One month ago, Israelis and Palestinians felt that rarest of things: optimism.

After months of stalled talks, there was finally a ceasefire in Gaza. There seemed to be a real path towards the end of the war.

But the situation has changed drastically since then.

The 42-day truce between Israel and Hamas is set to expire this weekend unless an agreement is struck to extend it. The two sides were meant to begin talks on a permanent end to the war in early February; three weeks later, they still haven’t started.

Since the deal was struck, there’s been a vibe shift in Israel. Prime Minister Benjamin Netanyahu is buoyed by the return of US President Donald Trump and under pressure from far-right members of his own cabinet to return to war. The Gaza ceasefire looks increasingly like it may end up being a fleeting interlude.

“We are ready to return to intense combat at any moment,” Israeli Prime Minister Benjamin Netanyahu told graduating military officers on Sunday. “The operational plans are ready.”

Netanyahu made his tenuous commitment to the ceasefire clear when he traveled to Washington DC to meet Trump earlier this month and opted not to send a negotiating team to Qatar or Egypt, which mediated the ceasefire.

He has replaced Israel’s security chiefs, who previously led ceasefire negotiations, with a close political ally – his minister of strategic affairs, Ron Dermer, who is said to be close to the Trump Administration. Israeli media last week was briefed by a “senior official” castigating the security chief-led negotiating team for giving Hamas too much in previous talks.

Even during the initial ceasefire negotiations it was clear that Netanyahu was skeptical of its potential second phase.

The first phase was always temporary for him. It was a way to get some hostages home without permanently ending the war or having to talk about what Gaza will look like once it’s over. Nearly 17 months since October 7, he has yet to present his vision for Gaza’s future, except to say that neither Hamas nor the West Bank-based Palestinian Authority should govern.

The second phase was always going to be trickier. It would see Hamas and Israel agree to a permanent end to hostilities, the release of all living Israeli hostages held in Gaza in exchange for Palestinian prisoners, and the full withdrawal of Israeli troops from Gaza, including from the Gaza-Egypt border.

Netanyahu is under tremendous pressure to return to war. His finance minister, the far-right-winger Bezalel Smotrich, has threatened to withdraw from the governing coalition if Israel doesn’t restart the war after this weekend. Itamar Ben Gvir quit his post as national security minister over the ceasefire.

It is unclear whether Hamas, for whom the hostages are their most valuable asset, would continue releasing Israelis without an Israeli commitment to end the war.

Though Trump championed and took credit for the ceasefire, his messaging since taking office has hardly been that of a peacemaker. He’s proposed expelling Palestinians from Gaza, he’s considering some Israelis’ desire to annex the West Bank, and he’s expressed doubt about the fate of the ceasefire. “I can’t tell you whether or not the cease fire will hold,” he said earlier this month. “We are going to see whether or not it holds.”

Steve Witkoff, the US special envoy to the Middle East, is returning to the region this week to try to save the ceasefire. He hardly expressed optimism when he spoke with the president’s son-in-law, Jared Kushner, at a Saudi investment conference in Miami last week. “Phase two is more difficult,” Witkoff said. “But I think ultimately if we work hard that there’s a real chance of success.”

Hours after Hamas released six Israeli hostages this weekend, Israel’s cabinet said it wasn’t going to uphold its end of the exchange – the release of 620 Palestinian prisoners and detainees.

The Israeli government and many international observers have expressed horror at the Hamas’ propaganda ceremonies staged to hand hostages to the Red Cross. It appears two incidents last week – the initial failure to hand over Shiri Bibas’ body and the staging of dead Israelis’ coffins under the banner of a bloodsucking Netanyahu – were a step too far. Hamas would have to stop “the humiliating ceremonies,” the prime minister’s office said.

Hamas spokesperson Abdul Latif Al-Qanou called Israel’s decision not to release the prisoners a “blatant violation” of the ceasefire agreement.

Critics of the Israeli government point out that Israel, too, has staged propaganda campaigns. Palestinian detainees released by Israel – some of whom have committed serious crimes, but most of whom were held without charge – have been made to wear sweatshirts upon their release with a Star of David and the Arabic phrase: “We don’t forget or forgive.” Others have said that they were made to watch hours of Israeli propaganda videos ahead of their release.

The future of the ceasefire now seems to come down to a simple calculation. Will Hamas see enough value in a short-lived peace to continue releasing hostages without long-term commitments from Israel? And if not, will the American government pressure Israel into the concessions necessary for a second phase?

