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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Israel has fought fresh battles with Hamas in northern Gaza and ordered tens of thousands more people to flee Rafah as it expands its assault on the densely populated southern city despite international condemnation.

The Israel Defense Forces said on social media on Saturday that Palestinians should leave three districts close to the centre of Rafah and two refugee camps in the city. It instructed them to move to what Israel described as a “humanitarian area” on the coast.

“Our operations against Hamas in Rafah remain limited in scope and focus on tactical advances, tactical adjustments, and military advantages — and have avoided densely populated areas,” Daniel Hagari, the chief IDF spokesperson, said on Saturday night.

The UN estimates that about 150,000 people have already fled Rafah since Israel sent ground troops to the eastern edge of the city on May 6 and seized the critical border crossing with Egypt. The IDF claims that 300,000 people have so far evacuated the area, which previously housed more than 1mn displaced Palestinians.

The IDF also said it was continuing operations against “Hamas terror targets” in the northern city of Jabalia and the Zeitoun neighbourhood of Gaza City, with fierce fighting reported on Israeli and Palestinian social media accounts.

In local media, Israeli military analysts criticised the need for the fresh offensives into the two neighbourhoods after Hamas forces moved back into the areas. Benjamin Netanyahu’s government has refused to put forward a realistic plan for an alternative postwar governing regime in Gaza that would replace Hamas rule.

The IDF offensive on Rafah has complicated diplomatic efforts to broker a deal to secure the release of hostages held by Hamas in Gaza and halt the war, while straining Israel’s relations with the Biden administration.

US President Joe Biden has told Israel that Washington will not supply certain offensive weapons if it proceeds with a full-scale assault on Rafah.

The US has already paused the delivery of some arms to Israel, including 3,500 bombs, over concerns about how they could be used in the city. That marks the first time the US has placed any conditions on arms deliveries to Israel since the war in Gaza erupted after Hamas’s October 7 attack.

UK foreign secretary Lord David Cameron on Sunday again warned Israel over the impact of the Rafah operation on civilians, but rejected calls for an arms embargo on the Jewish state.

“I still don’t think it would be a wise path,” Cameron said about halting weapons sales in an interview with Sky News. “It would strengthen Hamas, it would weaken Israel, and it would make a hostage deal less likely.”

Western states and UN aid agencies have repeatedly warned that an attack on Rafah, teeming with tent cities and those displaced from fighting in other parts of the enclave, would have disastrous humanitarian consequences. The war between Israel and Hamas has devastated Gaza, forced an estimated 80 per cent of the strip’s 2.3mn population from their homes and raised the spectre of famine and disease.

Israel insists it has no choice but to continue with its campaign against Hamas, saying the militant group’s last four intact battalions are in the southern city.

Netanyahu, who faces calls from far-right members of his governing coalition to press on, has publicly shrugged off US pressure to consider an end to the fighting even as Israel becomes more isolated internationally.

The prime minister said last week that Israel would “stand alone”, adding that “if we have to, we will fight with our fingernails”.

Netanyahu has vowed to eradicate Hamas and pursue “total victory” after the militant group launched its October attack on Israel, killing about 1,200 people and seizing 250 hostages, according to Israeli officials. About 130 Israelis and foreign nationals remain in captivity, but several dozen of those are already confirmed by Israeli intelligence to be dead.

Israel’s retaliatory offensive on Gaza has killed almost 35,000 people, according to Palestinian health officials.

Talks mediated by the US, Qatar and Egypt to broker a hostage and ceasefire deal broke down earlier this week after mediators failed to narrow the gaps between the warring parties over the terms of an agreement and after Israel attacked Rafah.

Netanyahu has insisted that Israel needs to maintain military pressure on Hamas alongside diplomatic efforts to secure a hostage deal.

But John Kirby, US national security spokesman, said on Thursday Washington believed “that any kind of major Rafah ground operation would actually strengthen” the hand of Yahya Sinwar, Hamas’s leader.

“If I’m Mr Sinwar and I’m sitting down in my tunnel . . . and I’m seeing innocent people falling victim to major significant combat operations in Rafah then I have less and less incentive to want to come to the negotiating table,” Kirby said.

“I can cast Israel in the worst possible way . . . It just gives him more ammunition for his twisted narrative.”

In this photo provided by the U.S. Army Corps of Engineers, salvors with the Unified Command prepare charges for upcoming precision cuts to remove Section 4 from the port side of the bow of the Dali container ship, May 7, 2024, during the Key Bridge Response, in Baltimore.

Christopher Rosario/AP

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Christopher Rosario/AP

In this photo provided by the U.S. Army Corps of Engineers, salvors with the Unified Command prepare charges for upcoming precision cuts to remove Section 4 from the port side of the bow of the Dali container ship, May 7, 2024, during the Key Bridge Response, in Baltimore.

Christopher Rosario/AP

BALTIMORE — After weeks of preparation, crews are scheduled to conduct a controlled demolition Sunday to break down the largest remaining span of the collapsed Francis Scott Key Bridge in Maryland, which came crashing down under the impact of a massive container ship on March 26.

The steel span landed on the ship’s bow after the Dali lost power and crashed into one of the bridge’s support columns shortly after leaving Baltimore. Since then, the ship has been stuck among the wreckage and Baltimore’s busy port has been closed to most maritime traffic.

Six members of a roadwork crew plunged to their deaths in the collapse. The last of their bodies was recovered from the underwater wreckage earlier this week. All the victims were Latino immigrants who came to the U.S. for job opportunities. They were filling potholes on an overnight shift when the bridge was destroyed.

