FP’s Situation Report: U.S. shifts policy on Syrian President Assad; Paris attacks prompt European rethink on terrorism; EU stands firm on Russia sanctions; and much more from around the world.

By David Francis with Sabine Muscat

The United States shifts policy on Syrian President Assad. The White House has long maintained no peace in Syria is possible while President Bashar al-Assad remains in office. However, as the civil war drags on and the fight against the Islamic State continues, the United States now supports two initiatives — one from Russia and one from the United Nations — that don’t call for his ouster.

The New York Times’ Anne Barnard and Somini Sengupta: “That shift comes along with other American actions that Mr. Assad’s supporters and opponents take as proof Washington now believes that if Mr. Assad is ousted, there will be nothing to check the spreading chaos and extremism. More here.

More on Syria and the Islamic State below.

Charlie Hebdo attack prompts a European rethink on terrorism. With the continent on edge following attacks in Paris and subsequent terror arrests, European leaders are considering increased intelligence sharing, tighter border security, and plans to stop the flow of fighters heading to the Middle East to fight for the Islamic State.

The Wall Street Journal’s Laurence Norman and Naftali Bendavid: “While officials said Monday’s discussions were aimed at generating ideas within the bloc, the plans underline the shift toward prioritizing security and stability versus concerns about democracy and human rights.” More here.

More on the fallout from the Paris attacks below.

Europe, once wavering, stands firm on Russia sanctions. In recent weeks, French President Francois Hollande suggested the sanctions weren’t working. However, with Russian troops pouring into Ukraine to join renewed fighting, the European Union stands firm on the punishments — despite hints to the contrary from the EU’s foreign policy chief.

Reuters’s Adrian Croft and Robin Emmott: “Federica Mogherini had suggested in a confidential memo seen by Reuters that EU governments could start talking to Russia again about global diplomacy, trade and other issues … Mogherini’s proposals were met with suspicion by some EU countries that feared they would send the message to Russian President Vladimir Putin the EU’s resolve was weakening.” More here.

More on Russia below.

Top Press Pack Story: Tonight’s State of the Union address

The Wall Street Journal’s Carol E. Lee, John D. McKinnon, and Kristina Peterson: “President Barack Obama’s plan for billions of dollars in tax increases and higher government spending … is reigniting familiar partisan debates about overhauling the tax code and how to best aid the middle class.” More here.

Stars and Stripes’ Travis J. Tritten: “Servicemember and veteran groups say looming budget cuts and health care services will be their top concerns when President Barack Obama takes the podium.” More here.

The Washington Post’s David Nakamura: “The president will enter the House chamber Tuesday night for his sixth State of the Union address riding a wave of confidence driven by an improving economy and brightening public approval ratings. And he seems as defiant as ever.” More here.

The New York Times’ Peter Baker: “Alan P. Gross, the American released last month after five years of captivity in Cuba, and Scott Kelly, an astronaut scheduled to leave soon for a year aboard the International Space Station, will be among President Obama’s guests.” More here.

Welcome to Tuesday’s edition of the Situation Report, where we’re just as eager to hear Sen. Joni Ernst’s response to the president’s speech.

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Who’s Where When Today

9:30 a.m. The Wilson Center holds a panel on “A Year of Crisis: The Middle East in 2015.” 10:00 a.m. Rep. Mac Thornberry (R-Tex.), chairman of the House Armed Services Committee, unveils his Committee agenda in remarks at the American Enterprise Institute. 12:00 p.m. Secretary of State John Kerry meets with National Security Adviser Susan Rice and Defense Secretary Chuck Hagel at the White House. 9:00 p.m. President Obama delivers the State of the Union address at the U.S. Capitol.

EU High Representative for Foreign Affairs Federica Mogherini visits Washington, D.C.

What’s Moving Markets

CNBC’s Li Anne Wong on China’s 7.4 percent GDP increase: “China’s economy grew at its slowest pace in 24 years in 2014, official data showed on Tuesday, undershooting the government’s target for the first time since 1998.” More here.

The Guardian’s Katie Allen on the International Monetary Fund’s downward revisions: “The Washington-based fund warns that the boost from lower oil prices is being outweighed by a host of negative factors and it now expects global growth to edge up only slightly from 3.3% last year to 3.5% this year.” More here.

The Wall Street Journal’s William Horobin on French President Francois Hollande announcing that the European Central Bank will start quantitative easing this Thursday: “The comments from the French leader were surprising as they appear to foretell the action of the ECB, which fiercely guards its independence from governments.” More here.

The South China Morning Post’s Daniel Ren on China’s tanking stock market: “The mainland A-share market suffered a Black Monday yesterday, with Shanghai’s benchmark index posting its biggest single-day drop in more than 6-1/2 years following Beijing’s crackdown on brokerages’ margin trading business and tightened supervision of shadow banking products.” More here.

The Financial Times’ Neil Buckley on the European Bank for Reconstruction and Development’s forecast for the Russian economy: “The development bank for the former Communist bloc said plunging oil prices and western sanctions would lead to a contraction in … Russia’s economy of 4.8 per cent this year, compared with a forecast drop of 0.2 per cent in September.” More here.

Islamic State

AFP on fighting in Kobani: “Kurdish fighters battling the Islamic State of Iraq and Syria … have captured a strategic hilltop, giving them line of fire over the town.” More here.

Bloomberg’s Zaid Sabah and Isabel Reynolds on Japanese hostages: “Islamic State militants threatened to kill two Japanese hostages just days after Prime Minister Shinzo Abe used a Middle East trip to pledge $200 million in non-military aid to nations confronted by the al-Qaeda breakaway group.” More here.

