Gaza War: New Opportunities and Challenges for Iran

The Iranian decision not to immediately retaliate against Israel for the assassination of Hamas political leader Ismail Haniyeh in Tehran on July 31, 2024, in part reflects a concerted effort by regional, Chinese, Russian, and Western diplomats to convince Iran that de-escalation and diplomacy was the wiser course. It also reflects recognition by the new administration of President Masoud Pezeshkian –whose inauguration preceded the Haniyeh killing by only a few hours– that such a military retaliation would likely provoke a massive Israeli response backed by the U.S. and other Western allies that would doom Iran’s chances of re-engaging with the West and relieving onerous economic sanctions. A wider conflict between Israel and Hezbollah across the Israel-Lebanon border does not appear to have changed this calculus for Iran, which is confronting severe domestic economic problems and a growing gap between the regime and society. Still, any progress in improving U.S.-Iran relations will have to await the results of U.S. presidential elections.