• Washington appears to be failing in its core goal of limiting the expansion of the Israel-Hamas war, with all of Tehran’s proxies highly active in the region.
• U.S. Secretary of State Antony Blinken’s January trip through the Middle East, as well as other high-level U.S. diplomacy, has achieved no de-escalation of any of the region’s interconnected conflicts.
• U.S. retaliatory attacks have thus far failed to deter pro-Iranian armed factions from attacks on U.S. military assets and personnel, diplomatic facilities, and commercial shipping.
• Washington has been unable to persuade Israel’s government to back U.S. proposals for post-war governance in Gaza or a broader Israeli-Palestinian settlement.

Similarly, U.S. retaliatory strikes in Iraq and Syria have failed to deter Iran-aligned militias from attacking U.S. forces deployed there on at least 130 occasions since October 17. At least one of the attacks targeted the sprawling U.S. Embassy compound in Baghdad. Perhaps even more worrisome, Iran has apparently started to mobilize its own forces to pressure the United States to discontinue its support for Israel’s war effort. Iran conducted an armed drone attack on a chemical tanker in the Indian Ocean, and, in early January, Tehran seized an oil tanker in the Gulf of Oman. Iran also positioned one of its largest naval vessels off the coast of Yemen as a show of support for the Houthis’ attacks. Iran’s actions, although short of provoking U.S. or other retaliation to date, nonetheless demonstrate that there is significant potential for regional conflagration and direct U.S.-Iran warfare. Just in the course of the past two days, Iran has fired missiles at targets in Iraqi Kurdistan, Syria, and Pakistan, demonstrating that Tehran remains more brazen and confrontational than it has been in a long time.

Secretary Blinken’s January itinerary did not include Lebanon, but another envoy, Amos Hochstein, has been tasked to try to de-escalate the skirmishing between Israel and Lebanese Hezbollah that began after the Hamas attack on Israel. Of members of Iran’s axis of resistance, Hezbollah is probably the most capable of causing widespread destruction inside Israel and drawing in its sponsor, Iran, into a region-wide war. Hochstein has sought to enlist Lebanese leaders – many of whom resent Hezbollah’s wielding of a large, Iran-supplied armed force outside the chain of command – to persuade Hezbollah not to draw Lebanon into a war with Israel. He and other officials have also cautioned Israeli leaders not to implement threats to militarily force Hezbollah to withdraw its militia from areas near the border. However, despite the diplomacy, which French officials have aided, the Israel-Lebanon front, far from calming down, appears to have deteriorated further. In early January, Israel struck and killed a key Hamas leader in Lebanon and a commander of Hezbollah’s elite Radwan forces. Hezbollah has responded by expanding its target set over the border to include key Israeli listening sites and other installations. On the other hand, the Lebanon-Israel front still remains far short of all-out Israel-Hezbollah warfare – an observation due more to the calculations of both Israel and Hezbollah than to the efficacy of U.S. or allied diplomacy.

Nor has Secretary Blinken’s trip, or U.S. President Joe Biden and other senior U.S. officials, advanced U.S. efforts to de-escalate the Israel-Hamas war or provide for the governance and reconstruction of the Gaza Strip after Israel ceases major combat operations. Israel has been gradually reducing the scale and tempo of its offensive in parts of Gaza, but Israel Defense Forces (IDF) operations continue to incur high levels of Gazan civilian casualties. Intensive diplomacy in Qatar by Secretary Blinken and another senior U.S. official, Brett McGurk, who visited Qatar separately in January, did not revive negotiations to release the 130 Israeli and third-country hostages still held in Gaza, although these talks appear ongoing and may still yield fruit at some point. The Associated Press reports that U.S. and Qatari efforts have succeeded in some concessions – Israel will allow additional medications into Gaza on the condition that the hostages receive some of that medicine, while additional aid shipments will also be allowed into Gaza. In his discussions with Saudi and Emirati leaders, Secretary Blinken did not obtain unconditional commitments to fund Gaza’s reconstruction. The Gulf states continue to make their contributions to Gaza contingent on a final resolution of the Israeli-Palestinian dispute, including the establishment of an independent Palestinian state. Toward the end of his trip to the region, Secretary Blinken sought to emphasize the positive by saying: “This is what I heard in country after country – a willingness to engage, to help to support the day after in Gaza, but on the condition that there be a clear pathway to the realization of Palestinian political rights, to a Palestinian state.”

