Government Advisor: “Petro Dinar” Requires Good Stock of Foreign Currencies and Gold
link this is a shorter version of a longer article
The Prime Minister's advisor for financial affairs, Mazhar Muhammad Salih, explained today, Sunday, that "the adoption of the dinar in pricing oil, or what is called (petro dinar), requires, first of all, the availability of foreign reserve currencies or gold, as Russia did when it purchased Russian oil with gold-backed rubles, which caused problems that we will discuss later."
He added in press statements that "these foreign reserves must be available (as a necessary condition) and operate according to a high standard of efficiency that guarantees the stability of the exchange rate linked to oil (the petro dinar) in order to hedge against oil price fluctuations to ensure the stability of the exchange rate (the petro dinar) itself."
The Video for this blogpost is below here:
“Linking oil sales to the dinar on a fixed basis with oil prices instead of the foreign reserves base means linking the dinar to the oil asset cycle first, and that oil is sold according to global oil prices. If the exchange rate of the dinar (petrodinar) against the (petrodollar) is fixed, and oil prices fall, then the demand for the dinar for accounting purposes will certainly fall, and the dinar will be exchanged for oil in larger quantities and the demand for the (petrodinar) will be lower, and vice versa,” he added.
He pointed out that "any deviation between oil prices (petrodollar) and the exchange rate (petrodinar) according to international market data will be considered a cost that requires compensation by paying fewer dinars or collecting a higher dinar in the opposite case," indicating that "international reserve currencies are foreign currencies held by central banks and global financial institutions as part of their cash reserves. These currencies are used in international transactions and settling debts between countries, and are a standard for international payments and facilitating global trade."
Government advisor explains the possibility of using the dinar instead of the dollar in oil sales
The Prime Minister's Advisor for Financial Affairs, Mazhar Mohammed Salih, clarified today, Sunday, what is being circulated in some media outlets regarding the possibility of using the dinar instead of the dollar in oil sales.
Saleh said in an interview with the Iraqi News Agency, followed by "Al-Eqtisad News", that "the adoption of the dinar in the pricing of oil, or what is called (petro dinar), especially when the national currency is not one of the international reserve currencies, requires the availability of foreign reserve currencies or gold, as Russia did when it bought Russian oil with gold-backed rubles, which caused problems that we will come to later."
He added that "these foreign reserves must be available (as a necessary condition) and operate according to a high standard of efficiency that guarantees the stability of the exchange rate linked to oil (the petro dinar) in order to hedge against oil price fluctuations to ensure the stability of the exchange rate (the petro dinar) itself from the beginning."
He added that “linking oil sales to the dinar on a fixed basis with oil prices instead of the foreign reserves base means linking the dinar to the oil asset cycle first, and that oil is sold according to global oil prices. If the exchange rate of the dinar (petrodinar) against the (petrodollar) is fixed, for example, and oil prices fall, then the demand for the dinar for accounting purposes will certainly fall, and the dinar will be exchanged for oil in larger quantities and the demand for the (petrodinar) will be lower, and vice versa.”
He pointed out that "any deviation between oil prices (petrodollar) and the exchange rate (petrodinar) according to international market data will be considered a cost that requires compensation by paying fewer dinars or collecting a higher dinar in the opposite case," indicating that "international reserve currencies are foreign currencies held by central banks and global financial institutions as part of their cash reserves. These currencies are used in international transactions and settling debts between countries, and are a standard for international payments and facilitating global trade."
He explained that "Russia suffered a lot when it priced its exported oil in rubles (petrorubles) and the ruble is a non-reserve currency and committed to a value for the ruble that was initially denominated in gold to ensure the stability of oil revenues. Here (petrorubles) were subject to two asset cycles at the same time (which complicated the scene of selling oil in local currency and stabilizing the value of the petrorubles)."
He pointed out that "the first cycle: is the result of the impact of what is called the gold assets cycle and its impact on the value of the (petroruble) or the local currency denominated in exported oil, while the second: is the oil assets cycle, and its impact on the value of a barrel of oil outside the global price and the reflection of that on oil revenues priced in that currency."
