Blinken: U.S. will help foster further Israeli ties with Arab states

By Matt Spetalnick and Humeyra Pamuk

WASHINGTON (Reuters) -U.S. Secretary of State Antony Blinken pledged on Friday to encourage more Arab countries to normalize relations with Israel as he hosted a virtual meeting with Israeli and Arab counterparts to mark the first anniversary of a set of landmark diplomatic agreements.

The event – held with Blinken’s counterparts from Israel, the United Arab Emirates, Bahrain and Morocco – was the Biden administration’s highest-profile embrace of the so-called Abraham Accords, which were widely seen as a diplomatic success for Republican former President Donald Trump.

Democratic President Joe Biden has backed the deals since taking office in January, and senior aides have said they want more Arab countries to normalize relations with Israel after decades of enmity. But the administration until now had been cool to the idea of commemorating the anniversary of the accords.

On Friday, however, Blinken hailed their diplomatic and economic benefits, saying: “This administration will continue to build on the successful efforts of the last administration to keep normalization marching forward.”

He said the Biden administration would help foster Israel’s growing ties with the UAE, Bahrain and Morocco – as well as Sudan, which also reached a breakthrough with Israel last year – and would work to deepen Israel’s relationships with Egypt and Jordan, which have long-standing peace deals.

And Blinken said Washington would encourage more countries to follow their lead. “We want to widen the circle of peaceful diplomacy,” he said.

Israeli Foreign Minister Yair Lapid agreed, saying: “This Abraham Accords club is open to new members as well.”

The leaders of Israel, the UAE and Bahrain signed the accords at the White House last September. Israel and Sudan announced in the following month that they would normalize relations, and Morocco established diplomatic ties with Israel in December, after Biden defeated Trump in the U.S. election.

Palestinian officials said they felt betrayed by their Arab brethren for reaching deals with Israel without first demanding progress toward the creation of a Palestinian state.

Some critics said Trump had promoted Arab rapprochement with Israel while ignoring Palestinian aspirations for statehood.

But Blinken, who has sought to repair ties with the Palestinians badly damaged under Trump, said: “We all must build on these relationships and growing normalization to make tangible improvements in the lives of Palestinians, and to make progress toward the long-standing goal of advancing negotiated peace between Israelis and Palestinians.”

(Reporting by Matt Spetalnick, Humeyra Pamuk and Daphne Psaledakis; Editing by Chizu Nomiyama and Jonathan Oatis)

Biden administration plans tougher action to rein in meat prices

By Trevor Hunnicutt

WASHINGTON (Reuters) -The Biden administration plans to take a tougher stance toward meatpacking companies it says are causing sticker shock at grocery stores.

Four companies control much of the U.S. meat processing market, and top aides to President Joe Biden blamed those companies for rising food prices in a blog on Wednesday.

As part of a set of initiatives, the administration will funnel $1.4 billion in COVID-19 pandemic stimulus money to small meat producers and workers, administration aides said in the blog post. They also promised action to “crack down on illegal price fixing,” White House aides said in the blog post.

Four companies slaughtered about 85% of U.S. grain-fattened cattle that are made into steaks, beef roasts and other cuts of meat for consumers in 2018, according to the most recent data from the U.S. Department of Agriculture (USDA).

The big four processors in the U.S. beef sector are: Cargill, a global commodity trader based in Minnesota; Tyson Foods Inc, the chicken producer that is the biggest U.S. meat company by sales; Brazil-based JBS SA, the world’s biggest meatpacker; and National Beef Packing Co, which is controlled by Brazilian beef producer Marfrig Global Foods SA.

The companies did not immediately respond to a request for comment. Shares of Tyson briefly dipped in higher-volume trade after the Reuters report.

Price increases in beef, pork and poultry have driven half of the increased prices Americans have paid for food they eat at home since December, the White House said. And the administration sees those companies collecting too much profit after the stimulus helped prop up demand for their products.

“We’ve helped sustain this market, and it’s frustrating to see these companies turn around and raise prices,” Bharat Ramamurti, the deputy director of the White House’s National Economic Council, said in an interview. “What we see here smacks of pandemic profiteering and that is the behavior the administration finds concerning.”

