Axios from Tel Aviv

The Biden administration urged the Israeli government to take urgent steps to stabilize the Palestinian Authority, which officials say is increasingly weakening and losing its control in the occupied West Bank, two Israeli officials told me.

Why it matters: U.S. officials are deeply concerned that the deteriorating situation in the West Bank and an increase in violence could lead to a major crisis.

• At the same time, an economic crisis has made it hard for the PA to pay salaries, further eroding its legitimacy and control in major cities like Hebron, Jenin and Nablus.

Driving the news: Barbara Leaf, the State Department’s most senior diplomat for the Middle East, visited Israel and the Palestinian Authority late last week and met with senior Israeli and Palestinian officials.

• Shin Bet director Ronen Bar, who leads the Israeli domestic security service in charge of gathering intelligence in the West Bank and Gaza, told Leaf he is highly concerned about the PA's situation and the ability of the Palestinian security forces to function, Israeli sources briefed on the meeting said. Palestinian leadership blames Israel for the weakened security forces. (See item 2.)
• “The situation on the ground is worse than it seems," Bar told Leaf, according to the Israeli sources. He claimed that Israel doesn't want to send the military for incursions into Palestinian cities, but has no choice due to increased violence.
• The Israeli sources added that Bar told Leaf the Shin Bet supports strengthening the PA, but it's harder to make decisions at this time because of November's election in Israel.

Leaf also met with Maj. Gen. Ghassan Alian, the head of COGAT, the Israeli Ministry of Defense agency in charge of civilian affairs in the West Bank, who also painted a dark picture of the situation.

• Israeli sources said Alian told the U.S. senior diplomat that he is doing everything in his power to stabilize the situation but thinks it might not be enough “to stop the snowball." He added that more significant steps require political decisions.
• Leaf then met with Israeli national security adviser Eyal Hulata for what Israeli sources briefed on the matter said was a tough meeting.
• Leaf stressed that the PA could collapse and “the ball is in Israel’s court” when it comes to strengthening and stabilizing it, the Israeli sources said.
• The State Department did not respond to Axios' request for comment on Leaf's visit.

What’s next: Israeli Prime Minister Yair Lapid is expected to hold a meeting on Thursday to assess the situation in the West Bank and discuss possible measures.

Leaf also had difficult meetings with Palestinian officials in Ramallah, Israeli and Palestinian officials say.

Why it matters: Leaf's visit took place as the Palestinian leadership's frustration grows over U.S. policy in the region. But she did not meet with Palestinian President Mahmoud Abbas, which was unusual.

• Palestinian leaders have expressed disappointment that President Biden's recent visit to the region ended with no political results for the Palestinians.

State of play: The Biden administration is trying to convince Palestinian leadership not to pursue a bid at the UN Security Council for full UN membership.

• The Biden administration also wants the PA to do more to restore control of security forces in several West Bank cities.

Behind the scenes: Leaf met with Abbas’ No. 2, Hussein al-Sheikh, and the director of the Palestinian intelligence service Majed Faraj.

• Al-Sheikh told me Leaf stressed the Biden administration’s position against a Palestinian move at the UN Security Council.
• “We told Leaf that amid the stalemate in the peace process, gaining full member status at the UN for Palestine was the best way to keep the two-state solution alive. The Biden administration doesn’t see it that way, but we continue to talk about it. There is still time," he said.

Leaf told Abbas’ aides that a move in the UN is not what’s going to help them regain control in cities like Jenin and Nablus, where armed groups have increasingly gained a foothold.

• Al-Sheikh said Palestinian officials responded by saying the U.S. needs to "press Israel to stop its unilateral steps on the ground and its incursions into Palestinian cities."

Al-Sheikh confirmed that Leaf asked for a meeting with Abbas, but claimed the meeting didn’t happen because of the Palestinian president’s busy schedule. "I apologized to Leaf and told her it wasn’t intentional and she understood," he said.

• A senior Israeli official claimed Abbas didn't meet with Leaf to signal his disappointment that she came with no new U.S. policy positions.

What they're saying: Al-Sheikh rejected the Israeli claims that the weakening of the Palestinian security forces is the reason for the increased violence in the West Bank.

• He blamed nightly incursions by the Israeli military into Palestinian cities.
• “They think the IDF will operate during the night and we will operate during the day? We can’t function when the Israeli military enters our cities every day arresting people and killing people. What do they expect?" al-Sheikh said.

Al-Sheikh added that Israel says it wants to strengthen the Palestinian Authority but does the opposite. He said the PA proposed that Israel mutually halt all unilateral steps like incursions in order to improve the atmosphere but the Israelis refused.

• "Israel is the one who weakens the Palestinian Authority by choking it economically and then it complains that our security forces are weak. We have been telling the Israelis for a year now their actions weaken the Palestinian Authority and lead to an escalation."

A senior Israeli official rejected the U.S. call for Israel to review the Israel Defense Forces' rules of engagement in the West Bank as part of accountability steps for the killing of Palestinian American journalist Shireen Abu Akleh.

Driving the news: State Department deputy spokesperson Vedant Patel said on Tuesday that the Biden administration will continue to press Israel “to closely review its policies and practices on rules of engagement” of the IDF in the occupied West Bank.

• He said this is needed in order “to mitigate the risk of civilian harm, protect journalists and prevent similar tragedies."

