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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UAE cuts trade and financial links with Iran19 August 2026
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The UAE has halted all trade, commercial exchanges and financial transactions with Iran until further notice, the Ministry of Foreign Affairs said on 19 August.
The suspension has been imposed in light of escalations that undermine regional and international peace and security, the ministry said. It did not specify a timeframe for any resumption.
The ministry rejected allegations regarding the status of the economic relationship between the UAE and Iran, and restated the UAE's commitment to dialogue, cooperation and regional integration as means of advancing peace, stability and prosperity in the region.
It said the UAE remains committed to safeguarding the integrity of the financial system, in line with international law and global standards.
The suspension covers the full range of commercial and financial links between the two countries. The UAE has historically been one of Iran's most significant trading partners, with much of the relationship built on re-export trade routed through Dubai to Iranian ports across the Gulf.
The ministry statement did not detail the mechanism for enforcing the halt, the sectors affected, or arrangements for existing contracts and in-transit cargo.
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Abu Dhabi begins Dar Al-Funoon Saadiyat construction19 August 2026

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Abu Dhabi-based piling contractor APCC Piling & Marine Contracting has started the enabling works on Dar Al-Funoon, a cultural development near the Saadiyat Cultural District.
The project, commissioned by the Department of Culture & Tourism – Abu Dhabi, was designed by the late Canadian-American architect Frank Gehry.
The venue is scheduled to open in 2030.
MEED understands that the main contract bids are under evaluation and the project is slated for award soon.
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The venue will host leading international productions, delivering high-quality cultural experiences for audiences locally, regionally and globally.
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The project was announced by Sheikh Khaled Bin Mohamed Bin Zayed Al-Nahyan, Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council in June, as MEED reported.
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Contractor wins Dubai Canal drainage deal19 August 2026

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Local firm Detech Contracting has won an engineering, procurement and construction (EPC) contract to upgrade and rehabilitate the East Dubai Canal stormwater system.
The project, known as TF-16-C1, is part of Dubai’s Tasreef strategic plan to improve the emirate’s stormwater network, increase flood protection and enhance the resilience of Dubai’s infrastructure.
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Detech has been awarded several packages under the Tasreef programme in the past 18 months.
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Maaden and Aramco sign deal to create joint venture18 August 2026
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Saudi Arabian Mining Company (Maaden) and Saudi Aramco have signed a shareholders’ agreement to form a joint venture (JV). Maaden will hold a 51% stake in the JV, while Aramco will own the remaining 49%.
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Kuwait awards oil contract to Baker Hughes18 August 2026
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Kuwait’s state-owned upstream operator Kuwait Oil Company (KOC) has awarded a multi-year contract to the Houston-based oil services company Baker Hughes, according to a statement from the US company.
The contract is focused on accelerating technology innovation in the country’s upstream energy sector, the statement said.
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