FP’s Situation Report: Obama wants a new strategy to fight the Islamic State; Russia and Ukraine move closer to all out war; China-U.S. climate deal is scrutinized; A nuclear deal with Iran looks unlikely; and much more.

By David Francis with Sabine Muscat

The White House is acknowledging its current strategy to fight the Islamic State isn’t working and wants a new one. CNN reported late Wednesday that President Barack Obama has asked his national security team to come up with a new blueprint to continue the fight. Obama’s team has already met four times to discuss changes in American policy.

From CNN’s Elise Labott: "In October the U.S. stressed an ‘Iraq first’ strategy with efforts to degrade ISIS in Iraq as the priority and operations in Syria done to shape conditions in Iraq. Washington hoped that would give time for the U.S. to vet, train and arm a moderate Syrian rebels fighting force to combat ISIS, and ultimately the regime of President Bashar al-Assad…But with the Free Syrian Army struggling in a two-front battle against Assad’s forces and extremists from both ISIS and other extremist groups like al-Nusra, U.S. officials recognize the ‘Iraq first’ strategy is untenable.

"Among the options being discussed are a no-fly zone on the border with Turkey and accelerating and expanding the Pentagon program to vet, train and arm the moderate opposition." More here.

There were signs Wednesday that a shift was in the works. Early yesterday, U.S. Central Command put out a notice about the start of a weeklong meeting at MacDill Air Force Base in Florida involving planners from the more than 30 nations that are part of the U.S.-led coalition fighting the Islamic State. A get-together of this length suggests substantive discussion about how the fight might change as well as discussions on which country is willing to do what.

Obama and his advisers have options to escalate the campaign. They have repeatedly promised no American boots on the ground in combat roles, but there is a growing acknowledgement from American politicians and foreign leaders that some kind of ground force would be needed to defeat the Islamic State. It remains unclear which country would be willing to do this. The most obvious candidate is Turkey, which shares a border with Syria. But so far, Turkish Prime Minister Recep Erdo?an has not offered ground support.

More details on the Islamic State below.

One option the White House has is to try to bankrupt the group, but so far, the Treasury Department hasn’t targeted banks that do business with the Islamic State. The Islamic State is a well-funded group, with some $400 million in assets, according to reports. This much money can’t be carried in cash; banks in the region have to be doing business with them.

FP’s Jamila Trindle: "Over the summer, the United States continued blacklisting members of the group and its supporters, but not the financial institutions in territory under Islamic State control." More here.

As Trindle notes, efforts to target banks were successful against al Qaeda in Iraq in 2004. Whether this kind of targeting would be part of the president’s new strategy remains to be seen.

Russia and Ukraine are close to all-out war. NATO said that columns of Russian troops, vehicles and equipment were entering Ukraine, a scene reminiscent of Moscow’s annexation of Crimea last winter. Russian officials denied troops were on the move, but evidence offered by NATO appears incontrovertible.

The New York Times’ David M. Herszenhorn: "In light of the military buildup, Western officials finally seemed ready to acknowledge that a cease-fire agreement signed in September had fallen apart, and that the threat to peace in Europe posed by the Ukraine crisis had returned in a possibly more virulent form." More here.

Putin’s endgame is unclear. He has a gas deal with Ukraine and Europe in hand. He’s riding high after signing a gas agreement with China that will lessen Gazprom’s dependence on Europe. Meanwhile, the Russian economy continues to suffer under the weight of Western sanctions.

More on Russia and Ukraine below.  

Welcome to Thursday’s edition of the Situation Report.

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Who’s Where When Today

7:45 a.m. President Obama holds a bilateral meeting with President Thein Sein in Myanmar’s capital Naypyitaw. Secretary of State John Kerry is in Jordan for talks with King Abdullah. 10:00 a.m. Defense Secretary Chuck Hagel and Chairman of the Joint Chiefs of Staff Martin Dempsey testify on Syria and Iraq before the House Armed Services Committee. 10:00 a.m. Treasury Undersecretary David Cohen testifies before the House Financial Services Committee on "Terrorist Financing and the Islamic State." 6:00 p.m. House Homeland Security Committee Chairman Michael McCaul speaks about the Islamic State at the Council on Foreign Relations in Washington, D.C. Watch the event live at CFR.org/live.

