FP’s Situation Report: Islamic State beheads another American; the Pentagon rethinks future war plans; Putin undeterred in Ukraine; and much more.

By David Francis with Sabine Muscat

The Islamic State beheaded another American. The group released a gruesome video showing the beheading of Muslim convert Abdul-Rahman Kassig, previously known as Peter Kassig, a former U.S. Army Ranger who went to Syria on a humanitarian mission. The group had previously threatened to behead Kassig in response to the American bombing campaign in Iraq and Syria. The video shows that they have followed through on the threat.

The Washington Post’s Adam Goldman: "The highly choreographed video, which the White House confirmed was authentic, shows a masked militant with a British accent saying: ‘This is Peter Edward Kassig, a U.S. citizen of your country. Peter, who fought against the Muslims in Iraq while serving as a soldier under the American army, doesn’t have much to say.’" More here.

Kassig is the fifth Western hostage and third American whose beheading was captured on video released by the Islamic State. It comes as the Pentagon is reviewing its strategy to fight the group amid growing concerns that the current strategy is not sufficient.

The fight against the Islamic State is forcing the Pentagon to rethink its plans for the future of warfare.? Defense Secretary Chuck Hagel told CNN yesterday that "he may have to consider recommendations to place ground forces in Iraq to help forces there locate targets if, in fact, the chairman of the Joint Chiefs of Staff makes that recommendation." General Martin Dempsey, who spoke to troops in Iraq this weekend, has said twice that ground troops could be sent to the country. 

FP’s Kate Brannen: "[W]ith new conflicts and pockets of violence and instability rapidly cropping up in places such as Ukraine, the Middle East, and parts of Africa, defense policymakers are being forced to revisit, if not rethink, some of the assumptions that underpin today’s strategy and resource decisions…Among the ideas under scrutiny are the relevance of ground forces and whether state actors pose the most dangerous threat to the U.S. homeland and global security." More here.

Large wars in the Middle East and elsewhere were supposed to be over. However, the success of the Islamic State, as well as Russia’s actions in Ukraine, are forcing policy planners to revisit the large war model used to fight in Afghanistan and Iraq. This could impact the size of the military, the Pentagon’s budget, and the kinds of weapons purchased.

Russian President Vladimir Putin is isolated for his role in the Ukraine conflict at the G-20 meeting in Australia. Leaders from around the world had few kind words for Putin as new Russian weapons and military vehicles entered Ukraine. Putin, however, was unbowed. After hearing his critics, he simply left the meeting early. Meanwhile, Obama said that Putin had broken the Sept. 5 cease-fire and came closer to calling Putin’s actions an invasion.

From the New York Times‘ Mark Landler: "Mr. Obama…warned [Putin] that if the Russians did not change course in Ukraine, ‘the isolation that Russia is currently experiencing will continue.’" More here.

It remains to be seen what more the United States and its allies could do to stop Putin. Sanctions crippling the Russian economy have done little to deter him. But the European Union has already ruled out new economic penalties. Obama has ruled out military intervention. It Putin wants eastern Ukraine, there seems to be little to stop him from taking it.

Welcome to Monday’s edition of the Situation Report.

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Who’s Where When Today

Deputy Secretary of Defense Bob Work and Chairman of the Joint Chiefs of Staff Army Gen. Martin E. Dempsey have no public or open media events on their schedules. 10:00 a.m. Senate Foreign Relations Committee debates fight against the Islamic State. 10:30 a.m. Secretary of State John Kerry speaks at Foreign Policy’s Transformational Trends event at the Four Seasons Hotel at 2800 Pennsylvania Ave., NW, in Washington, D.C. 1:00 p.m. Subcommittee on Oversight and Investigations of the U.S. House Committee on Energy and Commerce discusses the U.S. public health response to Ebola outbreak.

Vice President Joe Biden travels to Morocco, Ukraine and Turkey this week.

What’s Moving Markets

Hagel gives the defense industry a shot in the arm. From the Associated Press‘ Robert Burns: "Hagel announced a ‘defense innovation initiative’ that he likened to historic and successful campaigns during the Cold War to offset military advantages of U.S. adversaries." More here.