He stressed that "the two cycles are asset cycles that are linked and contradictory at the same time on the value of (the currency priced in the exported oil, such as the petroruble), which made pricing Russian oil in rubles as a local currency and according to the data of the global oil market a very complex issue."
He added that "the principle of using the dinar as a local currency in international oil exchanges (petrodinar) is not without many challenges, which is why those potential challenges must be carefully considered, especially the issue of the flexibility or stability of the value of the (petrodinar) itself to change and fluctuation, especially since we in the oil market are not price makers in it, but rather price takers."
He noted that "the global oil market will control the fluctuation of the local currency (petrodinar), in addition to the importance of international recognition of it, and the financial infrastructure necessary to support such operations of (petrodinar), in other words, the strategy of relying the value of the currency directly on oil exports may make the value of the local currency vulnerable to fluctuations in the global market."
Saleh added that “the proposal to sell oil in dinars as a local currency must take into account an important theory in global trade called the Law of One Price, which is an economic concept that assumes that the same commodity must be sold at the same prices in all markets when the price is expressed in the same currency, provided that there are no transportation costs or trade barriers such as customs tariffs and others. The Law of One Price is the basis for many economic and trade models, and the theory is based on the assumption that markets operate efficiently.”
He added: “The single price theory is the basic path to understanding the pricing mechanism in foreign exchange markets, as the theory seeks to explain that currency exchange rates always reflect the difference in prices between two countries, and when oil is priced in dollars (petrodollars), the exchange rate of the dinar (petrodinar) should be consistent with oil prices without fluctuation and at the same time consistent with the (petrodollars) and also steadily, and these are two issues that are difficult to control because they are external international factors that determine the value of the local currency so that it operates regularly and in a stable price compatibility with the oil market and international foreign currencies at the same time.”
“For example, if a barrel of oil is sold in the United States at $76 and in Europe at 72 euros, the single price theory predicts that, taking into account the exchange rate between the dollar and the euro, the price of a barrel of oil should be equal after adjusting the currency, provided that there are no transportation costs or trade barriers. This requires that the value of oil sold to Europe and America be consistent with the fluctuations in currency prices in order to ensure that the single price theory is in place. Thus, adopting the local currency in global trade is a very complex issue to ensure the stability of oil prices consistent with the value of the Iraqi dinar (petrodinar), especially in a fixed exchange rate system (exchange rate), unless discounts are granted or differences are charged in oil marketing operations or floating (petrodinar). Then, for example, the Oil Marketing Company (SOMO) will play a dual role in oil and monetary policies, whether in the field of oil pricing or pricing the oil dinar exchange rate (petrodinar),” he continued.
He added: "The strength and stability of the Iraqi dinar will remain linked to the factors of real growth and diversity in the national economy, in addition to achieving an appropriate surplus in the current account of the balance of payments, and linking the national currency to a basket of foreign currencies that provides stability in the value of the dinar itself. In light of the above, introducing mechanisms for stabilizing the dinar exchange rate into a single rentier economy exclusively based on the oil dinar is an economic trend with ambiguous results and is very vague, in addition to entering the (petrodinar) system, which requires risks (the aforementioned single price theory) to ensure its stability in light of the fluctuations in the oil assets cycle and a single rentier economy, not to mention not knowing the adopted exchange system (petrodinar). Will it be a fixed exchange system supported by foreign reserves or will it be a flexible exchange system in which the (petrodinar) changes with the change in oil prices? These are paths that have no answers on the ground and are really very ambiguous."
The environment is fertile for investment and solid global companies.. Parliament is "optimistic" about the government and is monitoring
Today, Sunday (August 18, 2024), the Parliamentary Investment Committee described the investment companies operating in Iraq as “solid and international,” stressing that Parliament monitors their work .
