BEIRUT: Iran-backed Hezbollah has rebuffed Washington’s initial ideas for cooling tit-for-tat fighting with neighboring Israel, such as pulling its fighters further from the border, but remains open to US diplomacy to avoid a ruinous war, Lebanese officials said.
US envoy Amos Hochstein has been leading a diplomatic outreach to restore security at the Israel-Lebanon frontier as the wider region teeters dangerously toward a major escalation of the conflict ignited by the Gaza war.
Attacks by Yemen’s Iran-aligned Houthis on shipping in the Red Sea, US strikes in response and fighting elsewhere in the Middle East have added urgency to the efforts.
“Hezbollah is ready to listen,” a senior Lebanese official familiar with the group’s thinking said, while emphasising that the group saw the ideas presented by veteran negotiator Hochstein on a visit to Beirut last week as unrealistic.
Hezbollah’s position is that it will fire rockets at Israel until there is a full cease-fire in Gaza. Hezbollah’s rejection of the proposals presented by Hochstein has not been previously reported.
Despite the rejection and Hezbollah’s volleys of rockets in support of Gaza, the group’s openness to diplomatic contacts signals an aversion to a wider war, one of the Lebanese officials and a security source said, even after an Israeli strike reached Beirut on Jan. 2, killing a Hamas leader.
Israel has also said it wants to avoid war, but both sides say they are ready to fight if necessary. Israel warns it will respond more aggressively if a deal to make the border area safe is not reached.
Such an escalation would open a major new phase in the regional conflict.
Branded a terrorist organization by Washington, Hezbollah has not been directly involved in talks, three Lebanese officials and a European diplomat said. Instead, Hochstein’s ideas were passed on by Lebanese mediators, they said. Reuters consulted eleven Lebanese, US, Israeli and European officials for this story.
One suggestion floated last week was that border hostilities be scaled back in tandem with Israeli moves toward lower intensity operations in Gaza, the three Lebanese sources and a US official said.
A proposal was also communicated to Hezbollah that its fighters move 7 km (4 miles) from the border, two of the three Lebanese officials said. That would leave fighters much closer than Israel’s public demand of a 30 km (19 mile) withdrawal to the Litani River stipulated in a 2006 UN resolution.
Hezbollah has dismissed both ideas as unrealistic, the Lebanese officials and the diplomat said. The group has long ruled out giving up weapons or withdrawing fighters, many of whom hail from the border region and melt into society at times of peace.
Israel’s Prime Minister’s office declined to comment on “reports of diplomatic discussions” in response to questions from Reuters for this story. Spokespeople for Hezbollah and the Lebanon government did not immediately respond to detailed requests for comment.
The White House declined to comment on Reuters’ reporting.
Hezbollah has, however, signalled that once the Gaza war is over it could be open to Lebanon negotiating a mediated deal over disputed areas at the border, the three Lebanese officials said, a possibility alluded to by Hezbollah’s leader in a speech this month.
“After the war in Gaza, we are ready to support Lebanese negotiators to turn the threat into opportunity,” one senior Hezbollah official told Reuters, speaking on the condition of anonymity. He did not address specific proposals.
Hezbollah previously held fire during a 7-day Gaza truce in late November.
Israeli government spokesperson Eylon Levy, in response to a Reuters question at a media briefing on Wednesday, said there was “still a diplomatic window of opportunity,” to push Hezbollah away from the border.
Hochstein has a track record of successful mediation between Lebanon and Israel. In 2022, he brokered a deal delineating the countries’ disputed maritime boundary — an agreement sealed with Hezbollah’s behind-the-scenes approval.
Lebanese Prime Minister Najib Mikati, in whose cabinet Hezbollah has ministers, has said Beirut was ready for talks on long-term border stability.