Rising inflation has posed a serious threat to Biden’s efforts to get a grip on the COVID-19 pandemic – his top priority as president – and engineer an economic recovery from the recession it caused.

The Biden administration has responded to these issues partly by ramping up efforts to crack down on what it sees as anticompetitive and monopolistic behavior that could be increasing prices. A meeting of a new White House Competition Council created by Biden is set for Friday.

USDA and the Department of Justice have already been conducting an investigation into price-fixing in the chicken-processing industry.

“The goal of that over time is to bring these prices down,” said Ramamurti.

U.S. lawmakers are seeking increased oversight of the beef sector as concerns about anticompetitive behavior increase after the pandemic and a cyberattack on JBS USA.

The administration is “encouraged” by bipartisan legislation that could aid more price negotiation in the meat market, it said in the blog.

(Reporting by Trevor Hunnicutt in Washington, Additional reporting by Tom Polansek in Chicago and Chuck Mikolajczak in New York; Editing by Matthew Lewis)

U.S. job openings vault to record high as employers scramble for workers

By Lucia Mutikani

WASHINGTON (Reuters) -U.S. job openings raced to a new record high in July while layoffs rose moderately, suggesting last month’s sharp slowdown in hiring was due to employers being unable to find workers rather than weak demand for labor.

The Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Wednesday also showed a steady increase in the number of workers voluntarily quitting their jobs, a sign of confidence in the labor market.

“This is a super tight job market,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “The ongoing struggle to find the right worker for the right role continues.”

Job openings, a measure of labor demand, jumped 749,000 to 10.9 million on the last day of July, the highest level since the series began in December 2000. The broad increase in vacancies was led by the health care and social assistance, finance and insurance, and accommodation and food services industries.

Job openings rose in the Northeast, South, Midwest and West regions. The job openings rate surged to a record 6.9% from 6.5% in June, driven by medium-sized businesses with 50-249 employees. The rate for large firms with 5,000 or more employees fell.

Hiring slipped 160,000 to 6.7 million, pulled down by decreases in retail trade, durable goods manufacturing and educational services. State and local government education hiring increased, as did federal government employment. The hiring rate fell to 4.5% from 4.7% in June. The hires rate dropped for large businesses with 5,000 or more employees.

LABOR CRUNCH

The JOLTS report followed in the wake of a government report last Friday that showed nonfarm payrolls increased by only 235,000 jobs in August, the smallest gain since January, after surging by 1.053 million in July.

The COVID-19 pandemic has upended labor market dynamics, creating worker shortages even as 8.4 million people are officially unemployed.

Lack of affordable childcare, fears of contracting the coronavirus, generous unemployment benefits funded by the federal government as well as pandemic-related retirements and career changes have been blamed for the disconnect.

The labor crunch is expected to ease starting in September, with the government-funded unemployment benefits having expired on Monday. The new school year is underway and most school districts are offering in-person learning.

But soaring COVID-19 cases, driven by the Delta variant of the coronavirus, could cause reluctance among some people to return to the labor force. Employment is 5.3 million jobs below its peak in February 2020.

The JOLTS report also showed 107,000 people voluntarily quit their jobs in July, lifting the total to 4.0 million. That reflected increases in the wholesale trade as well as state and local government education areas.

There were decreases in the number of people quitting in the transportation, warehousing, utilities and federal government categories.

The quits rate was unchanged at 2.7%. It is normally viewed by policymakers and economists as a measure of job market confidence. Some economists said the JOLTS report could put pressure on the Federal Reserve to announce when it would start scaling back its massive monthly bond-buying program.

Fed Chair Jerome Powell last month affirmed the ongoing economic recovery, but offered no signal on when the U.S. central bank plans to cut its asset purchases beyond saying it could be “this year.”

“It takes two to tango and the problem with job creation would appear to be a reluctance to supply labor, not a diminishment of demand, and we would love to hear the economic theory that explains how continued Fed bond purchases encourage workers to return to work,” said Conrad DeQuadros, a senior economic advisor at Brean Capital in New York.

