{"id":66622,"date":"2026-08-16T13:08:14","date_gmt":"2026-08-16T17:08:14","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/middle-east-crisis-iraq-faces-fiscal-strain-as-trumps-gaza-peace-plan-hits-israeli-resistance\/66622\/"},"modified":"2026-08-16T13:08:14","modified_gmt":"2026-08-16T17:08:14","slug":"middle-east-crisis-iraq-faces-fiscal-strain-as-trumps-gaza-peace-plan-hits-israeli-resistance","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/middle-east-crisis-iraq-faces-fiscal-strain-as-trumps-gaza-peace-plan-hits-israeli-resistance\/66622\/","title":{"rendered":"Middle East Crisis: Iraq Faces Fiscal Strain as Trump\u2019s Gaza Peace Plan Hits Israeli Resistance"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Iraq is facing a severe liquidity crisis<\/strong>, with oil revenues collapsing from <strong>$7 billion to $1 billion per month<\/strong> following the closure of the <strong>Strait of Hormuz<\/strong> amid regional conflict.<\/li>\n<li><strong>Eight Arab and Islamic nations<\/strong> issued a joint statement condemning Israel\u2019s rejection of a 15-point roadmap for <strong>President Donald Trump\u2019s<\/strong> Gaza peace plan, warning it threatens to derail the end of the war.<\/li>\n<li><strong>Jared Kushner<\/strong> met with a <strong>Hamas delegation<\/strong> in Egypt to translate the group&#39;s commitments to disarm into &quot;concrete and verifiable steps,&quot; including the transfer of power to a technocratic government.<\/li>\n<li>The <strong>Iraqi Finance Ministry<\/strong> is fast-tracking a transition to its first-ever <strong>&quot;program and performance budget&quot;<\/strong> to link resource allocation to measurable outcomes and curb waste.<\/li>\n<li>The <strong>Board of Peace (BoP)<\/strong> has demanded that Israel conduct &quot;reciprocal withdrawal operations&quot; in Gaza if Hamas begins relinquishing its military infrastructure.<\/li>\n<\/ul>\n<h2>Iraq\u2019s Fiscal Crisis and Budgetary Shift<\/h2>\n<p>The Iraqi government is navigating an unprecedented financial emergency as the closure of the <strong>Strait of Hormuz<\/strong> chokes the country\u2019s primary revenue stream. Oil exports have plummeted from <strong>100 million barrels in February<\/strong> to approximately <strong>32 million barrels<\/strong> in recent months, leaving the state unable to meet regular salary payments for millions of public employees. Finance Minister <strong>Falih Sari<\/strong> has warned that the government must now prioritize basic obligations and is moving to enhance non-oil revenues to mitigate the impact of the blockade.<\/p>\n<p>To address long-term structural weaknesses, Iraq is preparing its first <strong>program and performance-based budget<\/strong> for the 2027 fiscal year. This reform, developed in coordination with the <strong>World Bank<\/strong>, aims to move away from traditional line-item spending toward a system that ties funding to specific programs and measurable results. The government\u2019s goal is to increase non-oil revenues to <strong>45% of total public revenue<\/strong> within the next decade, up from the current level of less than 10%.<\/p>\n<h2>Diplomatic Friction Over Trump\u2019s Gaza Roadmap<\/h2>\n<p>A coalition of eight nations\u2014including <strong>Saudi Arabia, Egypt, Turkey, and the UAE<\/strong>\u2014has formally condemned Israel\u2019s rejection of the Gaza roadmap endorsed by <strong>President Donald Trump<\/strong>. The joint statement asserts that Israel bears &quot;direct and full responsibility&quot; for obstructing peace efforts and warns that the refusal undermines the <strong>Board of Peace\u2019s (BoP)<\/strong> 15-point plan. The roadmap includes a cessation of hostilities, the deployment of an <strong>International Stabilization Force (ISF)<\/strong>, and the reconstruction of the enclave.<\/p>\n<p>The <strong>Board of Peace<\/strong>, chaired by Trump, has proposed a plan where Gaza is governed by a <strong>Palestinian technocratic government<\/strong>, with no future role for Hamas. However, Israeli Prime Minister <strong>Benjamin Netanyahu<\/strong> has publicly rejected the roadmap, insisting that no withdrawal of Israeli forces will occur until Hamas is fully and &quot;genuinely&quot; disarmed. This stance has created a significant rift with the U.S. administration, which is pushing for &quot;reciprocal withdrawal operations&quot; to encourage Hamas to relinquish its weapons.<\/p>\n<h2>High-Stakes Negotiations in Egypt<\/h2>\n<p>U.S. envoy <strong>Jared Kushner<\/strong> held critical meetings in Cairo on Sunday with a <strong>Hamas delegation<\/strong> led by <strong>Khalil al-Hayya<\/strong>. The talks aimed to finalize the technical details of Hamas\u2019s commitment to dismantle its military infrastructure and hand over heavy weaponry. Sources indicate that the <strong>Peace Council<\/strong> wants a verifiable plan to ensure Gaza never again becomes a source of terrorism against Israel, while also facilitating the entry of humanitarian relief and reconstruction teams.<\/p>\n<p>The negotiations in Egypt come at a time of extreme regional tension, as the <strong>U.S. Navy<\/strong> continues its blockade of Iranian ports and the <strong>USS Lincoln<\/strong> remains deployed in the Arabian Sea. While Hamas has privately signaled a readiness to accept the demilitarization plan in exchange for an Israeli exit, the lack of consensus between the <strong>Trump administration<\/strong> and the Israeli cabinet remains the primary hurdle to a lasting ceasefire.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Iraq is facing a severe liquidity crisis, with oil revenues collapsing from $7 billion to $1 billion per 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