Gaza conflict puts region on edge again
26 December 2023

For much of 2023, the defining narrative for the Middle East was one of reconciliation. From Iran and Saudi Arabia agreeing to rekindle diplomatic relations under a China-brokered deal in March, and Syria’s President Bashar al-Assad being welcomed to an Arab League summit in Riyadh in May, leaders favoured diplomacy over division.
Not all wounds healed, but even in Yemen an unofficial truce between Houthi rebels and Saudi-backed forces largely held throughout the year.
The Hamas assault on Israel on 7 October and Israel’s response dramatically altered the picture, although whether it will lead to lasting regional change remains to be seen.
Prior to the fighting, few minds in the region were focused on the Palestinian issue, with far more attention being paid to developing commercial and security ties. Saudi Arabia was widely thought to be edging closer to normalisation with Israel, with Israeli ministers starting to visit the kingdom regularly.
Israel’s Communications Minister Shlomo Karhi was in Riyadh on 1 October for a conference. Tourism Minister Haim Katz visited for a World Tourism Organisation event a week earlier.
Such trips are now off the agenda, with Riyadh focused on leading the Islamic world in condemning Israel. On 11 November, it hosted a joint summit of the Arab League and the Organisation of Islamic Cooperation. Among the attendees was Iran’s President Ebrahim Raisi – the first visit by an Iranian president to Saudi Arabia since 2012. Raisi used the occasion to invite Crown Prince Mohammed bin Salman al-Saud to visit Tehran, a sign that the pre-war trend for reconciliatory diplomacy has not entirely disappeared.
The Gaza conflict has been particularly difficult to navigate for Abraham Accord signatories Bahrain, Morocco and the UAE. Bahrain suspended economic ties with Israel, but there has been no sign from any of the three of wanting to break off relations altogether.
“How far the war goes will determine how the relationship [with Israel] develops,” said one analyst.
Some other diplomatic gains are also being made against the backdrop of the war. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani travelled to Manama on 17 November as part of an energetic diplomatic push to bring the Israeli/Palestinian war to an end.
Sheikh Mohammed held talks with Prime Minister and Crown Prince Salman bin Hamad al-Khalifa, and they agreed to revive long-abandoned plans to build a ‘friendship bridge’ between the countries.
Navigating the multi-polar world will remain a key challenge for Gulf powers in the year ahead
Another trend evident in recent years has also continued – namely the efforts by some Gulf powers to dilute their ties with Western allies and build stronger links with China, Russia and others.
A clear sign of this came in August when the UAE and Saudi Arabia were invited to join the Brics grouping of major non-Western economies. They are set to formally join in January.
But in an indication of their desire to maintain links with all sides, Saudi Arabia and the UAE then signed up to the India-Middle East-Europe Economic Corridor (Imec) initiative at the G20 summit in New Delhi, India, in mid-September.
Navigating the increasingly multi-polar world will remain a key challenge for Gulf powers in the year ahead.
Imminent peril
In other parts of the region, the situation holds more immediate peril. In Egypt, the economy is in a parlous state, with President Abdul Fattah al-Sisi relying on Gulf allies to prop up an economy facing over $29bn of debt repayments in 2024.
Neighbouring Libya remains divided between rival administrations with their own regional allies. Turkiye and Qatar have supported the Tripoli-based government of Prime Minister Abdulhamid al-Dbeibah, while Egypt, Saudi Arabia and the UAE back General Khalifa Haftar and his Libyan National Army in the east.
In Sudan, the UAE-backed Rapid Support Forces (RSF) have been fighting President General Abdel-Fattah Burhan’s Sudanese Armed Forces in a vicious civil war since April. Peace talks in Riyadh in late September failed to deliver a ceasefire, and the UAE has been implicated in the delivery of weapons to the RSF.
Tunisia is quieter, but the economy is in a delicate state and the lurch towards authoritarian dictatorship under President Kais Saied is making observers nervous.
Tensions between Algeria and Morocco are also problematic. The two countries have long been at odds over Western Sahara, but relations have become more strained in recent years, with Algiers severing diplomatic ties in 2021. Algerian coast guards killed two Moroccans in August 2023 when they strayed into Algerian waters on their jet skis – an incident that could have readily escalated.
In Iraq, political disagreements came to the fore in November when the Supreme Court removed parliamentary speaker Mohammed al-Halbousi – the country’s most powerful Sunni politician – from office. Iran-backed Iraqi militias have also been flexing their muscle since the Gaza war, launching dozens of attacks on US forces in the country.
Other Iraqi court rulings have also caused disquiet, particularly a September decision by the Constitutional Court to annul a bilateral treaty on sharing the Khor Abdullah waterway with Kuwait.
Iran meanwhile weathered the protests that erupted in the wake of Marsa Amini’s death in September 2022. Tehran’s emerging challenge is in managing the response of its regional allies to the Gaza conflict. The actions of its other allies
in the region – including the Houthis in Yemen and Hezbollah in Lebanon – could set the tone for the whole region in the year ahead.
Image: Smoke rises after Israeli air strikes on the city of Rafah in the southern Gaza Strip on 10 October 2023
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Diriyah awards $727m Waldorf Astoria superblock deal17 June 2026
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The contract was awarded to the joint venture of Hassan Allam Construction Saudi and UCC Saudi, the local branch of Qatar’s Urbacon Holding.