The controlled demolition will allow the Dali to be refloated and guided back into the Port of Baltimore. Once the ship is removed, maritime traffic can begin returning to normal, which will provide relief for thousands of longshoremen, truckers and small business owners who have seen their jobs impacted by the closure.

The Dali’s 21-member crew will shelter in place aboard the ship while the explosives are detonated.

William Marks, a spokesperson for the crew, said they would shelter “in a designated safe place” during the demolition. “All precautions are being taken to ensure everyone’s safety,” he said in an email.

In a videographic released this week, authorities said engineers are using precision cuts to control how the trusses break down. They said the method allows for “surgical precision” and is one of the safest and most efficient ways to remove steel under a high level of tension. The steel structure will be “thrust away from the Dali” when the explosives send it tumbling into the water, according to the videographic.

Once it’s demolished, hydraulic grabbers will lift the resulting sections of steel onto barges.

“It’s important to note that this controlled demolition is not like what you would see in a movie,” the video says, noting that from a distance it will sound like fireworks or loud thunder and give off puffs of smoke.

Officials previously said they hoped to remove the Dali by May 10 and reopen the port’s 50-foot (15.2-meter) main channel by the end of May.

The Dali crew members haven’t been allowed to leave the grounded vessel since the disaster. Officials said they have been busy maintaining the ship and assisting investigators. Of the crew members, 20 are from India and one is Sri Lankan.

The National Transportation Safety Board and the FBI are conducting investigations into the bridge collapse.

Danish shipping giant Maersk chartered the Dali for a planned trip from Baltimore to Sri Lanka, but the ship didn’t get far. Its crew sent a mayday call saying they had lost power and had no control of the steering system. Minutes later, the ship rammed into the bridge.

Officials have said the safety board investigation will focus on the ship’s electrical system.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Northern Ireland should slash corporation tax in line with the Republic of Ireland to drive growth in the cash-strapped region, according a proposal from the region’s biggest business lobby group.

The gulf between the UK’s 25 per cent headline corporation tax rate and Ireland’s rate of 12.5 per cent for small firms and 15 per cent for large companies is making it impossible to compete for investment, said the Federation of Small Businesses.

The group has outlined its plan to the finance ministry at Stormont and UK officials ahead of detailed talks on the subject.

Ireland’s rate of corporation tax, well below the EU average, has driven a budget surplus and the FSB says reviving mothballed plans for Northern Ireland to cut its rate could create jobs and boost the region’s economic fortunes.

“We are massively disadvantaged,” said Roger Pollen, FSB head of external affairs. “Aligning with the Republic of Ireland isn’t going to impact the UK but it would dramatically affect our local economy.”

The vast majority of Northern Ireland’s funding comes from an annual “block grant” payment of £15bn at present. The Stormont executive raises less than £1 in every £20 of the region’s tax revenue — some £1.5bn in 2023-24.

Northern Ireland contributed £1.2bn to the UK Treasury from corporation tax in 2021-22, the latest year for which data is available, according to the Office for National Statistics.

The UK passed legislation in 2015 to allow Northern Ireland to set its corporation tax rate. But the act was never implemented because of frequent political crises and the stipulation that the region would first have to demonstrate its finances were sustainable.

Under an agreement dubbed “Safeguarding the Union” that helped restore Stormont in February after a two year hiatus, London promised to “swiftly progress” its corporation tax devolution commitments “supported by the necessary resource from within HM Treasury”.

Under the FSB’s plan, sums raised would not be deducted from the block grant for several years under a kind of “overdraft facility” to give the scheme time to get established. The business body argues that a lower tax rate would attract more global manufacturing investment and thus boost receipts.

“We need to be imaginative about it,” Pollen said. “What do you do in a company if you don’t have the cash to buy a business? You borrow and pay it back from the increased value and revenues of the business.”

Despite the trade-boosting prospects offered by Northern Ireland’s unique post-Brexit access to both the EU’s single market for goods and Britain, the former linen and shipbuilding powerhouse is struggling financially.

Ministers have warned they cannot afford to continue to deliver even the current level of crumbling public services. Productivity is 11 per cent below the UK average and the region has the UK’s second highest number of people neither employed nor looking for work.

The UK government wants Northern Ireland to raise revenue by introducing water rates and increasing other charges that are lower than in Britain. But Pollen said the answer was “revenue raising not by increasing corporation tax but by growing the corporation tax pie”.

Higher investment would also mean more jobs and thus more payroll and other tax revenue that would continue to flow to the UK Treasury, according to the FSB.

A low tax policy has paid dividends for the Republic of Ireland with corporate tax receipts more than doubling since 2019, to a record €24bn last year. However, Dublin has warned that the bonanza is already waning.

Slashing corporation tax in a region that already enjoys better post-Brexit access to the EU than the rest of the UK would be a “hard sell” in Britain, said Lorraine Nelson, tax partner at consultancy BDO Northern Ireland.

Caoimhe Archibald, Northern Ireland’s finance minister, said she was discussing a new fiscal framework for the region with the UK government.

“It is my intention that this would also include how increased fiscal powers could be devolved to the executive,” she told the Financial Times. “l welcome any proposals or evidence that could inform this work and my officials and I are happy to engage with business leaders on this.”

London, which has agreed £3.3bn in extra financing for Northern Ireland to ease current pressures, said it was working closely with Stormont on its Safeguarding the Union commitments.

“This includes further work on the devolution of the rate of corporation tax to Northern Ireland,” it said.