On October 1, 2024, Iran launched its largest missile attack to date on Israel, firing around 200 ballistic missiles. The attack targeted key military sites inside Israel, including the Nevatim and Tel Nof airbases and areas around Tel Aviv, causing damage but largely being intercepted by Israel’s air defence systems. Iran framed the attack as retaliation for recent Israeli assassinations of senior leaders in Hezbollah and Hamas, including Hassan Nasrallah and Ismail Haniyeh. Israel, already engaged in multiple fronts including Gaza and Lebanon, has vowed a significant response, with Prime Minister Benjamin Netanyahu calling Iran’s actions a “big mistake”.
Simultaneously, Israel has expanded its military operations in Lebanon, battling Hezbollah forces, while Iranian allies like the Houthis in Yemen have also increased missile and drone attacks on Israeli positions. If these tit-for-tat attacks escalate into a full-scale war, it would have far reaching consequences both for global geo-politics and the global economy.
American dilemma
The American dilemma in the Iran-Israel conflict stems from its dual objectives: supporting Israel, a key ally, while simultaneously avoiding an escalation that could draw the U.S. into a broader war. President Joe Biden’s stance reflects this delicate balancing act. He has made it clear that while the U.S. stands firmly with Israel, he will not endorse a full-scale Israeli attack on Iran’s nuclear facilities. This position came in response to Israel’s threats to strike back hard after Iran’s missile salvo, with Israeli diplomats warning of a retaliation “heavier than Tehran could ever have imagined.”
Washington fears that an aggressive Israeli response, especially targeting Iran’s nuclear sites, could lead to further escalation. A large-scale attack risks not only provoking Iran into a more direct confrontation but could also pull U.S. forces into the conflict, the scenario the Biden administration is keen to avoid.
Daniel Levy, president of the US/Middle East Project, pointed out that Israeli Prime Minister Benjamin Netanyahu has long sought U.S. involvement in a military confrontation with Iran, and now, this possibility seems closer than ever. However, Biden’s team remains cautious, recognizing the immense dangers of a war spiralling out of control in the already volatile region.
Ali Vaez, of the International Crisis Group, noted that while some within the Biden administration are enticed by Israel’s recent military successes and intelligence operations, they are wary of the consequences. Vaez warned that an attack on Iran’s nuclear program would likely be the final provocation pushing Tehran to pursue nuclear weapons.
An unequal conflict
It would be a gross misunderstanding of affairs to assume that Israel is the only culprit in the current conflict. Even a cursory reading of what the United States has been up to in the region will allow one to understand how Washington has been the “enabler-in-chief” of all major conflicts since the formation of Israel.
In recent times, one of the most significant is the 10-year Memorandum of Understanding (MoU) covering 2019-2028, under which the U.S. provides $3.8 billion annually to Israel. This includes $3.3 billion in Foreign Military Financing (FMF) and $500 million for joint missile defence programs like the Iron Dome, David’s Sling, and Arrow systems.
In 2023, amidst escalating conflicts, the Biden administration requested an additional $14.3 billion in military aid for Israel, supplementing the usual annual support. Furthermore, the U.S. has facilitated significant arms deals, including a $20 billion package in 2024, which includes advanced fighter jets and missiles to Israel. Israel has received more foreign aid from the U.S. than any other country since World War II, underscoring the strategic partnership between the two nations.
A weakened Iran
In contrast, American sanctions have significantly affected Iran’s economy and its defence capabilities over the years, particularly since the re-imposition of sanctions in 2018 under the Trump administration. The Iranian economy has faced substantial contraction due to sanctions. The sanctions have targeted key sectors, including oil exports, which are vital for Iran’s economy.
The sanctions have led to rampant inflation, with rates soaring above 40% in recent years. The Iranian Rial has also experienced major devaluation, losing much of its value against the U.S. dollar, which has further worsened economic hardships for the population, including high unemployment, and a decline in living standards. Sanctions have severely limited Iran’s ability to procure advanced military technology and equipment. This has hindered the modernization of its armed forces and restricted access to critical components for defence systems.
The sanctions have also influenced Iran’s nuclear ambitions. Naturally, Iranian leaders have to maintain a defiant stance against the attacks and assassinations on the top leadership of what has been dubbed as the Iranian ‘Axis of Resistance” namely (Hezbollah, Hamas and Houthis).
Iran’s Supreme Leader, Ayatollah Ali Khamenei, issued a firm statement addressing Israel and the escalating tensions in the region. Delivering a rare Friday sermon and speaking publicly for the first time in nearly five years, Khamenei emphasized that Iran and its allies, including Hezbollah and Hamas, would not retreat in their opposition to Israel. He described recent missile attacks on Israel as justified “minimum punishment” for Israeli actions and reaffirmed Iran’s support for the Palestinian cause. Holding a rifle as a symbol of resistance, Khamenei declared that Israel “will not last long,” while criticizing its reliance on U.S. support. He hailed Hamas’s October 7 attack on Israel as a legitimate and logical move, while denying direct Iranian involvement in planning it.
Global repercussions
The conflict between Iran and Israel is not just another exchange of blows in a volatile region. It has the potential to spiral into something far more devastating. While both nations have engaged in sabre-rattling for years, the recent escalation signals a shift towards a more dangerous confrontation. Israel’s superior military capabilities, backed by U.S. support, face off against a defiant Iran, weakened by sanctions but fortified by regional alliances and ideological resolve. Whether this will be a drawn-out series of retaliatory strikes or escalate into a full-scale war depends on the actions of both nations in the coming days.
The risk of a knockout punch, particularly with Iran’s nuclear ambitions in play, remains high. However, a full-scale war would not only destabilize the Middle East but also have severe global repercussions, impacting economies and geopolitics across the world. This isn’t just a match of military might – it’s a battle where the stakes are far greater than either side winning or losing.