Report for Friday, April 5, 2024

THE TOP STORIES

Biden demands Israeli action to ease Gaza suffering, Israel opens new aid routes

Israel used AI to identify 37,000 potential Hamas targets

Ukraine reports heavy fighting near Chasiv Yar

U.S. federal agencies impacted by Russian breach of Microsoft

CIPHER BRIEF EXCLUSIVES

SUBSCRIBER+EXCLUSIVE — Israel’s War Against Hamas, Six Months Later.

CIPHER BRIEF EXPERT OPINION — Putin’s Strategic Success with North Korea and China.

THE ISRAEL AND HAMAS WAR

SUBSCRIBER+EXCLUSIVE — Israel’s War Against Hamas, Six Months Later.

Biden demands that Israel take ‘specific, concrete, and measurable steps’ to ease suffering in Gaza; Israel opens new aid routes.   In a tense half-hour phone call on Thursday, President Joe Biden told Israeli Prime Minister Benjamin Netanyahu that while the U.S. “strongly supports” Israel, U.S. policy toward his country would depend on Israel’s swift action to ease the suffering of civilians in Gaza. According to a White House readout of the conversation, Biden told Netanyahu that “the strikes on humanitarian workers and the overall humanitarian situation are unacceptable.”  Netanyahu had heard all that before, from American and international leaders who had once been counted as firm friends of Israel. What was new was Biden’s insistence that Israel had to show “specific, concrete, and measurable steps to address civilian harm, humanitarian suffering, and the safety of aid workers.”  Biden, the readout said, “made clear that U.S. policy with respect to Gaza will be determined by our assessment of Israel’s immediate action on these steps.”  Biden did not spell out the consequences if Israel failed to comply, but among the possibilities, Washington could refuse new arms sales to Israel or could place new constraints on uses of arms the U.S. has already supplied to Israel. The White House said that Biden “underscored that an immediate ceasefire is essential to stabilize and improve the humanitarian situation and protect innocent civilians, and he urged the Prime Minister to empower his negotiators to conclude a deal without delay to bring the hostages home.”

Secretary of State Antony Blinken, in Brussels to visit NATO headquarters, put it succinctly: ”If we don’t see the changes that we need to see, there’ll be changes in our own policy.”

Netanyahu got the message.  Within hours, his office announced that Israel was opening the Erez crossing to allow aid into northern Gaza, where conditions for civilians are most severe, that Israel’s cargo port of Ashdod, about 16 miles north of Gaza, would be used to land aid for the enclave and that the volume of aid from Jordan would be expanded significantly. Associated Press Bloomberg New York Times Wall Street Journal  Axios  Washington Post The Hill  Reuters U.S. State Department  The White House White House briefing New York Times  

Israel fires military offers over drone strike on aid workers.  An Israeli investigation into the air strike in Gaza that killed seven aid workers this week found that the Israeli drone team behind the attack violated the military’s operating rules.  The Israeli military said the team identified Hamas gunmen at an aid warehouse and then mistakenly assumed the militants were in vehicles carrying aid workers.  The military added that the team spotted an item slung over the shoulder of a passenger, possibly a bag, which it assumed to be a weapon.  The military said this was not enough to justify the strike, which it said “should not have occurred.”  The investigation also found that information about the movements of the aid workers was not properly passed along to the commanders who ordered the strike.  The Israeli military said it dismissed a brigade chief of staff with the rank of colonel and a brigade fire support officer with the rank of major, and issued formal reprimands to senior officers including the general leading the Southern Command, over the strike.  Reuters Wall Street Journal IDF

Ceasefire talks still stuck.  Hamas official Osama Hamdan said in a press conference from Beirut on Thursday that Gaza ceasefire talks are stale-mated.  Another, unnamed “senior Hamas leader” told Reuters, "The Hamas leadership informed the Egyptian and Qatari mediators that what is being offered cannot be accepted, as it is a continuation of the stubborn Israeli position.”  He said U.S. and Egyptian mediators wanted to keep the ceasefire talks alive, but there remained a wide gap between Israel and Hamas.  He said representatives from Israel, Egypt, Qatar and the U.S. may have another round of talks in Cairo next week.  Axios reports that CIA Director William Burns is headed to Cairo this weekend to meet with Egyptian and Israeli counterparts for further talks.  Reuters Reuters Axios 

U.S. approved weapons for Israel hours before Israeli drone strikes killed seven aid workers.  The Biden administration approved the transfer of thousands more bombs to Israel on the same day Israeli airstrikes in Gaza killed seven aid workers for the charity group World Central Kitchen, The Washington Post reported.  The newspaper said the U.S. State Department approved the transfer of more than 1,000 MK82 500-pound bombs, more than 1,000 small-diameter bombs, and fuses for MK80 bombs, all authorized by Congress several years ago. Reuters quoted a U.S. official as saying the approvals happened first, then, much later, the Israeli strike.  The U.S. government can suspend the arms transfers anytime before delivery, but has not done so. The weapons are slated for delivery sometime next year. Washington Post Reuters

