FP’s Situation Report, presented by the UAE Embassy: U.S. accuses Iran of breaching nuclear sanctions; Drone strikes and a prisoner return thaw U.S.-Pakistan ties; Israel conducts airstrikes in Syria; and much more.

By David Francis with Sabine Muscat

The United States accuses Iran of secretly breaching U.N. nuclear sanctions. As Secretary of State John Kerry hints that a nuclear deal with Iran could be done in a matter of months, Washington has evidence that Tehran is trying to buy new equipment for a key nuclear facility. But the White House isn’t willing to say anything publicly about it.

FP’s Colum Lynch: “The United States has privately accused Iran of going on an international shopping spree to acquire components for a heavy-water reactor that American officials have long feared could be used in the production of nuclear weapons-grade plutonium.… The American allegations, which have never before been reported, come more than a year after the Iranian government pledged as part of an interim agreement with the United States and other big powers to scale back Iran’s most controversial nuclear-related activities, including the enrichment of high-grade uranium, in exchange for billions of dollars in sanctions relief. They stand in stark contrast to recent remarks by Secretary of State John Kerry, who has repeatedly credited Tehran with abiding by the terms of the November 2013 pact, which bound Tehran to suspend some of its work at Arak. ‘Iran has held up its end of the bargain,’ Kerry said last month in Vienna as he announced a seven-month extension of the timetable for big-power talks.” More here.

U.S. conducts airstrikes in North Waziristan as it returns a senior militant leader to Pakistan, marking a thaw in U.S.-Pakistan relations. A day after Hagel made an unexpected visit to neighboring Afghanistan, U.S. drones launched strikes in the North Waziristan tribal region that reportedly killed at least four people. The strikes targeted Ustad Ahmad Farooq, a Pakistani commander with al Qaeda links in the Indian subcontinent. The strikes came as the United States returned Latif Mehsud, a senior Pakistani Taliban leader arrested under questionable circumstances, to Pakistan. Pakistani officials said both the airstrikes and the prisoner release are indicative of improving relations between Pakistan, the United States, and Afghanistan.

The New York Times’ Declan Walsh: “Since coming to power in September, the Afghan president, Ashraf Ghani, has made a concerted effort to improve relations with Pakistan, a country that his predecessor, Hamid Karzai, regularly accused of supporting the Afghan Taliban. In a recent visit to Islamabad, Mr. Ghani held talks with Pakistan’s military leadership. In London last week he smiled and shook hands with the Pakistani premier, Nawaz Sharif, on the steps of 10 Downing Street as Prime Minister David Cameron of Britain looked on.” More here.

Israel conducted airstrikes against Syrian President Bashar al-Assad’s forces in the Damascus suburbs Sunday. The strikes were likely targeting Hezbollah, the militant group in Lebanon backed by Assad, and come as the United States continues to support Syrian rebels who are also trying to take down the Assad regime as part of its plan to defeat the Islamic State. Israel has conducted airstrikes against Assad before, targeting stores of advanced weapons or convoys.

The New York Times’ Isabel Kershner: “Israel has repeatedly said it has no intention of intervening in the bloody civil war between the government of President Bashar al-Assad and rebel forces in Syria. But Israel has vowed to prevent any transfer of advanced missiles or chemical weapons from Syria to Hezbollah, a militant Shiite group in Lebanon that fought a monthlong war with Israel in 2006.” More here.

Welcome to Monday’s edition of the Situation Report.

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Who’s Where When Today

10:00 a.m. Secretary of State John Kerry reports on accomplishments of the U.S. Conventional Weapons Destruction Program. 12:00 p.m. The Brookings Institution holds a discussion on “The United States and Germany: Engaging Europe’s Pivotal Player.” 12:15 p.m. World Bank President Jim Yong Kim discusses international efforts to reach a global climate agreement in Paris in 2015 at the Council on Foreign Relations. 1:45 p.m. U.S. Ambassador to Ukraine Geoff Pyatt speaks at the Atlantic Council. 2:00 p.m. Senate Foreign Relations Committee holds a hearing on “Authorization for the Use of Military Force Against ISIL.”

What’s Moving Markets

Defense News’s Aaron Mehta on a defense industry pivot: “Amid a global downturn in defense spending, the training and simulation world is booming. But … executives for some of the world’s largest defense firms acknowledged that the sector’s market strategy is changing.” More here.

The Wall Street Journal’s Rachel Louise Ensign on ties between U.S. and Russian companies: “Some of the people and entities on the new lists of sanctions, part of the U.S. government’s effort to pressure Russia over the conflict in Ukraine, have extensive connections to other companies in countries throughout the world. That poses hurdles for American companies, which are restricted in doing business with some companies owned by those that are blacklisted.” More here.

Reuters reports that Russian gas is set to start flowing to Ukraine today: “Russia cut gas deliveries to Ukraine in mid-June in a dispute over prices and debts and supplies have remained suspended while the haggling played out against a background of worsening political relations caused by the separatist war in Ukraine, which Kiev says Moscow is promoting.” More here. 

