WSJ What’s News - Trump Shakes Up Gaza Diplomacy

Episode Date: February 13, 2025

A.M. Edition for Feb. 13. WSJ correspondent Summer Said says President Trump’s plan to take over Gaza and relocate Palestinians is prompting Arab states to set aside old political concerns and race to find an alternative–and putting pressure on an already fragile cease-fire. Plus, a judge lifts the freeze on a buyout offer for federal workers. And Elon Musk says he’ll withdraw his bid to control OpenAI if the board stops its conversion to a for-profit company. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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A judge allows the Trump administration to move forward with its buyout offer for federal workers. Plus, Arab states led by Egypt begin taking Trump's Gaza takeover plan seriously as they race to draft an alternate proposal. This has pushed Egypt to lead a diplomatic blitz for a plan to rebuild Gaza, trying to squeeze out the political space for the now-adopted Riviera Plan proposed by the Trump administration. And a potential sign of weakness in the housing market as tens of thousands of homes are pulled

from sale. It's Thursday, February 13th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving your world today. The Trump administration's buyout plan for federal workers is back on. A federal judge in Massachusetts lifted a freeze on the program yesterday, ruling that labor unions seeking to posit lacked proper legal standing as they weren't directly affected.

A spokeswoman for the Office of Personnel Management, which extended the buyout offer to more than two million federal workers, said the agency was pleased with the court's decision and that the program had closed at 7 p.m. yesterday. According to an administration official, about 65,000 workers had opted to resign in connection with the program as of Tuesday. The Trump administration has stepped up its immigration fight against New York, announcing a lawsuit against senior state officials and pulling $80 million in

federal funding intended to help pay for migrant housing and services. In her first news conference as Attorney General, Pam Bondi accused New York Governor Kathy Hockel of failing to enforce federal immigration laws. New York has chosen to prioritize illegal aliens over American citizens. It stops. It stops today. As you know, we sued Illinois and New York didn't listen. So now you're next.

The commissioner of New York's Department of Motor Vehicles and State Attorney General Letitia James were also targeted by the suit. James said she's prepared to defend the state's laws. A spokesperson for Hokel said she supports deporting criminals, but that she believes law-abiding families shouldn't be targets, adding that the governor would coordinate with federal authorities who have a warrant. New York City Comptroller Brad Lander said yesterday that the administration's

move to revoke funding meant to help cities deal with migrant arrivals was illegal, calling it, quote, highway robbery. Last week, the Trump administration sued Illinois and Chicago over their efforts to limit cooperation with federal immigration enforcement, the first steps in what Bondi promised would be a crackdown on sanctuary cities. This just in, Elon Musk says he'll withdraw his $97.4 billion bid for the nonprofit that controls OpenAI if the company's board stops its conversion to a for-profit business. That's according to a document filed by the billionaire's lawyers. We'll have more updates as this story develops on wsj.com.

More homes are being pulled from sale in the U.S. According to real estate analytics firm CoreLogic, nearly 73,000 properties were delisted after they failed to find a buyer in December. That's about 1 in 10 properties being taken off the market, an increase of 64% from the same month of 2023. That jump could be an early sign of a weakening housing market. Japanese carmakers Honda and Nissan have officially walked away from their plan to merge less than two months after announcing it.

Industry analysts believe Nissan, which faces troubles in its two biggest markets and recently slashed its headcount and global capacity, will now look for a different partner to help shore up its finances and collaborate on technology. Taiwan's Foxconn, best known for assembling iPhones, has emerged as a candidate. The company's chairman said yesterday that he was open to collaborating with Nissan but doesn't intend to push for an acquisition. Shares of Robinhood have jumped off hours after the company posted a sharp rise in quarterly profit fueled by a flurry of post-election trading.

Its stock price has gained 50% since the start of the year. And in updates from some of Europe's largest companies this morning, Unilever plans to list its ice cream business in Amsterdam, London, and New York, resolving lingering questions about previously announced plans to separate the business, which includes the Ben & Jerry's and Magnum brands. Nestle reported its weakest organic sales growth in more than 20 years. The maker of KitKat and Nescafe attributed its 2024 performance to soft consumer demand after years of high inflation.

Its shares in Switzerland are sharply higher this morning, though, after it guided for improved sales growth this year. And Barclays has posted better than expected quarterly revenue thanks in part to strong results from Investment Banking, a business it hopes to grow and which has a significant U.S. presence. The British bank guided for higher profitability for the year. And back in the U.S., President Trump is expected to outline his reciprocal tariffs on nations that have imposed levies on American exports today, and will also get earnings from Airbnb,

Coinbase, Deere, and others. Coming up, President Trump's plan for Gaza leaves Arab states scrambling to put forward a more palatable alternative. The Journal's Summer Said joins us with that story after the break. Wealthsimple's Big Winter Bundle is our best match offer yet. Get a 2% match when you transfer over an eligible RRSP. For a $50,000 transfer, that's a $1,000 cash bonus. Enough to buy a fancy parka.