Israel braces for Iran’s retaliation for Damascus air strike.  Israel’s military were on high alert Thursday, anticipating an attack promised by Iran in revenge for Monday’s airstrike in Damascus that leveled a building next to Iran’s embassy in Syria.  The strike, reportedly carried out by Israeli warplanes, killed seven officers of Iran’s Islamic Revolutionary Guard Corps, including IRGC-Quds Force commanders. One of them, Mohammad Reza Zahedi, was a conduit between Iran, Hezbollah and Syrian intelligence, according to the U.S. Treasury Department, which sanctioned him in 2010 for supporting terrorism. “We will make them regret this crime and other similar ones with the help of God,” Iran’s supreme leader, Ayatollah Ali Khamenei, said in a statement Tuesday.

"For years, Iran has been acting against us both directly and via its proxies; therefore, Israel is acting against Iran and its proxies, defensively and offensively," Netanyahu said at a security cabinet meeting.  The Israeli Defense Forces announced Thursday that it was suspending leave for combat units, and it declared a reinforcement and call-up of reserve soldiers for its air defense units in response to Tehran’s threats. Maj. Gen. Aharon Haliva, head of military intelligence, said, "It is not certain that the worst is behind us. There are complex days ahead," according to the Israeli newspaper Haaretz.  Reuters Haaretz Washington Post

Trump says Israel’s military campaign in Gaza is ‘losing the PR war.’  Former President Donald Trump, calling into conservative radio host Hugh Hewitt’s show Thursday morning, said his advice for Israel regarding its military campaign in Gaza was, “You’ve got to get it over with, and you have to get back to normalcy.”  “And I’m not sure that I’m loving the way they’re doing it, because you’ve got to have victory,” he added. “You have to have a victory, and it’s taking a long time. And the other thing is I hate, they put out tapes all the time. Every night, they’re releasing tapes of a building falling down. They shouldn’t be releasing tapes like that. They’re doing — that’s why they’re losing the PR war. They — Israel is absolutely losing the PR war.”  Israel must “finish what they started, and they’ve got to finish it fast, and we have to get on with life,” Trump said.  The Hill Associated Press Al Jazeera CNN

Spain’s PM says E.U. could distance itself from Israel if it broke humanitarian law. Spanish Prime Minister Pedro Sanchez told Al Jazeera TV Thursday the E.U. should debate whether to continue its strategic relationship with Israel if the European Commission finds Israel violated humanitarian law in Gaza. In February, Sanchez and the Irish prime minister asked the EC to urgently review whether Israel is complying with its human rights obligations in Gaza. Sanchez called for a permanent ceasefire in Gaza and for the international recognition of Palestine as a sovereign state with full membership in the United Nations. Reuters

Israel used AI to identify 37,000 potential Hamas targets.  The Israeli military used a previously undisclosed AI-powered database coined “Lavender” that initially identified 37,000 potential targets linked to Hamas, according to intelligence sources involved in the war.  Sources offered firsthand accounts claiming Israeli officials permitted large civilian casualties while using machine-learning systems like Lavender to aid target identification.  One intelligence officer admitted having more faith in Lavender's “statistical mechanism” than human colleagues, saying that “the machine did it coldly. And that made it easier.”  Another Lavender user questioned whether human involvement in the targeting process was meaningful, saying that they invested roughly 20 seconds per target and approved “dozens” daily as a mere “stamp of approval.” Lavender is different than Israeli’s former “The Gospel” system that targets buildings.  The use of the system suggests the Israeli military heavily relied on AI despite known issues misidentifying civilians as Hamas combatants.  It is one of the first known public examples of AI being used for targeting in a conflict zone.  The Guardian Gizmodo Reuters

Senior U.K. judges, intelligence experts oppose arms sales to Israel. Three former U.K. Supreme Court justices and more than 600 British lawyers have called for a halt to arms sales to Israel. "The provision of military assistance and material to Israel may render the UK complicit in genocide as well as serious breaches of International Humanitarian Law," the judges, barristers and legal academics said in a 17-page letter to Prime Minister Rishi Sunak.  They were backed by two top British intelligence experts, who argued that Britain needed to use leverage  to persuade Israel to show restraint. British weapons sales to Israel are relatively modest, worth about $53 million in 2022.  Reuters Associated Press

THE RED SEA

Houthis say U.S.,U.K. strikes in Yemen have killed 37.  Abdul Malik al-Houthi, leader of Yemen's Houthi movement, said Thursday that U.S. and British airstrikes on targets in Yemen have killed 37 people and wounded 30.  He added that the Houthis, who are supported by Iran, had targeted 90 ships in the Red Sea and had expanded drone attacks to other regions. He said the Houthis had launched 34 attacks with 125 ballistic missiles and drones in the previous month.  Reuters

