BBC News, the Times and Reuters reports that the US has reportedly identified locations in Iran from which drones and cruise missiles were launched against major Saudi oil facilities on Saturday. Senior US officials have claimed that the locations were in southern Iran. Saudi air defences did not stop the drones and missiles because they were pointed southwards, to prevent attacks from Yemen, they added. Reuters reports that a senior US official on Tuesday called for a UN Security Council response to the attacks, but it was unclear what action he sought or whether Washington might secure Russian cooperation.

Reuters reports that US Vice President Mike Pence said on Tuesday the US was reviewing evidence that suggests Iran was behind the attacks on Saudi oil facilities and stands ready to defend its interests in the Middle East. “We’re evaluating all the evidence. We’re consulting with our allies. And the president will determine the best course of action in the days ahead,” Pence said in a speech at the Heritage Foundation.

BBC News, the Guardian, Telegraph, Times, Independent, Jewish Chronicle, Reuters and Sky News report that unofficial results in Israel’s election suggest that neither the Likud nor Blue and White have a clear path to form a coalition. The results indicate that weeks of post-election negotiations are likely before a final result is clear. Both parties are neck and neck with 32 seats each.

BICOM’s Senior Research fellow, Neri Zilber, appeared on Sky News to analyse the results and BICOM CEO James Sorene was interviewed on LBCs Nick Ferrari show.

In the Times, Catherine Philp maintains that the stakes in the Israeli election could not be higher for the Palestinians: “That system holds at its core the principle that a state may not acquire territory by force. No UN resolution has ever endorsed such a move”.

On Sky News, Dominic Waghorn says this could be the beginning of the end for Benjamin Netanyahu: “Netanyahu’s reign could end as the three parties that could form a coalition disagree with each other”.

The Guardian, Independent and Reuters report that Iranian Supreme Leader Ayatollah Ali Khamenei has announced there will be “no negotiations on any level” with US officials, in remarks aimed at dousing speculation of a possible summit between President Trump and President Rouhani. As chances of any such diplomatic breakthrough dwindled, Washington announced that Secretary of State Mike Pompeo would leave on Tuesday night for Jeddah for talks with Saudi Crown Prince Mohammed bin Salman to “coordinate efforts to counter Iranian aggression in the region”.

The Telegraph reports that former Defence Secretary Liam Fox has said that the UK must accept that the JCPOA Iran nuclear deal is “dead” and join the US in attempting to force Tehran to the negotiating table. Fox, who was in the cabinet until July, will use a speech in Washington to warn that the 2015 agreement was “flawed” from the start and that attempts to keep it alive “futile”. The intervention is interpreted as a call for Prime Minister Johnson to join President Trump and withdraw from the deal.

Reuters reports that Iran has held talks with a delegation from the Taliban, the Foreign Ministry said on Tuesday. Iran said in December it had been meeting with Taliban representatives with the knowledge of the Afghan government, after reports of US-Taliban talks about a ceasefire and a possible withdrawal of foreign troops. “In the framework of Iran’s comprehensive consultations with all parties in Afghanistan, a Taliban political delegation visited our country recently to discuss the latest developments in Afghanistan with […] Iranian officials,” Foreign Ministry spokesman Abbas Mousavi said.

The Guardian reports that International Trade Secretary Liz Truss is facing calls to resign after admitting that the government breached a court order banning the sale of weapons to Saudi Arabia. In June, the court of appeal ruled UK arms sales to Saudi Arabia were unlawful because they could be used in violations of international law in the conflict in Yemen. Following the ruling, Truss’s predecessor, Liam Fox, pledged to halt Saudi arms sales pending a review. On Monday night, Truss admitted two “inadvertent” breaches of that commitment and apologised to a Commons committee. On Tuesday, opposition MPs said her apology was insufficient and she should resign for breaking the law.

BBC News, the Independent, Financial Times and Reuters report that Saudi Arabia has said its oil output will return to normal by the end of this month, with half the production lost in Saturday’s drone attacks on the Abqaiq oil processing plant and the Khurais oilfield already restored. The news immediately calmed the oil markets, with the price falling 7% on Tuesday. US President Donald Trump said it was no longer necessary to release reserves from US emergency stocks. “Production will be back to normal by the end of September,” Saudi Energy Minister Prince Abdulaziz bin Salman told a press conference, adding that the state oil giant Aramco had emerged “like a phoenix from the ashes” after the attack.

According to the Financial Times, Saudi Arabia’s biggest customers for oil in Asia including Japan, China, South Korea and India are considering diversifying their supplies of oil and preparing to refine heavier grades of crude following Saturday’s attacks. Reuters reports that China’s Unipec chartered at least four crude tankers this week from the US.

Reuters reports that diplomats have claimed that Saturday’s attacks on Saudi oil installations could harm French diplomacy meant to avert a feared US-Iranian conflict. They said France was trying to pinpoint the origin of Saturday’s strike on the oil infrastructure of the world’s top crude exporter as it pursues diplomacy to defuse tensions across the Gulf.

Reuters reports that billions of dollars spent by Saudi Arabia on cutting edge Western military hardware mainly designed to deter high altitude attacks has proved no match for low-cost drones and cruise missiles used in a strike that crippled its giant oil industry.

In the Financial Times, Helen Warrell, Andrew England and Ahmed Al Omran state that Saturday’s attacks on Saudi oil facilities highlights the “Middle East drone war” and says the region is particularly vulnerable to cheap and nimble weapon that evades air warning systems”.