Layoffs and discharges rose a modest 105,000 to 1.5 million. That lifted the layoffs rate to 1.0% from 0.9% in June. There were 83 unemployed workers for every 100 job openings in July.

“Even if demand slows down or even falters, job seekers remain in a relatively favorable bargaining position,” said Nick Bunker, director of research at Indeed Hiring Lab.

(Reporting by Lucia MutikaniEditing by Paul Simao)

Oil slides 2% on worries about weak demand

By Nia Williams

CALGARY, Alberta (Reuters) – Oil prices fell on Tuesday on concerns about weak demand in the United States and Asia, although ongoing production outages on the U.S. Gulf Coast helped to limit losses.

Industry analysts said a strengthening U.S. dollar also weighed on crude prices. A strong dollar makes oil more expensive for holders of other currencies.

U.S. West Texas Intermediate crude was down $1.45 or 2.1% from Friday’s close at $67.84 a barrel at 1648 GMT. There was no settlement price for Monday due to the Labor Day holiday in the United States.

Brent crude futures fell 93 cents, or 1.3%, to $71.30 a barrel by, after falling 39 cents on Monday.

The U.S. economy created the fewest jobs in seven months in August as hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections.

Analysts said the oil market was still assessing the data from Friday as well as Saudi Aramco’s move on Sunday to cut October official selling prices (OSPs) for all its crude grades sold to Asia by at least $1 a barrel.

The deep price cuts, a sign that consumption in the world’s top-importing region remains tepid, come as lockdowns across Asia to combat the Delta variant of the coronavirus have clouded the economic outlook.

“There’s some concern about demand going forward because of a weak jobs report in the U.S. and COVID fears. The market is catching a bad mood,” said Phil Flynn, analyst at Price Futures Group in Chicago.

Oil prices found some support from strong Chinese economic indicators and continued outages of U.S. supply from Hurricane Ida.

China’s crude oil imports rose 8% in August from a month earlier, customs data showed, while China’s economy got a boost as exports unexpectedly grew at a faster pace in August.

More than 80% of oil production in the Gulf of Mexico remained shut after Ida, a U.S. regulator said on Monday, more than a week after the storm made landfall and hit critical infrastructure in the region.

(Additional reporting by Ahmad Ghaddar in London and Yuka Obayashi in Tokyo; Editing by Jane Merriman and Edmund Blair)

Mexico adopts firm stance on auto dispute ahead of U.S. talks

By Sharay Angulo

MEXICO CITY (Reuters) -Mexico expects the United States to comply with automotive rules in the new North American trade pact, a senior official said, taking a firm line ahead of high-level talks next week clouded by a dispute over the future of the car industry in the region.

Mexico and Canada have been at odds for months with the United States over the application of regional content requirements for the auto industry, one of the cornerstones of last year’s United States-Mexico-Canada Agreement (USMCA) trade pact.

The two countries favor a more flexible interpretation of the rules than the one taken by U.S. officials.

When asked late on Thursday whether a new methodology could be used to avoid taking the row to an international tribunal, Deputy Economy Minister Luz Maria de la Mora told Reuters: “No, because we’re not renegotiating (USMCA). It’s about honoring what was agreed in the treaty.”

“The text of the agreement made very clear what scope for flexibility there was in the deal,” she added, noting that differences between the United States and Mexico on the issue had begun while the Trump administration was still in office.

Under USMCA, which replaced the 1994 North American Free Trade Agreement (NAFTA), carmakers must meet a 75% threshold for North American content for vehicles in order to qualify for tariff-free trade within the region.

With NAFTA, which former U.S. President Donald Trump had decried as a “disaster” for U.S. industry, the content threshold stood at 62.5%.

Top U.S. and Mexican officials are due to restart the so-called high level economic dialogue on Sept. 9 in Washington, talks that were suspended during Trump’s time in office.

Mexican Economy Minister Tatiana Clouthier will be among the participants at the dialogue, which Mexico’s government said is in part aimed at deepening economic integration.

