FP’s Situation Report: Yemen’s collapse is a huge hit to U.S. counterterror strategy; White House dismisses Bibi’s apology tour; Israel reportedly spied on Iran talks; Ghani makes a promise to America; and much more from around the world.

By David Francis with Sabine Muscat

The fall of the Yemeni government is a massive blow to U.S. counterterrorism strategy. Violence has forced U.S. special operators out of the country, severely hampering the fight against al Qaeda in the Arabian Peninsula. FP’s Seán D. Naylor: “Officials familiar with the special operations mission said years of training and hundreds of millions of dollars in equipment that U.S. forces had given to Yemeni troops now will all but certainly be lost.”

More on Yemen below.

The White House yawns at Bibi’s latest apology. Israel’s Prime Minister Benjamin Netanyahu apologized to Israeli Arabs for using them as a scare tactic before last week’s election. This follows his reversal on a two-state solution with the Palestinians. President Barack Obama isn’t buying his remorse, FP’s John Hudson and David Francis report.

Breaking Wednesday morning from The Wall Street Journal’s Adam Entous: “Soon after the U.S. and other major powers entered negotiations last year to curtail Iran’s nuclear program, senior White House officials learned Israel was spying on the closed-door talks.”

More on Israel below.

Mr. Ghani goes to Washington. During his first public appearance in the United States, Afghan President Ashraf Ghani told Americans that the billions of dollars and thousands of lives invested in his country would not be wasted. FP’s Kate Brannen: “He promised to put an end to rampant corruption across Afghanistan, which U.S. watchdogs have warned is among the greatest obstacles to reconstruction.”

More on Afghanistan below.

PRESS PACK: Bibi says he’s sorry as details about Israeli spying emerge.

More from the Journal’s Entous: “The spying operation was part of a broader campaign by Israeli Prime Minister Benjamin Netanyahu’s government to penetrate the negotiations and then help build a case against the emerging terms of the deal…. The espionage didn’t upset the White House as much as Israel’s sharing of inside information with U.S. lawmakers and others to drain support from a high-stakes deal intended to limit Iran’s nuclear program.”

CNN’s Jethro Mullen and Oren Liebermann: “Israel did not spy on closed-door talks over Iran’s nuclear program involving the United States and other world powers, an Israeli official said Tuesday, denying a Wall Street Journal report.”

The New York Times’ Jodi Rudoren and Julie Hirschfeld Davis: “Prime Minister Benjamin Netanyahu of Israel apologized on Monday for making what were widely condemned as racist comments last week in saying that Arab citizens were voting in ‘droves.’”

The Wall Street Journal’s Nicholas Casey: “In a video posted on his Facebook page, Mr. Netanyahu, who won the election decisively, said that his comments had insulted many of Israel’s Arab citizens.”

The Washington Post’s Ruth Eglash: “Some believe that it was Netanyahu’s election day comment that helped increase voter turnout in the Arab sector, boosting the standing of the Joint List, a union of four Arab parties that ran on a united ticket for the first time. Tuesday’s election saw the party win 14 seats in Israel’s 120-seat parliament, making it the third-largest political faction.”

Welcome to Tuesday’s edition of the Situation Report, where we’re hoping this heartwarming crowdsourced effort to reunite Staff Sgt. Michael Maroney with a Hurricane Katrina survivor pays off.

Contact me at david.francis@foreignpolicy.com and follow me @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

9:30 a.m. The Senate Armed Services Committee holds a hearing on Middle East policy. 10:00 a.m. The House Oversight and Government Affairs Committee holds a hearing on problems in the Secret Service. 10:30 a.m. The House Committee on Homeland Security holds a hearing on “The Fight Against Islamist Extremism.” 2:00 p.m. A House of Foreign Affairs subcommittee holds a hearing on “Iran’s Noncompliance with its International Atomic Energy Agency Obligations.” 2:00 p.m. FP’s executive editor for print, Mindy Kay Bricker, will be taking reader questions on reddit.com. 2:20 p.m. Obama holds a press conference with Afghan President Ashraf Ghani. 4:00 p.m. Secretary of State John Kerry speaks at the USA Investment Summit.

WHAT’S MOVING MARKETS

FP’s Keith Johnson: “Four years after the meltdown at Japan’s Fukushima nuclear power station paralyzed the sector, nuclear energy is again gearing up globally for what appears to be a long-awaited renaissance.”

FP’s Jamila Trindle: “After having failed to convince allies to reject Beijing’s invitation to join a new multilateral development bank to build roads and bridges, U.S. officials now say they want to work with the new institution.”

FP’s David Francis: Hillary Clinton might want to try out Germany’s job-saving policy, but it “does little to create new jobs, and widens the gap between top earners and those at the bottom who don’t get salary increases when Berlin steps in with subsidies.”

The New York Times’ Alison Smale on a difficult meeting between Greek and German leaders: “After an hour of talks, the two leaders were guarded at a news conference, and indicated no breakthrough in resolving Greece’s debt troubles or its increasingly contentious negotiations with its European Union partners.”

YEMEN: Yemen’s pleas for help from its neighbors fall on deaf ears as Houthi rebels extend a violent streak.

The Washington Post’s Brian Murphy: “Although Saudi Arabia and its Persian Gulf partners are fearful of spillover from Yemen’s collapse, they have given no indication of consensus on possible intervention and appear unlikely to quickly mobilize their joint military command.”

The Wall Street Journal’s Hakim Almasmar and Asa Fitch: “Houthi gunmen fired live ammunition and tear gas on Monday into crowds of demonstrators in Taiz, Yemen’s third-largest city, wounding at least seven people and pushing the Arabian Peninsula country ever closer to all-out civil war.”