What’s Moving Markets

Stopping over in Seattle on his way to the G20 summit in Australia, U.S. Treasury Secretary Jack Lew gave Germany and Japan advice on how to stimulate their economies, as the Wall Street Journal’s David Wessel reports. More here.

FP’s Keith Johnson, on how Libyan oil is changing the dynamic of the global energy market: "The stunningly improbable return of oil production in Libya, right in the middle of a civil war, is one of the reasons crude prices have been tumbling. But now this Libyan crude renaissance looks to be ebbing — with potentially nasty consequences for Libya and a fresh dose of uncertainty for an already rattled oil market." More here.

Writing for China’s economic magazine Caixin, Berkeley economist Barry Eichengreen argues that forecasts of a slowdown of growth in China may be premature. More here.

U.S. Deputy Defense Secretary Robert Work urged lawmakers to "stop the madness" of across-the-board Pentagon spending cuts. More here.

Writing for FP, Daniel Altman explains how traditional assumptions about market behavior no longer hold true. More here.

Islamic State

The Washington Post’s Missy Ryan on a Kurdish appeal for more resources to fight the Islamic State: "The Peshmerga, as the militia forces of northern Iraq’s semiautonomous Kurdish region are known, have had some success retaking territory that Islamic State militants seized this summer. But now, Kurdish officials say, the modestly equipped Kurdish force is struggling to respond to the evolving tactics of militants who are increasingly using explosive booby traps and roadside bombs to defend the territory they hold." More here.

From Reuters‘ Hamza Hendawi and Ryan Lucas, on recent changes in the Iraqi military: "The Iraqi military shake up, which included the appointment of 18 new commanders, was ordered ‘as part of efforts to reinforce the work of the military on the basis of professionalism and fighting graft in all its forms,’ according to a statement posted on Prime Minister Haider al-Abadi’s official website." More here.

Reuters‘ Oliver Holmes reports Kurds block a key supply route into Kobani: "Despite having limited strategic significance, the battle in Kobani, also known as Ayn al-Arab, has become a powerful symbol in the fight against Islamic State. The hardline Sunni Muslim group has captured large expanses of Iraq and Syria and declared an Islamic ‘caliphate.’" More here.

The Wall Street Journal’s Sam Dagher on a Kurdish paramilitary group that will help the U.S. expel Islamic militants in exchange for a stretch of northern Syria: "Control of [Ras al-Ayn in Syria] now belongs to a Kurdish paramilitary force that boasts of having more than 30,000 fighters ready to help the U.S. and its allies drive Islamic State and other militants from a broad stretch of northern Syria. The force belongs to the same Kurdish group defending embattled Kobani with the assistance of U.S. airstrikes." More here.

Qatar’s ruling emir Sheikh Tamim bin Hamad Al Thani and Republican Sen. Saxby Chambliss (R-Ga.) both said yesterday that ground troops are needed to defeat the Islamic State.

Russia

The Los Angeles Times’ Carol J. Williams reports: "[I]n response to NATO’s ‘anti-Russia inclinations,’ the Kremlin will resume its Cold War-era practice of sending long-range bombers to patrol the western Atlantic and eastern Pacific." More here.

Writing for the Globalist, former U.S. ambassador J.D. Bindenagel refutes the common assumption that the West had promised Russia not to extend NATO to its borders. More here.

Bloomberg Businessweek’s Carol Matlack gives us four reasons why Putin is back in Ukraine. More here.

China

Congressional Republicans are up in arms against the emission reductions U.S. Obama promised in his climate agreement with China. While they can’t do anything about the agreement, they are plotting to thwart the efforts to fulfill the promises at home, reports the Washington Post’s Ed O’Keefe, David Nakamura and Steven Mufson. More here.

The Atlantic‘s China expert Jim Fallows puts the climate agreement between the U.S. and China in perspective: "It may not be as ambitious as both governments want to make you believe, but it is the best chance for getting to an international climate deal." More here.