The Waldorf Astoria superblock is a mixed-use development comprising a Waldorf Astoria hotel, Waldorf Astoria-branded residences, commercial and residential facilities, and office space.
The Waldorf Astoria hotel will feature 200 keys, while the residential component will comprise 47 branded residences.
The project is located on the Grand Boulevard South and Northern Arterial Road in the Boulevard Northwestern district at Diriyah Gate 2.
Diriyah Company tendered the contract in November last year, with submissions due in January, as MEED reported.
Diriyah Company Group CEO Jerry Inzerillo said: “We are delighted to announce this latest major construction contract for the Waldorf Astoria superblock as we continue to progress at pace across the Diriyah development area. The Waldorf Astoria will be a world-class addition to our growing portfolio of globally renowned hospitality brands, further strengthening Diriyah’s appeal as a globally significant destination that offers world-class hospitality and lifestyle experiences.
“Together with our partners, we look forward to delivering another landmark development that supports the kingdom’s Vision 2030 ambitions and contributes to the continued growth and success of Diriyah.”
Hassan Allam, chairman and CEO of Hassan Allam Holding, said: “We are proud to support the development of one of the kingdom’s most ambitious and transformative destinations and to continue our partnership with Diriyah Company in bringing its vision to life.
“Drawing on more than 90 years of experience across the Mena region, we remain committed to delivering the highest standards of quality and excellence on landmark projects that are helping shape the kingdom’s future.”
Ramez Al-Khayyat, UCC Holding president and group CEO, said: “Being awarded this contract by Diriyah Company marks another important milestone in our growing partnership and reinforces our shared commitment to delivering world-class developments across the kingdom. This project builds on our ongoing collaboration in Diriyah, including the delivery of four luxury hotels and the Royal Diriyah Equestrian and Polo Club in Wadi Safar.
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The latest award follows Diriyah Company’s award of an estimated SR730m ($195m) construction contract for civic quarter buildings within the Diriyah development to local contractor Al-Rashid Trading & Contracting Company (RTCC).
In April, Diriyah announced a SR1.84bn ($490m) construction contract to build the Saudi Arabia Museum of Contemporary Art (SAMoCA) within the Diriyah development. The contract was awarded to a consortium of Egyptian contractor Hassan Allam Construction and Saudi Arabia’s Albawani.
In March, Diriyah Company awarded an estimated SR2.5bn ($666m) contract to build the Pendry superblock in the DG2 area.
The Pendry superblock includes the construction of the Pendry Hotel alongside residential and commercial assets. The package will cover 75,365 square metres and is located in the northwestern district of the DG2 area.
The previous month, Diriyah Company also awarded a SR717m ($192m) contract for the construction of the One Hotel, located in the Diriyah Two area of the masterplan, with a gross floor area of more than 31,000 sq m.
The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.
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AHS Properties acquires Shangri-La hotel for $300m17 June 2026
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The acquisition expands AHS Properties’ portfolio, which includes AHS Tower, a Grade A commercial development on Sheikh Zayed Road, and AHS City, the company’s master-planned mixed-use community on the same corridor.
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UAE moves to clear the path for recovery17 June 2026
Commentary
Colin Foreman
EditorMore than three months after the conflict began to disrupt business across the Gulf, the UAE is moving to resolve the technical challenges that the economy faces as it shifts towards recovery.
The insurance gap has been a key obstacle to the recovery of aviation and tourism. Several countries continue to maintain advisories against travel to the Gulf, making it difficult or impossible for visitors to obtain conventional cover for trips to or through the region. The concern is twofold: one, becoming stranded should hostilities resume, and two, not being able to secure medical insurance. Both Emirates and Etihad have now moved to address that directly, offering insurance to passengers flying to or through their respective home hubs. The Etihad scheme, backed by DCT Abu Dhabi and underwritten by Daman, will run from July to December and covers eligible visitors for up to 15 days.
The second area of concern is real estate. Anecdotally, buyers in sectors economically exposed to the conflict have found it increasingly difficult to obtain mortgage financing, a problem that has become especially acute at the point of handover. The recently signed partnership between Dubai Holding Real Estate and Commercial Bank of Dubai is designed to ease that pressure. The programme opens financing from the 30% construction stage once buyers have met a 50% payment threshold, giving purchasers earlier visibility of their borrowing capacity and reducing uncertainty during the off-plan purchase process.
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Libya signs three oil deals after licensing round17 June 2026
Libya’s National Oil Corporation (NOC) has signed three production-sharing agreements with several international energy companies following the country’s first licensing round in nearly two decades.
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The three contracts were signed on 15 June.
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Firms prepare offers for Bahrain’s Sitra IWPP17 June 2026

At least three firms are preparing to submit offers for the 1.2GW Sitra independent water and power plant (IWPP), with bidding due to close on 17 June.
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The build-own-operate project is being procured by Bahrain’s Electricity & Water Authority (EWA) under a public-private partnership framework for 20-25 years.
According to sources, Abu Dhabi National Energy Company (Taqa), Acwa (Saudi Arabia) and Korea Electric Power Corporation (Kepco) are preparing to submit separate offers for the project, which has had several deadline extensions since the tender was released last year.
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China Energy Engineering Corporation and China Datang (Overseas Hong Kong, China) prequalified as the only consortium. It is unclear if either of these will submit an offer.
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Al-Hidd IWP
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