During his Jan. 11 visit to Beirut, Hochstein met Mikati, the parliament speaker and army commander. He said publicly at the time that the United States, Israel and Lebanon all preferred a diplomatic solution.
Hochstein was hopeful “all of us on both sides of the border” could reach a solution to allow Lebanon and Israel to live with guaranteed security, he told reporters.
The spearhead of the Iran-aligned “Axis of Resistance,” Hezbollah was drawn into a battle it has said it did not expect when Palestinian ally Hamas stormed Israel on Oct. 7, triggering a conflict that has also spilled into the Red Sea, where US strikes have targeted Yemen’s Houthis over their attacks on shipping.
Hezbollah has said its campaign has aided Palestinians by stretching Israeli forces and driving tens of thousands of Israelis from their homes.
It has come at a cost, with around 140 Hezbollah fighters and at least 25 Lebanese civilians killed, as well as at least nine Israeli soldiers and a civilian. The intensity has been growing in recent weeks.
Hezbollah, founded by Iran’s Revolutionary Guards in 1982, is the most powerful and influential of the groups Iran backs. It has played a big part in Tehran’s wider foreign policies.
Sources familiar with Hezbollah thinking have said it knows all-out war would be ruinous for Lebanon, a country already destabilized by years of financial and political crises, and where Hezbollah’s vast arsenal has long been a point of contention. Experts say the cache includes more than 100,000 rockets.
Even as Iran-aligned fighters draw US fire elsewhere in the region and Iran launches strikes in Syria and Iraq, Tehran would be loathe to see Hezbollah and Lebanon subjected to massive destruction, not least because it has previously had to foot the bill of reconstruction, said Mohanad Hage Ali, deputy director of the Carnegie Middle East Center, a think-tank based in Beirut.
Iran’s foreign minister on Wednesday said attacks against Israel and its interests by the “Axis of Resistance” will stop if the Gaza war ends.
Hage Ali said Hezbollah clearly wanted to avoid full-scale conflict. It did not want to be left in a situation where Israeli strikes continue or intensify in Lebanon after the Gaza war ends or is significantly scaled back, he said.
“A process in which it can engage, or support, the Lebanese state as it negotiates would provide the benefits of de-escalation,” he said.
The diplomacy faces significant complications, and many observers see a serious risk of an escalation in fighting. Israel has said its army will act if diplomacy cannot restore security to northern Israel.
Hezbollah leader Sayyed Hassan Nasrallah said the group had heard “threats and inducements.”
The threat, Nasrallah said in a Jan. 15 speech, was the warning that Israel would move forces to its northern border as it shifts to the next phase of the Gaza war. Hezbollah was ready for war and would fight without “any limits, rules or boundaries,” he said.
But he has also alluded to diplomatic possibilities, saying in a Jan. 5 speech that once the Gaza war was over Lebanon had “a historic opportunity” to liberate land.
Those comments were widely interpreted as reflecting the possibility of a negotiated deal settling the status of disputed border areas.
Four Lebanese officials briefed on the matter said Hochstein has discussed ideas aimed at advancing such a deal, but he had not presented any draft proposals. The officials did not provide details of the ideas.
An Israeli official told Reuters Israel’s government has “relayed lots of demands,” without giving details. “One way or another, our 80,000 northern residents will be returning home,” the official said.
France has also been involved in de-escalation efforts. A source familiar with French thinking said Nasrallah’s public comments alluding to a possible border deal were “direct messages to the Americans and to the French.”
“He’s telling us: ‘the door is open’.”
Hezbollah rejected US overtures, still open to diplomacy to avoid wider war
Hezbollah rejected US overtures, still open to diplomacy to avoid wider war