THE UKRAINE UPDATE

Ukraine reports fighting near Chasiv Yar, denies Russia has reached suburbs.  Ukraine’s military said Friday that there is intense fighting near the eastern town of Chasiv Yar in the Donetsk region, but denied Russian reports that Russia’s forces have reached the town’s suburbs.  Moscow views the town as a key, heavily fortified staging point for Ukrainian troops.  If Russia rapidly captures Chasiv Yar, which lies west of the Russian-occupied city of Bakhmut, it would mark a grim setback for Ukraine and indicate Russian momentum.  On Thursday, Serhii Chaus, the mayor of Chasiv Yar, said the situation in the town is the most difficult since Russia launched its full-scale invasion of Ukraine over two years ago.  Reuters RFE/RL BBC

Ukraine downs 13 Shahed drones launched overnight. Early on Friday, Russian forces attacked Ukraine with two S-300/S-400 missiles, three Iskander-M ballistic missiles and 13 Shahed drones, the Ukrainian Air Force reported. All Shahed drones, launched from occupied Crimea, and missiles, fired from Belgorod, were intercepted by Ukrainian air defenses. The drones were downed over Zaporizhzhia, Odesa and Dnipropetrovsk oblasts. This escalation follows recent Russian missile and drone attacks on Ukrainian infrastructure, notably two strikes in Kharkiv that killed four and wounded 12 on April 4.  Kyiv Independent 

Russia reports massive drone attack on Rostov Oblast amid claims of airbase attack.  A reported "massive attack" in Russia's Morozovsk district, Rostov Oblast, damaged a power substation early on Friday, according to Governor Vasily Golubev. Over 40 drones were intercepted by Russian air defenses, targeting potentially a local airbase, though no casualties were confirmed. The area, known for hosting Su-34 aircraft used in Ukraine, saw claims of wider drone attacks across Russia, including Krasnodar Krai and Saratov Oblast, with the Russian Defense Ministry reporting 53 downed Ukrainian drones. Amidst intensified Ukrainian strikes on Russian military and industrial sites, no casualties or destruction were reported in these incidents.  However, a Kyiv intelligence source told Reuters that the attack, a joint operation conducted by the SBU security service and Ukrainian military, destroyed six Russian warplanes at Russia’s Morozovsk military air base. Kyiv Independent Reuters

Ukraine likely used a small uncrewed plane in strike deep inside Russia.  A Ukrainian uncrewed aerial vehicle (UAV) that hit Russia's Tatarstan region this week was likely a modified Aeroprakt A-22 Ukrainian-made light aircraft, several experts told Reuters. The attack injured 13 people and targeted a facility involved in producing Russian long-range drones used against Ukraine. This incident highlights Ukraine's focus on developing long-range unmanned vehicles for deep strikes inside Russia – more than 1,000 kilometers deep into Russian territory – aimed at hurting the Kremlin's war funding. Questions about Russia's air defense capabilities were raised, as the significant target lacked adequate protection.  Reuters 

Russian-installed officials claim six civilians were killed in Ukrainian attacks.  Russian-installed officials claimed Ukrainian attacks in Russian-occupied areas of Ukraine killed six civilians on Thursday.  The officials said drone strikes killed four people in the Kherson region, and shelling killed two others in Donetsk.  Both Russia and Ukraine have denied targeting civilians in the war.  Reuters

Blinken: Allies must 'double down' on defense aid to Ukraine. At a NATO-Ukraine Council meeting in Brussels on Thursday, U.S. Secretary of State Antony Blinken emphasized the need for international partners to intensify efforts in providing resources to Ukraine as Russia strengthens its defense capabilities. The summit, which marked NATO's 75th anniversary, covered strategies to increase security assistance for Ukraine. Blinken affirmed the American commitment to support Ukraine and mentioned working on a bilateral security agreement, with Ukraine also negotiating deals with other countries. The discussions included safeguarding aid against potential political shifts in the U.S. and ensuring NATO's unwavering support, with a promise of Ukraine's future membership in the 32-nation alliance. Kyiv Independent

‘Can anything help Ukraine now?’  The Pentagon has defended the pace of its weapon deliveries to Ukraine amid criticism from Ukrainian officials who argue the assistance is too slow and might be too late to affect the war's outcome. Ukrainian authorities lament the delay in receiving F-16 jets and other critical weapons, stating such delays have rendered these assets less relevant due to the evolving nature of the conflict. Despite the criticism, the Pentagon insists that the process, including the delivery of F-16s, must proceed properly to ensure that they bolster Ukraine's air power effectively. Meanwhile, Ukraine faces growing challenges on the ground, which has prompted President Volodymyr Zelensky to lower the draft age to 25 and reshuffle government officials in response to conscription evasion and other issues. Additionally, Ukraine urgently requests more Patriot missile defense systems to counter Russian airstrikes, a need highlighted by the recent plea from Ukrainian Foreign Minister Dmytro Kuleba for additional air defenses. Politico National Security Daily