Between the lines: U.S. pressure for Israel to review the guidelines, which define the circumstances under which Israeli soldiers can use live fire in the West Bank, is unusual. Patel's comments were the first time the Biden administration raised this issue in public after discussing it in private in recent weeks.

• After meeting with Abu Akleh's family in late July, Secretary of State Tony Blinken called Israeli Defense Minister Benny Gantz and asked for a review of the IDF rules of engagement in the West Bank, saying it would be a step toward accountability in the Abu Akleh case.
• Blinken told Gantz he thinks that either the rules of engagement weren't followed or they need to be reviewed if an Israeli soldier shot Abu Akleh while she wore a bulletproof vest that was marked "press."

State of play: Patel's comments on Tuesday came a day after Israel published the final conclusions of its investigation into the death of Abu Akleh, who was killed while covering an Israeli military raid in the occupied West Bank city of Jenin.

• The investigation determined Abu Akleh was most likely killed by "unintentional fire" from an Israeli soldier who did not realize she was a journalist, a senior IDF official told reporters.
• The senior IDF official said that the investigation found there was no violation of the rules of engagement and no problem in the briefing the soldiers received before the Jenin raid.

What they're saying: "The rules of engagement were reviewed as part of the IDF investigation and it was found that there were no violations. Nobody is going to change the rules of engagement because of U.S. political pressure," the senior Israeli official told me.

• Israeli officials believe the U.S. call for reviewing the rules of engagement is an attempt to respond to pressure by U.S. progressives who have demanded an independent U.S. investigation — something the Biden administration can’t and doesn’t want to do, the Israeli official said.
• "The Biden administration is not really pressing us because they understand we are not going to change the rules of engagement," the official added. "We told them our position before and after their public statement on this issue."
• The State Department did not respond to a request for comment.

Israeli and Lebanese officials see the upcoming visit of U.S. envoy Amos Hochstein as crucial to the efforts to reach a deal to end the maritime border dispute between Israel and Lebanon and de-escalate the situation.

Driving the news: Hochstein is expected to arrive in the region in the coming days to try to push the parties closer to an agreement, Israeli officials said.

• The deputy speaker of the Lebanese parliament Elias Bou Saab said Hochstein will visit Israel first and then travel to Lebanon.

Why it matters: The U.S., Lebanon and Israel have expressed a sense of urgency to get a deal as soon as possible as Hezbollah intensifies its threats to go to war if Beirut's economic rights are not respected.

• The dispute is over a potential gas-rich, 330-square-mile disputed area of the Mediterranean Sea with an estimated value reaching billions of dollars.
• Hezbollah leader Hassan Nasrallah has called the beginning of production in the Karish rig, a major Israeli gas project that Israel says is located south of the disputed area, a red line.
• The rig won’t come online before the end of September, according to Israeli officials.

What they're saying: Bou Saab said on Tuesday after a meeting with President Michel Aoun that September will be decisive and stressed Lebanon has other options without elaborating. He denied reports that he asked Hezbollah for guarantees it won’t follow through on its threats to begin a war.

• A senior Israeli official involved in the talks said the upcoming round of indirect talks is “decisive and important."
• "We are ready to give the Lebanese almost everything they want, but they will have to give things too," the Israeli official said. "We want to make sure that the part of the maritime border close to the coast doesn’t change and that Israel also gets its economic rights. The question is whether the Lebanese agree," said the Israeli official.

Between the lines: President Biden last weighed in on the Israel-Lebanon negotiations, telling Israeli Prime Minister Lapid he wants a deal within weeks.

• A senior U.S. official said Biden did that because the issue has become urgent and could lead to dangerous consequences for the region.

An awkward incident took place during a meeting between a bipartisan U.S. congressional delegation and Israeli opposition leader Benjamin Netanyahu in Jerusalem on Monday, two sources with direct knowledge of the meeting told me.

Driving the news: When the congressional delegation, led by Sen. Lindsey Graham (R-S.C.), arrived for the closed-door meeting where they were set to talk about sensitive issues regarding Iran, they saw a video camera and Netanyahu wearing a neck microphone, according to the sources.

• The U.S. delegation also included Sen. Bob Menendez (D-N.J.), chair of the Senate Foreign Relations Committee, as well as Sens. Cindy Hyde-Smith (R-Miss.), Marsha Blackburn (R-Tenn.) and Cynthia Lummis (R-Wyo.) and Rep. Ronny Jackson (R-Texas). U.S. Ambassador to Israel Tom Nides was present as well.

Behind the scenes: At the beginning of the meeting, Nides asked Netanyahu why he was wearing a neck mic, according to the two sources. Netanyahu tried to brush off the question, saying it was "nothing."

• Graham then asked Netanyahu why there was a camera in the room and demanded it and any other recording equipment be removed, the two sources said.
• According to the sources, the meeting began only after the camera and Netanyahu's neck mic were taken out of the room. It created an awkward moment, the sources said.

What they're saying: A Netanyahu aide said that at almost every event Netanyahu attends there is a camera and "this meeting was no different."

• The aide added that there was "no drama" and Netanyahu's team respected the request of the U.S. delegation to remove the camera and microphone.
• Graham and Nides declined to comment.

What to watch: Campaigning is well underway ahead of November's election in Israel.

• Several polls project Netanyahu’s bloc could win a 61-seat majority in the Knesset.