- Lebanese mediators communicate US ideas to Hezbollah
- US envoy visits Israel and Lebanon in bid to restore calm
Why BCG’s involvement in Gaza marks an all-time low for consulting firms

- FT investigation examined Boston Consulting Group’s role in Gaza aid planning, including plans for Palestinian relocation
- BCG has disavowed the work and fired two senior partners — but the scandal sheds light on the wider industry’s irresponsibility
LONDON: A Financial Times investigation, published on July 4, found that a consulting firm connected to the Gaza Humanitarian Foundation secured a multimillion-dollar contract to help shape the initiative and a proposal for the possible “relocation” of Palestinians from the Gaza Strip.
The Boston Consulting Group was found to have played a central role in designing and managing the US- and Israeli-backed project, which aimed to replace the UN as the primary coordinator of humanitarian aid in Gaza.
Amid growing criticism, BCG denied any ongoing involvement in the Gaza Humanitarian Foundation. In a June 7 statement, the firm said it initially provided “pro bono support” in October 2024 to help launch “an aid organization intended to operate alongside other relief efforts.”

The firm said two senior US-based partners who led the initiative “failed to disclose the full nature of the work” and later engaged in “unauthorized” activities outside the firm’s oversight.
“Their actions reflected a serious failure of judgment and adherence to our standards,” the firm said. “We are shocked and outraged by the actions of these two partners. They have been exited from the firm.
“BCG disavows the work they undertook. It has been stopped, and BCG has not and will not be paid for any of their work.”
The company emphasized it is strengthening internal controls to prevent future breaches. “We deeply regret that in this situation we did not live up to our standards,” the statement said. “We are committed to accountability for our failures and humility in how we move forward.”
FAST FACTS:
• A Financial Times investigation examined BCG’s role in Gaza aid planning, including controversial proposals for Palestinian relocation.
• BCG disavowed the work and fired two senior partners, but documents suggest deeper involvement and lapses in internal oversight.
• The scandal underscores wider concerns about consulting firms’ ethics, with similar controversies involving PwC, KPMG, EY and McKinsey.
Following the FT story, BCG issued another statement on July 6 disputing aspects of the reporting. “Recent media reporting has misrepresented BCG’s role in post-war Gaza reconstruction,” the firm said.
BCG reiterated that the initiative was not an official company project and was carried out in secret. “Two former partners initiated this work, even though the lead partner was categorically told not to,” the statement read.
“This work was not a BCG project. It was orchestrated and run secretly outside any BCG scope or approvals. We fully disavow this work. BCG was not paid for any of this work.”

However, individuals familiar with “Aurora” told the FT that BCG’s involvement ran deeper. The report revealed that BCG created a financial model for Gaza’s postwar reconstruction that included scenarios for mass displacement.
This revelation intensified scrutiny of the consulting industry’s ethical boundaries.
“Consulting companies… are held to a higher standard of professionalism and ethics than other lines of work,” Dr. Abdel Aziz Aluwaisheg, the Gulf Cooperation Council assistant secretary-general for political affairs and negotiation, wrote in an April opinion piece for Arab News.
He warned that without corrective action, major firms risk alienating clients.

ndeed, in recent years, top consulting firms like McKinsey, PwC, KPMG, and EY have faced growing scrutiny for putting profit over ethics, with scandals revealing conduct lapses worldwide.
McKinsey, for instance, faced heavy backlash for its role in the US opioid crisis. The firm was accused of helping Purdue Pharma and other manufacturers to aggressively market addictive painkillers, including OxyContin, The New York Times reported.
Aluwaisheg noted in his op-ed that some of these ethical lapses “are quite common throughout the consulting business.”
However, he added, “big firms are more likely to commit them,” citing sprawling operations that limit senior management oversight.
The industry’s core business model may be the issue: consulting firms adopted law firms’ high-fee model for expert advice — without their legal liability.
Despite this, demand for consulting services remains high. Aluwaisheg believes governments and businesses will continue to need outside expertise.

Still, accountability concerns have prompted some governments to take action. In February, Saudi Arabia’s Public Investment Fund banned PwC from taking on new advisory and consulting contracts for one year.
Some media outlets reported that the decision was related to an ethical violation tied to an alleged recruitment of a senior-level employee from the client’s side. The suspension did not impact PwC’s auditing work.
These events highlight ongoing concerns over consulting firms’ roles in controversial actions. In April 2024, KPMG’s Dutch arm was fined $25 million after over 500 staff cheated on internal training exams, Reuters reported.
Yet the BCG case may represent a new low for the industry.
The Gaza Humanitarian Foundation’s model bypassed traditional organizations like the UN, restricted aid distribution to limited sites under Israeli oversight and relied on private security contractors. This move has had deadly consequences.
According to Gaza’s health authority, at least 740 Palestinians have been killed and almost 4,900 injured while attempting to reach aid centers, drawing condemnation from humanitarian organizations and UN officials.

UN aid chief Tom Fletcher called the initiative a “fig leaf for further violence and displacement” of Palestinians in the war-torn enclave.
In a July 10 letter to the FT editor, BCG’s CEO Christoph Schweizer pushed back against the allegations that his firm endorsed or profited from projects related to Gaza.
“None of that is true,” Schweizer wrote, adding that “a few people from BCG were involved in such work. They never should have been.”
Adding another layer to the controversy, FT reported on July 6 that staff from the Tony Blair Institute were also implicated in postwar planning that included scenarios for mass Palestinian displacement — despite being prominent advocates for peace in the Middle East.

The plan, seen by the FT, imagined Gaza as a regional economic hub, complete with a “Trump Riviera” and “Elon Musk Smart Manufacturing Zone,” based on financial models developed by BCG.
While the Tony Blair Institute for Global Change denied authoring “The Great Trust” blueprint, it acknowledged two staff joined Gaza planning calls and chats. It also denied backing population relocation.
Arab News approached the TBI for comment, but did not receive a response by the time of publication.
Nevertheless, its involvement has triggered additional concerns about the ethics of postwar reconstruction planning and the role of consulting firms in shaping policies with far-reaching humanitarian consequences.
Syrian, Israeli officials meet in Baku: Diplomatic source in Damascus