Leaders of the G20 nations ended their meeting in Brisbane, Australia, with a pledge to boost global growth by two percent (by $2 trillion) by 2018. The Guardian‘s Daniel Hurst: They also vowed to address climate change despite resistance from the host Australia. The next G-20 summits will be held in Turkey (2015) and China (2016). More here.

Japan’s economy is officially in recession. More from Bloomberg’s Keiko Ujikane here.

U.K. Prime Minister David Cameron warns that a second global crash is coming. The Guardian‘s Patrick Wintour: "His warning comes days after the Bank of England governor, Mark Carney, claimed a spectre of stagnation was haunting Europe." More here.

The European economy is going nowhere. Reuters’ John O’Donnell has more here.

Defense News’ Paul McLeary: 2016 U.S. Defense budget could be $60 billion over spending caps. More here.

Islamic State

The New York Times‘ Rukmini Callimachi on Obama’s reaction to the beheading video. "Kassig ‘was taken from us in an act of pure evil by a terrorist group,‘ Mr. Obama said in a statement from aboard Air Force One that was read to the news media in Washington." More here.

Read Hagel’s statement on the video here.

The Guardian‘s Martin Chulov reports the beheading masks Islamic State defeats. "On all of its active fronts, things have not been going well for the terror group…Isis appears to have lost control of one of its prized possessions, the Baiji oil refinery…" More here.

More details on the Baiji refinery from the Washington Post‘s Erin Cunningham: "It remained unclear whether Iraqi forces passed through the gates of the refinery — Iraq’s largest — on Saturday afternoon." More here.

CNN‘s Barbara Starr reports Hagel could consider sending more troops to fight the Islamic State. "But these would not be fighting forces, Hagel said. ‘There will be no American combat troops in Iraq or Syria.’" More here.

The Washington Post‘s Greg Miller and Karen DeYoung report that the White House is considering plans to escalate the CIA’s role in arming and training fighters in Syria. "The agency now vets and trains about 400 fighters each month — as many as are expected to be trained by the Pentagon when its program reaches full strength late next year." More here.

The Associated Press‘ Robert Burns reports that the military is accelerating its efforts to train and advise Iraqi forces fighting Islamic State. More here.

Writing for Foreign Policy, James Traub on the devil’s bargain the United States might have to make with Bashar al-Assad. More here.

The New York Times‘ Ben Hubbard on Sunni allies that have already been lost. "Now, as the United States and the Iraqi government urgently seek to enlist the Sunni tribes to fight the Islamic State…they are struggling to undo the militants’ success in co-opting or conquering the majority of them." More here.

Dempsey tells U.S. troops in Iraq that the tide of the battle against the Islamic State is turning. From the BBC: "Gen. Martin Dempsey, on an unannounced visit, called the militants ‘midgets’ but said the battle against them was likely to take years." More here.

The Independent’s Patrick Cockburn reports that a Kurdish official claims the Islamic State has 200,000 fighters, "seven or eight times bigger than foreign intelligence estimates of up to 31,500 men." More here.

Nigeria Today’s Olawale Kadir reports that Boko Haram is in contact with the Islamic State. More here.

Nigeria’s Premium Times reports that the Nigerian military has chased Boko Haram from Chibok. Ola’ Audu has more here.

G-20

The New York Times’ Mark Landler on Obama’s ambitious foreign policy in Asia: "Mr. Obama seems to have found a formula for a more ambitious approach overseas, built around two issues that only recently climbed to the top of his agenda: trade and climate change." More here.

Obama Asia trip proved his relevance after his election defeat at home, writes David Nakamura for the Washington Post. More here.

In a meeting that risked provoking China, the leaders of the United States, Japan and Australia pledged to increase their cooperation on defense and maritime security in Asia. The AP’s White House correspondent Julie Pace reports here.

Russia

Russia’s President Vladimir Putin got a cool reception at the G-20 meeting in Brisbane. The New York Times’ Emma G. Fitzsimmons reports how Canada’s Prime Minister Stephen Harper and others confronted him about the Russian aggression in Ukraine. More here.

