Introduction

Neri 0:05

Shalom and welcome to the Israel Policy Pod. I'm Neri Zilber, a journalist based in Tel Aviv and a policy advisor to Israel Policy Forum.

unknown 0:13

Dr.

Prospects for a Permanent Ceasefire Deal

Neri 0:13

Nasan Rafati is back with us this week to discuss all things Iran as the ceasefire talks between the U.S. and the Islamic Republic lurge from optimistic to pessimistic and back again and back again at the speed of a Donald Trump tweet. Nassan is, of course, the senior Iran analyst at the International Crisis Group in Washington and was previously a postdoc fellow at the RAN Corporation, the U.S. Institute of Peace, and the IFRI think tank in Paris. He also holds a doctorate from Oxford University and is an Arsenal football club fan, but we won't hold that against it. Wanted to get Nasan's take on the latest in the ceasefire talks and in the waters of the Persian Gulf. The question is always deal or no deal, or maybe something in between, as we discussed, and how the Iranian regime actually views the last two months of war and now non-war. At the end, we also delved into what's happening inside the Islamic Republic right now, politically and economically. This is shaping up to be a critical week in the war, and Nesan did a great job as always breaking it all down for us. But first, a few thoughts for me. So just FYI, we're recording this Monday afternoon Tel Aviv time in case, as is very likely, something happens between now and when this episode goes up. But in just a few hours, sirens will wail across Israel, not because of any incoming Iranian ballistic missile fire, but to mark the start of Memorial Day here, dedicated to the memory of all those fallen soldiers and civilian victims of terrorism who paid the ultimate price, including over the last two and a half years of war since October 7th, 2023. As is customary here in Israel, tomorrow night, Tuesday night, is the start of Independence Day festivities. So there's major emotional whiplash every year to go from the sorrow of Memorial Day to the joy of Independence Day. But this is how Israel's founders designed it on purpose to convey that very message from sorrow to joy, all in the span of really just a few hours. And this year, Israel, as we all know, turns 78 years young. I couldn't tell you what 76 and 77 were like the last two years. It was all a blur, honestly, and was superseded in many ways by not only October 7th and the ongoing wars, plural, but also the fate of the hostages, who were still, as we should all remember, being held in Gaza during those independence days. But I definitely remember number 75, Israel's 75th birthday, back in April of 2023. It was at the height of the mass demonstrations against the Netanyahu government and its attempt to overhaul and undermine Israel's judicial system and really Israel's democracy. A big, big demo was held that night, Independence Day Eve on Kaplan Street in central Tel Aviv, probably over 150,000 people in attendance that night. Remarkable in retrospect, uh, given the attrition and exhaustion of the Israeli public three years on, and with everything that has happened uh really in between. But that's the point, I think. Israel's 70th birthday was the first independence day under this latest far-right version of the Benjamin Netanyahu government. And this week will, number 78, uh, will be the last by definition of this Netanyahu government, with elections expected likely in the fall and really likely in September of this year. As we've said many times on this podcast, because uh it happens to be true, this coming election later this year will prove existential for Israel and its future trajectory. By next Independence Day, number 79, we'll have a much better sense of where this country is actually heading, with the hope that the preceding four years were the darkest darkness before a new dawn breaks. All right. With that, let's talk you wrong with Nasan Ravati. Hi, Nasan. Welcome back to the podcast. Hi, Neri, it's good to be back. Uh, it's good to have you back, Nasan. Uh, a lot has transpired uh in the world, but especially in your patch of the world uh since we last spoke in January. Um that was in the midst of the mass protests that engulfed uh Iran. Donald Trump back then uh put down the marker for what would uh eventually escalate into all-out war, saying uh he would come to the rescue of the Iranian people. That is debatable whether that has actually transpired since then. The regime also, uh, as you laid out for us back then, wasn't really capable of finding uh an exit ramp, uh not from its own domestic troubles and certainly from not from the head-on collision that would eventually transpire uh with the United States uh and Israel. So uh here we are, nearly four months later. So I wanted to start uh with the most immediate question, Nasan, uh, and that's where we are with the talks currently ongoing between the US and Iran. Uh the ceasefire is nearly two weeks old. The deadline is coming up this Wednesday. So uh we're a bit of a hostage to fortune uh and to Trump tweets with uh things moving very quickly, uh even on a kind of minute by minute and hourly basis. But give us a sense, if you could, of where we are uh as we record this episode Monday afternoon Tel Aviv time. Uh it wasn't a great weekend, was it, in terms of the prospect of actually getting a permanent ceasefire deal.

