TRUMP IS REWRITING THE DEAL HIS OWN TEAM NEGOTIATED

• The IRGC shot down a US MQ-1 Predator drone in Iranian airspace over the Persian Gulf in the early hours of Sunday 7MHR IRGC shoots down US MQ-1 drone in Iranian waters 8PTV IRGC shoots down intruding US MQ-1 Predator drone over Persian Gulf. This is confirmed by both Iranian state media (Mehr News and Press TV) and no immediate US denial has been reported in today's sources. Press TV separately reported that the Iranian Army shot down an "Orbiter" drone over Qeshm Island on Saturday 8PTV IRGC shoots down intruding US MQ-1 Predator drone over Persian Gulf. Two drones in two days. The MQ-1 is older and less capable than the MQ-9 Reapers being destroyed elsewhere in this conflict, but every downed US drone is a statement of intent during active ceasefire negotiations, and the IRGC is clearly making one.

• Israel has declared a "large-scale" ground offensive in southern Lebanon, crossed the Litani River with substantial forces, and captured Beaufort Castle, a crusader-era hilltop fortress with commanding views over northern Israel and the Nabatieh area 4TOI Soldier killed in Hezbollah drone strike in Lebanon; IDF captures strategic Beaufort Castle 6AAM Israeli army announces 'large-scale' offensive in southern Lebanon. One Israeli soldier, Staff Sgt. Michael Tyukin, 21, was killed in a Hezbollah drone strike during the operation 4TOI Soldier killed in Hezbollah drone strike in Lebanon; IDF captures strategic Beaufort Castle. Israeli forces are now operating "in the vicinity of Nabatieh," which the IDF spokesperson called "one of Hezbollah's principal strongholds" 6AAM Israeli army announces 'large-scale' offensive in southern Lebanon. Israel's Defence Minister Israel Katz said troops would remain at the castle "as part of the security zone in Lebanon" 4TOI Soldier killed in Hezbollah drone strike in Lebanon; IDF captures strategic Beaufort Castle, making clear this is not a raid but an occupation.

• France has called an emergency UN Security Council session over Israel's Lebanon operations, with Foreign Minister Jean-Noël Barrot calling the ongoing military campaign "a major mistake for Israel" and stating that "nothing can justify the prolongation of military operations in Lebanon" 1BBC Israel seizes castle in Lebanon as it expands ground offensive. This is notable because France has historically been a key interlocutor with Lebanon and has now moved from private pressure to a formal multilateral challenge. It will not produce binding action given US veto power, but it signals that western European tolerance for the Lebanon campaign is running out publicly, not just privately.

• According to Israel Hayom, the US Navy escorted dozens of Qatari oil and liquefied natural gas (LNG) tankers through the Strait of Hormuz over the past week, after Iran approved the passages and in some cases received payment 5TOI Trump said seeking changes to Iran deal, focused on fate of uranium stockpile. This is a single Israeli source citing three unnamed diplomatic and intelligence contacts, so treat it with appropriate caution. But if accurate, it means the blockade is already being selectively suspended through bilateral arrangements, and Trump's "the blockade is very much still in place" framing is at minimum incomplete. It would also explain why oil markets have been falling despite an unsigned deal.

• Iran's draft framework, as reported by Iranian state broadcaster IRIB, would give Tehran exclusive authority to determine which vessels qualify for transit through Hormuz, including the right to require cargo manifests, ownership records, and destination data from all ships 9AAM Iranian state media reports details of draft informal Iran-US agreement. Iran's economic negotiating team says the most contested issue in recent Qatar talks was not nuclear material but guarantees that unfrozen assets "will not be frozen again" through a future US directive 9AAM Iranian state media reports details of draft informal Iran-US agreement. The $12 billion immediate asset access demand and the anti-re-freezing guarantee are the economic preconditions Iran is most focused on. Washington has not publicly addressed either.

Oil's slide continued through Thursday, with Brent at $91.12 and WTI at $87.36, down around two dollars on the week and nearly thirty dollars off the April high. The Oil Volatility Index (OVX) has dropped from 76 in late April to 57.84 now. Markets are pricing a Hormuz deal as near-certain, faster than the diplomacy actually warrants.

Gold jumped to $4,593, a new series high, and the Gold/Oil ratio hit 52.58, also a series record. That divergence between collapsing oil and rising gold is the market's honest assessment: energy traders think this ends, macro hedgers think something can still go wrong. Given Trump's last-minute amendments, two drones shot down in two days, and Israel accelerating in Lebanon, gold looks like the smarter read right now.

Defence stocks are steady and the Defence ETF (ITA) remains near its series high. The Israeli TA-125 equity index is quietly at its highest point in the data series at 4,430, which tells you what Israeli markets think about the Lebanon campaign's trajectory.