- Meeting marked major step for two countries which have been foes for decades
DAMASCUS: A Syrian and an Israeli official met face to face in Baku Saturday on the sidelines of a visit to Azerbaijan by President Ahmed Al-Sharaa, a diplomatic source in Damascus said.
The meeting marked a major step for the two countries which have been foes for decades, and comes after Israel initially cold-shouldered Al-Sharaa’s administration as jihadist because of his past links to Al-Qaeda.
“A meeting took place between a Syrian official and an Israeli official on the sidelines of Al-Sharaa’s visit to Baku,” the source said, requesting anonymity because of the sensitivity of the issue.
Israel is a major arms supplier to Azerbaijan and has a significant diplomatic presence in the Caucasus nation which neighbors its arch foe Iran.
Al-Sharaa himself did not take part in the meeting, which focused on “the recent Israeli military presence in Syria,” the source added.
After the overthrow of longtime ruler Bashar Assad in December, Israel carried out hundreds of air strikes in Syria to prevent key military assets falling into the hands of the Islamist-led interim administration headed by Al-Sharaa.
It also sent troops into the UN-patrolled buffer zone that used to separate the opposing forces in the strategic Golan Heights, from which it has conducted forays deeper into southern Syria.
Al-Sharaa has said repeatedly that Syria does not seek conflict with its neighbors, and has instead asked the international community to put pressure on Israel to halt its attacks.
His government recently confirmed that it had held indirect contacts with Israel seeking a return to the 1974 disengagement agreement which created the buffer zone.
Late last month, Foreign Minister Gideon Saar said Israel was interested in striking a peace and normalization agreement with Syria.
A Syria government source quoted by state media responded that such talk was “premature.”
But during a visit to Lebanon this week, US special envoy to Syria Tom Barrack said: “The dialogue has started between Syria and Israel.”
After meeting Al-Sharaa in Riyadh in May, US President Donald Trump told reporters he had expressed hope that Syria would join other Arab states which normalized their relations with Israel.
“(Al-Sharaa) said yes. But they have a lot of work to do,” Trump said.
During his visit to Baku, Al-Sharaa held talks with his counterpart Ilham Aliyev, the two governments said.
Azerbaijan announced it would begin exporting gas to Syria via Turkiye, a key ally of both governments, a statement from the Azerbaijani presidency said.
5 children playing soccer killed in Yemen explosion

- Two local residents who were eyewitnesses, Ahmed Al-Sharee and Khaled Al-Areki, said that the children were playing soccer when the explosion happened
ADEN: Five children in southwestern Yemen died after an explosive device detonated in a residential area where they were playing soccer, rights groups and eyewitnesses said on Saturday.
The circumstances surrounding their deaths on Friday night in Al-Hashmah subdistrict of Taiz province remain unclear.
A spokesperson for the United Nations children’s agency UNICEF said that they are aware of reports about the incident but can’t verify the facts at the moment.
Two local residents who were eyewitnesses, Ahmed Al-Sharee and Khaled Al-Areki, said that the children were playing soccer when the explosion happened.
At least three people with minor to moderate injuries were also taken to the hospital.
Mahmoud Al-Mansi, another eyewitness, said the explosive was directed from an area where forces allied with the Islah party were present.
The Yemen Center for Human Rights condemned the incident in a report that included graphic photos of the children’s torn bodies. Citing health care sources at Al-Rafai Hospital, where the victims arrived unresponsive, the group said they died from shrapnel injuries.
Two of the children were 12 years old, while two others were 14 years old, according to the group. The age of the fifth child is unknown.
US envoy Tom Barrack clarifies Syria comments, denies they were threat to Lebanon

