BBC News, the Guardian, Telegraph, Times and Financial Times report that the US launched a cyber-attack on Iranian weapons systems on Thursday in retaliation for the shooting down of a US drone, disabling computer systems controlling rocket and missile launchers. Reuters reports that the cyber-attacks were not successful in damaging Iranian systems. The US is set to impose further sanctions on Iran that President Trump has described as “major”. He said the sanctions were needed to prevent Tehran from obtaining nuclear weapons, and economic pressure would be maintained unless Tehran changed course. Trump has warned Iran it was risking “obliteration” if it provoked a war with the US, but insisted he was not seeking conflict. Speaking in Jerusalem, US National Security Adviser John Bolton said the details of the new sanctions will be announced on Monday. Nobody had granted Iran “a hunting licence in the Middle East,” he added.

The Independent reports that Iran’s naval chief Rear Admiral Hossein Khanzadi has warned the US that Tehran is capable of shooting down other US drones. The message came during a meeting with defence officials, and four days after Revolutionary Guard forces downed a US navy drone in the Strait of Hormuz. The semi-official Tasnim news agency quoted Mr Khanzadi as saying Iran can always deliver another “crushing response […] and the enemy knows it”.

The Guardian, Telegraph, Times and Financial Times report that the Trump administration has unveiled a $50bn Palestinian investment and infrastructure proposal aimed at supporting its much-anticipated “deal of the century” Middle East peace plan. The scheme calls for public and private financing and intends to create one million jobs for Palestinians. The “Peace to Prosperity” workshop in Manama on Tuesday and Wednesday is being held amid heavy skepticism about its viability, opposition from Palestinian leaders and without official Israeli and Palestinian representation. The political part of the peace plan will not be revealed for at least five months. The Independent and Reuters report that the proposal was immediately rejected by the Palestinian leadership.  Palestinian President Mahmoud Abbas rejected the plan, saying the “economic situation should not be discussed before the political one”. Israeli Prime Minister Benjamin Netanyahu stated that he would give the plan a fair and open consideration.

Reuters reports that Parliament Speaker Nabih Berri has stated that Lebanon will not be lured by the US proposal to invest in the country in return for settling Palestinian refugees. “Those who think that waving billions of dollars can lure Lebanon, which is under the weight of a suffocating economic crisis, into succumbing or bartering over its principles are mistaken,” Berri said in a statement from his office.

The Independent reports that US President Donald Trump has reportedly complained that his closest advisers “want to push [the US] into a war” with Iran, following his decision to cancel military strikes against the Islamic Republic. “These people want to push us into a war, and it’s so disgusting,” the US president said about his inner circle of aides. “We don’t need any more wars.” Trump is said to have made the remarks about his administration officials to a confidant.

The Telegraph reports that Iran has hanged a CIA informer said to be a former member of the military unit that shot down a US drone. Iran’s Judiciary Unit for the Armed Forces confirmed an earlier report by the Iran Human Rights organisation that Seyyed Jamal Haji-Zavareh was executed last week on charges of “spying for an enemy state and the CIA”. The Justice Department has denied Haji-Zavareh had been a senior member of the military unit and has referred to him as “a subcontracted former employee of the Ministry of Defence who had left his job nine years ago”.

BBC News and Reuters report that Foreign Office minister Andrew Murrison has warned that Iran “needs to stop” attacks in the Gulf of Oman during a visit to Tehran. Murrison said the UK believes Iran “almost certainly bears responsibility for the attacks” and made clear UK concerns over Iran’s malign regional activities. Foreign Secretary Jeremy Hunt said the situation was “extremely serious” and he spoke to Iran officials “regularly”.

The Times, Independent and Reuters report that an opposition candidate has won a re-run of the Istanbul mayoral election, dealing a significant blow to the ruling party of Turkish President Recep Tayyip Erdogan. The secularist Republican People’s Party’s candidate took 54% of the vote. The lead over the candidate for Erdogan’s AK Party was increased from 11,000 to 700,000.

BBC News reports that Arabs are increasingly saying they are no longer religious, according to the largest and most in-depth survey undertaken of the Middle East and North Africa. The finding is one of a number on how Arabs feel about a wide range of issues, from women’s rights and migration to security and sexuality. More than 25,000 people were interviewed for the survey – for BBC News Arabic by the Arab Barometer research network – across 10 countries and the Palestinian territories between late 2018 and spring 2019.

The Guardian and Reuters report that financial markets are braced for a renewed period of turbulence as the US readies fresh sanctions against Iran and amid rising hopes for a breakthrough in the US-China trade war.

In Reuters, Stephen Farrell examines whether the Trump administration’s economic proposal can help end the Israeli-Palestinian conflict.

In the Financial Times, Demetri Sevastopulo argues that the Trump administration’s Iran policy ‘sows confusion among allies and foes alike’ and creates the perception of a chaotic administration.

The Guardian argues that the Trump administration’s ‘maximum pressure’ campaign on Iran risks triggering ‘war by accident’.

The Israeli media report US National Security Advisor John Bolton’s visit to Israel. Maariv reports the Netanyahu-Bolton meeting and its headline quotes Bolton saying: “Our military is ready to act.” The same story dominates the front page of Israel Hayom, which also highlights that “Sanctions are on their way”. Haaretz also leads on this story with an analysis by military affairs correspondent Amos Harel, who says: “Nothing the US administration has done to date seems to have convinced the Iranians that they’d be better off stopping their provocations.”

Yediot Ahronot leads with the headline, “Setback for a Dictator”, reporting the dramatic result of the rerun Istanbul mayoral election, in which the AKP party of President Erdogan lost control of the city for the first time in many years. Haaretz and Israel Hayom also feature the story on their front pages.

In domestic politics, Yediot Ahronot reports secret cooperation between Likud and MKs from Arab parties, in which Likud promised more funding for the Arab sector in return for backing Likud in sensitive Knesset votes, including the law to repeat the election, and the nomination of the state comptroller. Both parties have denied the reports.

In broadcast news, Kan radio reports Israeli and Palestinian responses to the US-led Bahrain summit on the Palestinian economy, scheduled to begin tomorrow. The broadcaster reports that PA President Mahmoud Abbas repeated his opposition to the event, which the Palestinians are refusing to attend, and Netanyahu’s criticism of the Palestinian attitude to the Trump administration’s diplomatic efforts.

Kan also reports a series of budget cuts that the Israeli cabinet are expected to approve today.

Ha’hadashot TV news claimed in its main broadcast last night that figures in the Likud and Blue and White party were exploring the legal and political possibility of cancelling the repeat Knesset elections scheduled for September, and forming a national unity coalition.

In other news Maariv reports on an incident in which a group of British passengers on a British Airways flight departing from Ben Gurion airport were removed from the plane by security, after one of them said he would blow up the plane.