Middle East conflict: is an all-out war inevitable?

Following days of rocket and missile exchanges between Israel and the Iranian-backed terrorist group Hezbollah, the confrontation took a “more ominous turn” when Iran launched another round of direct missile attacks on Israel at about the same time as Israel began a limited ground invasion of Lebanon, says The Economist. Iran’s actions suggest the “full-blown regional war that many have feared”, ever since the terrorist attacks of 7 October 2023, “now looks closer than ever”.

Will the Middle East crisis escalate?

The latest round of Iranian missile strikes, most of which were shot down, underlines the weakness of the Iranian regime, says Marc Champion on Bloomberg. The clerics in Tehran have seen Hezbollah, their “most powerful asset”, “decapitated and degraded” by the death of “one Hezbollah commander after another”, including the group’s leader Hassan Nasrallah, as well as the assassination of Hamas’s leader in Tehran. Israel is “clearly having a lot of military success right now”, and Hezbollah has been pushed further back into Lebanon. The resulting loss of credibility is dangerous for an “unpopular, repressive regime”. 

Israel’s defences were so effective that the damage to the military and civilian sites that Iran targeted is “minor to non-existent”, says Jonathan Spyer in The Spectator. But, in response, Israel is unlikely to repeat the “small and largely symbolic” strikes it launched last April, as it is aware this would probably be interpreted as “hesitation – and hence weakness”. It would encourage the mullahs in Tehran to see massive missile attacks on Israel as “part of the rules of the game”, which could lead to a similar response “every time Israel takes major action against an Iranian proxy”. This time, Israel is likely to “hit back hard”. 

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Will the US intervene?

Iran’s attack on Israel also presents a dilemma for the US, says Gideon Rachman in the Financial Times. On the one hand, the US has said it will “work with Israel” to ensure there will be “severe consequences” for Iran, implying some form of support – perhaps even joint military action. However, it is also worried this may spark a wider war in the Middle East, one that “might draw in the US or wreak havoc on the world economy”. So, behind its “tough talk”, the White House may still be urging Israel to “calibrate its response and to not hit back so hard that Iran feels compelled to up the ante again”. 

US president Joe Biden may have been putting “heavy pressure” on Israel to rein in its responses to a “symbolic minimum”, but it would be a “mistake” to give the same advice now, says Bret Stephens in The New York Times. Even a weakened Iran presents an “utterly intolerable” threat, not just to Israel, but to the United States, and “whatever remains of the liberal international order”, via Iran’s use of proxies around the Middle East, from Lebanon and Gaza to Yemen. 

This requires a “direct and unmistakable” US response that targets the production of missiles and uranium and sends a signal that Iran’s “vast and vulnerable network of pipelines, refineries and oil terminals” will be next, unless it orders its minions to “stand down”.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.