The BBC, Financial Times, Independent, Guardian and the Times report that the Islamic State group has released a video of a man it says is its leader, Abu Bakr al-Baghdadi, vowing to seek revenge for its loss of territory. The BBC reports that he has not been seen since 2014, when he proclaimed from Mosul the creation of a “caliphate” across parts of Syria and Iraq. In this new footage, Baghdadi acknowledges defeat at Baghuz, the group’s last stronghold in the region. It is not clear when the video was recorded. IS says it was filmed in April. The footage was posted on the militant group’s al-Furqan media network. A US State Department spokesman said the tapes would be inspected by analysts to ascertain their authenticity, adding that the US-led coalition remains committed to ensuring any IS “leaders who remain are delivered the justice that they deserve”. The Times reports that al-Baghdadi threatened a wave of attacks worldwide in revenge for the defeat of his militant group in its Iraq and Syria heartlands. He acknowledged that its territory was lost but vowed to continue a “battle of attrition” against the West. He paid tribute to the suicide bombers who carried out the Easter attacks in Sri Lanka, calling them revenge for the loss of Baghuz. They were among a series of events that he referred to, including the recent Israeli election and the uprising in Sudan.

The Independent reports that Israel has freed two prisoners and sent them back to Syria in what is being described as a “goodwill gesture”. The move comes after Damascus returned the body of an Israeli soldier killed during a 1982 battle with Syrian forces in Lebanon. The Israeli military said that the two prisoners were transferred to the International Committee of the Red Cross at the crossing in Quneitra – the main access point to the Golan Heights. Local Israeli media meanwhile reported that both prisoners had previously requested not be returned to Syria, for fear of persecution.

The Guardian reports that public figures including Stephen Fry, Sharon Osbourne, Marina Abramović and pop mogul Scooter Braun have signed a letter speaking out against a proposed boycott of this year’s Eurovision song contest, which is to be held in Tel Aviv in May. Their letter states that Eurovision’s “spirit of togetherness” across the continent is “under attack by those calling to boycott Eurovision 2019 because it is being held in Israel, subverting the spirit of the contest and turning it from a tool of unity into a weapon of division”. It continues: “We believe the cultural boycott movement is an affront to both Palestinians and Israelis who are working to advance peace through compromise, exchange, and mutual recognition. While we all may have differing opinions on the Israeli-Palestinian conflict and the best path to peace, we all agree that a cultural boycott is not the answer.” Non-profit organisation Creative Community for Peace (CCFP) are behind the letter, which has more than 100 signatories. Also among them are Gene Simmons of the band Kiss, comedian Al Murray, Countdown co-presenter Rachel Riley and Spanish singer/songwriter Conchita, AKA Maria Concepción Mendívil.

The BBC and Independent report that according to prosecutors, one of two men detained two weeks ago by Turkey on suspicion of spying for the United Arab Emirates has killed himself in prison. The BBC reports that the suspect, identified as Zaki Hasan, was found hanged in his cell in Silivri prison, west of Istanbul, on Sunday. He allegedly confessed during interrogation that he and the other suspect had spied on Arab dissidents. Turkish officials said they were also probing possible links to the murder of Saudi journalist Jamal Khashoggi. A UN special rapporteur has said he was “the victim of a brutal and premeditated killing, planned and perpetrated by officials of the state of Saudi Arabia”, but the Saudi government has insisted it was a “rogue operation”.

The Financial Times reports that, according to the IMF, US President Donald Trump’s sanctions against Iran have triggered a collapse in economic growth, pushing the Islamic republic into a deep recession and lifting inflation towards 40 per cent. The fund on Monday linked its forecast of a 6 per cent contraction in Iran this year with Mr Trump’s efforts to tighten an economic squeeze on the country. The economic slowdown is stoking popular discontent and heightening political tensions between reformists allied to President Hassan Rouhani and hardliners, who have long been staunchly opposed to dialogue with the US. The US measures are set to cause increasing pain after the Trump administration said it would start to enforce sanctions on some of Iran’s biggest oil buyers, which had been given waivers to import its crude. Japan, South Korea, Turkey, India and China face mounting US pressure to stop importing Iranian oil.

Reuters reports that some 20 million barrels of Iranian oil sitting on China’s shores in the northeast port of Dalian for the past six months now appears stranded as the United States hardens its stance on importing crude from Tehran. Iran sent the oil to China, its biggest customer, ahead of the reintroduction of US sanctions last November, as it looked for alternative storage for a backlog of crude at home. The oil is being held in so-called bonded storage tanks at the port, which means it has yet to clear Chinese customs. Despite a six-month waiver to the start of May that allowed China to continue some Iranian imports, shipping data shows little of this oil has been moved. The future of the crude, worth well over $1 billion (£773.2 million) at current prices, has become even more unclear after Washington last week increased its pressure on Iran, saying it would end all sanction exemptions at the start of May. “No responsible Chinese company with any international exposure will have anything to do with Iran oil unless they are specifically told by the Chinese government to do so,” said Tilak Doshi of oil and gas consultancy Muse, Stancil & Co in Singapore.

