In a telephone conversation, Merz also voiced “grave concern” over developments in the Palestinian territories and stressed that there must be no “de facto partial annexation” of the West Bank, according to a government spokesperson.

The call comes amid escalating tensions following the conflict launched on February 28 by Israel and the United States against Iran, which has increasingly threatened to expand into a broader regional war. German officials said Merz reiterated Berlin’s support for diplomatic efforts aimed at securing an understanding between Washington and Tehran.

Merz, who had initially backed the U.S.-Israeli military action, has shifted his stance as economic risks and security concerns intensify, including Iranian retaliatory strikes and disruptions to global energy flows.

He also indicated that Germany could contribute to ensuring maritime security in the Strait of Hormuz, a key global oil transit route, but only after hostilities cease and necessary conditions are in place.Shipping through the strait, which previously accounted for roughly one-fifth of global oil supplies, has been significantly disrupted amid Iranian threats targeting commercial vessels.

The situation has been further complicated by a partial naval blockade declared by U.S. President Donald Trump following stalled negotiations with Iran.

The report, citing Department of Defense officials, said the proposed deployment could include infantry units and armored assets, reflecting a broader effort to reinforce the U.S. posture in a region already on heightened alert amid the ongoing Iran conflic.

The potential troop increase would add to a growing U.S. presence in the region. The Pentagon is preparing to send at least 1,000 soldiers from the Army’s 82nd Airborne Division, according to earlier reporting by the Associated Press.

This would come alongside approximately 5,000 Marines being repositioned to the Middle East, on top of an existing force of around 50,000 U.S. personnel.The incremental buildup has fueled speculation that Washington is positioning itself for possible limited ground operations tied to strategic objectives linked to Iran’s energy infrastructure and regional waterways.

Analysts say U.S. ground forces could be capable of securing key maritime chokepoints or energy facilities, but warn of the potential for a prolonged and costly engagement. Mick Mulroy, a former deputy assistant secretary of defense, said that while such operations are feasible, the broader question remains whether they are strategically justified.

He noted that diplomacy remains the preferred pathway, though its success depends on both sides demonstrating willingness to compromise.

Trump said on Thursday that Iran had allowed several Pakistan-flagged oil tankers to transit a key maritime route, describing the move as a possible positive signal in the context of ongoing tensions.

The administration continues to balance military preparedness with diplomatic outreach, as indirect contacts between Washington and Tehran raise the prospect of negotiations even as force levels in the region expand.

The benchmark Nifty 50 climbed 1.6% to 23,277.50, while the BSE Sensex gained 1.53% to 75,212.07 as of 9:50 a.m. IST, putting markets on track for a second straight day of advances.

Market sentiment improved after reports that Washington has proposed a month-long ceasefire and presented Tehran with a 15-point framework aimed at de-escalating the conflict.

The development raised expectations of reduced geopolitical risk, particularly around global energy supply disruptions.The conflict has unsettled financial markets in recent weeks, with concerns over oil supply routes and inflationary pressures weighing on investor confidence.

Markets track global cuesIndian equities, which are sensitive to global risk sentiment and crude price movements, reacted positively to signs of potential diplomatic progress.

A de-escalation could help stabilise energy prices, a key factor for India as a major oil importer.

Gains in domestic markets reflect broader optimism that easing tensions may reduce volatility across emerging markets, which have been under pressure amid the ongoing conflict.

Geopolitics, markets, and technology intersected sharply this year, revealing deep anxieties about global stability, economic coordination, and the future of leadership.

The meeting made it clear that traditional alliances are under strain and that nations are reassessing how quickly and independently they must act in a rapidly changing world.

Europe emerged from Davos more united but also more cautious, having learned the cost of confronting U.S. pressure directly. Trump’s controversial remarks and actions related to Greenland crossed long-standing European red lines on territorial sovereignty, prompting rare resistance from European leaders.

While financial market reactions may have played a role in Trump stepping back, the episode badly shook Europe’s confidence in the transatlantic relationship.

European officials openly admitted that decision-making within the European Union is often too slow, and conversations in Davos focused heavily on accelerating collective responses to future crises.

Ukraine briefly faded into the background early in the meeting but returned to the spotlight as President Volodymyr Zelenskiy arrived for high-level talks.

Despite public statements suggesting progress, a peace agreement remained distant, with territorial disputes still unresolved.

The presence of a Russian envoy for talks with U.S. officials, the first such visit since the 2022 invasion, highlighted how geopolitical realities are reshaping diplomatic engagement.

Davos also became a forum for debating potential U.S. action against Iran, with leaders questioning not just the likelihood of intervention but the consequences of regime instability.

Economic discussions at Davos were dominated by uncertainty and concern over rising protectionism. Threats of U.S. tariffs against European allies heightened fears that the global trading system is fragmenting.

Business leaders repeatedly stressed the need for stability, predictability, and respect for the rule of law, qualities many felt were increasingly scarce.

These tensions strengthened arguments for diversifying trade away from over-reliance on the U.S. and building stronger regional and multilateral economic ties.

Financial leaders expressed cautious optimism about growth but warned of policy risks. Banking executives discussed challenges ranging from artificial intelligence disruption to regulatory pressure and consumer affordability.

Warnings were issued about proposals such as capping credit card interest rates, which some leaders argued could destabilize credit markets.

At the same time, crypto executives promoted stablecoins and blockchain as transformative tools, while traditional banks remained divided between experimentation and skepticism.

Concerns about asset bubbles, central bank independence, and long-term inflation lingered over market discussions.

Artificial intelligence was one of the most visible themes in Davos 2026, with major technology leaders making rare appearances. AI companies used the event to push enterprise adoption and reassure investors after months of valuation doubts.

Unlike late 2025, executives now expressed greater confidence that AI investment is moving from hype to practical implementation.

Still, worries about concentration of power, regulation, and long-term societal impact remained part of the conversation, underscoring that AI’s promise comes with complex trade-offs.

Overall, Davos 2026 reflected a world grappling with leadership unpredictability, shifting alliances, economic fragmentation, and technological acceleration. The meeting underscored that while global cooperation is under pressure, the urgency to adapt has never been greater.

The forum ended not with clear solutions but with a shared recognition that the global order is entering a more volatile and uncertain phase.

Global leaders left Davos aware that speed, adaptability, and trust will define the next chapter of international politics and economics.