A peace agreement has been reached between Israel and Hamas that — in its first phase — includes the partial withdrawal of Israeli troops from Gaza and the release of the remaining hostages held by Hamas, Axios' Barak Ravid and Dave Lawler write.

• The breakthrough, announced by President Trump last night, comes two years after Hamas' Oct. 7 attack, with Gaza almost entirely destroyed and more than 67,000 Palestinians killed, according to the Gaza health ministry.
• A U.S. official told Axios: "The war in Gaza is over. The hostages will be released 72 hours after the Israeli Cabinet approves the deal. The release is expected to happen by Monday."

📱 Trump told Barak in a brief phone call last night that he is "likely going to Israel in the coming days" to address the country's parliament, the Knesset.

• The president said he'd just had a "great" call with Israeli Prime Minister Benjamin Netanyahu: "He is so happy. He should be. It is a great achievement. The whole world has come together to reach this deal, including countries that were enemies."

🔎 Zoom in: Negotiations to finalize the deal took place in Egypt, with Steve Witkoff and Jared Kushner arriving yesterday morning to represent the U.S.

• Negotiators from Israel and Hamas and mediators from Qatar, Egypt and Turkey also participated.
• The deal is based on the 20-point plan Trump announced last week.
• Thorny issues such as the process for disarming Hamas and the future governing structure of Gaza still need to be negotiated.

Status report: 20 of the remaining 48 Israeli hostages kidnapped by Hamas are believed to be alive.

• Israel has also agreed to release 250 Palestinians serving life sentences in Israeli prisons and 1,700 Palestinians detained by the IDF in Gaza since Oct. 7.

🔮 What's next: Trump's statement was somewhat cautious, only referring to this as an agreement on the "first phase."

• The next phases could be just as difficult, given the complex issues involved in removing both Israeli forces and Hamas leadership from Gaza and creating a new political and security architecture.

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Chicago has become the ultimate proving ground for President Trump's domestic military experiment, pitting armed federal forces against a Democratic-led city determined to resist them, Axios' Zachary Basu writes.

• Why it matters: The arrival of the National Guard — coupled with Trump's calls to arrest Chicago Mayor Brandon Johnson and Illinois Gov. JB Pritzker — could open a volatile new chapter in American history.

Trump officials say the deployment, which relies on 200 National Guard troops from Texas, is meant to protect federal agents conducting immigration operations. Illinois has sued, calling it an illegal occupation.

🔭 Zoom in: Weeks of raids, protests and violent clashes tied to ICE's "Operation Midway Blitz" have already put the city on edge.

• Homeland Security officials say they're targeting criminal unauthorized migrants, and that incendiary rhetoric by Democratic leaders has led to a surge in violence against ICE officers.
• Local leaders say federal agents are exacerbating the situation with their increasingly aggressive tactics, including the use of a Black Hawk helicopter to surround an apartment building.

🖼️ The big picture: Chicago's blend of politics, demographics and history has set the stage for an explosive showdown.

• A liberal power center: Johnson, the city's Black progressive mayor, has vowed to resist Trump's "authoritarianism" and signed an executive order establishing "ICE-free zones" barring immigration agents from using city property. Pritzker, a potential 2028 presidential candidate, has made opposing Trump and funding liberal causes central to his political brand. Chicago is also the hometown of former President Obama, Trump's first major political foil.
• A conservative fixation: For years, Republicans and right-wing media have sought to use Chicago as a poster child for urban violence and Democratic chaos. FBI Director Kash Patel alleged that Chicago has 110,000 gang members, which would amount to nearly 5% of the city's population.
• A constitutional stress test: The decision to send Texas National Guard troops into Illinois without the governor's approval sits in a legal gray zone — one that could determine how far presidents can go in deploying force at home.

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The White House isn't just standing by its view that federal law doesn't guarantee back pay for furloughed workers. It has emails showing this belief dates back to the 2019 shutdown, according to correspondence reviewed by Axios' Marc Caputo.

• Why it matters: This interpretation from the Trump White House's current Office of Management and Budget has roiled Congress, outraged labor unions and added a layer of tension to the federal shutdown that began Oct. 1.

Amid the outcry over the possibility of up to 750,000 furloughed workers being denied back pay, OMB general counsel Mark Paoletta briefed Republican congressional staffers Tuesday about a draft OMB memo, first reported by Axios, concerning the furlough law.

• Paoletta discussed the emails between the office and congressional budget staff in 2019 that raised the same points, administration and congressional sources tell Axios.

📝 Zoom in: The law in question, the ''Government Employee Fair Treatment Act," or GEFTA, was signed by Trump during the 2019 shutdown, which lasted a record 35 days.

• At the time, the White House announced GEFTA "requires the compensation of government employees for wages lost, work performed, or leave used during" a shutdown.

That was the prevailing view until this shutdown began — and OMB began to publicly interpret the law differently than everyone else.

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Americans' approval ratings for six major federal agencies — FEMA, CIA, CDC, FDA, EPA and the IRS — have dropped sharply since 2024, Axios' Julianna Bragg writes from a new Gallup poll.

• Why it matters: Many of these agencies sit at or near their lowest approval levels in Gallup's records, which date back to 2003.

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New York City Council member Chi Ossé, a close ally of Zohran Mamdani, is privately discussing a run against House Minority Leader Hakeem Jeffries (D-N.Y.), Axios' Holly Otterbein and Alex Thompson report.

• Why it matters: Just talking about a potential campaign could drive a further wedge between Mamdani — the democratic socialist in line to be New York's next mayor — and Jeffries, who so far has declined to endorse Mamdani.

Ossé, 27, has a ubiquitous social media presence that Mamdani has cited as a major influence.

• Any effort by Ossé to unseat Jeffries — one of the most powerful Democrats in the nation — likely would deepen the divide within the Democratic Party over age and ideology.

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The road to futuristic nuclear power is long and paved with ... cancer drugs, Axios Future of Energy co-author Amy Harder writes.

• Several nuclear startups are pursuing profits on offshoot products stemming from scientific innovations — such as ingredients in cancer-treating drugs — to fund long journeys toward profiting on their primary business.

Why it matters: Building hundreds of nuclear power plants offers one of the most tantalizing ways to satisfy rapid power demand and combat climate change.

• But finding a way to fund their expensive and complicated roads to scaling is essential. Capitalism demands profits far sooner.

🧪 Zoom in: TerraPower, an advanced nuclear energy company founded nearly 20 years ago, is scaling up production of a key cancer drug ingredient — a medical isotope, or radioactive atoms used for medical diagnoses and treatment.

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Above: A note from Secretary of State Marco Rubio to President Trump— captured by AP photographer Evan Vucci — during a meeting in the State Dining Room yesterday on the Gaza negotiations ...

• "Very close. We need you to approve a Truth Social post soon so you can announce deal first."

Retailers and drone delivery companies say the federal government is overreaching with a proposed law on drone operations that would require TSA-like security screening for their stores, employees and potentially even their customers, Axios' Joann Muller writes.

• Why it matters: If a nefarious character wants to drop a burrito on your house, it's not likely to cause a national security threat.

The proposed rule, which assigns 55-pound delivery drones the same risk profile as huge cargo planes, would cripple the drone delivery business just as it's about to take off, industry leaders say.

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