FP’s Situation Report: U.S. slows troop withdrawal from Afghanistan; Congress says ‘So what?’ to Israeli spying; Secret Service scandal grows; and much more from around the world.

By David Francis with Sabine Muscat

It’s official: U.S. troops are staying in Afghanistan through the end of the year. President Barack Obama confirmed what’s been rumored for weeks: 9,800 U.S. troops will remain in Afghanistan, an adjustment from the planned drawdown to 5,500 by the end of 2015. But he promised they’ll be out by the time he leaves office. FP’s Kate Brannen: “The new plan allows the United States to keep control of two key bases in Kandahar and Jalalabad, where the Taliban threat is close by.”

More on Afghanistan below.

Congress is unmoved by Israeli spying. Many U.S. lawmakers appear unconcerned with the revelation that Israeli lobbyists were sharing information obtained through espionage. FP’s John Hudson: “The muted reaction to the explosive Wall Street Journal report highlighted Congress’ reflexive and bipartisan support for Israel — despite a White House backlash against Prime Minister Benjamin Netanyahu’s apology this week for racially charged pre-election campaigning and an abandonment of a two-state solution with Palestine.”

More on Israel below.

The Secret Service scandal is bigger than drunk driving. Lawmakers allege the agency botched the response to a March 4 suspicious package outside the White House gates. Now, some are questioning whether newly minted director Joseph Clancy is the right man for the job. FP’s David Francis: Rep. Jason Chaffetz (R-Utah) said “it took 11 minutes for the Secret Service to call the Washington bomb squad and that traffic was allowed to drive by the site for 17 minutes. Some pedestrians also walked within feet of the package, which was feared to be a bomb.”

PRESS PACK: Spying allegations are yet another blow to the relationship between Washington and Jerusalem.

FP’s Elias Groll: “Israel mounts more aggressive espionage efforts against the United States than almost any other nation on the planet.”

The Washington Post’s Karen DeYoung: “President Obama said Tuesday that the prospect of Israeli-Palestinian peace ‘seems very dim’ in the wake of pre-election remarks last week by Israeli Prime Minister Benjamin Netanyahu and that he is evaluating ‘how we manage Israeli-Palestinian relations over the next several years.’”

The New York Times’ Jodi Rudoren: “Israelis have been astonished by the unrelenting White House criticism that has helped sink relations between Washington and Jerusalem to a nadir not seen for more than 25 years.”

The Wall Street Journal’s Michael R. Crittenden: “House Speaker John Boehner (R, Ohio) said Tuesday he was ‘shocked’ by revelations that Israel spied on closed-door nuclear talks involving the U.S. and then passed information along to U.S. lawmakers.”

The New York Times’ Julie Hirschfeld Davis and Ashley Parker: “Over an elegant dinner at his official residence Monday night, Ron Dermer, the Israeli ambassador to the United States, tried to reassure a group of congressional Democrats that the dramatic public break between President Obama and Prime Minister Benjamin Netanyahu was nothing more than a passing disagreement.”

Welcome to Wednesday’s edition of the Situation Report, where the victims of the horrible plane crash in France are in our thoughts.

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WHO’S WHERE WHEN TODAY

11:00 a.m. Afghan President Ashraf Ghani addresses a joint session of Congress. 5:30 p.m. The Center for Strategic and International Studies hosts a panel on “If failure in Iran, then what?” 6:45 p.m. The Atlantic Council honors Ghani at the National Archives.

WHAT’S MOVING MARKETS

The Wall Street Journal’s Paul Hannon: “The eurozone’s modest economic recovery gathered further momentum in March, as Germany led the fastest increase in private sector activity since May 2011, according to surveys of purchasing managers.”

The Guardian’s Graeme Wearden: “Greece has pledged to pull together a comprehensive list of reforms by the start of next week, in an attempt to unlock fresh funds before Athens runs out of cash in April.”

The Wall Street Journal’s Brody Mullins: “As the federal government was wrapping up its antitrust investigation of Google Inc., company executives had a flurry of meetings with top officials at the White House and Federal Trade Commission.”

Bloomberg’s Natasha Doff and Daryna Krasnolutska: “Ukraine’s Finance Minister Natalie Jaresko urged the nation’s bondholders, including Russia, to negotiate a debt-restructuring agreement now or risk facing bigger losses.”

AFGHANISTAN: U.S. fears of a resurgent Islamist movement fuel the change in U.S. troop withdrawal plans.

