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Israel-Hamas war: The Middle East is one step away from a much bigger crisis

A frantic new round of diplomacy is underway to pull the Middle East back from the brink - as it hurtles towards an irreversible tipping point.

This is a dangerous moment with implications for us all, as the world awaits America's next move after the killing of three US soldiers by an Iranian-backed group.

The Gaza war, provoked by one of the most savage and barbaric days in the region's history, is still raging.

Israel demands the right to continue until Hamas is destroyed and it has its hostages, brutally taken against all the rules of war, back.

Middle East latest: US retaliation 'could last weeks'

Israel's government has not lowered much of the tempo of its operations in Gaza, despite the urging of America's Biden administration.

Israel's allies say far too many civilians are still being killed.

The war will radicalise a new generation of Gazans who have lost their families, their loved ones and their homes and, as long as the conflict continues, it threatens to destabilise the always-volatile Middle East to the point of all-out regional war.

Duelling between Hezbollah and Israel could escalate at any point. In Yemen, US and British airstrikes appear only to have goaded Iranian-backed Houthi fighters into upping the ante.

They seem to have developed a taste for attacking international shipping, with long-term implications for the world economy.

And now the killing of three American soldiers in Jordan requires a response from America that could push the region another step towards a much bigger war.

The assumption is still that no one, including Iran, wants that kind of conflict, but overreach by one side can leave the other with no option but to escalate, too. That risk is ever present while the war in Gaza continues unabated.

As the most powerful player in this and Israel's closest ally, America had a responsibility to defuse this crisis through diplomacy, but so far has failed.

In the wake of the 7 October attacks by Hamas, there had been talk of a grand bargain being forged by US diplomats. In it, the Arab world would fully recognise Israel in return for concessions giving Palestinians a horizon towards their own state.

It may sound far-fetched, but the region had already changed before 7 October. Even arch-foes Saudi Arabia and Iran had managed to settle their differences in diplomacy led by China.

Gulf states had reached a peace of sorts with Israel with Saudi Arabia looking likely to follow. Instead, in almost four months of war there has been intransigence, deepening division and a steady ratcheting up of tensions.

Israel's prime minister refuses to countenance any talk of a Palestinian state, his allies in government openly talking of resettling Gaza in a meeting that also considered the "forced relocation of Gazans", as the White House put it.

Hamas has continued firing rockets at Israel and refuses to release its hostages. And Israel's enemies further afield are risking a much wider conflagration with inflammatory words and deeds.

There is no doubt tensions would ease if the war in Gaza was brought to a close, but America is not prepared to force Israel towards that end.

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Its diplomats, though, and their European allies, have failed to find any alternative way to defuse the situation.

We are one step away from a much bigger crisis engulfing the region. That could include a Houthi missile sinking a US or British vessel, a Hezbollah shell killing a platoon of Israelis, an Israeli shell landing in a southern Lebanese school and so on. All could ignite a much, much worse conflict.

A diplomatic breakthrough is urgently required.

European diplomats, including Britain's Foreign Secretary Lord Cameron, well steeped in the politics of the region and back on his fourth visit, have been shuttling to and fro. And US secretary of state Anthony Blinken is on his way again this weekend.

They need to show results. The pressure is on to avert a deepening crisis before it is too late.