Committee member Mohammed Al-Ziyadi told Baghdad Today, "All investment companies operating in Iraq are solid and international, and have many businesses in different countries. Any company operating in Iraq works according to specifications, and its file is audited and all its previous businesses in different countries are reviewed," stressing "the need for Parliament to monitor the work of these companies."
He added, "Iraq is not obligated to introduce any unsound foreign company, especially since Iraq has an important and fertile investment environment and all international companies have a real desire to work within it, especially in light of the security and political stability after the formation of the current government."
Since the first day that Mohammed Shia al-Sudani assumed power in the country, he stressed his keenness to attract solid international companies to implement road, bridge and infrastructure projects in Iraq.
Here, the Parliamentary Transport Committee confirms the success of the Iraqi government in developing external roads and paying attention to this file.
The head of the committee, Zahra Al-Bajari, told Baghdad Today, Saturday (August 10, 2024), that “the government has succeeded in developing many external roads between the governorates, and there is a clear and tangible improvement in those roads, through paving and tiling,” noting that “certainly this matter has contributed greatly to reducing traffic accidents, which used to occur on a daily basis due to the deterioration of those roads,” and she added: “We still need more attention to this file.”
Prime Minister Mohammed Shia al-Sudani has repeatedly stressed that his government is moving forward to fulfill its promises to implement service projects in Baghdad and the governorates. On May 27, 2024, the prime minister said, at the Rustumiyah, Al-Muhandisin and Al-Shaljiya bridges, as part of the first package of projects to ease traffic congestion in the capital, Baghdad, that his government is moving forward to fulfill its promises to the people and implement service projects in Baghdad and the governorates, indicating that "there are 4 projects at the level of bridges and overpasses in Anbar, Diwaniyah, Dhi Qar and Maysan, which will be opened within the next three months."
Controlling 80% of currency smuggling in Iraq.. 6 qualitative strikes "paid off" and efforts continue
The Parliamentary Security and Defense Committee revealed, today, Sunday (August 18, 2024), the secrets of 6 qualitative strikes against what it called hard currency smuggling mafias in Iraq.
Committee member MP Yasser Iskandar Watout said in an interview with Baghdad Today, "Smuggling hard currency in all its forms is a drain on the country's economic capabilities and leads to pressure on the markets by raising exchange rates, which leads to an increase in prices."
"There are efforts being made, some of which are exceptional, through the reports we receive that reflect the continuation of implementing a series of strategies to reduce the smuggling of hard currency, which has been controlled by up to 80% in recent months through the efforts of the Ministry of Interior and its formations with the Central Bank, which has achieved positive results in this regard," added Watout.
He pointed out that "6 operations took place in the past months, representing qualitative strikes against the hard currency smuggling mafias in Iraq, which bore fruit, explaining, "But has smuggling ended completely? The answer is no, and efforts are continuing to end these illegal acts, which are taking place with complications that require intensive and doubled work by the competent authorities."
Financial and economic expert Nawar Al-Saadi revealed on Friday (August 16, 2024) the importance of the benefits of “digitizing” financial transactions for Iraqi banks, while pointing out that digitization can enhance financial inclusion by attracting users who do not deal with traditional banks by providing easy-to-access and easy-to-use services.
Al-Saadi told Baghdad Today that “digitizing financial transactions in Iraqi banks can provide significant benefits, especially in terms of reducing currency smuggling,” indicating that “by adopting digital systems, banks can track all financial transfers with greater accuracy and transparency. This means that each transaction is automatically recorded and saved in a central database that can be reviewed at any time. This allows the relevant authorities to monitor and quickly detect suspicious financial activities, making it difficult for smugglers to exploit the financial system to smuggle currencies.”
“Digitizing the banking system contributes to reducing money laundering cases, as these operations usually depend on exploiting loopholes in traditional systems, but with an advanced digital system, these operations become more complex. Digitization also allows the use of advanced technologies such as artificial intelligence to analyze patterns in banking data and identify any abnormal or suspicious transactions,” he added, stressing that “this helps prevent money laundering by early identification of unusual activities and reporting them to the competent authorities.”