On Aug. 20, Mexico requested formal consultations over the interpretation and application of the stricter automotive content rules, but de la Mora said these had not yet begun.

Making the rules tougher than what was agreed under USMCA risked backfiring on the industry, reducing competitiveness, raising costs and making the region “less attractive for investment and production,” de la Mora said.

She added that disputes over content requirements only fanned uncertainty and could even end up benefiting suppliers from other parts of the world with laxer rules like South Korea.

Nevertheless, earlier this week, President Andres Manuel Lopez Obrador said he did not expect the dispute to end up before an international tribunal, and expressed optimism that agreement could be reached before long.

(Reporting by Sharay AnguloEditing by Chizu Nomiyama and Frances Kerry)

U.S. job growth takes giant step back as Delta variant hits restaurants

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. economy created the fewest jobs in seven months in August as hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections, which weighed on demand at restaurants and hotels.

But other details of the Labor Department’s closely watched employment report on Friday were fairly strong, with the unemployment rate falling to a 17-month low of 5.2% and July job growth revised sharply higher. Wages increased a solid 0.6% and fewer people were experiencing long spells of unemployment.

This points to underlying strength in the economy even as growth appears to be slowing significantly in the third quarter because of the soaring infections, driven by the Delta variant of the coronavirus, and relentless shortages of raw materials, which are depressing automobile sales and restocking.

“It is important to keep the right perspective,” said Brian Bethune, professor of practice at Boston College. “Given the supply chain constraints and the ongoing battle to lasso COVID-19 to the ground, the economy is performing exceptionally well.”

The survey of establishments showed nonfarm payrolls increased by 235,000 jobs last month, the smallest gain since January. Data for July was revised up to show a whopping 1.053 million jobs created instead of the previously reported 943,000.

Hiring in June was also stronger than initially estimated, leaving average monthly job growth over the past three months at a strong 750,000. Employment is 5.3 million jobs below its peak in February 2020. Economists polled by Reuters had forecast nonfarm payrolls increasing by 728,000 jobs in August.

Though the Delta variant was the biggest drag, fading fiscal stimulus was probably another factor. The response rate to the survey is lower in August and the pandemic has made it harder to adjust education employment for seasonal fluctuations.

The initial August payrolls print has undershot expectations over the last several years, including in 2020. Payrolls have been subsequently revised higher in 11 of the last 12 years.

“The August payroll figures have historically been revised higher in the years since the Great Recession, sometimes significantly, and there’s a good chance this effect will occur again this time,” said David Berson, chief economist at Nationwide in Ohio.

Employment in the leisure and hospitality sector was unchanged after gains averaging 377,000 per month over the prior three months. Restaurants and bars payrolls fell 42,000 and hiring at hotels and motels decreased 34,600, offsetting a 36,000 gain in arts, entertainment and recreation jobs. Retailers shed 29,000 jobs.

Construction lost 3,000 jobs. There were gains in mining, financial services, information and professional and business services as well as transportation and warehousing.

Manufacturing added 37,000 jobs, led by a 24,100 increase in the automobile industry. Factory hiring remains constrained by input shortages, especially semiconductors, which have depressed motor vehicle production and sales.

General Motors and Ford Motor Co announced production cuts this week.

Motor vehicle sales tumbled 10.7% in August.

That, together with raw materials shortages, which are making it harder for businesses to replenish inventories, prompted economists at Goldman Sachs and JPMorgan to slash third-quarter GDP growth estimates to as low as a 3.5% annualized rate from as high as a 8.25% pace. The economy grew at a 6.6% pace in the second quarter.

Government payrolls fell by 8,000 in August as state government education lost 21,000 jobs. August is the start of the back-to-school season, but the Bureau of Labor Statistics, which compiles the employment report cautioned that “pandemic-related staffing fluctuations in public and private education have distorted the normal seasonal hiring and layoff patterns.”

Stocks on Wall Street were mixed. The dollar slipped against a basket of currencies. U.S. Treasury prices fell.

SILVER LININGS

Details of the smaller household survey from which the unemployment rate is derived were fairly upbeat.

