FP’s Situation Report: White House threatens new Russia sanctions; U.S. courts deal a huge blow to the Palestinian Authority; Is the al-Shabab mall threat a recruiting ploy?; and much more from around the world.

By David Francis with Sabine Muscat

The White House wants Russia to pay for Debaltseve. Deputy Secretary of State Tony Blinken said Moscow had to pay for its “land grab” after pro-Russian rebels captured the strategic railway town. FP’s John Hudson: Blinken said “Washington was working ‘very closely’ with European allies on ramping up economic pressure, and noted the possibility of sanctions targeted at sensitive parts of Russia’s energy sector as a next step.”

More on Ukraine below.

U.S. courts deal a financial blow to the Palestinian Authority and the Palestine Liberation Organization. A New York jury awarded 10 American plaintiffs a whopping $655 million as victims of six terrorist attacks in Israel between 2002 and 2004, opening the door for future terror-related lawsuits. But after a 13-year legal odyssey, they might not see a penny of this money. FP’s Colum Lynch: “For the moment, it remains hard to imagine how the plaintiffs will be able to collect on the multimillion award, given the Palestinians’ dire financial straits.”

Is al-Shabab’s threat a call to arms? U.S. authorities doubt the east African terror group could carry out an attack against the Mall of America. But the al Qaeda affiliate could use the threat as a recruiting tool. To prevent such an attack the mall has its own controversial anti-terror task force, FP’s David Francis reports.

PRESS PACK: Iran nuclear talks inch forward.

The New York Times’ Michael R. Gordon and David E. Sanger: “Iranian and American officials ended a round of high-level nuclear talks here on Monday considering a proposal that would strictly limit for at least 10 years Iran’s ability to produce nuclear material, but gradually ease restrictions on Tehran in the final years of a deal.”

The Associated Press’s George Jahn and Bradley Klapper: “Officials said there were still obstacles to overcome before a March 31 deadline, and any deal will face harsh opposition in both countries.”

The Wall Street Journal’s Laurence Norman: “Critics in Congress and in Israel quickly attacked the prospect of a 10-year time frame as inadequate.”

Welcome to Tuesday’s edition of the Situation Report, where we’re impressed with Kim Jong Un’s efforts to ensure a North Korean wins the Pyongyang marathon.

Connect with me at david.francis@foreignpolicy.com and @davidcfrancis and spread the word about SitRep — your destination for global security news and Washington whatnot. Like what you see? Tell a friend. Tell your colleagues. Don’t like what you see? Tell me. Or holler with tips, reports, or anything else the world needs to know, and I’ll try to include it.

WHO’S WHERE WHEN TODAY

10:00 a.m. Secretary of State John Kerry testifies before the Senate Appropriations subcommittee. 10:00 a.m. Federal Reserve Chair Janet Yellen delivers her semi-annual monetary policy report to the Senate Banking Committee. 11:20 a.m. President Barack Obama meets with the Amir of Qatar, Sheikh Tamim bin Hamad al Thani. 12:00 p.m. The Middle East Institute hosts a panel on “The Impact of Falling Oil Prices on the Future of the Middle East.”

WHAT’S MOVING MARKETS

The Financial Times’ Peter Spiegel: “Brussels has determined Greece’s reform plan is ‘sufficiently comprehensive’ and should be approved by eurozone finance ministers, the clearest signal yet that Athens will secure an extension of its [$194 billion] bailout beyond Saturday’s expiry date.”

The Wall Street Journal’s Nicole Friedman: “The national average gas price at the pump has climbed for 28 consecutive days to $2.30 a gallon on Monday, according to AAA, and are at a 2½-month high in the futures market. Diesel futures are up 20.1% this year.”

UKRAINE: Ukraine’s currency can’t hold its value but President Petro Poroshenko promises to recapture Crimea.

The Washington Post’s Michael Birnbaum: “Ukraine’s currency touched record lows Monday as continued violence in the rebel-held east fueled pessimism about the country’s economic future.”

The Anadolu Agency: “Poroshenko said in a statement that the Ukrainian state will regain control over this temporarily occupied territory.”

The New York Times’ Andrew E. Kramer: “Pro-Russian rebels celebrated their recent victory at Debaltseve with a festive rally on Monday in Donetsk, the main city they control, where soldiers received medals in Lenin Square and the crowd cheered and waved Soviet flags.”

Defense One’s Marcus Weisgerber reports Ukranian officials are set to meet with U.S. weapons manufacturers today in Abu Dhabi “during a major arms exhibition here even though the American government has not cleared the firms to sell Kiev lethal weapons.”

AFGHANISTAN AND PAKISTAN: Peace talks between the Taliban and the Afghan government are on the horizon. Pakistan threatens to kill cell service and forces Afghan refugees back home.

Pajhwok News’s Muhammad Hassan Khetab: “Chief Executive Officer Dr. Abdullah Abdullah on Monday hinted at early beginning of peace talks between the Afghan government and the Taliban leadership, but said national interests would be kept supreme.”

The Washington Post’s Tim Craig and Shaiq Hussain: “In one of world’s largest — and fastest — efforts to collect biometric information, Pakistan has ordered cellphone users to verify their identities through fingerprints for a national database being compiled to curb terrorism. If they don’t, their service will be shut off.”

The New York Times’ Joseph Goldstein: “It is not clear if the pressure on Afghans to leave Pakistan is the result of a widespread policy, or if local officials are taking advantage of the situation to expel unwanted refugees, as many Afghans suspect.”

