Reuters World News - Israel’s plans, Australia, redistricting, Fed and naval drones

Episode Date: August 21, 2025

Israel says it has taken first steps of military operation in Gaza City and approves a settlement plan to erase the idea of a Palestinian state – while diplomatic relations sour with Australia. Texas Republicans approve a Trump-backed congressional map to protect the party's majority. U.S. President Donald Trump calls on Fed Governor Cook to resign over mortgage allegations. Plus,  the setbacks the U.S. faces as it tries to build a naval drone fleet.  Listen to On Assignment podcast here. Sign up for the Reuters Econ World newsletter ⁠here⁠. Listen to the Reuters Econ World podcast ⁠here⁠. Find the Recommended Read ⁠here⁠. Visit the ⁠Thomson Reuters Privacy Statement⁠ for information on our privacy and data protection practices. You may also visit ⁠megaphone.fm/adchoices⁠ to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, Israel begins its assault on Gaza City amid international condemnation. The Trump administration sets its sights on another Federal Reserve governor. And the setbacks the US faces as it tries to build a naval drone fleet. It's Thursday, August 21st. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes, seven days a week. I'm Kim Vinal in Wanganui, New Zealand. Israel is calling up tens of thousands of reservists as it begins its operation to take over Gaza's biggest urban center, Gaza City. Israeli military spokesperson, Brigadier General Effie Dervin, says forces will intensify strikes above and below ground.

There's been international criticism of the plan, with fears many more Palestinians will be killed or displaced. Israel accuses the militant group Hamas of operating from within civilian infrastructure in Gaza, which Hamas denies. And separately, in what critics fear could be a fatal blow to the two-state solution, Israel has approved a plan to slice through the occupied West Bank. The E1 project would see almost 3,500 housing units built, bisecting Palestinian territory, cutting it off from East Jerusalem. In a statement, the ultra-nationalist Israeli finance minister Bezal Smotrich says the Palestinian state is being erased from the table.

The plan was previously frozen after U.S. and European objections. The UN is calling on the Israeli government to halt all settlement activity, while the Palestinian Foreign Ministry says the plan will isolate Palestinian communities in the area. Infrastructure work could begin within a few months. Israel's escalation in both Gaza and the West Bank has flared tensions with international leaders, particularly Australia. Israel's Prime Minister Benjamin Netanyahu

has called Australia's Prime Minister, Anthony Albanese, a weak politician after Canberra's decision to recognise a Palestinian state. Alexander Cornwall is in Tel Aviv. This week, it was revealed that Australia had also denied a visa to an Israeli lawmaker who is a member of Prime Minister Benjamin Netanyahu's governing coalition. Now, he is not from Netanyahu's Lakud Party.

He is from another party. And that really spurred what we have seen. Israel has now revoked the visas of Australian diplomats who are based in the West Bank or working in the West Bank. And we've now seen this escalation to public or personal attacks from the Israeli Prime Minister, I'm the Australian Prime Minister. Australia is just one of a number of countries that has said it will recognise a Palestinian state, including France, Canada and the UK.

Alas de Pall is in Sydney and says as the war in Gaza has gone on, the sentiment in Australia has changed. Some of the recent opinion polling does show a shift in sentiment and that seems to be because of some of the images that have been coming out of Gaza and also some of the rhetoric from the Israeli government as to, whether that's the reason that Albanese has responded the way he has. It's a little bit difficult to quantify, but yeah, it certainly does seem like there is a shift in the public mood. Texas State House Republicans have approved a new congressional map. The redistricting is intended to flip five Democratic-held U.S. House seats in next year's mid-term elections. The vote comes after dozens of Democratic lawmakers fled the state for two weeks. weeks to temporarily block the unorthodox mid-decade redistricting.

It comes as Republicans in California file suit with that state Supreme Court to delay redistricting efforts by Democrats. California governor Gavin Newsom is pushing forward legislation that, if approved by voters in November, could add five Democrat-held districts next year. A federal judge has denied the Justice Department's request to unseal grand jury records from Jeffrey Epstein's sex trafficking case. Manhattan District Judge Richard Berman says it would be more logical for the government to release the 100,000 pages of Epstein files it already has.

As the Federal Reserve begins its three-day conference in Jackson Hole, Wyoming, the regulator is once again in the sites of the Trump administration. This time, it's Fed Governor Lisa Cook, who's facing calls to resign over questions about her financial history. We caught out with our Fed reporter and Sophia at the airport on her way to Jackson Hole. She's been looking into the pressure facing Cook. So at the center of the allegations are a couple of mortgages that she took out on homes back in 2021 before she was nominated for the post by President Joe Biden.

These mortgages, one was in Georgia and one was in Michigan. And apparently on the application, she called them both her primary residence, typically when you get a mortgage for primary residence, you get a better deal on a loan. So the allegations is that it was mortgage fraud. But she had reason to be in both places. She was a professor at Michigan State University, and she was also a native of Georgia. So it's not surprising she would have homes in both places. Anne says this inquiry could be another tactic in President Trump's pressure campaign on the Fed to lower interest rates.

It's unclear what's motivated. it. But what we do know is that Trump has been putting pressure on the Fed to cut rates, has wanted to get rid of Powell and would like to fill the Fed board with as many like-minded people as he could. And Lisa Cook, should she resign or should Trump try to fire her, as he has indicated he might try to do? That would leave a space for him to put someone on the board. Cook says she has no intention of being bullied to step down after U.S. federal housing, housing finance agency director, William Pult, raised the allegations in a tweet. While Hurricane Erin is hundreds of miles off the east coast of the US, it is bringing storm

surges up and down the coastline. It's creating dangerous conditions in up to 20-foot waves, from North Carolina's outer banks up to New England. Drones have become a regular feature in the war in Ukraine, flying overhead and terrorizing soldiers on the front lines. But maritime drones have also played a huge role in the Ukraine war. These primarily remote-controlled speedboats can carry weapons, explosives and surveillance equipment. Now, the US is aiming to build an autonomous naval fleet of its own. But as our space and defence correspondent David Jeans explains, the project has hit some choppy waters.

So as US military leaders have been looking at the potential for conflict with China in a future and perhaps around Taiwan, they've seen a huge need for these cheap maritime drones. There is one plan called Operation Healthgate, which is a goal to field hundreds or thousands of aerial and maritime drones, all sort of working in concert to disrupt a Chinese advance over the Taiwan straight. One of the challenges is the US has tried to create something more ambitious than what's been deployed in Ukraine, and that's causing some production hiccups. challenges facing this program are really twofold. First of all, it's really hard for them to just

get the technology and the boats to work in the way that they want to. We saw two of these vessels crash into each other. We reported that some of those issues stem from not only software issues, but also human error in trying to understand how you use the technology. So there's been a number of these incidents in the last couple months. And the second issue that's really emerged is the Navy is used to building really big systems, really big ships that cost billions of dollars and take years to build. Maritime drones are only a couple million dollars at most and the technology changes so quickly. So they haven't been able to put in a good program to acquire these vessels. It's under review currently and the Admiral who was leading that program was fired a couple

months ago over loss of confidence. To China for today's recommended read, where they're considering allowing the usage of Yuan-backed stable coins for the first time. You can read more about China's major reversal of its stance towards digital assets by following the link in the pod description. For more on any of the stories from today, check out Reuters.com or the Reuters app. And don't forget to follow us on your favorite podcast player. If you're listening on a smart speaker, just ask for the latest news, from Reuters seven days a week. We'll be back tomorrow with our daily headline show.