The US Department of Defense has elevated the threat level associated with espionage by Israeli intelligence services to its highest tier, amid escalating tensions between Washington and West Jerusalem over potential actions against Iran.

The Pentagon is deeply concerned about an increase in Israeli intelligence operations targeting the US, NBC News reported, citing sources within the Department of Defense.

According to these sources, the Defense Intelligence Agency issued a new threat assessment document after Israel intensified its espionage activities. These operations reportedly aimed to monitor decisions regarding the conflict in the Middle East, as well as internal deliberations within US President Donald Trump’s team.

The document raises Israel’s espionage threat category to the “critical” level.

An official at the Israeli Embassy in Washington told NBC News that the allegations of surveillance targeting the US are entirely false. The official stated that Israel’s intelligence activities focus solely on its enemies, not its allies, and asserted that any claims to the contrary are disinformation or politically motivated.

The Pentagon declined to comment on the developments, while a White House official declared that reports of Israeli surveillance operations are baseless.

In addition to the intelligence dispute, a new debate has emerged regarding the military aid relationship between the two nations. According to a report by The Washington Post, Israeli Prime Minister Benjamin Netanyahu announced his support for a draft resolution introduced by Republican Representative Marlin Stutzman, which proposes altering the format of US military assistance to Israel.

The resolution proposes ending the $3.8 billion in direct annual military aid that the US provides to Israel, requiring Israel to pay the full cost of the US weaponry it purchases.

The current memorandum of understanding on military assistance between the US and Israel, which totals $38 billion, is scheduled to expire in 2028.

While the new resolution submitted to Congress is not legally binding, it reflects the growing debate in Washington over the future of the assistance, amid the war in Gaza and declining public approval ratings for Israel in the US.

The Washington Post reported that Prime Minister Netanyahu issued a statement expressing his desire for Israel to stand on its own feet, noting that the country aims to transition from the status of an aid recipient to that of a partner.

Supporters of the draft resolution argue that the move would transition the US-Israel relationship from a direct aid model to a trade-focused structure, facilitating closer military-technological cooperation.

US crude oil reserves have fallen to their lowest level since 2004 as the energy market impacts of the war with Iran continue to expand.

Meanwhile, countries are actively seeking ways to adapt to these shifting conditions. The climate and energy editor at Semafor argued that the energy shock resulting from what is historically the largest supply disruption on record has been felt “quite mildly.”

One strategist noted that the decline in Chinese oil imports has “shielded the rest of the oil market.” Concurrently, new research from the Federal Reserve Bank of Boston indicates that the impact on the US is less pronounced than during the 1970s energy crisis, primarily due to increased domestic oil production.

In a study published yesterday (June 4), Boston Fed researchers stated that an oil shock of the kind triggered by the war with Iran would increase the Personal Consumption Expenditures (PCE) price index by 1.5 percentage points over the following year, compared to a 2.2 percentage point increase in the 1970s.

The researchers pointed out that while such a shock would have reduced employment growth by 1.8 percentage points in the 1970s, this effect has “largely disappeared in recent years.”

For the authors, this development implies that “monetary policy should focus more on the inflationary effects associated with oil shocks rather than the employment effects.”

One reason for this is that “more limited employment effects may generate less deflationary pressure to offset the inflationary impact of higher oil prices.”

According to the study, the impact of rising energy costs on employment currently remains limited because oil-producing states—such as New Mexico, North Dakota, Alaska, Oklahoma, and Texas—are able to record employment growth even as other states experience job losses.

The Boston Fed researchers found that in a scenario resembling the current oil shock, relative employment growth in Texas could increase by approximately 1.7 percentage points, whereas relative employment in Massachusetts could fall by about 0.4 percentage points.

“The world is learning to live without seaborne exports from the Gulf,” Christopher Smart, a US Treasury official during the Obama administration, wrote in an op-ed for The New York Times.

On the other hand, the war has forced Asia and Europe to accelerate their transition to renewable energy. A Bloomberg article reported that in countries particularly dependent on Gulf LNG, such as the Philippines, households have begun generating electricity by installing solar panels on their own properties.

The US House Armed Services Committee late Thursday passed its annual defense policy bill, approving a massive $1.15 trillion budget and sending the legislation to the full House floor. The committee debated the bulk of approximately 900 submitted amendments during a grueling 14-hour session.

Known as the National Defense Authorization Act (NDAA) for fiscal year 2027, the bill was approved in a post-midnight vote of 44 to 12.

While the committee historically operates on a bipartisan consensus—typically with only one or two Democrats voting against the bill before it advances to the floor—this vote recorded unusually low Democratic support, with nearly half of the committee’s Democrats voting against the measure alongside unanimous Republican approval.

Prior to the final vote, committee members gave a standing ovation to the panel’s chairman, Representative Mike Rogers, a Republican who was presiding over his final NDAA markup unless granted a waiver.

“I don’t get choked up easy,” Rogers said in response to the gesture.

Among the adopted amendments was a provision requiring the Pentagon to notify Congress within five days of the grounds for dismissing high-ranking military officers.

The requirement, introduced by Democratic Representative Pat Ryan, was adopted on Thursday with bipartisan support via an unopposed voice vote.

Concerns had escalated across both parties following the dismissal of two dozen senior military officers by Secretary of War Pete Hegseth since taking leadership of the Pentagon, leading to allegations that experienced personnel were being removed without explanation.

The committee also approved another amendment introduced by Ryan requiring Hegseth to provide the defense committee with a copy of the official investigation and a briefing regarding the March 1 lethal attack on Shuaiba Port in Kuwait, which resulted in the deaths of six US service members.

In one of the session’s unexpected developments, the committee adopted an amendment by Republican Representative Ronny Jackson to officially change the name of the Department of Defense to the “Department of War.”