Defense News’s Paul McLeary on DoD’s 2016 budget: “The White House is developing a fiscal 2016 defense budget that would align with its long-planned $535 billion top line, ensuring that the administration would ignore the congressionally mandated budget caps put in place in 2011.” More here.

The Wall Street Journal’s Ian Talley on low oil prices bolstering the global economy: “Many of the world’s top policy makers are rewriting their economic forecasts for the U.S., Europe, Japan and elsewhere, betting plummeting oil prices will lead to an overall boost in the global economy.” More here.

Iran

The Washington Post’s Carol Morello on the timing of a nuclear deal: “Secretary of State John F. Kerry predicted Sunday that a deal to limit Iran’s nuclear capacity could be reached in three or four months, or even sooner.” More here.

Reuters on Iran’s plans to increase military spending: “Iranian President Hassan Rouhani will hike military spending by more than a third in the next fiscal year.” More here.

The Washington Times’ Guy Taylor on the Washington Post reporter detained in Iran: “The State Department on Sunday condemned the Iranian government‘s leveling of unspecified charges against Washington Post reporter Jason Rezaian, who has been detained in the Islamic republic since July.” More here.

Afghanistan

The Wall Street Journal’s Julian E. Barnes and Adam Entous on a push to slow the U.S. drawdown: “President Ashraf Ghani is pushing the U.S. to slow its drawdown of forces in the next two years, an effort that threatens to put the Obama administration in a bind as it seeks to end large-scale military involvement in Afghanistan.” More here.

The Guardian’s Jon Boone on how life has become harder for the Pakistani Taliban after a U.S. drone attack: “[W]ith the election of a more amenable president in Kabul and a dramatic improvement in relations between Islamabad and Washington, the Pakistani Taliban fighters hiding inside Afghanistan have suddenly become vulnerable, as a surge of counter-terror operations take place on both sides of the border.” More here.

The Washington Post’s Missy Ryan on the urgency of the U.S. support mission: “The United States faces a tight timeline between the start of the U.S.-led NATO mission in 2015 and hitting the first milestone in President Obama’s plan for concluding the U.S. military effort in Afghanistan — closing the regional training sites, narrowing the effort to the capital, Kabul, and halving the number of U.S. troops on the ground — by Dec. 31, 2015.” More here.

Vice’s Meredith Hoffman on the death of a militant plotting against America: “The militant, Adnan Shukrijumah, was on the FBI’s most wanted list and served as al Qaeda’s head of external operations, a role formerly occupied by 9/11 mastermind Khalid Sheikh Mohammed.” More here.

The Islamic State

The Christian Science Monitor’s Christa Case Bryant on a U.N. report on Israel’s contacts with Syrian rebels over the past 18 months: “Though some in Israel appear to support the Assad regime as the lesser evil, Israel is no doubt interested in gleaning intelligence from rebel groups in order to better assess and defend itself against jihadi activity in the occupied Golan Heights.” More here.

The Jerusalem Post’s Yaakov Lappin on Iran and Syria smuggling weapons to Hezbollah: “The Assad regime, despite its dwindling control of Syria, remains Hezbollah’s main weapons depot, from where both Syrian-made and Iranian-produced arms often pass through en route to Hezbollah storage facilities in Lebanon.” More here.  

Guantánamo Prisoner Transfer

The Pentagon transferred six prisoners from the U.S. military detention center at Guantánamo Bay, Cuba, the largest transfer since 2009, reports the Washington Post’s Adam Goldman: “Defense Secretary Chuck Hagel initially was reluctant to approve the transfer.… The administration is legally required to provide a 30-day notice to Congress of its intent to transfer detainees out of Guantanamo Bay.” More here.

The Wall Street Journal’s Felicia Schwartz and Taos Turner: “The six — four Syrians, a Palestinian and a Tunisian — are the first Guantanamo detainees to be resettled in South America, and the largest resettlement at one time from the prison since 2009. The men had been held at Guantanamo for 12 years and had been cleared to leave the prison since 2009.” More here.

The Associated Press’s Leonardo Haberkorn and Ben Fox on Uruguay accepting the prisoners: “Uruguayan President Jose Mujica agreed to accept the men as a humanitarian gesture and said they would be given help getting established in a country of 3.3 million with a total Muslim population of perhaps 300 people.” More here.

Yemen

The Wall Street Journal’s Julian E. Barnes, Patrick McGroarty, and Alexis Flynn on the failed rescue mission of American Luke Somers and South African Pierre Korkie: “The Pentagon isn’t reviewing the use of special-operation forces to rescue hostages despite a weekend mission that led to the death of two men held by militants in Yemen, defense officials said.” More here.

The New York Times’ Rukmini Callimachi on Pierre Korkie: “Hours before his expected release, the South African hostage was killed by his Qaeda guards when a military operation by the United States to save his cellmate — Luke Somers, an American photojournalist — went wrong. Mr. Somers and eight civilians were also killed in the raid.” More here.