NATO pledges to send more air defense aid to Ukraine. On the 75th anniversary of NATO, overshadowed by Russia’s war at its borders, alliance members committed to searching their arsenals for additional air defense systems, particularly U.S.-made Patriot missiles, to aid Ukraine against Russian missile attacks. This decision followed an appeal from Ukrainian Foreign Minister Dmytro Kuleba during a meeting with NATO counterparts. Both NATO Secretary General Jens Stoltenberg and U.S. Secretary of State Antony Blinken emphasized the urgency of bolstering Ukraine's defenses, noting the importance of air defense, artillery, and munitions in the face of support for Russia from countries like China, North Korea, and Iran. The commitment comes amidst a grim backdrop of Russian attacks on Ukraine, including a drone strike in Kharkiv, and discussions on NATO's future role in coordinating military aid to Ukraine. Reuters

NATO tempers expectations for long-term Ukraine funding. NATO allies are tempering their expectations regarding a proposed $100 billion fund to aid Ukraine. Concerns over the feasibility of pooling such a large sum over five years emerged at a foreign ministers' meeting in Brussels on Wednesday. Big doubts about securing new funding have led to suggestions of committing to a smaller, more manageable amount.

Amid these discussions, the alliance aims to provide Ukraine with a package of measures as a precursor to membership, focusing on immediate needs like air defense systems, including U.S.-made Patriots, to counter severe ammunition shortages and the heightened threat of Russian advances.

Ukraine's Foreign Minister Dmytro Kuleba noted that the alliance had experienced difficulties in raising military assistance of much smaller amounts. "In other words, in the current funding model, this initiative has zero chances. Because they can't collect 500 million, and here they would have to collect 20 billion in the current model," Kuleba said. But if all the bloc's members were obliged to contribute, Kuleba added, the plan could "exist and has a chance of being implemented.”

Stoltenberg emphasized the fund's importance: "We must ensure reliable and predictable security assistance to Ukraine for the long haul so that we rely less on voluntary contributions and more on NATO commitments. Less on short-term offers and more on multi-year pledges." But Hungary, for one, came out against the idea. Hungarian Foreign Minister Péter Szijjártó insisted that NATO was only a defense alliance. "Hungary will reject any proposal that would transform it into an offensive alliance as this would lead to the serious danger of escalation," he said before the meeting, adding: "This isn't Hungary's war and it isn't NATO's war either."  Bloomberg Reuters Politico

Ukrainian soldiers and engineers toil around the clock to build defenses.  Ukraine is intensively constructing defensive fortifications along its border with Russia and the front line in the east and south, spending $509 million this year with an additional $142 million promised. In the Chernihiv region, workers are building defenses including trenches, "dragon's teeth" obstacles, and anti-tank ditches to thwart Russian advances. This effort comes as Ukraine braces for a potential Russian offensive, with defenses stretching over 2,000 kilometers and featuring 100,000 "dragon's teeth." Continuous work is necessary to adapt to the changing dynamics of the conflict, with construction ongoing even in areas under threat from Russian drones.  Reuters (Read Ukraine Digs In and Hopes for the Best in “Spring Defensive” in The Cipher Brief.)

WHO records 1,682 attacks against Ukrainian healthcare centers during Russia’s full-scale invasion.  Since the start of Russia's full-scale invasion in February 2022, the World Health Organization has documented 1,682 attacks on healthcare centers in Ukraine, resulting in 128 deaths and 288 injuries among medical personnel and patients. According to the WHO, ambulance workers and other health transport personnel face especially high risks, being three times as likely to be injured or killed compared to other healthcare workers. “Many emergency teams come under fire either on the way to a call or at their bases,” Halyna Saldan, head of the Center for Emergency Medical Care and Disaster Medicine of Kherson Regional State Administration, said.  Kyiv Independent 

Russia's Lavrov says Chinese peace plan on Ukraine is the most reasonable so far.  Russian Foreign Minister Sergei Lavrov on Thursday praised China's 12-point peace plan for Ukraine as the most reasonable proposal to date, emphasizing its logical structure and focus on addressing the root causes of the conflict.  The plan, which outlines general principles without specifics, had previously received mixed reactions and was criticized by the United States for echoing Russia's narrative without condemning its invasion. Lavrov's comments come as Russia expresses willingness to engage in talks based on "new realities" on the ground, in contrast to Ukrainian President Zelensky's peace formula, which Russia dismisses as unrealistic without its participation. The cornerstone of Zelensky’s peace plan is the withdrawal of Russian forces from the nearly 20% of Ukrainian lands that they currently occupy.  Reuters Associated Press

Czech FM: Ukrainians are fighting for all of Europe.  At a NATO-Ukraine Council meeting in Brussels, Czech Foreign Minister Jan Lipavsky emphasized Ukraine's role in ensuring European security, urging Western allies to support a Czech-led initiative aiming to purchase 1.5 million artillery shells for Ukraine amid severe ammunition shortages. Highlighting mutual dependence, Lipavsky discussed enhancing aid coordination and increasing resources for Ukraine with various partners. The initiative has already secured commitments for 500,000 shells, with participation from around 15 countries, including Canada and France. The discussions were part of efforts to strengthen Ukraine's defenses against ongoing threats. Ukrainians “really depend on our help and we in turn depend on the fact that the Ukrainians are also fighting for the security of the whole of Europe, so we are in this together," Lipavsky said.  Kyiv Independent 