Al-Saadi explained that “to implement this digital transformation in Iraq, there is a need for investments in technological infrastructure and developing the institutional capabilities of banks,” noting that “this requires providing modern technology, training employees to use it effectively, in addition to developing legislation and laws that protect users and encourage digital transactions. It is also important to enhance customer awareness of the benefits of digital transactions and build their confidence in the new systems.”
He stressed that “digitization in banks contributes to achieving more transparency and credibility in the financial system, as each transaction can be easily tracked and reviewed. It also improves the operational efficiency of banks by completing transactions faster and at a lower cost. In terms of security, digitization provides higher levels of protection against fraud and theft through advanced encryption technologies.”
The financial and economic expert concluded by saying, “Digitization can enhance financial inclusion by attracting users who do not deal with traditional banks by providing easy-to-access and easy-to-use services. Digitizing financial transactions in Iraqi banks also has great potential to enhance economic stability and reduce the risks associated with money laundering and currency smuggling, leading to a safer and more efficient financial system.”
Economist identifies weaknesses in banking system: 80% of money supply in citizens’ homes - Urgent
Financial and economic affairs expert Alaa Jaloub Al-Fahd revealed today, Sunday (August 18, 2024), a weakness in the Iraqi banking system, while confirming the presence of 80% of the cash mass in citizens’ homes.
Al-Fahd told Baghdad Today, "The amount of cash liquidity pumped into the local market is estimated at the size of annual government spending, and this includes salaries, wages, and others. It constitutes a large percentage and is considered the citizen's purchasing power."
He added that "the rise in income levels after 2003, due to the increase in salaries, led to an increase in purchasing power, and this led to an increase in the level of demand for real estate and other things," indicating that "the rise in real estate prices has nothing to do with the issue of the increase in the citizen's cash liquidity or not, because this increase is dependent on the issue of supply and demand."
Al-Fahd explained that "any increase or decrease in the volume of liquidity is estimated by the size of real spending and the size of savings, considering that the citizen's income is divided between consumption and savings, and the higher the savings rate, the more it is supposed to be exploited economically through investment."
He pointed out that "there is a weakness in the banking system's ability to absorb all the cash available to citizens, as most of this cash is inside homes, far from banks," noting that "the amount of cash available to citizens in homes is estimated at more than 80% of the issued cash mass, and this constitutes a weakness in the banking system, in withdrawing that mass and investing it."
It is noteworthy that financial expert Saleh Al-Masrafi confirmed on Tuesday (August 6, 2024) that Iraq is among the highest countries in the Middle East in the file of hoarding money, while he diagnosed a grave error in the Iraqi banking system .
The banker said in an interview with Baghdad Today, "The accumulations that have continued for many years have pushed citizens to lose confidence in banks and resort to hoarding money in their homes," indicating that "its percentage reaches 70% of financial liquidity, and these are large numbers that indicate that we are among the highest countries in the Middle East in hoarding money ."
He added that "hoarding money in the financial concept is a grave mistake that will confuse the financial process and reduce the government's ability to provide liquidity to pay salaries," explaining that "resorting to electronic payment is a step in the right direction, but the most important thing is withdrawing liquidity, and there are several ways ."
The banker pointed out that "the recent issuance of treasury bonds is a correct decision, but the media propaganda to create a culture of safe investment in the street is very weak, and this is what creates low rates of dealing with them, even though the interest rates are attractive ."
He stressed the "necessity of seeking to expand the circle of withdrawing liquidity from homes and creating a movement of money that contributes to increasing the recovery of investment and granting government loans, especially with the presence of requests that exceed by 5 times the amount of money allocated for loans in any sector, especially housing."
Trade discusses the mechanism for Iraq's accession to the World Trade Points Federation
link This is NOT the WTO
The Private Sector Development Department discussed with the Departments of Foreign Economic Relations and Administrative and Financial Affairs at the Ministry of Trade, the mechanism for Iraq's accession to the Federal Union of World Trade Points, the legal procedures for joining, and the benefits that the Iraqi sectors will obtain.