Yet, U.S. leaders have been unable to overcome Israeli Prime Minister Benjamin Netanyahu’s entrenched opposition to a Palestinian state or advance even the more limited goal of re-establishing the West Bank-based Palestinian Authority (PA)’s governance of the Gaza Strip after Israel’s offensive winds down. During his meeting with Secretary Blinken in Ramallah, Palestinian Authority (PA) President Mahmoud Abbas reportedly questioned the U.S. ability to compel the Netanyahu government to offer any concessions to the Palestinians, citing the U.S. failure to prevail on Israel to release $150 million per month in tax revenues due to the PA but withheld by Israel after the October 7 Hamas attack. Israeli leaders insist that the PA, which has a reputation for corruption and has consistently failed to prevent West Bank Palestinian militant attacks on Israelis, cannot be trusted to maintain security in the Gaza Strip unless the Authority is fundamentally reformed. U.S. leaders publicly support reforming the PA and have suggested promoting technocrats to key PA leadership roles, but there was no indication that Secretary Blinken moved President Abbas toward relinquishing any of his authority. Nor has U.S diplomacy, including frequent phone calls between President Biden and Prime Minister Netanyahu, softened Israeli opposition to a two-state solution, with Axios recently reporting “the President’s patience is running out.” Still, undeterred by the Israeli hard line, which far-right members of Israel’s government have reinforced, the readout of Secretary Blinken’s January 9 meeting with Prime Minister Netanyahu made clear the U.S. view that a two-state solution is the only way to prevent unending conflict, saying: “The Secretary reiterated the need to ensure lasting, sustainable peace for Israel and the region, including by the realization of a Palestinian state.”

• Iran’s actions against commercial shipping and efforts to support its “axis of resistance” allies are increasing the prospects for direct US-Iran armed conflict.
• Iran and the United States appear to be inching closer toward open warfare, unintentionally, even as officials on both sides try to avoid a broader armed conflict in the region.
• Iran and its regional allies appear to be locked into hardline stances in favor of attacking U.S. and allied interests, and U.S. officials are under pressure to respond forcefully.
• The Houthi movement in Yemen, Lebanese Hezbollah, and Iran-backed militias in Iraq and Syria are all part of Tehran’s unity of fronts strategy, as Iranian proxies tie their regional actions to the ongoing conflict in Gaza.

As of mid-January, Iran appears to be undertaking more direct action to support its allies and thwart U.S. efforts to keep the war limited to Gaza. Iran continues to resupply Hezbollah as fighting on the Israel-Lebanon border escalates, although remaining far short of all-out Israel-Hezbollah war. Iranian leaders have not only applauded but provided direct materiel support to the Houthi movement in Yemen to facilitate its attacks on U.S. and allied naval vessels and commercial shipping in the Red Sea. U.S. officials have repeatedly stated that the Houthi attacks are directly traceable to Iran, insofar that the ballistic and land-attack cruise missiles, armed drones, and other weaponry used by the Houthis were supplied by Iran. Iran reportedly has deployed naval and other forces to help the Houthis identify, and then target for attack, commercial ships financially linked to Israel. In early January, as U.S. and UK leaders threatened to retaliate for Houthi attacks, Iran positioned one of its larger naval vessels (the Alborz) off the Yemen coast as a show of support. Careful to avoid direct involvement, Iran reportedly withdrew the Alborz on the eve of the January 11 U.S. and UK-led strike on 60 Houthi targets in Yemen. The strikes, conducted by U.S. and UK forces with the support of Bahrain, which hosts U.S.-led regional maritime security operations, as well as Australia, Canada, and the Netherlands, came one day after the adoption of U.N. Security Council Resolution 2722 that demanded the Houthis immediately cease attacks on merchant and commercial vessels. The Houthis seem undeterred, however, and yesterday, Houthi militants fired an anti-ship ballistic missile at a Marshall Islands-flagged, U.S.-owned and operated container ship, the M/V Gibraltar Eagle, in the Gulf of Aden. United States Central Command (USCENTCOM) also announced that it shot down an anti-ship cruise missile fired by the Houthis toward the USS Laboon, an American warship operating in the Red Sea.