Opinion – ‘A lot of grim realism’: What our columnists heard in Ukraine. Two Washington Post columnists, David Ignatius and Jim Geraghty, discuss their observations about their recent trip to Ukraine. Washington Post

The Americas

Treasury sanctions vessels shipping commodities for Iranian military.  The U.S. imposed new counterterrorism sanctions on Thursday targeting Oceanlink Maritime DMCC for its role in shipping commodities on behalf of the Iranian military. According to the U.S. Treasury Department, the Oceanlink Maritime DMCC-managed vessel HECATE loaded Iranian commodities valued at over $100 million via a ship-to-ship transfer from another sanctioned tanker. The sanctions are part of a broader U.S. and Western campaign to target Iran's “destabilizing activities in the region and around the world” through its network of proxies across the Middle East, including in Lebanon, Syria, Iraq and Yemen. U.S. Department of the Treasury Reuters  

Yellen launches contentious meetings on Chinese excess production threat.  U.S. Treasury Secretary Janet Yellen is using her trip to China to highlight growing concerns over the global economic impact of China's excess manufacturing capacity. In meetings with Chinese officials, Yellen plans to address the issue of overproduction in sectors like electric vehicles and semiconductors, which she argues is detrimental both to China and to international producers. Despite tensions, Yellen will note areas of cooperation, including financial risk management. She emphasized the need for a level playing field for U.S. companies. She cautioned against China's production-driven economic model, suggesting it could lead to more U.S. protective actions against low-cost Chinese imports.  Reuters Reuters Associated Press

U.S. bets on revamped 40-year-old ship to compete with China. The U.S. Coast Guard has updated the Harriet Lane, a 270-foot cutter, enhancing its capability with a new deck gun, reliable power generators, an advanced navigation system and improved internet connectivity. Positioned in the Pacific to counter China's influence, this deployment is part of the U.S. strategy to engage with island nations through law enforcement support and training as an alternative to China. Despite its age, the Harriet Lane's upgrades make it a key asset for the U.S. in the region, contrasting with China's reinforced Coast Guard presence in contested areas like the South China Sea. The aging U.S. Coast Guard fleet is a problem, the Wall Street Journal reports. A Government Accountability Office report outlined issues with propulsion, power systems, corrosion and mold on the medium-endurance cutters, the class of ship that includes the Harriet Lane and a smaller 210-foot version. Spare parts for obsolete generators, for example, are hard to get, and repairs can take 10 months.  Wall Street Journal

Federal report finds 68,000 guns were illegally trafficked through unlicensed dealers over 5 years. Between 2017 and 2021, over 68,000 firearms trafficked in the United States were sold by unlicensed dealers, constituting 54% of such illegal transactions, according to the Bureau of Alcohol, Tobacco Firearms and Explosives. These guns, implicated in 368 shootings, pose significant challenges for investigations due to the absence of sales records for tracing. This analysis, the first in over two decades, underlines the significant role of unlicensed sales and straw purchases in firearm trafficking, highlighting the urgency of addressing these pathways to reduce gun violence. Associated Press

Ecuador orders dismissal of Mexico ambassador, declares her persona non grata. Ecuador on Thursday declared Mexico's ambassador persona non grata after comments by President Andres Manuel Lopez Obrador on Ecuador's elections and the assassination of presidential candidate Fernando Villavicencio. The move signals Ambassador Raquel Serur Smeke's upcoming departure without severing diplomatic ties. López Obrador's remarks questioned the election's outcome, won by Daniel Noboa, and claimed another leading presidential candidate was unfairly tied to Villavicencio's murder.  Washington Post Reuters France 24 Deutsche Welle  

Guyana condemns Venezuela for signing into law a referendum approving the annexation of the disputed region.   Guyana on Thursday strongly objected to Venezuelan President Nicolás Maduro's enactment of a law claiming two-thirds of Guyana, specifically the oil- and mineral-rich Essequibo region. The move, not yet detailed in public, was based on a recent referendum. Guyana insists on not ceding land, labeling Venezuela's actions as a severe breach of international law principles. Maduro describes the law as part of Venezuela's internal political movement and a step towards defending its claim internationally. Tensions between the countries, escalated by significant oil discoveries near Guyana's coast, have led Guyana to seek judicial resolution at the International Court of Justice and to bolster its military capabilities. Associated Press

Asia and Oceania

Tokyo and Manila discuss deployment of Japanese troops to Philippines. Tokyo and Manila are nearing security agreements, including a "reciprocal access agreement" (RAA), which would allow Japanese forces to be deployed in the Philippines on a rotational basis, similar to the United States. This move, aimed at boosting regional deterrence against China, signals deepening cooperation between Japan and the Philippines, especially concerning military activities around Taiwan and the South China Sea. These discussions underscore growing concerns about China's regional militarization. The announcement comes ahead of a trilateral meeting in Washington with leaders from the U.S., Japan, and the Philippines, highlighting a strategic shift towards a regional, multilateral security architecture in response to Beijing's actions.  Financial Times