The Director General of the Department, Ibtihal Hashem, stated in a statement: "The meeting discussed an explanation of the union as an international non-profit organization, which was established under Swiss laws in 2000 and is concerned with managing and developing international trade points in order to activate electronic commerce, in addition to its capabilities to provide small and medium-sized companies with commercial information for member states located in developing and least developed countries."
The meeting also discussed the issue of transforming the electronic trade systems currently operating within the international arena in order to raise the export level of the Iraqi private sector and introduce the outside world to the comparative advantage of Iraqi industries.
The union includes more than 74 countries in its membership, including 6 Arab countries.
Iraqi government issues new decisions - Urgent
The Council of Ministers, headed by Mohammed Shia Al-Sudani , issued today, Sunday (August 18, 2024), during the 34th regular session, a set of new service, economic and urban decisions.
The media office of the Prime Minister's Office said in a statement received by "Baghdad Today" that "Al-Sudani chaired the thirty-fourth regular session of the Council of Ministers, in which the latest developments in the country were discussed, and a number of economic and service issues were discussed, in addition to considering the topics included on the agenda and taking the necessary decisions regarding them, as follows:
- As part of the government’s efforts to organize the millions of visits to religious shrines and provide their requirements, through the Permanent Supreme Committee, the Council of Ministers approved the following:
1. The Prime Minister’s Office shall assign ministries, governorates and other relevant entities to implement the components of the Million Visits Project, including the procedures for advertising, referral, contracting and supervision of the implementation of the work, according to each case (component) directed by the Prime Minister, and based on the availability of allocation and financial liquidity.
2. The procedures for auditing the dues of the companies implementing the components of the Million Visits Project shall be the tasks of the sectoral bodies of the ministries, governorates and other relevant bodies, and disbursement, allocation and funding requests shall be within the powers of the Prime Minister’s Office in coordination with the Ministries of Planning and Finance.
3. The Supreme Committee for Million-Person Visits shall coordinate with the ministries, governorates and other relevant authorities to select projects and complete the requirements for including the components of the Million-Person Visit Project with the Ministry of Planning. The authorities preparing these components shall bear the legal, accounting and technical responsibility in terms of preparing plans, designs, specifications and prices according to the nature of the work.
4. The Supreme Committee for Million Visits will follow up on the project components during the announcement, referral, contracting and implementation stages.
Within the framework of the government’s vision for economic reform and activating the investment and development movement in the country, the Council approved the national strategy for bank lending prepared by the Central Bank of Iraq, including the recommendations and programs included therein.
According to the statement, the strategy aims to "stimulate the growth of the Iraqi private sector by improving the business environment, attracting local and foreign investors, and increasing credit granted to it from the non-oil GDP by 2029, in addition to increasing credit to small projects from the non-oil GDP, and financing approximately 100,000 projects."
The Council of Ministers voted that the customs duty for containers larger than 40 feet would be 4 million dinars.
- In order to proceed and expedite the implementation of urgent service projects and complete infrastructure projects, it was approved to exempt the Ministries of Construction, Housing, Municipalities, Public Works, Health, Higher Education and Scientific Research from the contracting methods stipulated in the Instructions for Implementing Government Contracts (2 of 2014) to implement infrastructure projects and establish teaching hospitals based on solid and specialized companies.
- In order to provide service and entertainment facilities for the people of the capital, Baghdad, the Council approved the referral of the project to transform the land of Al-Rashid Camp, east of Baghdad, into sustainable and tourist forest areas, according to high specifications that are compatible with the environment, and to invest the area designated for recreational activity only, and to grant the investor an investment license to establish a residential complex of (12) thousand housing units, instead of the camp land, in the districts of Al-Dahna, Hekteria and Shaar, and 19 Ghazaliya, and to cancel all previous allocations.