The Guardian maintains that though Saturday’s attack on Saudi oil facilities has “increased the dangers – US actions triggered this crisis”.

In the Times, Richard Spencer asks “where does Saudi Arabia go from here?”: “One hour of strikes by what seem to be jerry-rigged drones and missiles took out half of Saudi Arabia’s oil production. What would a war do?”.

In BBC News, Jonathan Marcus examines which parties are using armed drones in the Middle East: “The offensive use of drones or unmanned aerial vehicles (UAVs) has grown significantly in recent years, and nowhere more so than in the Middle East”.

The Guardian reports that Iran has confirmed that it has detained three Australian citizens, alleging they were arrested on espionage charges. Judiciary spokesman Gholam Hossein Esmaeili confirmed the arrests in a press conference in Tehran. “This is true. These individuals have been detained in two cases and indictments have been issued for both.” He said one of the cases related to images taken by two foreign nationals from military and restricted areas, and “the images have been retrieved from the memory of the camera which has been discovered and seized from them”.

Reuters reports that Taliban suicide bombers killed 48 people in two separate attacks in Afghanistan on Tuesday, the deadliest taking place near an election rally by President Ashraf Ghani. The attacks happened 11 days before Afghanistan’s presidential election, which Taliban commanders have vowed to violently disrupt.

Reuters reports that the UN Security Council unanimously agreed on Tuesday to extend a UN political mission in Afghanistan after last-minute talks overcame a Chinese threat to veto if there was no reference to the Belt and Road Initiative. The final language – drafted by Germany and Indonesia – adopted by the 15-member council does not mention the project.

The Times reports that IS leader Abu Bakr al-Baghdadi has urged followers to rise up and free jihadists and their wives and children from detention camps in Iraq and Syria. In his first recorded comments since April, al-Baghdadi tried to exploit western fears that places such as the al-Hawl camp in northern Syria, which holds 70,000 displaced women and children, will become breeding grounds for a new generation of fighters.

Reuters reports that the US will only provide Saudi Arabia with nuclear technology if the kingdom signs an agreement with the UN atomic watchdog that allows for intrusive snap inspections, US Energy Secretary Rick Perry repeated on Tuesday. Saudi Arabia, the world’s top oil exporter, says it aims to develop nuclear power to increase its energy mix, but growing tensions with Iran have raised fears that it could use that technology to develop nuclear weapons.

Reuters reports that lawyers for Metin Topuz, a US consulate employee in Turkey on trial on espionage charges, applied in January to the European Court of Human Rights a day before his next court date. The European court has accepted the application, the person said on condition of anonymity due to the sensitivity of the case.

Reuters reports that Saudi Aramco is pressing on this week with banker meetings about its planned listing, although some investors and analysts doubt it can now meet its timeline after the weekend attacks on its oil facilities.

BBC News examines whether the settlement enterprise issue can be solved: “The issue of Jewish settlements in the West Bank and East Jerusalem has long been a major source of dispute between Israel and the Palestinians, and most of the international community”.

In the Financial Times, Simeon Kerr contends that the stalemate in Yemen “sets the scene for [a] wider conflict”: “Attack on key Saudi Arabian oil facility raises questions over Riyadh’s strategy”.

In the Times, Neil Martin states that the British Jewry should show “hope amid the hate”: “With thousands of young British Jews joining together to express their pride in both their country and their faith, it is undeniable that the future of Britain’s flourishing Jewish community is in safe hands”.

Liberman sets terms for coalition talks: Yisrael Beitenu leader Avigdor Liberman, widely viewed as the kingmaker of any future government, laid out his conditions this morning outside his home, Israeli media reported. Liberman said the only option as far as he was concerned was a “national unity government…liberal and wide-spanning.”  He also rejected any option of sitting in government with the Arab-Israeli parties. Liberman said he had not shifted from his core election promises, which he termed his conditions for any future government: passage of an ultra-Orthodox military conscription bill, mandatory core education schooling (English, science, and maths) in ultra-Orthodox schools, allowing civil marriages, as well as running public transportation and keeping supermarkets open on the Sabbath. Liberman did not reject outright the possibility of sitting in government with Prime Minister Benjamin Netanyahu, saying: ‘It’s not a personal issue here…we don’t disqualify anyone. The key is the President [Reuven Rivlin]. He needs to take a much more active role than in the last round.” Liberman also rejected the possibility of a third (repeat) election, saying there would be no parliamentary majority to again dissolve the Knesset.

Odeh says Arab turnout was much higher than in April: Joint (Arab) List leader Ayman Odeh told Israel Army Radio this morning that Arab-Israeli voter turnout had risen sharply from the April election, he estimated an increase from 49 to 63 per cent yesterday. “Listen Abu Yair [i.e. Benjamin Netanyahu], incitement has a price,” Odeh said explaining the increased voter turnout. Odeh said he would be willing to recommend Benny Gantz become Prime Minister if core Arab-Israeli demands were met: rescinding the nation-state law, tackling crime in the Arab sector, and shifting more state subsidies into Arab communities.

Gantz calls for patience and a national unity government: Blue and White head Benny Gantz outside his home this morning called for patience until official vote counts were announced, the Israeli media reported. “A long time we were occupied with the election. Let us wish the nation of Israel a wanted and good national unity government. The system should calm down a bit and we’ll set out on our way,” Gantz said.