In 2014, in response to American complaints about its policy of paying salaries to terrorists, the Palestinian Authority (PA) stopped such payments and instead began funneling money to the Palestinian Liberation Organization (PLO)—also headed by Mahmoud Abbas—which then distributed it to the terrorists. With the failure of other efforts to stop this practice, the Israeli defense minister, Avigdor Liberman, recently declared the Palestinian National Fund, which is the PLO’s treasury, a terrorist organization. Eylon Aslan-Levy explains:

[Israel’s] ability to pressure the PA . . . is constrained: making Israel’s civil policy in the West Bank more restrictive would harm economic growth, foment resentment, and generate international concern and bad headlines. Additionally, Israel fears that weakening the Palestinian Authority would serve only to boost the popularity of Hamas as an alternative government, so it is reluctant to expose it to public criticism. . . .

[Liberman’s] decision to designate the Palestinian National Fund a terrorist organization . . . puts the PLO on notice. The defense minister may [legally] order the confiscation of a terror entity’s assets. He is not required to, but he can. A defense-ministry statement says that “necessary steps will be taken . . . to seize and forfeit” the Palestinian National Fund’s assets, but there is a vast range of possible enforcement actions that Israel could take. How far Israel goes is now up to Liberman.

[Confiscation] could even take the form of raids on banks and financial institutions in areas under PA control, as Israel has done in the past. Liberman’s announcement reminds Palestinian leaders that their powers of patronage based on controlling this money remain dependent on Israeli policy. It signals that Israel is prepared to take punitive action against the Palestinian government if it provokes Israel.

For more than a year, the Iran-backed Houthis have been launching drones and missiles at ships traversing the Red Sea, as well as at Israeli territory, in support of Hamas. This development has drastically curtailed shipping through the Suez Canal and the Bab al-Mandeb Strait, driving up trade prices. This week, the Trump administration began an extensive bombing campaign against the Houthis in an effort to reopen that crucial waterway. Burcu Ozcelik highlights another benefit of this action:

The administration has a broader geopolitical agenda—one that includes countering China’s economic leverage, particularly Beijing’s reliance on Iranian oil. By targeting the Houthis, the United States is not only safeguarding vital shipping lanes but also exerting pressure on the Iran-China energy nexus, a key component of Beijing’s strategic posture in the region.

China was the primary destination for up to 90 percent of Iran’s oil exports in 2024, underscoring the deepening economic ties between Beijing and Tehran despite U.S. sanctions. By helping fill Iranian coffers, China aids Iran’s Islamic Revolutionary Guard Corps in financing proxies like the Houthis. Since October of last year, notable U.S. Treasury announcements have revealed covert links between China and the Houthis.

Striking the Houthis could trigger broader repercussions—not least by disrupting the flow of Iranian oil to China. While difficult to confirm, it is conceivable and has been reported, that the Houthis may have received financial or other forms of compensation from China (such as Chinese-made military components) in exchange for allowing freedom of passage for China-affiliated vessels in the Red Sea.