ISLAMIC STATE: Defense chief Ashton Carter recognizes shortcomings of U.S. policy, but no one should expect major changes. The relationship between the United States and Qatar gets complicated.

The Washington Post’s Craig Whitlock on the results of Carter’s military strategy session on the Islamic State: “He gave no indication that he would push for major changes in the Obama administration’s approach, despite urging from some members of Congress to move more aggressively.”

The New York Times’ Michael S. Schmidt: Carter “said Monday after meeting with senior American military and diplomatic officials in Kuwait that the Obama administration had ‘the ingredients of the strategy’ to defeat Islamic State militants in Iraq and Syria.”

The Wall Street Journal’s Jay Solomon and Nour Malas: “The problem is that the very traits making the Persian Gulf emirate a valuable ally are also a source of worry: Qatar’s relationships with Islamist groups.”

Breaking Tuesday morning, from the BBC: “Islamic State (IS) has abducted dozens of Assyrian Christians from villages in north-eastern Syria, activists say.

EUROPE: France prevents angry young men from traveling to Syria as Denmark tries to reintegrate its own disillusioned youth when they return home.

Radio France International: “Interior Minister Bernard Cazeneuve said Monday that six French nationals, suspected of planning to leave for Syria, had their passports confiscated by the authorities.”

Der Spiegel’s Manfred Ertel and Ralf Hoppe on a program for returning jihadis in the Danish city of Aarhus: “The city has received 150 requests from across the globe for more information and delegations are constantly visiting.”

IRAN: Iran and Russia defy the West by getting into the arms business together.

Reuters’s Vladimir Soldatkin: “Russia has offered Iran its latest Antey-2500 missiles, the head of Russian state defense conglomerate Rostec said on Monday according to media reports, after a deal to supply less powerful S-300 missiles was dropped under Western pressure.”

CYBER: The CIA wants to overhaul its cyber operations as the NSA promises responsible use of U.S. tech data.

The Washington Post’s Greg Miller on CIA Director John Brennan’s call to increase the agency’s cyber prowess: “U.S. officials said Brennan’s plans call for increased use of cyber capabilities in almost every category of operations — whether identifying foreign officials to recruit as CIA informants, confirming the identities of targets of drone strikes or penetrating Internet-savvy adversaries such as the Islamic State.”

The Guardian’s Tom McCarthy: “The National Security Agency director, Mike Rogers, on Monday sought to calm a chorus of doubts about the government’s plans to maintain built-in access to data held by US technology companies, saying such ‘backdoors’ would not be harmful to privacy.”

AFRICA AND THE MIDDLE EAST: Bibi is invited to meet with congressional Democrats. Western travel warnings are killing Kenya’s coastal economy. Meanwhile, leaked files reveal the CIA reached out to Hamas.

Reuters on a democratic olive branch for Israeli Prime Minister Benjamin Netanyahu: “Senators Richard Durbin and Dianne Feinstein extended the invitation ‘to maintain Israel’s dialogue with both political parties in Congress,’ according to a letter to the Israeli leader obtained by Reuters.”

The New York Times’ Jeffrey Gettleman: “Kenyan officials are incensed, saying that the coast is hardly a raging war zone and that the Western travel warnings amount to ‘economic sabotage.’”

The Guardian’s Seumas Milne and Ewan MacAskill: “Despite an official ban on contact, a CIA officer discussed with a South African intelligence agent the possibility of gaining access to Hamas in 2012, the leaked documents disclose.”

NORTH KOREA: The United States and South Korea ignore North Korean threats.

Yonhap News’s Oh Seok-min: “South Korea and the United States will conduct their annual joint military drills next month.”

HOMELAND SECURITY STANDOFF: Republicans try to diffuse standoff over Homeland Security Funding.

The Wall Street Journal’s Kristina Peterson and Andrew Grossman: “Senate Majority Leader Mitch McConnell said Monday he planned to bring up a bill targeting President Barack Obama’s recent immigration policy, separating it from the Department of Homeland Security funding.”

DRONES: The U.S. defense industry gets into the drone export business.

Bloomberg’s Anthony Capaccio on the pending sale of drones by General Atomics to the United Arab Emirates: “The State Department notified the House and Senate foreign relations committees on Feb. 6 that it’s prepared to license the export of eight Predator drones and associated equipment, such as electro-optical and infrared sensors, valued at $220 million.”

MARINES: More than a decade later, a Marine is found guilty of leaving his post.

The Washington Post’s Dan Lamothe: “A Marine who vanished from his military base in Iraq in 2004 and was later shown in captivity in a video on Islamist militant Web sites was found guilty on Monday of desertion after spending most of the past decade in Lebanon.”

VETERANS AFFAIRS: Did Bob McDonald lie about serving in special operations?

The Huffington Post’s David Wood: “Robert McDonald, the secretary of veterans affairs, wrongly claimed in a videotaped comment earlier this year that he served in special operations forces.”

REVOLVING DOOR

The Washington Business Journal’s Jill R. Aitoro: “Vienna-based FedBid Inc. can again bid on federal contracts, thanks to a decision by the Air Force to lift a four-week suspension that led to the resignation of founder and Chairman Ali Saadat.”

Defense News’s Andrew Chuter: “Finmeccanica UK boss Alberto de Benedictis has become the latest victim of a clear out of top executives by the Italian company’s Chief Executive Mauro Moretti.”

AND FINALLY, remember last week when Rudolph Giuliani said Obama doesn’t love America? The former New York mayor had consulted for the government of Qatar, a country with no love lost for the United States, reports FP’s Elias Groll.