Israel security Cabinet approves deal for ceasefire in Gaza

Marissa Newman, Alisa Odenheimer and Galit Altstein, Bloomberg News on Jan 17, 2025

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Israel’s high-level security Cabinet approved a ceasefire and hostage-prisoner exchange deal with Hamas, paving the way for a weeks-long pause from Sunday to the 15 months of fighting in Gaza.

The deal will now be brought to the full Cabinet, where it is expected to be signed off despite opposition by some far-right members of Prime Minister Benjamin Netanyahu’s government.

The six-week ceasefire and first exchange of Israeli hostages and Palestinian prisoners are expected to begin the day before Donald Trump’s inauguration as U.S. president.

Both he and outgoing leader Joe Biden pushed the warring sides to reach a deal before the presidential handover.

The truce had looked at risk of collapsing for much of Thursday when Netanyahu accused Hamas of reneging on some commitments. Final terms of the agreement have now been ironed out.

Under the terms of the deal, Hamas, designated a terrorist organization by the U.S. and many other countries, will gradually release 33 of about 98 hostages that remain in Gaza, many of who are dead. Israel’s military will withdraw from populated areas of the Gaza Strip and free around 1,000 Palestinian prisoners.

The agreement was mediated by the U.S., Qatar and Egypt. It envisions further negotiations between the sides to end the war that began in Oct. 2023, though those terms have yet to be negotiated.

Israel stocks have gained significantly in recent days in anticipation of a ceasefire. The main bourse in Tel Aviv rose 4.4% this week in dollar terms, one of the best performances globally.

The shekel strengthened 0.8% against the dollar as of 3:25 p.m. on Friday, and Israel’s dollar bonds were among the best performers in emerging markets. Debt securities due in 2060 gainedabout 1.2 cents on the dollar to 65 cents, the biggest jump since November.

Israeli wariness

Within Israel there’s still plenty of wariness about the ceasefire, with many politicians saying the war should continue until Hamas is completely destroyed.

Far-right Finance Minister Bezalel Smotrich has threatened to resign if Israel doesn’t resume fighting once the first phase of the ceasefire ends.

Hamas invaded Israel from Gaza on Oct. 7, 2023, killing 1,200 people, mostly civilians, and taking 250 people hostage. Israel responded with an intense air and ground war in Gaza that has devastated the enclave and killed over 46,000 people, the Hamas-run health ministry says, without differentiating between combatants and civilians.

There will be a moratorium to allow relatives of victims of terrorist attacks to appeal to the High Court of Justice against the release of specific Palestinian prisoners, though this is seen as a formality.