its majority. A hung parliament could well hobble Lai’s policy agenda, while heralding a return of the kind of notorious open feuding among Taiwan’s legislators.

“On the legislative elections, the DPP did not hold onto a majority,” Lai said. “This means we did not work hard enough, and there are areas where we must humbly review and look back on.”

As it stands, the new Taiwan government will have its hands full, with voters largely concerned with bread-and-butter issues, particularly stagnant wages at a time of escalating rents and home prices that have been worsened by high inflation.

These issues have largely helped buoy Ko’s popularity as he positioned himself as a political outsider. 

“Taiwan People’s Party got more votes than expected. Ko got 25%, showing there is still a significant number of voters wanting a change,” Wei-Ting Yen, an assistant professor in government at Franklin and Marshall College, told CNBC.

“The social force is there, and the Lai administration has to address the social and economic issues right on,” she said. “People may be supporting the DPP’s foreign policy directions, but they are not necessarily supporting them for domestic policies.”

At the same press conference on Saturday after his two opponents conceded, Lai said he will carefully consider and include policy ideas and positions of his two electoral rivals that further Taiwan’s interests.

In a nod to issues that dominated the presidential election campaign, Lai singled out the financial sustainability of Taiwan’s labor and health insurance, along with the country’s energy transition as urgent issues that he will prioritize in forging consensus.

Lai also said he will appoint the most qualified professionals and personnel regardless of political affiliations in the “spirit of a democratic alliance.”

“The elections have told us that the people expect a strong government and effective checks and balances,” Lai said. “As for the new structure of the new legislature, Taiwan must build a new political environment of communication, consultation, participation, and cooperation.”

Still, Lai also had one eye on the broader strategic significance of his electoral victory — however diminished it may seem in comparison to the DPP’s comfortable victory in the presidential and legislative elections in 2016.

“Through our actions, the Taiwanese people have successfully resisted efforts from external forces to influence this election. We trust that only the people of Taiwan have the right to choose their own president,” Lai said.

Taiwan’s DPP-led government has often accused Beijing of vote interference either by military intimidation or by co-opting Taiwan’s business elite due to their economic reliance on China.

In the run-up to Saturday’s vote, Lai said that Beijing’s meddling is “the most serious” at this elections.

Xi told U.S. counterpart Joe Biden on the sidelines of the APEC leaders summit in November that Taiwan has always been the “most important and sensitive” issue in China-U.S. relations.

Prior to Saturday’s elections, a senior Biden administration official said the White House is preparing for several different outcomes. Biden has pledged to defend Taiwan in the event of a China invasion, a position that has irked Beijing.

Former U.S. House Speaker Nancy Pelosi visited Taiwan in 2022, becoming the highest-ranking U.S. official to visit the island in over two decades. Her trip was one reason that communication between the world’s two leading powers ground to a halt before a tentative resumption only months ago.

“As one of the first and most highly anticipated elections of 2024, Taiwan has achieved a victory for the community of democracy,” Lai said. “We are telling the international community that between democracy and authoritarianism, we will stand on the side of democracy.”

More than 19 million voters in Taiwan headed to the polls on Saturday to decide if the ruling Democratic Progressive Party should earn an unprecedented third consecutive presidential term — or if a leadership change is in order.

The traditional DPP-Kuomintang duopoly is being challenged this year by the emergence of former Taipei mayor Ko Wen-je and his Taiwan People’s Party. With a legislative majority also at stake at these elections, there are fears of a hung Parliament, which could hobble policymaking and herald a return of notorious confrontations between feuding legislators.

With China intensifying its rhetoric on its claim over Taiwan, global observers are billing this Taiwan election as highly pivotal for security in the Asia-Pacific at a time of testy U.S.-China relations.

Local voters though are mainly concerned about the incumbent DPP’s patchy policy record. It comes amid stagnant wages in the face of persistently high inflation and rising home prices and rent.

“In a two-way presidential race, it’s easy to frame it as a binary, a dichotomous, de facto referendum on China policy. When you have a three-way race, it can’t be nearly as effective a framing,” said Wen-Ti Sung, a non-resident fellow at American think tank Atlantic Council’s Global China Hub.

“That’s why I talk about change versus continuity, because that allows more variables with policy issues at the domestic level to get into the equation more. That’s Ko Wen-je’s primary effect for me,” he added.

Some of the more common concerns that have emerged in pre-election rallies and debates include lingering resentment over outgoing President Tsai Ing-wen’s controversial rollout of locally manufactured Covid vaccines at the height of the pandemic and criticism of a perceived broader lack of transparency.

