Timeline

What happened: Following the October 7th massacres, 251 people were taken hostage. In March, Trump issued a similar, though less specific, threat to Hamas.
What's happening now: Trump's special envoy, Steve Witkoff, has reportedly communicated a new, comprehensive proposal. Simultaneously, Israeli forces are expanding operations in Gaza City, and a diplomatic rift is widening over the potential recognition of a Palestinian state at the UN.
What's next: All eyes are on the mediators to see if the gap between Hamas's demands and the reported proposal can be bridged. The UN General Assembly in late September looms as a potential flashpoint for the Palestinian statehood issue.

Impact Analysis

The renewed diplomatic push carries significant implications for global markets, which remain sensitive to geopolitical instability in the Middle East. The primary risk remains a conflict escalation that could disrupt energy supplies, though the impact on oil prices has so far been "modest and transitory." More immediate are the effects on global logistics. Houthi attacks in the Red Sea have already rerouted shipping, increasing costs and transit times, directly impacting supply chains. Companies with regional exposure, such as Yum! Brands, have reported headwinds to sales. The economic toll on the Palestinian economy is catastrophic, with an estimated $50 billion in investments lost and 1.8 million people pushed into poverty.

What to Watch

Negotiation Signals: Monitor public and private statements from Hamas, Israeli officials, and U.S. mediators for signs of convergence or divergence on the core terms of a deal.
Military Movements: The official start of Israel's large-scale offensive against Gaza City would signal a potential breakdown in talks and a new phase of the conflict.
Diplomatic Alignments: Watch for further announcements from Western countries regarding their intention to recognize a Palestinian state, and Israel's potential "unilateral" responses.