MENA Strategic Bulletin – Special Edition

Israel risks winning the war but losing the peace.

The Middle East faces a series of escalating conflicts. Significant red lines have been crossed, and there will be severe repercussions for the region. Israel has delivered a devastating blow to Hezbollah in Lebanon, showcasing its military and intelligence superiority. Hezbollah’s ally and main backer Iran has retaliated with a barrage of missiles against Israeli military and intelligence assets.

Now, the world is waiting for Israel’s response – and to see whether the US can prevent hostilities ramping up even further.

The current escalations began when Israel remotely detonated Hezbollah pagers and walkie talkies in consecutive attacks on September 17 and 18. Starting on September 21, Hezbollah and Israel traded cross-border attacks, with the latter conducting an increasingly intense bombing campaign across Lebanon, including a strike on southern Beirut.

By September 24, the Lebanese government had reported 558 deaths, making it the deadliest bombardment since the 2006 Israel-Hezbollah war, with Prime Minister Najib Mikati declaring that Lebanon was entering “one of the most dangerous phases of its history.” On September 27, Israel dealt Hezbollah its largest strategic blow to date by killing Hassan Nasrallah in the bombing of a residential building in Dahiyeh, southern Beirut. Within a couple of days, Israel had brought the number of high-ranking Hezbollah officials killed to seven.

Retaliation from Hezbollah allies then brought further escalation. On September 29, Israel launched a major strike on Yemen, targeting fuel facilities and docks, following an intercepted ballistic missile attack by Yemen’s Houthis on Ben Gurion International Airport the previous day. Iran responded to Nasrallah’s death on October 1 by firing 200 ballistic missiles into Israel. Israel has vowed to retaliate, leaving the region in a state of heightened tension and uncertainty.

Why this matters

Israeli operations in Lebanon indicate that its intelligence services have penetrated Hezbollah and compromised its security, a feat requiring years of espionage and careful planning. Hezbollah’s systems and ranks have been infiltrated – as reflected in the success of targeted operations culminating in Nasrallah’s assassination. Israel took the ensuing chaos as an opportune moment to intensify its attacks against Hezbollah’s rocket launchers, claiming to have hit 290 targets.

Iran’s response on October 1 was not solely triggered by Nasrallah’s assassination; it was the culmination of previous events, including the assassinations of Fuad Shukr and Ismail Haniyeh, the latter occurring on Iranian soil. This escalation is likely to initiate a series of military exchanges with Israel, which risks becoming overconfident and overly motivated.

To Israel, this presents a once-in-a-generation opportunity to significantly set back Iran, especially when the US administration seems supportive of its approach. In its turn, Iran might leverage its capabilities beyond Hezbollah, increasing the involvement of Houthi forces in Yemen and Iraq’s Popular Mobilisation Units.

As Israel conducts its multi-fronted operations, it faces a precarious situation. Despite some victories on the ground, it has failed to restore deterrence or achieve its objectives in Gaza, where Hamas remains resilient. The risk is that its aggressive approach has opened Pandora’s box, irreversibly destabilising the region. The situation in Lebanon may provide temporary tactical gains but sustaining them remains a challenge. Despite being weakened, Hezbollah remains active – as evidenced by its missile strikes on Israel, which will continue to prevent residents from safely returning to northern areas.

Nevertheless, Israel has most definitely achieved a shift in the power dynamics in the Middle East. Its strategic victories over Hezbollah, long seen as the Islamic Republic’s main weapon of deterrence against Israeli military hegemony, have weakened Iran’s position in the region. For its part, the US has given Netanyahu a green light to continue his campaign of aggression, effectively allowing him to act with impunity despite official statements calling for de-escalation.

Israel is likely to continue pursuing its agenda. However, the path it is taking makes the possibility of peaceful coexistence with its Arab neighbours increasingly remote. This will undermine any normalisation efforts or peace deals in the near future and has ultimately undone decades of diplomatic efforts towards reconciliation.

This escalation coincides with the UN General Assembly’s annual session. Although new Iranian President Masoud Pezeshkian has shown openness to increased engagement with the West, his influence is expected to be undermined by the Supreme Leader and the Islamic Revolutionary Guard Corps.

Israel’s operations in Lebanon have been met by increased support for Netanyahu at home, and a further shift to the right in public opinion. However, while his popularity may have risen, the forces of polarisation in Israeli society remain strong. As the conflict progresses, these growing fractures will increase the domestic challenges for Netanyahu.

This path threatens not only the nation’s stability but also the very fabric of its future. By winning this war, Israel may jeopardise its long-term peace. Its military actions have destabilised the region, provoked its neighbours and drawn Iran further into the conflict. Ultimately, this cycle of escalation could leave Israel with a hollow victory, facing greater insecurity and a more volatile environment for years to come.

What’s next?

Israel

There’s no turning back for Israel at this point. This is a crucial moment, and the country’s leadership realises it may never have another opportunity to fully dismantle Hezbollah and weaken Iran.

The US’s inability to pressure Israel into a ceasefire combined with its unwavering diplomatic, military and financial commitment to Israel – Washington provides at least $3.8bn in military aid annually and has approved $14bn in additional assistance since the Gaza war began – suggests that Israel is likely to retaliate against Iran, which could threaten global security by potentially drawing the US into a confrontation.

Lebanon

Hezbollah is focused on regrouping and strengthening its units to see off the existential threat posed by Israel. The group is unlikely to capitulate easily to Israeli operations.

Meanwhile, the humanitarian situation in Lebanon continues to deteriorate, with around 1m displaced individuals placing strain on the government’s limited resources and increasingly involving neighbouring countries like Syria, Jordan and Turkey as stakeholders in the conflict.

Other constituencies in Lebanon may also see Hezbollah’s moment of weakness as an opportunity to reinforce state institutions and reassert their interests, having been defeated in 2008. Meanwhile, in the event of a full or partial Israeli withdrawal, Western powers may look to bolster the Lebanese Armed Forces, which they have been quietly supporting over the years.

Iran

Iran is also on edge, insecure and uncertain about how deeply its intelligence networks and capabilities have been compromised and its ability to neutralise the Israeli threat. It will look to take a calculated approach, seeking to demonstrate its ability to defend the Axis of Resistance while avoiding provoking a conflict that could draw in the US and escalate into a full-scale war.