Naysan 6:07

No, I think you could look at it and say that, you know, from from the end of February, we had several weeks where we had the fog of war. And for the last two weeks or so, we've been in the haze of a ceasefire whose terms are not entirely clear unless they're being breached in negotiations that may or may not be happening uh with a supreme leader in Iran who may or may not be alive. You're right. I mean, uh we are recording on on Monday, but to give your listeners, watchers, a sense of how fast some of these things uh have been moving, uh it was, you know, two weeks ago or so when you know President Trump started off the day by threatening that you know the end of Iranian civilization may be nigh, and by the end of the day had announced a ceasefire agreement of two weeks through Pakistani mediation. And about a hundred hours later, uh, we had the highest in-person negotiations between the United States of America and the Islamic Republic of Iran since the revolution, uh, led by Vice President J.D. Vance on the US side and Iran's parliamentary speaker, Mohammed Bar Ghalibaf, uh, on the other side. So, you know, throughout these two weeks, there have been back channel contacts and uh group of mediators led by Pakistan trying to see whether or not at minimum this ceasefire can be extended, and at most whether Washington and Tehran can make their way to some kind of memorandum of understanding, some kind of deal. Um, and it is uh poised. Um as we're speaking, the US delegation is in the air. The Iranians may or may not uh be joining them um for talks that could um, at least theoretically, resume in Islamabad uh tomorrow.

Neri 7:46

Finally poised, as uh as they like to say, but uh as you mentioned earlier, uh things are not at all clear about the prospects of of getting a deal or not. We'll get into the the various uh minutiae and the various scenarios in just a in just a moment. Over the past two weeks, mistakes have been made by either by both sides, one side in particular, one side more than the other, in terms of how we've gotten to the point now. And again, we're speaking Monday afternoon Tel Aviv time, where I think it's maybe a 50-50 chance whether there's a deal or potential re reignition of the war, escalation, and a pretty bad escalation potentially.

Naysan 8:25

And an in-between where you have uh a continued muddle of a ceasefire. Um, I mean, so big picture since the ceasefire took in uh took effect. The US has stopped bombing Iran, Iran has largely stopped bombing Israel and Gulf states. That was essentially the tenor of hostilities uh from the end of February when Israel and the US started Operation uh Epic Fury slash Roaring Lion. Um Iran retaliating by attacking shipping through the Strait of Hormuz, Iran also retaliating with missile and drone strikes against Israel, as well as uh missile and drone strikes against US allies in the Gulf. So that um major element of armed hostilities has ebbed. Um, and we've seen a bit of a quieting on on all fronts, uh a bit of a muzzling of guns, but um a lot of uh uncertainty and and contradiction uh around that. So, for example, the Iranians who had uh you know shut down the um Strait of Hormuz by by menacing uh traffic going through there. For the first several weeks, the U.S. had actually issued a sanctions waiver that allowed Iranian uh oil to continue going through the Gulf. Remarkable. Um and then President Trump essentially flipped an UNO card and said, we're gonna introduce a blockade of Iranian oil. So if if the Iranians aren't going to let other people's ships go through, the U.S. will assemble more than a dozen warships in the Gulf of Oman to basically set up a blockade net preventing Iranian exports from coming out and Iranian exports from going into Iranian ports. Over the weekend, the Iranians suggested that they could go back to uh limited opening of the of the Strait of Hormuz with fur commercial traffic. President Trump said, you know, that's great, but we're still not going to let your ships go through. The Iranians then resumed firing at a couple of vessels over the weekend, and the US uh in turn um uh shot and and boarded uh an Iranian vessel that was trying to breach the U.S. uh blockade. So a lot of these things on the fringes of this ceasefire are you know fraying. And we've seen again, you know, uh President Trump moot the possibility of resuming strikes that would go up the escalation ladder relative to where hostilities froze off by you know attacking Iranian power uh production sites and and bridges and you know moving into a an infrastructure stage. Um so we're at a we're in a position where you know there's there's a lot of uh jockeying for position. Um both sides, I think, you know, it's not their ideal to go back into hostilities because they know that that entails a lot of risks. But between a ceasefire and an MOU, there are compromises that would that would have to be made and happening in very murky um uh scenarios where things are being done either through mediators or pronouncements via tweets, which is not usually how you know clarities are obtained, but rather leaves a lot of room for for you know miscommunication, miscalculation, and misunderstanding.

