FirstFT: Israel forms national unity government ahead of expected offensive

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. Israel has formed an emergency war cabinet and unity government as it tightens its siege of the Gaza Strip ahead of an expected ground offensive.

Prime minister Benjamin Netanyahu struck the deal on Wednesday with Benny Gantz, head of the centre-right opposition National Unity party, in the wake of Saturday’s deadly attack by Hamas.

The agreement came as the siege brought down Gaza’s power supply, leaving residents alarmed they would soon lose contact with the outside world and as Israel sent tens of thousands of army personnel to the border with the enclave.

The deal is an attempt to bypass the rift in Israeli politics ahead of what threatens to be a deeply challenging and prolonged military campaign.

“This affords Israel a modicum of unity for the duration of the war,” said Natan Sachs at the Brookings Institution. “The political interests of the members will diverge sharply in the day after.” Read the full story for the latest updates on the war.

Here’s what else I’m keeping tabs on today:

• US-Israel ties: US secretary of state Antony Blinken visits Israel to show support for the Jewish state in the wake of Saturday’s deadly attack by Hamas.

• Oil market: Opec and the International Energy Agency publish their October oil market reports.

• China-Europe relations: The EU’s chief diplomat Josep Borrell visits Beijing to meet Chinese foreign minister Wang Yi.

• Vladimir Putin: Russia’s president will visit Kyrgyzstan today, the Central Asian country has said, in what would be the Putin’s first known trip abroad since the International Criminal Court issued a warrant for his arrest on war crimes charges in March. (Reuters)

Five more top stories

1. Steve Scalise narrowly won the Republican nomination to serve as the next House Speaker, as the party races to determine who will lead the lower chamber of Congress. Scalise said his first act as Speaker would be to pass a resolution in support of Israel in its fight against Hamas. But Scalise still faces a vote by the full House, which Republicans control by a slim margin. Here’s what Scalise needs to secure the gavel.

• More US news: Federal Reserve officials agreed in September that the US central bank should “proceed carefully” on interest rate decisions, according to minutes from their latest meeting.

2. Australian journalist Cheng Lei has returned to Melbourne after more than three years of detention in China, in a diplomatic coup for Prime Minister Anthony Albanese. Cheng, an Australian citizen, had worked as a news anchor for Chinese state broadcaster CGTN for more than a decade when she was detained by Chinese security officials. Here’s more on Cheng’s release and the improving ties between Beijing and Canberra.

3. Sam Bankman-Fried directed colleagues to create seven “alternative” balance sheets for Alameda Research, some of which disguised billions of dollars of kickbacks to FTX executives, according to testimony from Caroline Ellison, the former chief executive of the exchange’s trading arm. Ellison, the star witness in the trial against Bankman-Fried, also implicated the former crypto tycoon in a Chinese bribery scandal.

4. ExxonMobil has agreed to buy Pioneer Natural Resources in a $59.5bn deal that is set to unleash a wave of consolidation in the US shale oil industry. The combination hands Exxon a dominant position in the Permian Basin, the vast field in western Texas and New Mexico that has helped turn the US into the world’s largest oil and gas producer. Here’s more on the tie-up.

5. Xpeng, the Chinese electric vehicle start-up backed by Volkswagen, has suspended a senior executive over alleged corruption. The company said Li Feng, a vice-president who oversaw supply chain procurement, had been suspended after an internal investigation but gave no further details of the allegations. Xpeng is one of China’s fastest-growing EV companies and is considered by analysts to be a potential future challenger to Tesla and its Chinese competitor BYD. Read the full story.

News in-depth

In the days since Hamas’ surprise assault on Israel, the Jewish state has also been fighting on another front: its northern border with Lebanon, where light artillery exchanges have killed three members of militant group Hizbollah. The violence there has raised alarm among diplomats that Iran-backed Hizbollah may fully commit to conflict, triggering a broader regional conflagration.

We’re also reading and listening to . . . 

• WhatsApp in India: The country has embraced the platform’s business messaging feature. But can Meta make it pay?

• 🎧 Rachman Review: Gideon Rachman talks to the historian and writer Lawrence Freedman about the miscalculations that led to unprecedented carnage in Israel.

• ‘Pure evil’: A vicious 20-year feud is at the centre of Poland’s election on Sunday. The outcome could redefine the country’s role within the EU and have ramifications for neighbouring Ukraine.

Graphic of the day

Nasa aims to uncover the secret life of the metal-rich asteroid Psyche in a pioneering mission aimed at revealing how Earth and other rocky planets were formed. Due to launch later today, the mission could also offer tantalising insights for mining entrepreneurs and disaster planners.

Take a break from the news

The Rolling Stones’s new album Hackney Diamonds represents a risk. It requires us to believe, contrary to evidence, that the Mick Jagger-Keith Richards songwriting partnership is no longer semi-defunct. But the record shows fresh life for the band in its old age, writes FT music critic Ludovic Hunter-Tilney.

Additional contributions from Tee Zhuo and Gordon Smith