US, Japan, Philippines expected to discuss South China Sea tensions in summit.  Leaders from the United States, Japan, and the Philippines will convene at a trilateral summit on April 11 to discuss South China Sea incidents and Indo-Pacific economic ties. Hosted by U.S. President Joe Biden, the meeting aims to align views on China's assertiveness in the region, without explicitly targeting any country. A joint vision statement on diplomatic relations is anticipated, alongside a separate bilateral discussion between Biden and Philippine President Ferdinand Marcos Jr. This comes amid ongoing maritime disputes between the Philippines and China, highlighted by confrontational episodes, including a recent one involving the use of a water cannon by China. Reuters

Why Japan is not giving up on fraught U.S. Steel deal.  Japan's Nippon Steel is persevering with its $15 billion bid for U.S. Steel, undeterred by political opposition from both President Joe Biden and Donald Trump, who argue for domestic ownership. Despite facing significant regulatory and political hurdles, including skepticism from the United Steelworkers (USW) union and potential impacts on the forthcoming elections, Nippon Steel is publicizing the deal's benefits and exploring strategies to navigate foreign ownership concerns. The firm aims to delay the final decision until after the election, hoping for a more favorable environment, while also attempting to win over the USW with commitments to worker support. Reuters

Myanmar capital hit by mass drone attack. Myanmar's military-ruled government reported foiling an attempted drone attack on the capital Naypyitaw on Thursday, claiming 13 fixed-wing drones were shot down before reaching their targets. According to the military-run state media, four of the drones carried explosives in what was described as an effort by “terrorists” to destroy “important locations” in the city. No casualties or property damage was reported, The disrupted attack was a challenge to Myanmar's military, which has struggled to govern effectively.  BBC Reuters Reuters Al Jazeera 

New Zealand reiterates NATO ties.  New Zealand Foreign Minister Winston Peters reiterated his country’s commitment to working with NATO and said its partnership agreement with the alliance will be concluded in the “coming months.”  He highlighted New Zealand’s support for Ukraine as a facet of ties with NATO.  Negotiations on a new partnership agreement come as NATO adopts a new model for partnerships called an Individually Tailored Partnership Programme.  Reuters

Europe

Biden: NATO ‘the greatest military alliance in the history of the world.’  On the 75th anniversary of the NATO alliance Thursday, President Joe Biden called NATO “the greatest military alliance in the history of the world.”  For the last 75 years, he said, the “United States and our fellow Allies have chosen to come together to stand up for freedom and push back against aggression.”  The Hill  

Stoltenberg: Europe and U.S. are ‘stronger together.’  NATO Secretary-General Jens Stoltenberg, speaking at a celebration of NATO’s 75th anniversary, said the US provided Europe with security, while the militaries, intelligence and diplomatic leverage of its European allies aided the U.S.  “We are stronger and safer together," he said.  BBC  

Macron warns that Russia seeks to undermine Paris 2024 Olympics. Russian disinformation aimed at undermining the upcoming Paris Olympics has been ramping up, according to French President Emmanuel Macron. Speaking at the inauguration of a new Olympic swimming facility, Macron said that, “Without a doubt, (Russia) is putting out stories every day saying that we are unable to do this or that, so (the Olympics) would be at risk.”  BBC 

Russia-China bank payments reportedly delayed by threat of sanctions.  As the threat of secondary sanctions deters Chinese banks from facilitating trade with Russia, companies are flocking to VTB Bank's Shanghai branch, the only Russian bank with a fully-fledged presence in China.  The surge in customers at the bank has led to delays of up to six months.  Banks in China, Turkey and the United Arab Emirates have grown increasingly wary of potential U.S. secondary sanctions, causing delays of several months for Russian oil firms to receive payment.  The risks have prompted companies to seek alternative payment routes, resulting in the bottleneck at VTB's Shanghai branch due to limited staff handling an increase in prospective account holders. VTB declined to comment on the situation.  Reuters 

Germany announces sweeping military overhaul. Germany's Defense Ministry announced a military restructuring on Thursday, introducing a new central command and a dedicated information and cyberspace branch on an equal footing to the land, air and sea branches. The new cyber branch will be responsible for dealing with hybrid threats and tactical tasks such as electronic warfare. Russia’s war on Ukraine is triggering the top-to-bottom overhaul.  “No one should have the idea of attacking us as a NATO territory. We have to convey this credibly and truthfully," Defense Minister Boris Pistorius told a press conference in Berlin. The overhaul aims to enhance NATO defense capabilities and address hybrid threats. Additionally, an extra €6.5 billion is requested for the 2025 budget to meet NATO's spending target. The central command will unify domestic and foreign deployment commands, improving coordination within NATO. This move is part of Germany's commitment to modernize its military and increase defense spending to 2% of GDP, without any current decision on reintroducing military service. But the Associated Press reported that the parliamentary commissioner for the military said last month that the Bundeswehr “still has too little of everything.”  Reuters Politico Financial Times Associated Press 