- On the service side of the capital as well, it was approved that the Ministry of Finance allocate an amount of (21,980,040,000 dinars) from the emergency reserve to the Baghdad Municipality, regarding the direct implementation works of the Karkh/Al-Buaitha sewage water purification project based on the provisions of the Federal General Budget Law (13 of 2023).
- As part of the ongoing preparations to conduct the general population census next November, the Council approved the special requirements to equip the Kurdistan Region of Iraq data center with the necessary devices, equipment, licenses and servers to transfer the general population census data in the region’s governorates from and to the main center in Baghdad.
- In the process of completing stalled projects in all sectors, the following was approved:
1- Promoting the required spare parts order and increasing the reserve amount for the project (implementing the infrastructure for (water, electricity, and communications) works with the first phase of (municipality and sewage) works for the allocation of 2375/ which is located behind (Yassin Kharbit/ allocation of the martyrs of the crowd), and adjacent to allocation 2373, and increasing the total cost of the main project in Basra Governorate.
2- Increase the reserve amount and the total cost of the project (construction of the second Qurna Bridge).
3- Increasing the reserve amount for the contracting company (development works of District 627 - University District, paving + water within the Mansour Municipality sector), and increasing the total cost of the project (paving main roads and residential shops) within which the contracting company falls.
The Council of Ministers also approved the identification of the creditor companies concerned with the procedures for seizing and selling Iraqi real estate in France and the size of their debt, to avoid the processes of seizing and selling real estate in France.
Cabinet approves 'new' strategy for bank lending
The Iraqi government approved, on Sunday, a “new” strategy for bank lending to attract local and foreign investors and finance nearly 100,000 projects.
The Prime Minister's Media Office stated in a statement seen by "Al-Eqtisad News" that "Al-Sudani chaired, today, Sunday, the thirty-fourth regular session of the Council of Ministers, in which the latest developments in the country were discussed, and a number of economic and service issues were discussed, in addition to considering the topics on the agenda and taking the necessary decisions regarding them."
He added that "the Council of Ministers approved the national strategy for bank lending prepared by the Central Bank of Iraq, including the recommendations and programs included therein, within the framework of the government's vision for economic reform and activating the investment and development movement in the country."
The statement added, "The strategy aims to stimulate the growth of the Iraqi private sector by improving the business environment, attracting local and foreign investors, and increasing credit granted to it from the non-oil GDP by 2029, in addition to increasing credit to small projects from the non-oil GDP, and financing nearly 100,000 projects."
Money Laundering: Iraq is Far from the “Grey List”
The Anti-Money Laundering and Terrorist Financing Office revealed that Iraq is far from being included in the gray list.
The representative of the office at the Central Bank, Hussein Al-Maqram, told Al-Sabah: “After the completion of the international mutual evaluation by the international team of experts that Iraq recently underwent, which lasted 14 months, the technical commitment to the legal framework, regulations, instructions and controls for combating money laundering and terrorist financing was evaluated,” adding: “The effectiveness of the systems for combating money laundering and terrorist financing was also evaluated, by providing statistics, in addition to practical cases, to prove the extent of the application of the legislative framework, in addition to the field visit.”
Iraq avoids the gray list: temporary victory or the beginning of a new crisis?
In a remarkable development, the Anti-Money Laundering and Terrorist Financing Office in Iraq announced that the country is far from being included in the gray list, after the mutual international evaluation that Iraq underwent for 14 months.
This announcement was made by Hussein Al-Maqram, the office’s representative at the Central Bank, who confirmed in an interview with the newspaper “Al-Sabah”, which was followed by Al-Mustaqilla, that the initial results of the international assessment showed that Iraq does not deserve to be included in the gray list, which requires enhanced follow-up.
The assessment conducted by the Middle East and North Africa Financial Action Task Force (MENAFATF) addressed technical compliance with legal elements, regulations and instructions related to combating money laundering and terrorist financing, in addition to the effectiveness of regulations by providing statistics and practical cases, which indicated an improvement in the implementation of the legislative framework.
