Trump signs executive order lifting most sanctions on Syria

• Trump's executive order comes six weeks after his historic meeting with al-Sharaa in Saudi Arabia, where Trump first announced the U.S. would lift sanctions on Syria to give the country a fresh start.
• "Now it is their time to shine. We are taking them all off. Good luck Syria. Show us something very special," Trump said in a speech at the time.

Zoom in: Trump's executive order outlines a sweeping reversal of U.S. policy toward Syria dating back to 1979. It includes:

• A review of Syria's designation as a state sponsor of terrorism.
• A potential suspension of the Caesar Act, which sanctioned the Assad regime for war crimes against civilians.
• Steps to remove Hayat Tahrir al-Sham (HTS) — the Islamist group formerly led by al-Sharaa — from the U.S. foreign terrorist organization list.

U.S. officials say sanctions against former Syrian President Bashar al-Assad, who is believed to be living in Moscow, and members of his former regime will not be lifted.

Driving the news: The Trump administration is holding "preliminary discussions" with Israel and Syria on a potential security agreement between the longtime enemy states, U.S. and Israeli officials tell Axios.

• While normalization isn't on the table yet, the talks could lay the groundwork for future diplomacy — starting with efforts to reduce tensions and update security arrangements along the volatile Israel-Syria border.
• Any breakthrough would represent a major diplomatic achievement for the Trump administration, given the decades of hostilities between Israel and Syria under the rule of the Assad family.

Between the lines: The U.S. favors a gradual process that would slowly build trust and improve relations between Israel and Syria.

• But Israel is pushing for assurances that any talks will ultimately lead to a full peace agreement and normalization, a senior Israeli official told Axios.
• Another Israeli official cautioned that a deal is "not around the corner" and said it will take time to achieve meaningful progress.

The intrigue: Israeli officials had hoped the U.S. would retain some sanctions as leverage to push Syria toward full normalization with Israel.

• But a U.S. official told reporters Monday that the administration didn't see value in that approach.
• "It's a benefit for Syria to lean toward Israel. President al-Sharaa said he wants to start talks with Israel. The way to entice the Syrians is to make a deal with Israel fruitful for them," the official said.

State of play: In early June, Israeli Prime Minister Benjamin Netanyahu told Trump's Syria envoy Tom Barrack that he was interested in negotiating a new security agreement with Syria's post-Assad government, brokered by the U.S.

• A senior Israeli official said Netanyahu's goal is a phased set of agreements with Syria — starting with a modernized version of the 1974 disengagement of forces accord, and ultimately culminating in a full peace deal and normalization.

When Islamist militants toppled the Assad regime in a stunning rebel offensive last December, Israel responded with waves of airstrikes that systematically destroyed what remained of Syria's air force, navy, air defense, and missile systems.

• Israel also took control of the buffer zone between the two countries and occupied territory inside Syria, including the Syrian side of the strategic Mount Hermon.
• Israeli officials now view these areas as their primary leverage in negotiations, and say Israel will only withdraw in exchange for full peace and normalization with Syria.

Behind the scenes: Israel is communicating with Syria through at least four different channels — including Netanyahu's national security adviser Tzachi Hanegbi, Mossad director David Barnea, Foreign Minister Gideon Saar for political and strategic dialogue, and the Israel Defense Forces for day-to-day military coordination.

• But Israeli officials say they want the U.S. to take a more active mediating role, believing it would give Syria's new government a stronger incentive to engage seriously.

• Senior Israeli and U.S. officials said Barrack has been in contact with Syrian officials since his visit to Israel in early June to explore launching formal talks.
• "We are having very soft preliminary discussions. Diplomatic breakthroughs are like unwrapping an onion — we are peeling," a senior U.S. official told Axios. "President Trump and Secretary of State Rubio have been super supportive, and our teams are working well."

The talks are currently limited to officials below the level of Syrian President Ahmed al-Sharaa, and there is no discussion yet of a leaders' summit, a U.S. official added.

• Two senior Israeli officials said a deal is possible, but emphasized that it will take time.
• "We hope to see the Trump administration pushing more assertively on this track," one Israeli official said.

Friction point: One of the biggest question marks hanging over any future Israeli-Syrian peace talks is the status of the Golan Heights, which Israel captured from Syria during the 1967 war.

• In every previous round of negotiations over the past three decades, the Assad regime demanded a full — or nearly full — Israeli withdrawal from the territory in exchange for peace.
• During his first term, Trump recognized the Golan Heights as part of Israel — a move that the Biden administration did not reverse.
• Israeli Foreign Minister Gideon Saar said Monday that Israel is open to an agreement with Syria, but insisted that the Golan Heights will remain part of Israel under any future deal.

A U.S. official told reporters that the Trump administration is ready to assist in brokering an Israel-Syria deal, but that the details — including border delineation and the future of the Golan Heights — will be left to the two countries.

• "It is up to them, not up to us," the official said.
• The official added that the goal is to build trust gradually, starting with a limited security agreement that could lay the foundation for a broader peace.

What to watch: Ron Dermer, Netanyahu's close confidant and minister for strategic affairs, is visiting Washington this week for meetings with White House officials.

• The potential deal with Syria will be one of the issues discussed, Israeli officials say.
• Netanyahu will also visit the White House on July 7 and discuss Syria with Trump, in addition to other regional issues, an Israeli official told Axios.