Two million Palestinians struggling to survive depend on the answer. So too do the 63 hostages who remain in Gaza – just under half of whom are thought to be alive.

“Please, I just want to go home,” Evyatar David, who was kidnapped from the Nova music festival, said Saturday in a Hamas propaganda video as he watched hostages handed to the Red Cross. Though he was likely speaking under duress, David’s family authorized the video’s release.

“The time has come to end it,” he said. “You started something, finish it. Please.”

Eugenia Yosef and Kevin Liptak contributed to this report.

Britain will accelerate an increase to its defense spending, Prime Minister Keir Starmer announced Tuesday, on the eve of a crucial visit to meet US President Donald Trump in Washington.

Starmer said he will raise military spending from 2.3% of Britain’s GDP to 2.5% by 2027, and then again to 2.6% the following year, as a rift opens up between Trump and Europe over the future of the war in Ukraine.

“We must reject any false choice between our allies. Between one side of the Atlantic or the other. That is against our history, country and party,” Starmer told members of parliament. He called Britain’s relationship with America his country’s “most important bilateral alliance,” and said: “This week when I meet President Trump, I will be clear: I want this relationship to go from strength to strength.”

Starmer also set an ambition to hike defense spending to 3% in the next parliament, which will begin in 2029 at the latest, after the next general election. That final target would depend on the fiscal conditions at the time, Starmer said. Trump has urged NATO countries to raise their defense spending to 5% and made clear that the US will not work to maintain Europe’s security in the future.

“This government will begin the biggest sustained increase in defense spending since the end of the Cold War,” Starmer told parliament as he laid out the plans.

The increase will be funded in part through a cut to international development spending, which will now fall from 0.5% of Britain’s GDP to 0.3% in the coming years, Starmer said. “That is not an announcement I am happy to make,” he said, adding the defense increase “can only be funded through hard choices.”

Charities who will be affected by the cuts to international development spending said that they were “shocked” and “stunned” by Starmer’s decision.

WaterAid, a charity focused on providing clean water and water systems to those in need, called the move a “cruel betrayal of people living in poverty globally.”

The CEO of Save The Children UK, Moazzam Malik, said in a statement that the cuts will “make the world a more dangerous place for children now and in the future.”

And the co-CEO of ActionAid UK, a charity working with women and girls living in poverty, called the cuts “reckless,” writing in a statement that “there is no justification for abandoning the world’s most marginalized time and time again to navigate geopolitical developments.”

“This is a political choice — one with devastating consequences,” Hannah Bond said.

Britain’s previous Conservative government set a goal to reach the 2.5% target on defense spending by 2030. After winning a general election last year, Starmer maintained the goal, but refused to set a timeline on when it would be achieved.

“Courage is what our own era now demands of us,” Starmer told MPs as he announced the new timeframe.

Millions of people in sub-Saharan Africa rely on money sent to them by relatives living abroad.

But it costs more to send this money — known as remittances — to sub-Saharan Africa than any other region in the world, according to the World Bank.

In recent years, a number of African-founded financial technology (fintech) companies have emerged, with the aim of bringing down costs and carving into the dominant market share of traditional players like Western Union and MoneyGram.

The potential benefits are huge; the less it costs to send money to Africa, the more money is likely to be sent. An increased flow of foreign currency can act as a lifeline for both individuals and national economies.

Worth $54 billion to sub-Saharan Africa in 2023, remittances account for more than a fifth of GDP of the Gambia, Lesotho, and Comoros, and more than a tenth of Liberia, Cape Verde, and Guinea-Bissau. They are more valuable to Kenya than its key exports.

And estimates are generally assumed to be lower than the real figure due to the prevalence of unrecorded payments made through informal networks.

“Not only do (remittances to low-and-middle income countries) exceed foreign direct investment and official development assistance (combined), but it also somehow remains constant,” said Christian Kingombe, managing partner of “impact investment” advisor 4IP group, and formerly with the African Development Bank. “So it is really a very important source of development,” he added.

The problem with cash

Sending money to sub-Saharan Africa costs the sender an average of 8.37% of the total value of the transaction, as of Q2 2024, according to the World Bank, compared to 5.53% in South Asia. How can fintechs bring that number down?

The first challenge is to move customers away from making cash payments.

A survey by Visa found that 12% of global consumers still send remittances by mail as cash, checks or money orders.