The Associated Press’s Christopher Torchia on the United States being unaware of talks underway to free Korkie: “The United States did not know about talks on the reportedly imminent release of a South African hostage who died in a U.S. raid on al-Qaida militants in Yemen.” More here.

Al Jazeera’s Rahul Radhakrishnan created a list of failed U.S. attempts to rescue hostages. More here.

Israel

Writing for Foreign Policy, Aaron David Miller on Israel’s proposed nationality legislation: “[I]f this effort to define Israel as a Jewish state (again) does become law, it’s likely to consecrate, codify, and make even more permanent two already deeply entrenched realities rather than to revolutionize Israel’s politics.” More here.

The Wall Street Journal’s Joshua Mitnick on investigations around last summer’s conflict: “Israel’s military said it opened eight new criminal investigations into soldiers’ conduct during the summer’s Gaza conflict, including the deaths of at least 27 members of one family who were killed in one of the deadliest strikes during the fighting.” More here.

The New Defense Chief

Time magazine’s Mark Thompson on Hagel skipping the announcement of his replacement on Friday: “It’s the latest in a string of snafus that has marred the transition between President Obama’s third and fourth Defense secretaries.” More here.

Russia

The Financial Times’ Sam Jones on NATO efforts to counter Russian propaganda: “National intelligence agencies in the alliance point to what they say is alarming anti-Nato and anti-European rhetoric in the Russian media. The Kremlin has been particularly masterful, they believe, at using a web of disinformation to generate doubt internationally over its huge military support for separatists in Ukraine.” More here.

Writing for Foreign Policy, Nathalie Rothschild on feminists taking on Putin: “Margot Wallström, the newly minted foreign minister, has said that under her leadership Sweden will become the only country in the world to conduct a ‘feminist foreign policy.’” More here.

Torture Report

The Associated Press on concerns about the report’s release: “Foreign governments and U.S. intelligence agencies are predicting that the release of a Senate report examining the use of torture by the CIA will cause ‘violence and deaths’ abroad, the chairman of the House Intelligence Committee said Sunday.” More here.

The Daily Beast’s Shane Harris and Tim Mak on the CIA: “The agency will neither defend the so-called rendition, detention, and interrogation programs. Nor will the CIA disavow those controversial efforts entirely.” More here.  

The New York Times’ Peter Baker on Bush administration officials ahead of the report: “A long-awaited Senate report condemning torture by the Central Intelligence Agency has not even been made public yet, but former President George W. Bush’s team has decided to link arms with former intelligence officials and challenge its conclusions.” More here.

North Korea

Reuters’s Kahyun Yang and Jim Finkle on North Korea’s role in the Sony cyberattack: “The Pyongyang government’s state-run media said the cyber attack on Sony’s Hollywood studio may have been the work of pro-North Korean supporters in a report on Sunday that dismissed charges that the country itself was to blame as ‘wild rumor.’” More here.

Troop Morale

The Military Times’ Hope Hodge Seck on low troop morale: “The services have weathered several years of deep cuts in funding and tens of thousands of troops have been unceremoniously given the boot. Many still in uniform and seeking to retire from the military fear the same fate, as those cuts are not yet complete.” More here.

China

The South China Morning Post’s Li Jing on the territorial dispute between China and the Philippines: “In a position paper, China outlined its arguments against the jurisdiction of the Permanent Court of Arbitration at The Hague to take up the case filed by the Philippines last year that could have implications for Beijing’s claims over the South China Sea.” More here.

Ebola

The Washington Post’s Lenny Bernstein on Ebola survivors: “Recovering from one of the most fearsome infections known to humankind should provide a time of unsurpassed joy. But it doesn’t always work out that way.” More here.

The New York Times’ Denise Grady interviewed a doctor who survived Ebola. More here.

Nigeria

Writing for Foreign Policy, Georgia Holmer on vigilantes in Nigeria: “Vigilante action is a controversial but common measure to counter Boko Haram — and one that may complicate efforts to find a longer-term solution to extremist violence in the country.” More here.

Navy

FP’s David Francis on a Navy spying scandal: “Mustafa Ahmed Awwad, a 35-year-old employee of the Navy, was indicted Friday for trying to steal plans for the USS Gerald R. Ford, the Navy’s newest nuclear aircraft carrier, to send to the Egyptian government.” More here.

Revolving Door

Fortune’s Tory Newmyer on Obama’s Ebola czar: “With the Ebola crisis seemingly in hand, Ron Klain … is planning a late-winter return to the private sector.” More here.

The EU’s new foreign policy chief Federica Mogherini appoints her predecessor Catherine Ashton as the lead negotiator in talks with Iran. More here.

And finally, Reuters’s Treena Shapiro covered yesterday’s 73rd commemoration ceremony of the Pearl Harbor attacks. More here.