Finland indefinitely extends Russia border closure.  Finland has extended the closure of land border crossings with Russia indefinitely.  The closures were meant to be lifted April 14.  Finland also prohibited leisure travel from Russia to several of its ports.  Finland first shut its land borders with Russia late last year after a surge of migrants arrived from the Russian side.  Finnish authorities accused Russia of steering asylum seekers to the border as a form of hybrid warfare to pressure Finland after it joined NATO.  Officials say migrant arrivals may rise again as temperatures rise in the spring.  Reuters Associated Press The Moscow Times  

Denmark closes shipping lanes over missile launcher failure.  Denmark closed airspace and shipping lanes due to an activated but faulty missile launcher on a naval vessel.  The military said until the launcher is deactivated, there is a risk of a missile being fired, which could cause “falling missile fragments.”  A naval exercise is ongoing in the area, which covers the Great Belt strait, Denmark’s main maritime access to the Baltic Sea.  BBC Reuters

CIPHER BRIEF EXPERT OPINION — Putin’s Strategic Success with North Korea and China.

Middle East

Iraqi jihadist chief killed in suicide bombing in Syria.  Iraqi jihadist leader Abu Maria al Qahtani was reportedly killed in Syria by a suicide bomber on Thursday.  Sources said the bomber blew himself up in Qahtani’s guest house in the northwestern Syrian town of Sarmada.  Qahtani was one of the founders of the Nusra Front, a former al Qaeda offshoot in Syria that renamed itself Hayat Tahrir al-Sham (HTS) after breaking from al Qaeda.  HTS blamed ISIS for Qahtani’s death, though no group has claimed responsibility for the bombing.  Qahtani fought U.S. forces in Iraq after the U.S.-led invasion of Iraq in 2003.  He then moved to Syria in 2011 to support insurgents fighting against Syrian President Bashar al Assad.  Reuters France 24 Associated Press 

Africa

Somalia expels Ethiopian envoy, closes consulates amid the naval base dispute. Somalia is expelling Ethiopia's ambassador and closing two Ethiopian consulates in response to Ethiopia's naval base plans in Somaliland, a region claiming independence from Somalia. The Somali government's actions, which it says are a defense of sovereignty, follow Ethiopia's proposal to lease the coastline in Somaliland for a naval base, potentially offering recognition in return. This move has escalated tensions, with Somaliland and Puntland, another semi-autonomous region, asserting the decisions won't apply to them. The dispute highlights regional instability concerns and questions the status of Ethiopian soldiers in Somalia amid growing tensions.Reuters Al Jazeera France 24 Associated Press 

Russia and West join forces to tackle trade in ‘blood diamonds’ despite feud over Moscow’s diamonds.  Despite tensions over Russia's diamond production, the United States, its Western allies and Russia united at a United Nations General Assembly meeting Wednesday to support the Kimberley Process, aimed at eliminating the trade in conflict diamonds. Countries passed a resolution reaffirming the process's role in preventing conflict-fueled diamond trade and supporting Security Council sanctions. The Kimberley Process, effective since 2003, has faced challenges, notably due to disagreements over Russia's involvement in Ukraine. Calls for reform, including broadening the definition of "conflict diamonds" and addressing the environmental impact of the diamond trade, were emphasized. Associated Press 

Algerians question the president for calling an early election without announcing his own campaign.  Algeria's President Abdelmadjid Tebboune unexpectedly announced early presidential elections, stirring political activity in a country where he seemed set for an easy win. The decision, made three months ahead of schedule, has puzzled many and revitalized opposition parties, as Tebboune has not confirmed his reelection bid. This move has injected uncertainty into Algerian politics, previously marked by voter disillusionment and low turnout, particularly after the peaceful protest movement that led to former President Bouteflika's resignation. The election is now set for Sept. 7, during a time that could challenge voter participation due to the scheduling and seasonal climate.  Associated Press 

THE CYBER AND TECH RUNDOWN

CISA issues directive for federal agencies over Russian breach of Microsoft.  The Cybersecurity and Infrastructure Security Agency (CISA) issued an emergency directive to federal agencies following a breach of Microsoft by a hacking unit linked to Russia’s foreign intelligence agency. This breach, attributed to the hacking group Midnight Blizzard, which is accused of past high-profile attacks like the 2016 hack of the Democratic National Committee and the 2020 SolarWinds attack, allowed Russian operatives to access emails of Microsoft executives and source code. Microsoft and CISA are collaborating to mitigate risks and provide guidance to government agencies that may have been affected. This incident adds to growing concerns about Microsoft's security posture, highlighted by recent breaches targeting the company by both Russian and Chinese hackers. The Cyber Safety Review Board criticized Microsoft's security practices, citing a corporate culture that allegedly deprioritized security investments.  CyberScoop