The New York Times’ Michael D. Shear and Mark Mazzetti: “The resilience of Al Qaeda in the mountains that straddle the border between Afghanistan and Pakistan has surprised many American officials, and there are fears that the Islamic State could gain a foothold in the Afghan conflict.”

YEMEN: The Houthis raise the prospect of outside intervention as U.N. peace talks are planned. Yemen’s president flees from his refuge in Aden.

The Wall Street Journal’s Hakim Almasmari and Asa Fitch:  “Houthi forces battled their way southward toward the strategic city of Aden on Tuesday, heightening the prospect of outside military intervention by Saudi Arabia to protect the country’s embattled president.”

The Associated Press’s Ahmed Al-Haj: “President Abed Rabbo Mansour Hadi left just hours after the rebels’ own television station said they seized an air base where U.S. troops and Europeans advised the country in its fight against al-Qaeda militants.”

Al Jazeera: “U.N.-brokered talks aimed at resolving the escalating political crisis in Yemen will be held in Doha, the U.N. envoy to Yemen has said, after the internationally recognised Yemeni government appealed to the Gulf Cooperation Council (GCC) for military assistance.”

NATO: Obama hasn’t met with the new NATO chief.

Bloomberg’s Josh Rogin: “President Barack Obama has yet to meet with the new head of the North Atlantic Treaty Organization, and won’t see Secretary General Jens Stoltenberg this week, even though he is in Washington for three days.”

ISLAMIC STATE: The U.S. has started surveillance flights over Tikrit. The terror group has recruited hundreds of minors in Syria. And far away, Hong Kong worries about Islamic State recruitment among Indonesian domestic workers. Meanwhile, vigilantes take the fight against the group online.

Reuters’s Richard Mably, Samia Nakhoul, and Ned Parker on the request for U.S. led air strikes in Tikrit: “If the coalition accepts the request, it would see by far the biggest collaboration so far against the militants by Iraqi forces, the Iranian-backed paramilitaries and their Iranian advisers on the ground, and the United States and its allies.”

The New York Times’ Anne Barnard and Kareem Fahim: “Rather than storming in to clear [Tikrit] 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.”

Reuters: “Islamic State has recruited at least 400 children in Syria in the past three months and given these so-called ‘Cubs of the Caliphate’ military training and hardline indoctrination, a monitoring group said on Tuesday.”

Quartz’s Heather Timmons: “This is the latest in a series of inconclusive, yet worrying, reports about alleged Islamic State recruiting among Hong Kong’s Indonesian maids, who make up nearly half of the city’s 320,000 domestic workers.”

The New York Times’ Rick Gladstone: “In what has become a cyber analogy to the battles in Syria, Iraq and elsewhere between governments and the Islamic State, online vigilantes, some of them with diverse agendas, have united in a common cause to subvert the militant group’s aggressive use of social media, particularly Twitter.”

IRAN: The IAEA says Tehran isn’t complying as Iran seeks to avoid a formal accord.

The Washington Post’s Steven Mufson: “With the deadline nearing for international talks on constraining Iran’s nuclear program, Yukiya Amano, director general of the IAEA, said in an interview that Iran has replied to just one of a dozen queries about ‘possible military dimensions’ of past nuclear activities.”

The New York Times’ David E. Sanger and Michael R. Gordon: “Over the past few weeks, Iran has increasingly resisted any kind of formal ‘framework’ agreement at this stage in the negotiations, preferring a more general statement of ‘understanding’ followed by a final accord in June.”

NIGERIA: Boko Haram continues its reign of terror.

Reuters’s Joe Penney: “Boko Haram militants have kidnapped more than 400 women and children from the northern Nigerian town of Damasak that was freed this month by troops from Niger and Chad, residents said on Tuesday.”

ASIA: Is a peace deal at the top of the world in the works?

AFP: “India and China agreed Tuesday to foster peace along their Himalayan border after wrapping up two days of talks designed to resolve a long-festering boundary dispute.”

CYBER: Lawmakers create an incentive for private firms to share data with the federal government.

The Washington Post’s Ellen Nakashima: “The House Intelligence Committee introduced bipartisan legislation Tuesday to grant legal immunity to firms that pass cyberthreat data to the government, as lawmakers expressed cautious optimism that there is finally enough support to pass a bill that the president will sign.”

AND FINALLY, FP’s Alicia P.Q. Wittmeyer knows the key to a city-state’s capitalistic success.