Trump faces Gulf pressure for diplomacy as world leaders gather in New York

Welcome to this week’s Fortune Gulf Brief. We’ll be covering:

• Trump meets with Gulf leaders in New York as he escalates Iran threats
• Qatar’s wealth fund signs $20 billion partnership with JPMorgan and launches new domestic investment platform
• Hollywood’s new power investors: Gulf funds granted U.S. approval to back $111 billion Paramount-Warner merger
• The UAE’s growing space satellite ambitions receive $1 billion boost
• And, the three things we enjoyed reading this week

The U.S. President has certainly upped the rhetoric on the conflict in the Gulf, telling the annual UN General Assembly in New York, that Iran could face “annihilation”.

“I have a big decision to make,” Trump said. “Will a deal be made with Iran that lets them rebuild and create a far greater country than it ever was before? Or do I annihilate the Islamic Republic and do it quickly?”

The President has spoken before about the “decapitation” of Iran and that the country would be “decimated”, and this appears to be the latest attempt at threatening Iran back to the negotiating table and ending the conflict.

There is frustration in the White House that the war continues, with Iran launching attacks on its neighbors and the Strait of Hormuz still compromised.

The latest salvo will add to fears in the Gulf that the conflict, which started in February, is far from over.

Ahead of their planned meeting with Trump on the sidelines of UNGA, Bloomberg reported that the Gulf states were looking to urge the U.S. President to avoid any further escalation of hostilities.

Qatar’s Emir, Sheikh Tamim bin Hamad Al Thani, also took to the podium at this year’s UNGA to call for renewed diplomacy to resolve the conflict.

“We remain deeply convinced that the crisis in the Gulf can be resolved through diplomatic means,” he told the assembly, which is expected to feature nearly 130 heads of state. He added that the Gulf is experiencing “one of the most dangerous phases” in its history.

During his meeting with Gulf states, the U.S. President said that special envoys Steve Witkoff and Jared Kushner had held a “very productive” three-hour meeting with the Iranian delegation, which included Iran’s foreign minister Abbas Araghchi. It marks the first direct U.S.-Iran talks since June when a 60-day Memorandum of Understanding was signed.

“We’ll see what happens with that,” Trump said. “But I think there’s a lot of momentum for them to make a deal—that’s what we’re hearing from everybody.”

Al Jazeera’s English TV channel reported that the meeting had discussed possible conditions for resuming negotiations to end the conflict and to reopen the Strait of Hormuz, but said it produced no breakthroughs. Another meeting is expected in the near future.

While a diplomatic resolution remains the top priority for Gulf leaders, analysts told The New York Times that they are also likely to ask Trump for hardened security guarantees.

The Houthis’ rapid advance along Yemen’s western coast over the past fortnight has opened a second front in the Middle East conflict, enabling them to seize territory near the Bab al-Mandab Strait, which Saudi Arabia has relied on as a vital bypass route since the blockade on Hormuz.

Last week, the Trump administration said it had approved the sale of 48 F-35 fighter jets to Saudi Arabia in a dealestimated at $24.3 billion.

Saudi Arabia’s crown prince has reportedly urged Trump to take military action against the Houthis, according to CBS News, but the U.S. President has so far declined to do so.

The U.S. Congress has 30 days to scrutinize the deal. If approved, it would make the kingdom only the second country in the Middle East, alongside Israel, to operate the advanced stealth fighters.

Melissa Hancock

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melissa.hancock@fortune.com

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