Despite this positive news, the announcement raises many questions and controversy in Iraq. While Iraq’s removal from the gray list is considered a victory, experts point out that this assessment is not the end of the road, but rather just a step on a long road to compliance with international standards. The assessment report also indicated the need to implement an action plan and recommendations to ensure continued compliance, which places an additional burden on the Iraqi government and the office responsible for combating money laundering and terrorist financing.
In a related context, observers point out that the improvements made, such as the automation of procedures and the activation of the “goAML” system, come at a critical time as the government seeks to expand an updated and comprehensive database and keep pace with international standards. However, some critics believe that these measures may be insufficient if they do not translate into tangible results on the ground.
Some also point out that international experts accredited by the Financial Action Task Force, who will in turn prepare the Financial Investigations Manual, may help improve the situation. However, there are those who believe that this progress is still fragile and may not be sufficient to address the fundamental challenges facing Iraq in the field of combating money laundering and terrorist financing.
Ultimately, the question remains open: has Iraq really avoided being listed on the grey list or is this merely a postponement of the crisis? What are the next steps to ensure that Iraq does not return to this list and that success in combating money laundering and terrorist financing continues? These questions will remain until all recommendations are implemented and positive results are achieved on the ground.
Blinken begins new round of Middle East amid hopes of Gaza truce
US Secretary of State Antony Blinken left the United States on Saturday evening for Israel as part of a new attempt by Washington to reach a ceasefire agreement in the Gaza Strip, an AFP journalist said.
Blinken's plane took off from Andrews in Maryland and is due to land in Tel Aviv, where he will meet Israeli leaders.
During his previous trips, the US Secretary of State has also visited a number of Arabic countries in the region. This time, no other stations have been announced at this stage.
This is Blinken's ninth trip to the Middle East since the Hamas attack on Israel on October October 7.
The trip, for which Blinken postponed his vacation, comes two days after talks in Doha on a ceasefire in the Gaza Strip called by US President Joe Biden.
U.S. officials said progress had been made in the talks.
After the two-day talks in which the Palestinian movement was absent, the mediating nations of the United States, Qatar and Egypt announced a new proposal to "reduce the gaps" between Israel and Hamas for a ceasefire in the more than decade-long war and the release of Israeli hostages.
US President Joe Biden said a ceasefire agreement was "closer than ever", at a time when efforts are intensifying to avoid the expansion of the war regionally after the escalation of tension between Iran and its allies on the one hand, and Israel and its allies on the other.
However, Hamas leader Sami Abu Zuhri said in a statement to AFP that "talk about a ceasefire agreement is imminent and delusional."
He stressed that the Israel "continues to obstruct all efforts to complete any agreement," adding: "We are not facing an agreement or real negotiations, but rather the imposition of American dictates."
On Saturday, Israeli negotiators returning from the Doha talks expressed "cautious optimism" to Benjamin Netanyahu, the Israeli prime minister's office said.
"There is hope that the great pressure on the United States and the mediators will allow Hamas to back down from its opposition to the American proposal, which contains elements acceptable to Israel," the office said in a statement.
A U.S. official acknowledged that the negotiating process had not yet reached its "final stage," noting that diplomats were currently working on preparing a "cell" capable of quickly implementing the terms of any possible agreement.
A ceasefire agreement would mark a major victory for Biden as the Democratic Party prepares to meet in Chicago for a convention where Vice President Kamala Harris will formally run for president on November November.
Pro-Palestinian demonstrators are expected to march on the sidelines of the conference to denounce the Biden government's pro-Israel policy. The United States recently approved a $20 billion arms sale to Israel.
The war erupted after a Hamas attack on Israel on Oct. October 7 that killed 1,198 people, according to an AFP tally based on official Israeli figures.
During the attack, 251 people were kidnapped, 111 of whom remain in custody in Gaza, including 39 who the army says died.
Israeli airstrikes, shelling and ground operations in the Gaza Strip have killed at least 40,074 people, according to the Hamas Health Ministry.
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