Neri 11:38

And it is remarkable that, by the way, it's not just the US president, but also many Iranian officials that uh are reacting via Twitter and other kind of public comments, trying to jockey for a position at the negotiating table, and sometimes even uh in the Gulf itself, uh, while diplomacy is happening behind the scenes. So uh there's uh rhetorical escalations, slight actual military escalations, all the while they're still negotiating, I assume, because it hasn't broken off yet, emphasis on on yet.

Naysan 12:11

Yeah, I think um, you know, we've if you have the misfortune of having to track all of the the readouts that come from various foreign ministries. I mean, there are four countries that now have in in among diplomatic circles uh managed to earn their own acronym, which is the the steppe countries, the the Saudis, the Turks, um the uh the Pakistanis and the Egyptians, yeah, um, all of whom are you know in touch with the US team, with the Iranian team, but really in terms of in-person negotiations, we've had pre-round, pre-war negotiations, uh two sets of them between the Trump administration and Iran in 2025 and early 2026, and now um the possibility of a of another round uh in Islamabad following up on uh the one about 10 days ago.

What a Deal Could Look Like

Neri 13:01

Right. So that's where we are uh at the moment as we speak. And again, our listeners and viewers may be smarter than we are uh if things go uh well pear-shaped by the time this episode goes goes up. But I wanted to get into the various scenarios that you touched on, uh, Nissan, uh, and let's start with a little game. We've played here on this podcast way too often, uh, and that's called Deal or Doe Deal. Uh trademark, trademark pending uh on that, on that title. I mean, basically, what do you think a deal could look like between the US and Iran? Uh, what would be the consequences of no deal? Uh again, potentially in the coming, coming days if they things do go pear-shaped. Uh, and as you kind of alluded to, is there some kind of halfway house zombie-like measure, right? No deal but no non-deal uh that just kind of extends the current ceasefire indefinitely. Uh, give us a sense of those those three scenarios, uh, what they what they could look like.

Naysan 13:57

So I've had the pleasure of being on the pod a couple of times. Uh we've talked about you know various rounds of of US Iran negotiations. So people who have who have tuned into those will know that there's certain elements that will be very, very familiar, and there are certain elements that will be a bit different than what we've had in the past and different circumstances, not just different factors. So the Trump administration in its second term has done kind of three sets of talks with the Iranians. The first set was in March, uh April of last year, prior to uh or April, May, uh May last year, prior to the start of the 12-day war. And at the time, it, you know, it was uh Iran's nuclear program was expanding, Iran was building up fissile material, especially at 60%. That was the the focus of the negotiations, and US sanctions relief was on the other side of the table. Those talks were largely moot after um uh the start of the 12-day war, but it also introduced a new nuclear reality where Iran is not enriching involuntarily, as far as we know, um since uh the June war, Iran's enrichment has been at zero. Right. It also still has fissile material that uh is presumed to be inaccessible, but um uh at at least two sites in Iran that were bombed um by the US in Operation Midnight Hammer. So when we had the second set of negotiations between the US and Iran, and you mentioned the protests, you know, the protests that happened uh beginning uh of uh late December through January, the the Trump administration came in and you know talked about you know um that uh for Iranians to kind of seize this opportunity and and and topple the government, and they the US began to move in uh significant significant military assets, and there was again a pivot to talks over the remnants of Iran's nuclear program, right? What like this FISAL material that is still there and again some element of sanctions relief. And now we are in the third set of negotiations where those nuclear elements are all still there, as is a new issue, which is the future of navigation in the Strait of Hormuz. So you have a combination of things that that are fairly consistent, and then you have an element, an introduction of some new factors. Now, at its most sweeping, the US would be looking at you know four kind of um broad themes of Iranian concessions: nuclear, proxies, missiles, hormuz. And it seems from the reporting around the negotiations that there's really been a uh a triage of of the nuclear piece of the puzzle and the the hormuz piece of the puzzle. So um if you want to get into the the nuclear side of what it looks like, there are two fundamental elements. I mean, there are other elements, but there are two main ones. One is what's happening with Iran's thissile material.

