Yesterday’s newsletter considered the terrible dilemma that hostage negotiations pose for the Jewish state. But Hamas faces its own dilemmas when it comes to accepting or rejecting a deal. Michael Oren takes a look at the terrorist group’s calculations, examining

the Hamas leader Yahya Sinwar’s understanding that he cannot achieve his minimum demands in negotiations: a permanent cease-fire and the withdrawal of all IDF forces from Gaza, including from the Philadelphi Corridor. Without such concessions, Sinwar is unlikely to give up the “assets” in his possession (the hostages) for a deal that would allow Israel to restart the war in the future and block the flow of weapons through the corridor.

From his perspective, what could shift the balance of power is a war between Iran and Hizballah and Israel—a conflict that could destabilize the entire region, and possibly the world. In such a war, the IDF would be forced to divert significant forces away from Gaza to address other threats, greatly increasing the pressure on Israel to reach a deal, both domestically and internationally.

If that is the case, . . . the United States, having deployed massive naval and air forces to the region, must unequivocally declare its readiness to exact a heavy price from Iran should it or its proxies dare to attack Israel. . . . Only this way can Sinwar be made to realize that he has no military backing from Iran or Hizballah and that he will be left to his own devices, in a tunnel somewhere underground.

Israel will likely respond directly against Iran after yesterday’s attack, and has made known that it will calibrate its retaliation based not on the extent of the damage, but on the scale of the attack. The specifics are anyone’s guess, but Edward Luttwak has a suggestion, put forth in an article published just hours before the missile barrage: cut off Tehran’s ability to send money and arms to Shiite Arab militias.

In practice, most of this cash comes from a single source: oil. . . . In other words, the flow of dollars that sustains Israel’s enemies, and which has caused so much trouble to Western interests from the Syrian desert to the Red Sea, emanates almost entirely from the oil loaded onto tankers at the export terminal on Khark Island, a speck of land about 25 kilometers off Iran’s southern coast. Benjamin Netanyahu warned in his recent speech to the UN General Assembly that Israel’s “long arm” can reach them too. Indeed, Khark’s location in the Persian Gulf is relatively close. At 1,516 kilometers from Israel’s main airbase, it’s far closer than the Houthis’ main oil import terminal at Hodeida in Yemen—a place that was destroyed by Israeli jets in July, and attacked again [on Sunday].