It didn’t help that Putin arrived with the Russian navy in tow. The Australian’s Brendan Nicholson: "It was common in the past for a Russian task force far from home to be escorted by a nuclear submarine, which would scout ahead of the flotilla. Naval sources say that is a less common practice now but the increasing Russian posturing around the globe has raised the possibility it is happening again." More here.

Obama moves close to calling Russia’s actions in Ukraine an invasion, the New York Times’ Mark Landler reports. More here.

FP’s Elias Groll reports the Sweden has evidence that a Russian sub was in Swedish waters. More here.

Reuters‘ Erik Kirschbaum reports that Putin insists a political solution to Ukraine is possible. He also said he was concerned about "ethnic cleansing" there. More here.

Iran

The Washington Post’s Carol Morello on growing doubts that a deal could be reached. "[A]s negotiators gather in Vienna this week in one last push for a deal, decades of mutual mistrust and years of Iranian obfuscation on its nuclear program may be proving too much to surmount." More here.

The New York Times‘ David E. Sanger, Steven Erlanger and Jodi Rudoren on challenges to getting the deal done: "As negotiators head back to Vienna this week for what they hope will be the final round of talks, Mr. Obama’s top national security advisers put the chance of reaching an agreement this month at 40 to 50 percent." More here.

Israeli Prime Minister Benjamin Netanyahu on CBS‘ "Face The Nation" Sunday: "Don’t fall for Iran’s ruse. They are not your friend." More from Hunter Walker at Business Insider here.

Israel

The Telegraph‘s Robert Tait on possible sanctions against Israel from the European Union: "In what amounts to Europe’s toughest-ever line with the Israelis, punishments such as trade restrictions could result if continued settlement building on occupied land is deemed to be at odds with reaching a two-state solution to the decades-old conflict — defined as an independent Palestine alongside Israel." More here.

From the Associated Press: "Israel’s prime minister said Sunday that he is pushing forward a bill that enshrines in law that Israel is the nation-state of the Jewish people, adding a new complication to already tense relations with Arab-Israelis and Palestinians." More here.

AFP reports that Israel will never agree to limit its construction activity in Occupied East Jerusalem. More here.

Okinawa

The Washington Post’s Anna Fifield on the new mayor of Okinawa: "Although it is not clear whether Takeshi Onaga will be able to make good on his campaign promise to stop a new base from being built in the Japanese island prefecture, his overwhelming victory is sure to complicate American and Japanese plans to do so." More here.  

Afghanistan

The New York Times‘ Carlotta Gall and Farooq Jan Mangal report on Pakistanis escaping war at home. These refugees are fleeing the "Pakistani military’s continuing offensive against Islamist militants in the North Waziristan region…As many as 250,000 of them have since crossed the border into Afghanistan, officials say." More here.

The BBC reports a prominent Afghan politician survives a suicide attack. "Shukria Barakzai, a women’s rights advocate and ally of new President Ashraf Ghani, was lightly injured in the attack." Three people were killed. More here.

United Nations

FP’s Colum Lynch reports on the selection process for a new U.N. Secretary-General: "For now, at least, the race for the premier diplomatic job is playing out discreetly in midtown Manhattan coffee bars, diplomatic missions, and foreign-policy conference halls." More here.

Ebola

The Pentagon has mobilized reserve soldiers for the Ebola mission in West Africa. From the Military Times‘ Patricia Kime: "Roughly 2,100 guardsmen and reservists will rotate to Liberia and Senegal to relieve troops who deployed to the region in September and October." More here.

The Washington Post’s Ariana Eunjung Cha on private foundations helping to fight Ebola: "The unpredictable nature of the Ebola virus has made the government’s partnerships with private donors critically important in the crisis response." More here.  

State and White House Hacked

Nextgov‘s Aliya Sternstein reports that the State Department and White House were hacked at the same time. "It is believed hackers backed by a nation state, likely Russia or China, infiltrated the White House system in September or October." More here.

North Korea

The Associated Press’ Calvin Woodward on U.S. spy chief James Clapper’s trip to North Korea to free American hostages. More here.

Weapons

Bloomberg‘s Tony Capaccio on the deployment of the Navy’s first laser weapon. More here.

And finally, writing for Foreign Policy, Roger Pielke Jr. asks if FIFA’s corruption can be stopped. More here.