A ticket to somewhere you don't need a fancy parka. Or just be responsible and top up your retirement fund. Plus, move any other eligible account and we'll give you a 1% match. Minimum $15,000 transfer. Register by March 15th. Additional terms apply. Learn more at Wealthsimple.com slash match. At first, Arab states flatly rejected President Trump's plan to take over Gaza.

Egypt, Jordan, the UAE, and Qatar said they wouldn't back the relocation of Palestinians, with Saudi Arabia adding that its opposition to the idea was non-negotiable. But as journal senior Middle East correspondent Summer Said reports, leaders in the region are quickly waking up to the fact that Trump is serious about his proposal to permanently displace Palestinians, take over the territory, and redevelop it as an international destination, kicking off a diplomatic scramble to work out an alternative. Summer, let's start by looking at Egypt's position in all of this. This is the one country besides Israel that borders Gaza, and President Trump has lately

been saying in quite explicit terms that Palestinians would be sent to Egypt. So Egyptian officials, just like the rest of the Arab world, the Europeans and much of the international community, were completely taken off guard over the past two weeks as Trump threw out ideas, proposals and plans. This has pushed Egypt to lead a diplomatic blitz for a plan to rebuild Gaza, trying to squeeze out the political space for the now the Riviera Plan proposed by the Trump administration. And they do believe that there are several ways to help without displacing the Palestinians. In terms of what an alternative proposal might look like,

Egypt has now scheduled a summit of Arab leaders to be held on the 27th of February to discuss future options for the Palestinians. What do we know about their plans? So far the plans have been to announce that we're going to have an international donor conference where you're going to have Gulf, the UN, United Nations representatives showing up in Cairo. So far the plan is still being drafted, but roughly is about reconstructing Gaza over the course of five years in stages without displacing the Palestinians.

So they want to start first with the very basics, offering humanitarian zones for the Palestinians while they build. So they will start with, for instance, sewage system, electricity, hospitals, some schools, and then take it from there. And this summer is according to people familiar with the matter that you've spoken to? That's according to Egyptian officials and other Gulf officials that we've been speaking to. I should point out as well, those sources are telling you that this would also potentially

involve Palestinians who are trained by Arab forces to provide security. Is that right? Yes, there has been talks for months now where Egypt has actually said, we will be willing to train Palestinians and to train at a later stage officials from the PA to go in and secure Gaza. But they are absolutely against the idea of sending soldiers or having a peace keep missions because they do believe that could ultimately lead

to confrontations or what they call Arab civil war between Egypt or other Arab forces and Hamas and other Palestinian factions inside Gaza. Right, that seems like a source of a lot of anxiety here is preventing Hamas from taking control again and that potential outcome does, from your reporting, seem like it is giving certain Arab states quite a bit of pause about whether to even push forward with this. Yeah. So Arab states or particularly Gulf countries have been quite anxious about pouring money inside Gaza while either Hamas is still in

control or the PA taking over without actually showing real reforms inside the organizations. This plan, summer, is obviously still in its infancy and as you point out Egypt continues to say that a roadmap should be developed for an eventual Palestinian state but the fact that they are moving ahead with arrangements here, or for instance, that Jordan's King, who was at the White House this week, said that it would work with Egypt and other governments to form their own plan, it marks quite a significant shift in sort of diplomatic positioning here, does it not? So generally, Egypt would not abrogate the demand for a Palestinian state, and it will remain a

fundamental part of the broader framework political framework that the Egyptians the Saudis and the Arab world will insist on but if you speak to Egyptian officials they believe it shouldn't be a precondition for the beginning of the reconstruction and they believe that Reconstruction should start as soon as possible Some of them are talking about even next month. And they do believe that this is the only way to stop any outside plans to displace Palestinians rather than them waiting for months or possibly even years for a two state solution.

And finally, Summer, given that these very sensitive discussions about the future situation for the Palestinians are coming in the middle of the Gaza ceasefire, one that is really teetering on the brink of collapse at the time when both Israel and Hamas were meant to be looking at phase two of this ceasefire and negotiating some longer term arrangements. What is the interplay between this regional diplomacy and that ceasefire? Could one affect the other? Hamas wants the ceasefire to continue. And they believe that Trump plans

have created other possibilities for Israel. So they believe now that phase two will only happen with tremendous pressure from the U.S. on Israel. And in their eyes, that's quite unlikely. So the atmosphere has actually shifted. Hamas is doubling down on some of their demands. We have seen how they came up and surprised everyone a few days ago and said they're not going to release hostages for Saturday. This issue is now being resolved, but I would expect

as Trump continues making these statements that Hamas will definitely get more wary and less trusting of the process as a whole. I've been speaking with Wall Street Journal senior Middle East correspondent, Summer Saeed. less will definitely get more wary and less trusting of the process as a whole. I've been speaking with Wall Street Journal's senior Middle East correspondent, Summer Saeed. Out and about today, I can hear your phone ringing off the hook there, always on the move. Summer, thank you so much. Thank you.

And that's it for What's News. For this Thursday morning, today's show was produced by Daniel Bach and Kate Bulevent with supervising producer Christina Rocca. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.