In the Financial Times, Chloe Cornish writes: “Iraq’s city of black gold pays a high price for petrodollars”. Residents of Basra, a city with some of the world’s biggest oil reserves, says Cornish, suffer drought, poisoned water and pollution. She argues that the city serves as a warning for how rapidly people can pay the environmental price for petrodollars.

Haaretz reports that senior Palestinian Authority officials said yesterday that Palestinian President Mahmoud Abbas has no intention of accepting tax revenues that Israel collects on its behalf, as long as Jerusalem continues to deduct funding earmarked for Palestinian prisoners and their families, despite an imminent risk of economic collapse. A Palestinian official warned that: “As far as we’re concerned, let the people take to the streets. We have our backs to the wall. The ones who should feel pressured are all those who have gotten used to having someone handling Palestinian affairs in the West Bank and coordinating security with Israel for 25 years. In the event of a collapse there won’t be a vacuum. Israel knows exactly who will control the field. That’s why Israel should rethink this. in the White House they may find themselves without a PA when they present their so-called ‘Deal of the Century,’ and Jordan and Lebanon will have to explain what they plan to do with the Palestinians in their territories.”

Mako reports that the financial crisis facing the Palestinian Authority has grown progressively worse, prompting Israeli fears about the possible collapse of the PA. The self-imposed sanctions that PA Chairman Abu Mazen has taken upon himself have cost the Palestinian Authority hundreds of millions of shekels, putting the PA on the verge of financial collapse. In order to comprehend the severity of the crisis and the extent to which the Palestinian Authority is dependent on the tax revenues that are levied on its behalf by Israel, one need only look at the huge sums of money that are involved, and the changes that have occurred in the past several months.

In coalition news, Kan Radio reports that Kulanu Chairman Moshe Kahlon told close associates that there was no chance that Kulanu would merge with the Likud anytime soon, and said that his party would hold negotiations with the Likud about joining the coalition.

Yediot Ahronoth reports comments by Avigdor Lieberman that he would not join the new government if the ultra-orthodox parties present far-reaching demands on matters of religion and state and were to introduce unilateral initiatives that threatened to turn Israel into a state of Jewish law. “We in Yisrael Beiteinu, with our five seats as opposed to the 22 seats held by the ultra-orthodox and the Zionist Haredim, consider our role to be to block unilateral initiatives that are liable to turn the State of Israel into a state of Jewish law. We don’t want to make it harder to establish a new right wing coalition, but it’s our duty to ensure that we don’t enable radicalisation and coercion. We don’t want to drag out the coalition negotiations down to the last minute, only to announce in the end that we aren’t going to join.” Lieberman said that while he is in favour of a national right wing government, he warned that:  “Anyone who tries, either by force or unilaterally, to impose their views on the majority of the people in Israel—who are far from the Haredi worldview—will be responsible for the failure of the coalition negotiations.”

Kan Radio and Haaretz report that Attorney General Avichai Mandelblit said that his decision to indict the prime minister pending a hearing was not biased toward any side and that no one was being persecuted, and certainly no one was being framed. Commenting on the correlation between the elections and the Netanyahu’s indictment, Mandelblit said that the choice of the people could not come in place of the rule of law. Mandelblit said that no final decision had yet been made and that if the defendants wanted a hearing, he would hold one willingly with an open mind.

Kan Radio reports that after several weeks of quiet, a missile was fired last night from Gaza in the direction of the Mediterranean Sea. The missile did not fall in Israeli territory. Haaretz writes that Israel reduced the fishing zone for Gazans from 15 nautical miles down to six, after the missile was fired. The Israeli army said the missile was launched by Islamic Jihad and was aimed at Israeli communities along the border. It named Islamic Jihad officials directly, publishing their photos, and laid responsibility for the attack on the organization, an unusual move as it normally holds Hamas accountable for aggression coming out of Gaza. “Facts in the field show Islamic Jihad does not submit to the authority of Hamas, acts without its knowledge and thus is expected to shirk responsibility for Monday’s incident,” the Israeli army statement said.

Kan Radio reports on comments in Asharq Al-Awsat that the bodies of more IDF soldiers are to be returned in exchange for the release of Syrian prisoners.  According to the report, the Druze [residents of the Golan] were informed of the expected development after having expressed their disappointment that the oldest of the Syrian [Druze] prisoners, Sidki al-Maqt, who was convicted of spying on behalf of the Syrian regime, and Amar Abu Salef, who was convicted of lynching an injured Syrian man who was being transported into Israel, had not been released even though their families had been informed that they would be.