President Donald Trump on Monday formally lifted most US sanctions on Syria, aiming to reintegrate the war-torn nation into the global economy as Israel signals interest in establishing ties with Syria’s new leadership.

In May, Trump removed the sanctions in response to lobbying from Saudi Arabia and Turkey after Ahmed al-Sharaa, a former Islamist guerrilla, ended nearly fifty years of Assad family rule.

Through an executive order, Trump ended the “national emergency” that had imposed sweeping sanctions on Syria since 2004, targeting state institutions including its central bank.

“These actions reflect the president’s vision of fostering a new relationship with a Syria that is stable, unified, and at peace with its neighbors,” Secretary of State Marco Rubio said. Rubio indicated the administration would begin reviewing Syria’s designation as a state sponsor of terrorism, in place since 1979, which has blocked most foreign investment.

He also confirmed that the US would consider removing the terrorist classification of Sharaa and his movement Hayat Tahrir al-Sham (HTS), once affiliated with Al-Qaeda. The US previously lifted the bounty on Sharaa after he took power.

Brad Smith, the Treasury official overseeing sanctions policy, said the move would end Syria’s isolation from the international financial system. Syria recently conducted its first electronic bank transfer since descending into civil war in 2011.

Sanctions will remain against elements of the former government, including ex-president Bashar al-Assad, who fled to Russia last year.

Syrian Foreign Minister Assaad al-Shibani hailed the move as a “major turning point” that will reopen pathways for reconstruction and create conditions for the dignified return of displaced Syrians.

Meanwhile, Israel, historically hostile to Syria, has shifted its stance. Despite skepticism towards Sharaa, who has abandoned jihadist attire for Western business suits, Israel expressed interest in normalizing relations with Syria and Lebanon under an expanded “Abraham Accords,” potentially reshaping regional dynamics.

Iran’s influence in Syria and Lebanon has weakened significantly due to ongoing Israeli military strikes following Hamas’s October 7, 2023 attacks.

Trump administration officials argue lifting sanctions will integrate Syria back into the region and incentivize openness to Israel. Tom Barrack, the US ambassador to Turkey and Trump’s Syria envoy, described the current moment as unprecedented.

“It’s an opportunity we have never seen before,” Barrack said. “This president has assembled a team that can actually get it done.”

Despite optimism, recent sectarian violence persists. On June 22, a suspected Islamist attack on a Greek Orthodox church in Damascus killed at least 25 people and injured dozens more.

Until Trump’s surprise sanctions relief announcement during a trip to Saudi Arabia, the US had maintained that Syria first improve protections for minorities before economic restrictions would be lifted.