Processing cash is more expensive than digital money, explained Andy Jury, CEO of Mukuru, a big remittance player serving Africa and founded by a Zimbabwean entrepreneur, that processes both cash and digital payments, because cash requires a large physical infrastructure, including booths, tellers, and supplies of cash.

While the average cost of sending money to sub-Saharan Africa is the highest in the world, the cost of digital remittances to the region is less than the global average. If more Africans sent money home via digital services rather than cash, average remittance fees should fall, but receiving money online requires the internet, which is used in sub-Saharan Africa by only 37% of people, according to the World Bank.

Even when users have access to mobile apps, it’s not always easy to persuade them to move over from the tried and trusted cash model.

“Imagine a world in which you’ve grown up in a cash-to-cash ecosystem — it’s a sort of leap of faith to leave your money in this esoteric, intangible thing,” explained Jury. “(But) if you get somebody to use it, they educate themselves on the benefit, and they can get that ‘aha!’ moment. That’s the most powerful conversion tool.”

It’s mainly young people who are making the switch, said Nicolai Eddy, COO of NALA, a remittance fintech founded in Tanzania that facilitates payments to 11 African countries and last year raised $40 million from investors. “It’s really like 35 (year olds) and below where there’s a huge focus on the digital side of things,” he said. “People in their fifties and sixties, they’re used to the person at the shop who they know, and they just continue to go there.”

Building trust is a challenge, but with a growing youth population and a steady flow of migrants moving abroad, the potential user base is expanding.

Bypassing the middlemen

Luring customers over from cash is one piece of the puzzle. But digital payments have their own costs.

Historically, sending money to Africa via a remittance company has been a complex process involving many different parties. “It’s so bloody difficult to move money around,” said Jury.

The middlemen — mainly the third parties used to move money between banks, and the foreign exchange traders who find and negotiate the best rates — all want a cut, and they can drive up costs and cause delays.

In recent years, fintechs — like NALA, Flutterwave, LemFi, Chipper Cash, Leatherback, and many more — have emerged with a model of cutting out the middlemen and enabling instant payments.

Many of these new fintechs hold liquidity in every country in which they operate, explained Eddy. This allows them to deposit funds directly into the local bank account or digital wallet of the receiver instantly. Often, these companies use their own software wherever possible to move money around, as well as having their own teams to negotiate on the foreign exchange market, removing the reliance on third parties.

“We’re cutting out two steps, in some cases it’s like five or six steps,” explained Eddy.

But bypassing the middlemen is not easy. As well as developing in-house software, it means working directly with banks and governments to acquire licenses to transfer money internally within African countries, each of which has different requirements.

Sending money between African countries can be especially costly; in Q4 of 2023, fees were an average of 33% for remittances of $200 from Tanzania to neighboring Kenya, Uganda, and Rwanda.

“We’ve got 50 different payment use case licenses in 15 different territories, and that’s taken nearly two decades to build up,” said Jury. “Very few environments have alignment in terms of what they require; one market might require a passport as proof of identity, another one might take a driver’s license. All of that variability increases the costs.”

Although still in its infancy, the Pan African Payment Settlement System (PAPSS) is designed to unify regulation across different African countries.

“I love that sort of stuff because it creates harmony,” said Jury. “Whether it’s centrally dictated, whether it’s ourselves creatively integrating (with other fintechs), we’re constantly on the lookout for those things.”

Regulation

The UN has targeted a global average of 3% for remittance fees. According to Eddy, the biggest inhibitor for fintechs in Africa to lower their costs is the fees charged by banks and digital wallets for locally depositing money to receivers. He wants governments to limit fees for things like sending money to family. “If they cap those fees for those types of transactions, we could be processing at 1% (total fees),” he said.

But according to Dr Joseph Antwi Baafi, senior lecturer at Akentien Appiah-Menka University of Skills Training and Entrepreneurial Development in Kumasi, Ghana, governments should focus on helping to reduce operating costs for remittance fintechs and the companies that operate digital wallets in Africa.

“Governments (can play) a huge role in terms of infrastructure support, in terms of tax support, to help these network operators to operate at their full capacity and full efficiency. And that will bring down charges,” he said.

For Jury, the key to success is to tailor the product to the user’s needs.

“If you come at this with a Silicon Valley mind(set) where you’re going to take a small proposition, throw lots of money (at it) and scale it up, you come unstuck very quickly,” Jury said.

“But if you can take a global platform or infrastructure and ensure you appreciate the local idiosyncrasies and invent something that’s relevant to a customer, there’s a massive, massive tidal wave of opportunity coming.”