Writing for FP, Kate Galbraith on how the deal is a good start: "In the end, real progress on stopping climate change will rely not just on Beijing and Washington, but on the rest of the world." More here.

"Hackers from China breached the federal weather network recently, forcing cyber security teams to seal off data vital to disaster planning, aviation, shipping and scores of other crucial uses", the Washington Post’s Mary Pat Flaherty, Jason Samenow and Lisa Rein revealed yesterday. The intrusion already occurred in September, but apparently the National Oceanic and Atmospheric Agency initially tried to cover up the incident. More here.

Iran

Reuters‘ Parisa Hafezi and Louis Charbonneau on the unlikely prospects of a nuclear deal by Nov. 24: "Western and Iranian officials told Reuters the two sides would probably settle for another interim agreement that builds on the limited sanctions relief agreed a year ago as they hammer away at their deep disagreements in the coming months." More here.

Israel

The New York Times’ Isabel Kershner and Said Ghazali on an Israeli police officer arrested in connection with the shooting of two Palestinian teenagers: "Citing orders not to discuss the case, the police provided few details, but Israeli news media reported that the officer was suspected of shooting at least one of the teenagers and that his commander was under house arrest, apparently under suspicion of having helped cover up the episode…" More here.

Secretary of State Kerry is in Jordan in an attempt to defuse tensions in Jerusalem. More here.

Turkey

From the Associated Press, on three U.S. sailors attacked in Turkey: "A dozen or more protesters shouted at them, calling them killers and said they should leave Turkey. The protesters, who carried a banner of the left-leaning Youth Association of Turkey, threw red paint at the sailors and briefly succeeded in putting white sacks over their heads." More here.

Ebola

From FP’s David Francis, DoD scales back response in Liberia as a new outbreak emerges in Mali: "Mali had already stemmed an earlier outbreak. However, a 70-year-old grand imam, who contracted the virus in Guinea before traveling to Mali where he died on Oct. 27 is the source of another outbreak. AFP identified the man as Goika Sekou." More here.

Myanmar

The New York Times’ Thomas Fuller and Mark Landler report Obama will try to push Myanmar back on the path to democracy. More here.

FP’s Justine Drennan on how President Obama has no leverage as he arrives in Myanmar: "Hopes for reform embodied by the release of the country’s iconic opposition leader, Aung San Suu Kyi, from house arrest in 2010 and election to Parliament have faded amid reports of widespread human rights abuses, including what some watchdog groups call the ethnic cleansing of Myanmar’s Rohingya Muslims." More here.

Nigeria

FP’s Siobhán O’Grady on how Nigerian President Goodluck Jonathan is blaming the United States for Boko Haram: "With Nigerian President Goodluck Jonathan announcing his candidacy for the 2015 election and the militant group Boko Haram’s bloody campaign against the government showing no sign of letting up, Nigeria’s ambassador to Washington is lashing out at the United States for not providing sufficient military aid." More here.

U.S. Army

From the New York Times’ Dave Philipps, on how cuts in the military mean job losses for career staff: "For the first time since the end of the Cold War in the 1990s, the Army is shrinking. Faced with declining budgets, the Army, the largest of the services, cut its force this year to 508,000 soldiers from 530,000, with plans to trim an additional 20,000 troops next year. If funding cuts mandated by Congress continue, the Army could have fewer than 450,000 soldiers by 2019 — the smallest force since World War II." More here.

The Los Angeles Times’ Alan Zarembo, on how the Army tries to identify soldiers most likely to commit suicide: "In an analysis involving all 40,820 U.S. soldiers hospitalized for psychiatric problems during a six-year period, researchers created an algorithm to identify some of the Army personnel most likely to commit suicide. Sixty-eight of the soldiers killed themselves within a year of hospitalization." More here.

Revolving Door

From a Tweet by the Daily Beast‘s Tim Mak: "After Sen displeasure re answers on military sexual assault, WH has withdrawn nomination of Jo Ann Rooney to be Under Secretary of the Navy." More here.

And finally, "L’Affaire Baraçois Hollandbama": American and French politics seem to be devolving in parallel. More from Robert Zaretsky, writing for FP, here.