Trump lifts sanctions on Syria as it holds talks on diplomatic ties with Israel

Donald Trump has removed punishing economic sanctions on Syria, seeking to bolster the fledgling government in Damascus as it considers an end to hostilities with Israel.

Syria's President Ahmad al-Sharaa meets Donald Trump in Riyadh, Saudi Arabia. Picture: AP.

President Donald Trump removed punishing economic sanctions on Syria, seeking to bolster the fledgling government in Damascus as it considers an end to hostilities with Israel.

Mr Trump signed an executive order on Monday to formally dismantle much of the decades-old US sanctions program on Syria, unwinding sweeping economic and financial restrictions on the country.

The order preserves targeted sanctions on ousted Syrian leader Bashar al-Assad, his inner circle and designated terrorist groups. Some sanctions were rolled back in May, after Mr Trump pledged during a trip to the Middle East to give the country “a chance at greatness”. Israel is looking to expand regional peace treaties to include Syria and Lebanon, Israeli Foreign Minister Gideon Sa’ar said on Monday, and recent comments by Mr Trump and Israeli Prime Minister Benjamin Netanyahu suggest Israel could normalise relations with more Arab or Muslim countries after its war with Iran.

Israel and Syria have been holding discussions for months about ending hostilities, according to people briefed on the negotiations. There are currently no direct discussions between Lebanon and Israel, and a deal is less likely, those people said.

Syrian President Ahmad al-Sharaa. Picture: AP.

Mr Netanyahu’s senior confidant, Strategic Affairs Minister Ron Dermer, is in Washington to discuss among other issues a deal that would create formal relations between Syria and Israel, said people briefed on the trip. Syria and Israel have been bitter enemies for decades and fought three major wars against each other.

Mr Trump suggested on Sunday that other countries could join the Abraham Accords, a 2020 set of agreements struck during his first term that normalised relations between Israel and Arab countries including the United Arab Emirates and Bahrain. Mr Netanyahu said last week that the war with Iran opened up opportunities for Israel to normalise relations with other countries.

US officials on Monday said that while Mr Trump’s decision to lift the sanctions comes with no formal conditions, they are optimistic that normalisation with Israel would be a likely outcome.

An expansion of treaties with Arab or Muslim countries could further shift the balance of power in the Middle East away from Iran and in Israel’s favour. The opportunity to improve relations comes after the fall of Assad, who was aligned with Iran. Israel has attacked and weakened Iran and its allies around the region in the wake of the Hamas-led October 7, 2023 attack. Syrian President Ahmed al-Sharaa has taken a hard line against Iran, driving Iranian forces from the country and banning Iranian citizens from entering Syria.

But any agreement would have to contend with a dispute of more than 50 years over the Golan Heights, which both countries claim, and challenges facing Mr Sharaa, who is still consolidating his grasp on power.

“Israel is interested in expanding the Abraham Accords circle of peace and normalisation,” Mr Sa’ar told a press conference on Monday. “We have an interest in adding countries such as Syria and Lebanon, our neighbours, to the circle of peace and normalisation – while safeguarding Israel’s essential and security interests.”

He also laid down an Israeli red line: maintaining Israeli sovereignty over the Golan Heights, part of which Israel annexed in 1981, and a move the US recognised in 2019 during Mr Trump’s first term. Much of the world considers it occupied territory.

Israel occupied further territory in Syria beyond a former United Nations-controlled demilitarised zone between the two countries following the fall of the Assad regime in December.

Any deal with Israel would come with risks for Mr Sharaa, who took over after leading the overthrow of the Assad regime in a country where most people view Israel as an occupying power. Mr Sharaa enjoys support from many Syrians for his role in pushing Assad from power but also faces scepticism over his government’s treatment of minorities and the slow pace of reconstruction and reform.

Mr Sharaa also faces an array of challenges to his rule including from elements loyal to the old regime. He also must finish implementing a pact signed in March designed to integrate Kurdish militias into the Syrian military.

Mr Trump’s executive order assigned Secretary of State Marco Rubio to review Syria’s designation as a state sponsor of terrorism.

“Today’s actions will end the country’s isolation from the international financial system, setting the stage for global commerce and galvanising investments from its neighbours in the region, as well as from the United States,” said Brad Smith, the Undersecretary for Terrorism and Financial Intelligence at the US Treasury.

The European Union in May similarly lifted a range of sanctions on Syria. If a deal were struck with Syria and Lebanon, it would mean Israel would be at peace with all its Arab bordering nations, even as its conflict with the Palestinians remains unsolved. It currently has peace deals with Jordan and Egypt. Israel has fought major wars against all four countries.

It has been the longstanding position of Arab countries that there would be no normalisation with Israel until there was a solution to the Israeli-Palestinian conflict.

Saudi Arabia, which was close to normalising relations with Israel before the October 7, 2023 Hamas-led attack derailed those efforts, is insisting on a pathway toward a Palestinian state before agreeing to a peace deal.

Mr Sa’ar’s announcement on Monday follows repeated comments from Mr Trump and Mr Netanyahu that the war with Iran had created opportunities to expand normalisation between Israel and Arab countries.

Backchannels between Israel and Syria were created several months ago at the encouragement of Qatar and Saudi Arabia, according to Arab officials. A Syria-Israel deal is not being tied to a ceasefire in Gaza, Arab officials said.

Israeli officials have previously conveyed deep suspicion over Mr Sharaa because of his past ties to al-Qa’ida, which he renounced in 2016. Mr Sa’ar has been one of the most vocal detractors of Mr Sharaa, publicly calling him “the leader of radical Islam” who cannot be trusted.

“They were jihadists and remained jihadists, even if some of their leaders have put on suits,” Mr Sa’ar said March 10.

After the fall of Assad, Israel launched a series of aggressive strikes on Syria, targeting military infrastructure and equipment to prevent it from falling into the hands of extremists, Israeli officials said. The bombing campaign has since stopped. Israeli troop presence in areas in southern Syria has at times led to protests and has angered much of the local population, which the Israeli military said it aimed to disarm.

The change in tone is likely due to Mr Trump’s embrace of Mr Sharaa and his desire to work with him, say officials briefed on the negotiations. Mr Trump called Mr Sharaa a “young, attractive guy” after he met the Syrian leader in early May.

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