Household employment increased by 509,000 jobs, enough to push the unemployment rate to 5.2%, the lowest since March 2020 from 5.4% in July. The jobless rates, however, continued to be understated by people misclassifying themselves as being “employed but absent from work.” Without this problem, the jobless rate would have been 5.5%.

Even so, a broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to a 17-month low of 8.8% from 9.2% in July.

Though the participation rate was steady at 61.7%, about 190,000 people entered the labor force last month. Even more encouraging, the number of permanent job losers declined 443,000 to 2.5 million. The number of long-term unemployed dropped to 3.2 million from 3.4 million in the prior month.

They accounted for 37.4% of the 8.4 million officially unemployed people, down from 39.3% in July. The duration of unemployment fell to 14.7 weeks from 15.2 weeks in July.

Economists did not believe the pullback in hiring was enough for the Federal Reserve to back away from its “this year” signal for the announcement of the scaling back of its massive monthly bond buying program, given strong wage growth.

“For the Fed a taper announcement is still likely coming in either November or December,” said Michael Feroli, chief U.S. economist at JPMorgan in New York.

The 0.6% jump in average hourly earnings after a 0.4% rise in July boosted annual wage growth to 4.3% in August from 4.0% in the prior month. The increase, led by lower-paying industries, is the result of worker shortages caused by the pandemic. There were a record 10.1 million job openings at the end of June.

There is cautious optimism that the labor pool will increase because of schools reopening and government-funded benefits expiring on Monday. But the Delta variant could delay the return to the labor force by some of the unemployed in the near term.

About 41,000 women, 20 years and older, dropped out the labor force. The number of number of people saying they were unable to work because of the pandemic increased 497,000 in August, the first rise since December. There was also a slight rise in the number of people working from home.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

Analysis: U.S. Supreme Court’s rightward lurch put Roe v. Wade on the brink

By Lawrence Hurley

WASHINGTON (Reuters) – During a 2016 presidential debate, then-candidate Donald Trump made a statement that seemed brash at the time: If he were elected and got the chance to nominate justices to the U.S. Supreme Court, the Roe v. Wade ruling that legalized abortion would be overturned.

By this time next year, with the court having tilted further to the right thanks to Trump’s three appointments to the nation’s highest court, his prediction could come true.

The court’s decision on Wednesday night to allow Texas’ six-week abortion ban to go into effect in apparent contravention of the 1973 Roe decision suggests the court is closer than ever to overturning a ruling U.S. conservatives have long reviled.

“We don’t know how quickly or openly the court will reverse Roe, but this decision suggests that it’s only a matter of time,” said Mary Ziegler, an expert on abortion history at Florida State University College of Law.

Two generations of American women have grown up with access to abortion, although its use has declined over the past decade.

But while Roe handed liberals a victory on a crucial issue of the times, it also helped to power the religious right into a galvanizing force as it worked to get the decision overturned.

Since Congress never acted to formalize abortion rights – which shows what a hot button issue it is politically – the same court that once legalized abortion has the power to allow states to ban it.

In the coming months, the court will weigh whether to throw Roe out altogether as the justices consider whether to uphold a 15-week abortion ban in the state of Mississippi.

Unlike the Texas dispute, in which the justices did not directly address whether Roe should be reversed, they will in the Mississippi case.

A ruling is due by the end of June 2022, just months before an election that will determine whether the Democrats retain their narrow majority in both houses of Congress.

The last time the Supreme Court was this close to overturning Roe, in 1992, opponents were bitterly disappointed when the court’s moderates banded together and upheld abortion rights. Although the Supreme Court had a conservative majority, it was not deemed conservative enough.

MCCONNELL’S ROLE

The reason why the outcome could be different now is in part thanks to the decades-long efforts of conservative legal activists to re-shape the court, which bore fruit during Trump’s presidency. Trump was aided by then-Senate Majority Leader Mitch McConnell as well as the death of liberal icon Justice Ruth Bader Ginsburg, which gave him a third vacancy to fill just before he lost the November 2020 election.

All three Trump nominees were pre-vetted by conservative lawyers associated with the Federalist Society legal group. All three — Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett — were in the majority as the court allowed the Texas abortion law to go into effect.