Reuters’s Anthony Deutsch on Syrian chemical weapons: “Syria has started the long-delayed destruction of a dozen underground bunkers and hangars that were used for the production and storage of chemical weapons.” More here.

The Wall Street Journal’s Joshua Mitnick and Dana Ballout with more details on a suspected Israeli airstrike: “Iran said a general in the elite Iranian Revolutionary Guards force was killed in an Israeli helicopter strike in Syria on Sunday that Iran said also claimed six Hezbollah fighters, fanning concerns that an eight-year truce between the Shiite militia and Israel could weaken.” More here.

The Huffington Post’s Akbar Shahid Ahmed on what the suspected Israeli strike means for the United States: “An Israeli-linked airstrike in Syria on Sunday is drawing attention to an element of the messy Syrian civil war that the U.S. has tried to downplay: the Obama administration’s failure to check the growing influence of Iran and its Lebanese proxy, Hezbollah, within Syria.” More here.

Paris Attacks

The Wall Street Journal’s Stacy Meichtry, Matthew Dalton, and David Román on borderless travel in the EU: “Terror suspects are exploiting the ease of travel across the Continent to stay one step ahead of authorities as they move militants, cash and weapons across the bloc without raising alarms, according to European officials.” More here.

The EUobserver’s Nikolaj Nielsen on the EU seeking closer intelligence cooperation with Turkey, North Africa, and Asia: “An EU source said it could involve a future proposal by the EU’s counter-terrorism chief Gilles de Kerchove to rebuild dismantled intelligence agencies in post-Arab spring countries, such as Tunisia.” More here.

The New York Times’ Andrew Roth on protests in Chechnya: “Tens of thousands of people marched on Monday through Grozny, the capital of the mainly Muslim Chechnya region of Russia, in a conservative retort to the mass demonstrations in France this month expressing solidarity with the victims of the terror attacks in Paris.” More here.

Russia

Reuters’s Richard Balmforth on the fight for an airport in the east: “Ukrainian officials said three soldiers had been killed and 66 wounded over the past 24 hours, during which they said they had returned battle lines at the airport outside Donetsk to the status quo under a much violated international peace plan.” More here.  

Writing for the Diplomat, Nadège Rolland on what the conflict in Ukraine means for Asia: “From an Asian perspective, the Ukraine crisis poses the question of the future of U.S. engagement in Asia, a question crucial both to U.S. allies and to other regional countries.” More here.

Yemen

Al Arabiya on fighting in Yemen: “Heavily armed Houthi rebels surrounded Yemeni Prime Minister Khalid Bahah at his Sanaa residence late Monday, hours after he escaped a shooting attack on his convoy, government spokesman Rajih Badi said.” More here.

NBC News on U.S. embassy staff in Sanaa: “U.S. officials told NBC News late Monday that they don’t plan to evacuate the American embassy in Yemen’s capital, where government soldiers and Shiite rebels fought near the presidential palace and a military before agreeing to a cease-fire.” More here.

Cyberwar

The Guardian’s James Ball on the surveillance of reporters: “GCHQ’s bulk surveillance of electronic communications has scooped up emails to and from journalists working for some of the US and UK’s largest media organisations.” More here.

Politico’s Tal Kopan on unprepared staffers on Capitol Hill: “[I]nterviews with nearly a dozen current and former staffers, as well as congressional IT security staff, reveal a typical array of poor cyber habits.” More here.

Reuters reports China denies hacking plans for the F-35 fighter jet. More here.

Nigeria

AFP on a push at the U.N.: “The UN Security Council urged central African countries on Monday to step up plans for a multinational force to fight Boko Haram, in its first overall response to the threat posed by the Nigerian jihadists.” More here.

The Wall Street Journal’s Emmanuel Tumanjong with a small piece of good news: “Cameroon’s military said it had freed 24 of the 80 people kidnapped by Boko Haram fighters over the weekend.” More here.

Cuba

The New York Times’ Randal C. Archibold on a missed opportunity in Havana: “A delegation of members of Congress … concluded a three-day visit here on Monday with optimism over trade deals but without an anticipated meeting with President Raúl Castro.” More here.

Reuters on U.S. plans to lift travel restrictions: “The United States will try to convince Cuba to lift travel restrictions and upgrade its interest section to an embassy during historic talks in Havana this week, a senior State Department official said on Monday.” More here.

Afghanistan and Pakistan

The Army Times’ Michelle Tan raises the possibility of an extended stay: “As the Afghan National Security Forces prepare for another tough fighting season, the top U.S. commander in Afghanistan said he could still recommend extending the mission and keeping more U.S. troops in country.” More here.

The Times of India on a U.S. request: “The US and UK have asked Pakistan to hand over Zakiur Rehman Lakhvi, the mastermind of the 2008 Mumbai attacks, to India to improve bilateral ties or to them for his ‘independent trial.’” More here.

The Wall Street Journal’s Syed Shoaib Hasan on fears after the Peshawar school attack: “Lawyers say the government has done little to remove one of the most formidable obstacles that prevents the successful prosecution of terror suspects in regular courts: The routine intimidation of prosecutors.” More here.

Libya

Reuters on new fighting at Libya’s largest oil port: “Two opposing governments — the internationally recognized authorities in the east and rivals who have seized the capital Tripoli — are fighting for control of the country.” More here.

And finally, FP’s Elias Groll interviews the person behind “Je Suis Charlie.” “Joachim Roncin, the art director of the Paris magazine Stylist, was attending an editorial meeting at his office when two masked gunmen attacked the newsroom of Charlie Hebdo, about a 20-minute walk away.” More here.