The designation is favored by the Trump administration and is a term frequently used by Hegseth and several Republican lawmakers. The amendment passed in a 29-to-27 vote.

In another significant vote, the committee adopted an amendment by Democratic Representative Marilyn Strickland. The provision directs the renaming of military bases that once bore the names of Confederate generals, were subsequently renamed to honor other service members, but were reverted to their former Confederate-linked names under the second Trump administration by attributing them to different historical soldiers sharing the same surnames.

Additionally, the committee adopted a “right to repair” amendment sponsored by Democratic Representative Maggie Goodlander and Republican Representative Pat Harrigan, which requires contractors to provide access to the data and parts necessary to repair military equipment.

“This is a common-sense requirement,” Goodlander told the committee. “This bipartisan amendment establishes a clear set of rules that will help resolve disputes before they arise, streamline processes, reduce bureaucracy, and close legal loopholes that drag our military into endless complications when we should be empowering our troops to do basic tasks.”

Rogers opposed the amendment, arguing that while it attempted to address “legitimate concerns,” it created a far more significant issue by granting the government overly broad authority over intellectual property developed by the private sector using its own capital.

“This amendment will force companies to choose between protecting their intellectual property and doing business with the Department of War,” Rogers said.

The adoption of the amendment, which also enjoys bipartisan support in the Senate, is seen as a major blow to major defense industry contractors.

Opposition budget cuts rejected

Democrats attempted to reduce the overall topline of the massive NDAA budget, cut funding allocated for Trump-class warships, oppose war with Iran, and ban the transfer of cluster munitions, but all such proposals were rejected by the committee’s Republican defense hawks.

Democratic Representative Seth Moulton said of his amendment to cut $150 billion from the NDAA budget: “I do not trust the current administration to properly utilize this historic budget. I will not give them a blank check to fund reckless and unilateral personal wars.”

The committee’s ranking Democrat, Representative Adam Smith, introduced an amendment to strip approximately $2 billion allocated for Trump-class warships from the defense policy bill.

Moulton, supporting Smith’s amendment, characterized the warship as “the most expensive target in world history.”

While the warship amendment was defeated, a provision introduced by Smith requiring the head of the Pentagon to submit quarterly reports to Congress on munitions inventories was adopted as part of an en bloc package.

An amendment by Strickland aimed at preventing the Secretary of Defense from removing names from officer promotion lists, and reserving the authority to overturn such decisions solely for the commander-in-chief, was defeated in a 30-to-26 vote.

Democratic Representatives Don Davis and Jared Golden voted with Republicans to defeat the measure, while Republican Representative Austin Scott crossed party lines to support it.

An amendment by Ryan aimed at blocking additional funding for further military operations against Iran was rejected 30 to 26, with Davis again voting with the Republican majority.

Republicans on the committee also voted down several amendments aimed at protecting the editorial independence of the military news outlet Stars and Stripes, which is currently operating under new restrictions imposed by the Trump administration, as well as preserving press access at the Pentagon.

Lawmakers rejected a provision introduced by Democratic Representative Sara Jacobs to shield Stars and Stripes from recent editorial interference attempts by the Pentagon in a 29-to-25 vote. Democratic Representative Derek Tran was the sole Democrat to vote against the measure.

“For 165 years, Stars and Stripes has been an independent voice for service members and a real newspaper reporting facts, not a mouthpiece for the Pentagon,” Jacobs said, adding that Hegseth “is attempting to end this legacy, and we must not allow it.”

The amendment would have established statutory status for the Stars and Stripes ombudsman position. The role, created in 1991, was designed to monitor the outlet’s editorial independence and report concerns to Congress.

The paper’s most recent ombudsman, Jacqueline Smith, was dismissed in April after criticizing the Pentagon’s new restrictions on the publication.

The restrictions, implemented by the Pentagon through a January directive, introduced new content requirements and mandated that job applicants be questioned on how they would support Trump’s policy priorities.

“This is censorship, and it is a dangerous warning sign,” Jacobs said. “We must make this position permanent immediately.”

While Rogers agreed that the ombudsman role is important, he stated he “cannot support limiting the secretary’s oversight authority over an ombudsman.”

The committee also rejected an amendment by Goodlander to establish Stars and Stripes as an independent agency within the Department of War, thereby creating oversight mechanisms against political interference, in a 29-to-26 vote.

Republican Representative Don Bacon crossed party lines to vote in favor of the measure, while Tran voted against it.

Goodlander, a former navy officer, argued that her provision would ensure “editorial decisions remain where they belong—in the hands of professional journalists, not political appointees.”

Rogers spoke against the amendment, asserting that the measure would “interfere with Hegseth’s ongoing efforts to ensure modernization and accurate reporting aligned with our military’s values.”

The rejection of these provisions came one day after two members of the Stars and Stripes advisory board filed a lawsuit against the Pentagon, alleging that recent structural changes have compromised the publication’s editorial independence.

Another amendment introduced by Jacobs to preserve press access at the Pentagon was also defeated in a 28-to-27 vote, despite Bacon joining Democrats to vote in its favor.

“If you remove the press from the Pentagon, you blind Congress and the American people to what is being done in their name and with their money,” Jacobs said.

Rogers urged members to oppose the amendment, stating that the Pentagon had “set a prudent policy to protect sensitive information by placing responsible limits on press access.”

The Pentagon has maintained a particularly tense relationship with the press during Trump’s second term, with journalists now largely barred from the building. While courts have frequently sided with reporters in lawsuits challenging these measures, the Pentagon has continued to increase restrictions.

Most recently, defense officials barred reporters from entering the press room inside the building, declaring the facility a classified space and blocking access to an area journalists had utilized for decades.