Editor’s note: This story was updated to add missing detail in the introduction and further updated to reflect approval of a cease-fire deal by Israel’s cabinet and U.S. President Joe Biden’s Tuesday afternoon announcement. Stock price action in the story has been updated and exchange and ticker info for the ISRA ETF has been corrected as well.
The governments of Israel and Lebanon have accepted a cease-fire deal, President Joe Biden said Tuesday.
“Today I have some good news to report from the Middle East,” Biden said, adding that he spoke with the prime ministers of Israel and Lebanon.
“I am pleased to announce that their governments have accepted the U.S. proposal to end the devastating conflict between Israel and Hezbollah,” said Biden, who made the remarks in the White House Rose Garden.
The cease-fire is set to take effect at 4 a.m. Wednesday, Biden said.
Hezbollah has not immediately commented on the deal announcement, the New York Times reported. Lebanon’s government does not control the Hezbollah militant group.
The deal calls for a 60-day truce, The New York Times reported, and would be overseen by the U.S., United Nations and others. Israel would withdraw forces from Lebanon and Hezbollah would move fighters to north of the Litani River.
Strikes between Israel and Hezbollah have continued during the cease-fire negotiations.
What Happened: The short-term proposal is to pause hostilities for 60 days but with the intention of a lasting truce, according to CNN, which cited an Israeli official.
Israeli Prime Minister Benjamin Netanyahu offered three reasons for the cease fire, one being to shift focus to Iran, replenish Israeli troops and put greater pressure on Hamas to release the hostages that were captured on Oct. 7, 2023.
See Also: Crude Oil Moves Lower; Dick’s Sporting Goods Earnings Top Views
Why It Matters: Not everyone is so confident the cease-fire will work.
Per the New York Times, Israel’s national security minister Itamar Ben-Gvir stressed the need for a "security zone" inside Lebanon to defend against Hezbollah. Otherwise, the two countries risk another war in the future, he said.
Ben-Gvir did not indicate that a cease-fire decision would cause him to leave Netanyahu's coalition.
Market Reactions
Oil prices were trading down Tuesday, with the United States Oil Fund USO 0.65% lower at last check.
Israeli stocks, as monitored through the VanEck Israel ETF ISRA are up 23.5% year-to-date.
Other oil ETFs were in the red at last check Tuesday afternoon.
ProShares Ultra Bloomberg Crude Oil UCO fell by 0.93%, SPDR S&P Oil & Gas Exploration & Production ETF XOP was down 0.75% ahead of the closing bell and MicroSectorsTM Oil & Gas Exploration & Production 3X Leveraged ETNs OILU saw a 0.45% drop, according to Benzinga Pro.
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