- Reports cited Barrack warning that Lebanon risked “going back to Bilad Al-Sham”
- Syrian government also moved to quash speculation that it was planning escalatory steps against Lebanon
LONDON: US Special Envoy Tom Barrack has sought to clarify remarks made during his recent visit to the region, saying that his comments praising Syria’s progress were not intended as a threat to neighboring Lebanon.
“My comments yesterday praised Syria’s impressive strides, not a threat to Lebanon,” Barrack posted on X on Saturday.
“I observed the reality that Syria is moving at light speed to seize the historic opportunity presented by @POTUS’ lifting of sanctions: Investment from Turkiye and the Gulf, diplomatic outreach to neighboring countries and a clear vision for the future. I can assure that Syria’s leaders only want coexistence and mutual prosperity with Lebanon, and the US is committed to supporting that relationship between two equal and sovereign neighbors enjoying peace and prosperity,” he added.
The clarification comes after reports in Lebanese media, including from MTV Lebanon, cited Barrack as warning that Lebanon risked “going back to Bilad Al-Sham” if it failed to act quickly on regional realignment.
The term Bilad Al-Sham, historically referring to Greater Syria, encompasses present-day Syria, Lebanon, Jordan and Palestine under the Ottoman Empire; a sensitive concept in Lebanon given fears over sovereignty and outside interference.
Barrack’s comments were widely interpreted by some local outlets as a warning that Lebanon could fall under renewed Syrian influence if it failed to align with shifting regional dynamics.
Meanwhile on Saturday, the Syrian government also moved to quash speculation that it was planning escalatory steps against Lebanon over the issue of Syrian detainees held in Lebanese prisons.
A Syrian Ministry of Information official said that the detainee issue remains “a top priority” and that Damascus is committed to resolving it “swiftly through official channels between the two countries.”
Earlier reports had cited unnamed sources close to the Syrian government suggesting that diplomatic and economic retaliation was under consideration in response to what Damascus saw as Lebanon’s neglect of the detainees’ plight.
However, the Information Ministry source denied this, saying there were no such plans and reaffirming Syria’s commitment to bilateral resolution.
In an interview with Arab News on Friday, Barrack had made remarks reflecting growing US concern over Lebanon’s political inertia and the evolving role of Hezbollah.
“If Lebanon doesn’t hurry up and get in line, everyone around them will,” Barrack warned, pointing to a broader regional shift sparked by the lifting of US sanctions on Syria.
He framed the moment as pivotal for Lebanon, with pressure mounting for a new political order.
Addressing questions about Hezbollah’s future, Barrack said the group consists of “two parts,” an Iran-backed militant faction designated as a terrorist organization, and a political wing operating in Lebanon’s parliament.
He added that any disarmament process “must be led by the Lebanese government, with the full agreement of Hezbollah itself.”
Barrack said: “That process has to start with the Council of Ministers. They have to authorize the mandate. And Hezbollah, the political party, has to agree to that. But what Hezbollah is saying is, ‘OK, we understand one Lebanon has to happen.’ Why? Because one Syria is starting to happen.”
On Syria, Barrack described the lifting of sanctions on May 13 as a “strategic fresh start” for the war-ravaged nation and said that the US was not intending to pursue “nation-building or federalism.”
He called the Middle East a “difficult zip code at an amazingly historic time,” and told Arab News that the Trump administration’s new approach was designed to offer “a new slice of hope” to the Syrian people.
“President (Trump)’s message is peace and prosperity,” he said. “Sanctions gave the people hope. That’s really all that happened at that moment.”
Fuel shortages in Gaza at ‘critical levels,’ UN warns

- Seven UN agencies said in a joint statement that “fuel is the backbone of survival in Gaza”
GENEVA: The United Nations warned Saturday that dire fuel shortages in the Gaza Strip had reached “critical levels,” threatening to further increase the suffering in the war-ravaged Palestinian territory.
Seven UN agencies said in a joint statement that “fuel is the backbone of survival in Gaza.”
Fuel was needed to “power hospitals, water systems, sanitation networks, ambulances, and every aspect of humanitarian operations,” they said, highlighting that bakeries also needed fuel to operate.
The besieged Palestinian territory has been facing dire fuel shortages since the beginning of the devastating war that erupted after Hamas’s deadly attack inside Israel on October 7, 2023.
But now “fuel shortage in Gaza has reached critical levels,” warned the agencies, including the World Health Organization, the World Food Programme and the humanitarian agency OCHA.
“After almost two years of war, people in Gaza are facing extreme hardships, including widespread food insecurity,” they pointed out.
“When fuel runs out, it places an unbearable new burden on a population teetering on the edge of starvation.”
The UN said that without adequate fuel, the agencies that have been responding to the deep humanitarian crisis in a territory swathes of which have been flattened by Israeli bombing and facing famine warnings, “will likely be forced to stop their operations entirely.”
“This means no health services, no clean water, and no capacity to deliver aid,” the statement said.
“Without adequate fuel, Gaza faces a collapse of humanitarian efforts,” it warned.
“Without fuel, bakeries and community kitchens cannot operate. Water production and sanitation systems will shut down, leaving families without safe drinking water, while solid waste and sewage pile up in the streets,” it added.
“These conditions expose families to deadly disease outbreaks and push Gaza’s most vulnerable even closer to death.”
The warning comes days after the UN managed to bring fuel into Gaza for the first time in 130 days.
While a “welcome development,” the UN agencies said the 75,000 liters of fuel they were able to bring in was just “a small fraction of what is needed each day to keep daily life and critical aid operations running.”
“The United Nations agencies and humanitarian partners cannot overstate the urgency of this moment,” they said.
“Fuel must be allowed into Gaza in sufficient quantities and consistently to sustain life-saving operations.”