The court now has a rock-solid 6-3 conservative majority, which means that even if one peels away – as Chief Justice John Roberts did on Wednesday and in another abortion case in 2020 – the conservative bloc still retains the upper hand.

Conservative Republican McConnell played a key role in the Senate, which has the job of confirming nominees to the bench.

Democrats’ hopes were raised early in 2016, when conservative Justice Antonin Scalia died, that what had been a 5-4 conservative majority on the high court could switch to a 5-4 liberal majority for the first time in decades. McConnell crushed those dreams, refusing to move forward with then-Democratic President Barack Obama’s nominee, Merrick Garland.

As a result, when Trump came into office in early 2017 he was able to immediately nominate Gorsuch, who was duly confirmed by McConnell’s Republican-led Senate.

Trump and McConnell then pushed through the nomination of Kavanaugh to replace the retiring Justice Anthony Kennedy in 2018 despite allegations of sexual misconduct against the nominee, which he denied. Kennedy was a conservative but had voted to uphold abortion rights in key cases, including in 1992.

Finally, in September 2020, Ginsburg died. In an unprecedented move, Trump and McConnell installed Barrett just days before Election Day on Nov. 7, leading to widespread accusations of hypocrisy but cementing the conservative majority.

Despite the favorable winds, some anti-abortion advocates are playing down the importance of the Supreme Court’s Texas ruling, and say the fate of Roe v Wade is still up in the air.

“I’ve long thought the court should overturn Roe because it is not based on what the Constitution actually says,” said John Bursch, a lawyer at conservative Christian legal group Alliance Defending Freedom, before adding: “This order doesn’t give a signal either way about what the majority will do in the Mississippi case.”

(Reporting by Lawrence Hurley; Editing by Scott Malone and Sonya Hepinstall)

U.S. to invest $3 billion in COVID-19 vaccine supply chain – White House official

By Carl O’Donnell and Lisa Lambert

(Reuters) -The U.S. plans to invest $3 billion in the vaccine supply chain as it continues to work to position itself as a leading supplier of vaccines for the world, a top U.S. health official said on Thursday.

The funding, which will begin to be distributed in the coming weeks, will focus on manufacturers of the inputs used in COVID-19 vaccine production as well as facilities that fill and package vaccine vials, White House COVID adviser Jeffrey Zients said during a news conference.

“The investments we are making, the $3 billion, are in U.S. companies that will expand their capacity for critical supplies,” Zients said.

He added that areas of focus will include lipids, bioreactor bags, tubing, needles, syringes, and personal protective equipment. The White House has not yet selected specific companies to receive the funds.

U.S. demand for COVID-19 vaccines remains high as the White House prepares to begin offering a third booster shot to Americans later this month, pending a regulator greenlight. The United States also plans to give hundreds of millions of shots to other countries during the remainder of the year.

Top U.S. infectious disease expert Anthony Fauci added that he would not be surprised if a third dose became standard for COVID-19 vaccines that originally were expected to require two shots.

U.S. cases of COVID-19 have surged to a seven-day average of more than 150,000 per day, up from less than 10,000 in June, according to federal data, as the contagious new Delta variant continues to circulate.

The daily average of COVID-19 deaths has risen this week to more than 950 from around 900 last week, U.S. Centers for Disease Control and Prevention Director Rochelle Walensky said.

Fauci downplayed concerns about a new COVID-19 variant known as Mu, or B.1.621, that some scientists are concerned could be resistant to vaccines.

“Even when you have variants that do diminish somewhat the efficacy of vaccines, the vaccines still are quite effective against variants of that type,” Fauci said.

(Reporting by Carl O’Donnell in New York and Ahmed Aboulenein and Lisa Lambert in Washington, D.C.; Editing by Leslie Adler and Mark Porter)

Israel opposes Biden plan to reopen U.S. Palestinian mission in Jerusalem

By Dan Williams

JERUSALEM (Reuters) -Israel said on Wednesday that a U.S. plan to reopen its consulate in Jerusalem that has traditionally been a base for diplomatic outreach to Palestinians is a “bad idea” and could destabilize Prime Minister Naftali Bennett’s new government.

