Reports from the Israeli Broadcasting Authority indicate the Security Cabinet is convening this evening to debate a significant expansion of ground operations in Lebanon.

The move follows a week of intensifying friction that saw Israel nearly double its evacuation zones in southern Lebanon, now covering roughly 10% of the country’s territory. With Defense Minister Israel Katz already signaling that the military has been instructed to “broaden operations,” tonight’s meeting is likely the formal rubber stamp on a deeper push toward the Litani River.

The IDF’s 91st, 210th, and 146th Divisions are positioned to push further north. The goal is to physically push Hezbollah forces (specifically the Radwan Unit) behind the Litani River to stop direct anti-tank fire into northern Israeli communities.

Expect a focus on “village clearing”—systematically destroying tunnel networks and weapons caches in border towns like Khiyam and Taybeh, which Israel claims were launchpads for a planned October 7-style invasion.

Hezbollah has characterized this as a decisive “last war,” and Israel appears to be matching that intensity. Prime Minister Netanyahu is under massive domestic pressure to ensure residents of the north can return home permanently, something a mere ceasefire hasn’t achieved.

In terms of markets, this is much lower stakes than Iran as there is no energy at risk here. There is a sense though of things spiralling out of control as Israel gets involved in a second war. It’s also unclear how Lebanon’s fragmented government might respond.

This could be another long night in markets as we try to get a sense of what the goals are.

Gold has struggled to gain a bid despite the turmoil but that’s also a spot to watch. In general though, activity directly around Israel is largely ignored by global markets.