U.S. power grids increasingly vulnerable to cyberattacks, regulator warns.  The North American Electric Reliability Corporation (NERC) said on Thursday that U.S. power grids are increasingly vulnerable to cyberattacks.  The energy regulator said the grids’ weak spots, in both its software and hardware, grew to 23,000 to 24,000 last year from 21,000 to 22,000 at the end of 2022.  The regulator added that the number of weak points in electrical networks is increasing by around 60 per day.  NERC said geopolitical conflict, including the wars in Ukraine and Gaza, continued tensions with China and the upcoming U.S. elections have all contributed to the increase in the profitability of attacks on U.S. power infrastructure.  Reuters

FBI seeks to balance risks, rewards of artificial intelligence. The FBI is approaching the use of artificial intelligence with a balanced perspective, recognizing its potential for enhancing cybersecurity defenses while exercising caution over potential misuse and adversarial threats. Jonathan Lenzner, Chief of Staff to FBI Director Christopher Wray, said that the bureau is evaluating AI from multiple angles to stay ahead of threats, safeguard U.S. innovation, and institute an ethical governance framework for internal AI usage. Cynthia Kaiser, Deputy Assistant Director of the FBI's Cyber Division, expressed enthusiasm about AI's “potential for keeping networks across America and our allies safer” but warned of adversaries potentially “poisoning” AI models or using it to “scale up their operations.”  CyberScoop

U.S., Japan to agree on subsidy rules on chips, batteries with China in mind. The U.S. and Japan are set to agree on new shared standards for subsidies related to semiconductors, batteries, and permanent magnets during the upcoming summit between Prime Minister Fumio Kishida and President Joe Biden in Washington next week. The subsidy rules aim to establish common criteria for government incentives in these critical technology sectors to avoid overreliance on China and promote supply chain resilience. Aligning subsidy standards is expected to better position Japanese and U.S. companies to leverage each other's incentive measures and facilitate cross-border business collaboration in advanced, capital-intensive fields.  Nikkei Asia

Nvidia partner bets $3.9 Billion on the Midwest’s chipmaking potential.  South Korea's SK Hynix announced plans to invest $3.9 billion in an advanced chip packaging facility in West Lafayette, Indiana, a win for the  Midwest's efforts to attract more semiconductor investments. The planned plant will mass-produce high-bandwidth memory (HBM), a component for artificial intelligence computing, with production expected to begin in the second half of 2028 and create over 1,000 new jobs in the region. In addition to manufacturing, the facility will also host research and development activities for SK Hynix, with a $4 Billion dollar investment. To secure the investment, Indiana Governor Eric Holcomb's office offered SK Hynix up to $554 million in tax rebates along with millions more in grants and performance-based payments as incentives. Purdue University and the Purdue Research Foundation provided additional incentives and services valued at approximately $60 million to land SK Hynix's multibillion-dollar chip packaging plant.  Wall Street Journal Bloomberg

State Department investigating data theft federal tech consulting firm. The U.S. State Department said it is investigating claims that a hacker stole government data from a contractor after a cybercriminal known as “IntelBroker” claimed to have breached a Virginia-based consulting firm, Acuity. IntelBroker alleged they stole data related to multiple U.S. agencies including the State Department, Defense Department, and National Security Agency through the breach of Acuity, which provides IT and cybersecurity services to federal agencies. While Acuity did not respond to requests for comment, a State Department spokesperson confirmed that they are “aware of claims that a cyber incident has occurred and is currently investigating.” The Cybersecurity and Infrastructure Security Agency (CISA) declined to comment on the alleged breach of the technology consulting firm with nearly 400 employees and over $100 million in annual revenue.  The Record BleepingComputer

Taiwan chip industry sails overseas amid supply chain shift. Similar to TSMC and Foxconn, other Taiwanese tech companies supplying chips, electronics tools, materials, and plant construction are expanding overseas. Acter, a facility builder for tech giants like Foxconn and ASE, saw its Southeast Asian business surge 50% last year, outpacing its core Taiwan and China markets, with continued growth expected in 2024. Acter's general manager Lai Ming-Kuen noted particularly strong growth in Thailand for printed circuit board plants, Vietnam for electronics assembly, and Malaysia attracting semiconductor packaging investments. Taiwanese investment in Thailand, Vietnam, and Malaysia rose 146% in 2023 to over $2.2 billion, reflecting the tech industry's accelerating shift toward the region amid major overseas expansion efforts. Nikkei Asia

NYT:  Did One Guy Just Stop a Huge Cyberattack? Andres Freund, a 38-year-old software engineer at Microsoft, is being hailed as a hero for inadvertently uncovering a hidden backdoor that could have enabled a major cyberattack while performing routine work on the open-source PostgreSQL database. During maintenance, Freund noticed strange error messages that led him to discover malicious code planted in recent versions of the xzUtils compression tool used in the Linux operating system kernel. The backdoor would have allowed its creator to hijack SSH connections and secretly run malicious code on users' machines, with cybersecurity experts warning it could have caused enormous damage if successfully exploited.  New York Times

Report Info

The data cutoff for this product was 7:00 a.m. E.T.

Brad Christian, Ethan Masucol, Elaine Shannon, Allison Brown, Ken Hughes, Brian Bonner, and Katharine Campbell contributed to this report.

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