The prior administration of President Donald Trump signaled support for Israel’s claim on Jerusalem as its capital by moving the U.S. embassy there from Tel Aviv. It later subsumed the consulate, in west Jerusalem, in that mission.

It was among several moves that incensed the Palestinians, who want East Jerusalem as capital of a hoped-for, future state.

President Joe Biden has pledged to restore ties with the Palestinians, back a two-state solution and move forward with reopening the consulate. It has been closed since 2019, with Palestinian affairs handled by the embassy.

“We think it’s a bad idea,” Foreign Minister Yair Lapid told a news conference when asked about the reopening. “Jerusalem is the sovereign capital of Israel and Israel alone, and therefore we don’t think it’s a good idea.

“We know that the (Biden) administration has a different way of looking at this, but since it is happening in Israel, we are sure they are listening to us very carefully.”

Wasel Abu Youssef, a senior Palestine Liberation Organization official, told Reuters that the Israeli rejection of the consulate’s opening was expected, adding: “They are trying to maintain the status quo and block any political solution”.

Asked about Lapid’s remarks, a U.S. Embassy spokesperson said: “As Secretary Blinken announced in May, the United States will be moving forward with the process to reopen our consulate in Jerusalem. We do not have additional information to share at this time.”

The spokesperson said the United States was not reversing its decision to move the U.S. Embassy to Jerusalem nor its recognition of the city as Israel’s capital.

Israel captured the city’s east, along with the occupied West Bank and Gaza, in the 1967 Middle East war.

It deems all of Jerusalem as its undivided capital – a status not recognized internationally. In recognizing Jerusalem as Israel’s capital in 2017, Trump said he was not taking a position on “any final-status issues, including the specific boundaries of the Israeli sovereignty in Jerusalem”.

Bennett, a nationalist atop a cross-partisan coalition, opposes Palestinian statehood. Reopening the consulate could unsettle Bennett’s government, which ended long-term premier Benjamin Netanyahu’s tenure in June, Lapid said.

“We have an interesting and yet delicate structure of our government and we think this might destabilize this government and I don’t think the American administration wants this to happen,” he said.

Divisions among Palestinians also cast doubt about the prospects for diplomacy, Lapid said. “I am a devoted believer in the two-state solution … but we’ll have to admit the fact this is not feasible in the current situation.”

(Writing by Rami Ayyub;Editing by Andrew Cawthorne and Jonathan Oatis)

Majority of Afghan allies may have missed out on airlift – U.S. official

WASHINGTON (Reuters) – The United States may have left behind the majority of Afghans who helped in the 20-year war effort along with their families as U.S. citizens were prioritized in the airlift that came to an end this week, a senior State Department official said on Wednesday.

The departure of the last U.S. military flights out of Kabul on Monday marked the end of an operation that saw more than 123,000 people brought out of Afghanistan in less than two weeks.

President Joe Biden has pledged to keep helping 100 to 200 U.S. citizens left in the country who wanted to leave and a much larger group of at-risk Afghans, including former interpreters for the U.S. military.

Asked how many potential applicants to the Special Immigrant Visa (SIV) program for Afghan allies and their families remained in Kabul, a senior State Department official said they could not provide an estimate.

“But I would say it’s the majority of them just based on anecdotal information about the populations we were able to support,” the official said. About 2,000 SIV applicants were brought to the United States before the broader airlift began in mid-August.

Initial efforts to prioritize those Afghans for evacuation were marred by security concerns at the airport gates and difficulties in giving them credentials that could not be replicated, the official said.

U.S. officials had a legal obligation to help American citizens who were stuck in Kabul and prioritized their departure, the official said. About 5,500 U.S. citizens were on evacuation flights from Kabul after Aug. 14, according to the State Department.

“Everybody who lived it is haunted by the choices we had to make and by the people we were not able to help depart in this first phase of the operation,” the official said.

(Reporting by Simon Lewis, Arshad Mohammed and Humeyra Pamuk; Editing by Cynthia Osterman)