AFGHANISTAN/PAKISTAN: The Taliban denies reports of a key leader’s death as Ghani gives U.S. officials a breath of fresh air. Pakistan unveils a homegrown drone; gunmen attack a vehicle on a highway near Kabul.

Xinhua: “A vast section of Pakistani media reported that Mullah Fazalullah was in the rugged mountainous Tirah Valley of Khyber Agency when fighter jets pounded positions of the Taliban militants there.”

Voice of America: “After a day of high-level discussions with Afghanistan’s leaders, top U.S. officials praised progress on the two countries’ ‘revitalized partnership.’”

Al Jazeera: “Armed men have killed 13 passengers travelling on a bus towards southern Afghanistan, officials say, the latest attack to target civilians in the country’s conflict.”

The Associated Press on Pakistan’s first locally made armed drone: “The drone was introduced to the public Monday as part of Pakistan’s Republic Day parade, with officials hailing it as a key element in the country’s ongoing battle against local Islamic militant groups.”

RUSSIA: Kiev plays its hand as it angles for a new gas deal with Russia. A show of U.S. forces moves across eastern Europe.

Reuters: “Ukraine plans to stop buying Russian gas from April 1.”

Reuters’s Monika Scislowska: “The U.S. ‘Dragoon Ride’ convoy is attracting interest and greetings from people along its route. It started last week from Estonia and passed through Latvia and Lithuania before entering Poland on Monday.”

ISLAMIC STATE: The fight shifts west as U.S. officials play down the Islamic State hack that revealed soldiers’ personal information. Iraq tries to isolate Tikrit as the group raises money.

Reuters’s Oliver Holmes and Mariam Karouny: “Islamic State fighters attacked a military airport in Syria’s Homs province on Monday as they pressed a westward offensive against government strongholds.”

The Daily Beast’s Nancy A. Youssef: “As it turns out, the group didn’t need to hack the Pentagon. At least two-thirds of the troops on the ISIS ‘hit list’ had been featured on public Defense Department websites designed to promote the military.”

The New York Times’ Anne Barnard and Kareem Fahim: “As a small force of Islamic State militants holds out in parts of Tikrit for a fourth week, Iraqi forces have been forced to shift tactics, officials say: Rather than storming in to clear the city at any cost, the security forces are trying to seal off the area and begin preparing for even more challenging battles to the west and north.”

The Wall Street Journal’s Damian Paletta and Adam Entous: “Islamic State militants are skimming tens of millions of dollars a month from salaries paid to Iraqi government employees in occupied areas such as Mosul, and Baghdad continues to send the cash to maintain local support.”

IRAN: Iranian hardliners are quiet on a possible deal. House lawmakers warn Obama against an agreement without congressional approval as Israeli officials make a case against the deal to France.

The New York Times’ Thomas Erdbrink: “As the United States and Iran prepare to restart nuclear talks this week, the hard-liners have been keeping a low profile.”

CNN’s Alexandra Jaffe: “A veto-proof, bipartisan majority of House lawmakers have signed an open letter to President Barack Obama warning him that any nuclear deal with Iran will effectively require congressional approval for implementation.”

The New York Times’ Alissa J. Rubin: “The Israeli intelligence minister, Yuval Steinitz, said in a statement released Monday night that the talks with the French national security adviser, Jacques Audibert, and the French nuclear negotiating team were ‘serious and profound’ and that the Israelis had laid out their reservations about the emerging deal.”

AFRICA AND THE MIDDLE EAST: Tunisia makes arrests following the museum siege as Nigerian authorities say there’s no place for the military in upcoming presidential elections.

The BBC: “Tunisia’s prime minister has sacked six police chiefs following last week’s attack on the famous Bardo Museum.”

The Premium Times’ Ben Ezeamalu: “A Federal High Court in Lagos has ruled that the Nigerian Armed Forces have no role in the conduct of elections in the country.”

ASIA: Obama will meet with his Japanese counterpart. Lee Kuan Yew served as an inspiration for modern China.

Reuters’s David Brunnstrom and Susan Heavey: “U.S. President Barack Obama will host Japanese Prime Minister Shinzo Abe at the White House next month for talks expected to focus on their joint response to China’s rising power and efforts to finalize a major Asia-Pacific trade pact.”

The Associated Press’s Christopher Bodeen: “Chinese leaders admired modern Singapore’s founder Lee Kuan Yew for his toughness, economic pragmatism and insistence on respect for authority.”

EBOLA: International organizations don’t agree on when the outbreak will end.

The BBC’s Smitha Mundasad: “The Ebola outbreak in West Africa will be over by August, the head of the U.N. Ebola mission has told the BBC.”

In an interview with Deutsche Welle’s Manasi Gopalakrishnan, a World Health Organization representative is more cautious: “‘We don’t make specific predictions. One thing we’ve learned from this outbreak is, every time you think it’s over, another wave starts up.’”

NSA: Snowden strikes again, this time up north.

The Intercept’s Ryan Gallagher: “Canada’s electronic surveillance agency has secretly developed an arsenal of cyberweapons capable of stealing data and destroying adversaries’ infrastructure.”

AND FINALLY, FP’s Elias Groll on Ted Cruz: “On Monday, he publicly declared himself a candidate for president with an address that could be described as a parody of the overwrought oratory that is a mainstay of the debate circuit — if for no other reason than the strange rhetorical device Cruz relied on throughout the address.”