The U.S.-led decision to strike Houthi targets last week reflected the significant pressure on U.S. leaders to act forcefully after many Houthi attacks, including a widescale Houthi armed drone attack on commercial ships in the Red Sea on January 9. That volley defied a January 3 joint statement by the United States, United Kingdom, and twelve maritime security partner countries warning the Houthis to stand down, although the strikes appear to have failed in deterring the group, whose leaders claim their attacks on naval and commercial ships have attracted new recruits and political support inside Yemen and will not cease until Israel’s war in Gaza comes to an end. Protracted exchanges between the Houthis and the U.S.-led coalition could cause Tehran to take further and more direct steps to support its ally, even though doing so might lead to an unplanned clash with U.S. forces. The January 11 action is also likely to forestall, indefinitely, any chance of achieving a final settlement of the internal conflict in Yemen – a civil war that appeared close to resolution before the October 7 Hamas attack on Israel.

Compounding the potential for U.S.-Iran military engagement, in December and January, Iran used its own forces to conduct attacks that appeared to threaten global commerce. Iran’s assaults could, if continued and escalated, prompt U.S. officials to assert that Iran’s actions impinge on regional freedom of navigation and meet the criteria for an armed response. On December 24, a chemical tanker, the Chem Pluto, was struck by an armed drone in the Indian Ocean during a voyage from Saudi Arabia to India. The strike caused a fire that was extinguished, but no casualties. The U.S. military determined the weapon was launched from Iranian territory. India, which maintains ties to Iran and opposes U.S.-led efforts to pressure Iran economically, sent aircraft and warships to offer assistance to the vessel. On January 10, as U.S.-led military action against the Houthis appeared imminent, Iran seized an oil tanker, the Suez Rajan, in the Gulf of Oman. The ship had earlier been at the center of a U.S.-Iran dispute; U.S. authorities diverted the ship to a U.S. port in 2021 for violating U.S. sanctions on transactions with Iran’s oil sector, and subsequently resold its cargo (1 million barrels of Iranian crude oil). Iran’s capture of the ship seemed intended to send a defiant message to Washington in the context of looming action against Iran’s proteges in Yemen. Over the past decade, Iran has periodically attacked and seized ships in the Persian Gulf in response to U.S. and allied sanctions decisions. However, Tehran’s recent acts against shipping, coming in the context of regional war, have amplified the voices of those Washington officials calling for U.S. military action against Iran itself.

Even though U.S. leaders assess Iran’s actions – both direct and indirect – as a threat to U.S. and broader Western vital interests, the considerations that have always produced caution in Washington on the question of armed conflict with Iran remain. Any military strike on Iran, even if limited, could result in protracted warfare with Tehran that is certain to encompass the entire region. Any U.S. strike on Iranian targets has the potential to cause the still relatively limited Israel-Hezbollah skirmishing to escalate into full-blown war. Iran’s allies in Iraq are nearly certain to support Tehran by attacking U.S. diplomatic facilities in the country, and Iran-aligned militias in Syria will surely escalate attacks on the 950 U.S. military personnel deployed there to combat the Islamic State organization. Any direct conflict with Iran is certain to be costly – militarily, financially, and diplomatically. Iran has developed sophisticated capabilities, particularly armed drones such as those it is supplying to Moscow, that are sure to produce losses of U.S. weaponry and, possibly, military personnel.

Despite the risk perceptions, the United States and Iran remain steadfast in support of their allies and assess that altering their current policies would have adverse political and strategic consequences. Moreover, the diplomatic pathways for de-escalation appear absent. There are currently no talks underway between Iran and the United States or its European allies, either on Iran’s nuclear program, the status of sanctions, or on regional issues. The major Arab states appear focused primarily on shaping the aftermath of the Israel-Hamas war rather than avoiding conflict between the United States and Iran, although the Kingdom of Saudi Arabia has called for “avoiding escalation” following the U.S./UK strike on the Houthis. Global mediators largely lack leverage with either Washington or Tehran. Still, U.S. and Iranian leaders express awareness of the consequence of all-out warfare and appear to try to calibrate their actions to try to avoid it.