These issues have helped buoy Ko’s popularity as he positions himself as a political outsider. Ko has picked Cynthia Wu, the eldest daughter of a prominent business family, as his vice presidential nominee.

“In particular, young voters, who typically do not have strong party affiliations, arguably care more about who can offer solutions to the longstanding issues of low wages and high housing prices, which have not significantly improved over the past DPP and KMT administrations,” said Jing Bo-jiun, senior research fellow in Taiwan Studies at the University of Oxford.

The latest official wage data show average monthly regular earnings of full-time Taiwanese employees rose about 2.2% in October from a year ago, while headline inflation was more than 3% that same month.

“This could be one of the main reasons that TPP’s Ko Wen-je has been popular among the young population, who hope that this non-traditional politician can come up with new policies to improve their lives,” Jing added.

With Tsai stepping aside due to term limits after serving two full terms, Ko will come up against the DPP’s presidential nominee this year: Tsai’s current vice-president Lai Ching-te. He has nominated Hsiao Bi-khim — most recently the Taiwanese envoy to the United States — as his vice president.

If Lai and Hsiao win the Jan. 13 vote for the Taiwan presidential office, it would mark the first time any political party has stayed in office for more than two consecutive terms since Taiwan introduced direct presidential elections in 1996.

The DPP duo will face Kuomintang’s presidential nominee Hou Yu-ih and vice-presidential nominee Jaw Shaw-kong, who is a prominent local television personality and talk show host. Hou was formerly the director-general of Taiwan’s National Police Agency and the current mayor of New Taipei City, the municipality that encloses the city of Taipei but not the capital.

“There is arguably a more anti-establishment streak among younger voters, who see both the KMT and DPP as old, ineffective, and even corrupt party machines. Ko’s stronger support among those 30-ish and lower is a good indicator of this,” said Kevin Luo, an assistant professor in political science at University of Minnesota.

Risking that support, the TPP was in talks with KMT about an alliance to field a team that is less antagonistic toward China. That plan though dramatically fell apart on live television ahead of the nomination deadline in late November when both parties could not agree on the leader for the joint ticket.

This has led to concerns the change vote would split even for the parliamentary election, perhaps even leading to a hung parliament.

“Regarding relations with China or the US, my concern would be that it provides an opportunity for mixed messages from Taiwan, one that China may try to exploit,” said Timothy S. Rich, a professor in political science at Western Kentucky University.

“Overconfidence in US support coupled with an unfriendly legislature would make responding to a growing security threat from China not only more difficult, but could lead to miscalculations,” he added.

Chinese President Xi Jinping told his U.S. counterpart Joe Biden that Taiwan has always been the “most important and sensitive” issue in the China-U.S. relations when they met on the sidelines of the APEC leaders summit in November.

“The reunification of the motherland is a historical inevitability,” Xi said in his 2024 New Year’s address, according to a CNBC translation.

Biden has pledged to defend Taiwan in the event of a China invasion, irking Beijing.

Former U.S. House Speaker Nancy Pelosi visited Taiwan in 2022, becoming the highest-ranking U.S. official to visit the island in over two decades. Her trip was one reason that communication between the world’s two leading powers grounded to a halt before a tentative resumption only just months ago.

China has never relinquished its claim over Taiwan — which has been self-governing since the Chinese nationalist party, or Kuomintang, fled to the island following its defeat in the Chinese civil war in 1949.

China’s Taiwan affairs office has characterized the self-ruled island’s election as a choice between “peace and war, prosperity and decline.”

The election comes as China has escalated military activity in the Taiwan Strait and other nearby waters as Beijing presses its sovereignty claims over an island it sees as its own.

Taiwan’s DPP-led government has often accused Beijing of vote interference either by military intimidation or by co-opting Taiwan’s business elite due to their economic reliance on China.

“Peace is priceless, and war has no winners,” said DPP’s Lai at a pre-election press conference in Taipei on Tuesday. “China has always meddled whenever there is an election in Taiwan, but this time, it’s the most serious.”

Weeks before the elections in late December, China suspended tax concessions on 12 chemical compound imports from Taiwan in retaliation for what Beijing deems to be a violation of the Cross Straits Service Trade Agreement.

The timing of China’s probe has led Taiwanese government officials to conclude that Beijing’s aims are more political rather than economic.

“This election will not be won over a specific policy or even cross-Strait relations,” said Charles Wu, an assistant professor in political science at University of South Alabama.

“It provides an opportunity to see if citizens in Taiwan would still be willing to let the DPP govern the country for the next four years.”

Correction: The story has been updated to accurately reflect that former U.S. House Speaker Nancy Pelosi visited Taiwan in 2022.