Neri 17:02

These are the 440 kilos buried somewhere in various sites inside Iran.

Naysan 17:07

These include the 440 kilos, but there's a much bigger stockpile at 5% and 20%. Our concern is always with the 60%, because that is the closest to weapons grade. But there is a there's if you're approaching it as a problem set, the the HEU, the highly enriched uranium, is the most concerning, but there are also larger stockpiles of 20 and 5%, which if Iran were enriching, could also be enriched to 60 or 90 percent. Um, so that's the the status of the fissile material. So basically dealing with the big question mark on Iran's current program, and then negotiating over the future of Iran's nuclear program. So with each of these issues, whether it's the fissile material or it's the future trajectory of Iran's nuclear program, you have a finite number of options that produce an almost infinite number of combinations for an agreement, right? So on the fissile material, you have a finite set of things that you can do with them. You can keep bombing them and hope that aerial surveillance gives you enough of a sense of where the Iranians are moving these, uh, if they're attempting to move them and where they where they are, and you know, hope that they just don't ever have an opportunity to access them. A second option is to get the Iranians to dilute them, to recover the 60% and dilute it down. Um move it away from um um weapons grade to whatever level you want to decide. And the third option is to exfiltrate the material, right? So this can be done either through a ground operation where US forces or US and or Israeli forces go in, physically try to seize this material, which is obviously a fairly complicated operation, or you get the Iranians to send it out, uh, send it out to you know, Russia's proposed itself as a recipient. You have uh, you know, fuel banks, you have the US, you have other places where it can go. Um, and you have a combination of all of these things, right? So Iran dilutes part of its stockpile, so it says it's not giving up the entirety of it, and it ships out another part of the stockpile, so the US can say it shipped out some of the material, right? So all of these combinations um uh can you know be moved around to come up with some kind of uh compromise. And the same thing is true with regards to the future trajectory. So the US um uh aspirational line is Iran agreeing to zero enrichment forever. Dismantle the program, give up domestic enrichment. Um, if you want to work with the US on nuclear civil cooperation, that's fine, but no enrichment on Iranian soil. The Iranians will always insist that they have the right to enrich, even though they are physically not able to carry that out in practice right now because their enrichment facilities are non-operational. Um, so then you get into a similar debate. Is it zero or is it limited? Is it zero for a while, then limited, or it's limited and then phased out to zero? If you can't agree, if the US doesn't agree to a limited program and the Iranians don't agree to a perpetually kneecapped program, then are there permutations in between where you say for X years we do this, or for X years we do X, and then for X years we do Y? Um, all of these things can get you towards a non-proliferation objective, which is having eyes on Iran's fissile material and ensuring that for as long as you can, that program is as constrained as you can make it so that it's not a proliferation threat.

Neri 20:48

And just to be clear, uh in terms of a potential deal and specifically on the nuclear issue, the prior Trump position was quite maximalist, shall we say? Zero enrichment, give up uh what is what did Donald Trump call it? Your nuclear dust, the the highly enriched uranium. So that was uh at least the prior, potentially current American position. But like you said, according to reporting, maybe there is some flexibility there in terms of the Americans.

Naysan 21:19

And that's not just consistent with his second term, but also with his first term. Um Maxim was from from the time of uh the US withdrawal from the JCPOA, the 2015 nuclear agreement in in May of 2018, the the US position under President Trump's first term was zero enrichment uh for Iran. And over the course of the 2025 negotiations and the 2026 negotiations, this has remained one of the fundamental dividing uh points between the two sides. Is uh is that the US, uh at least in in its public posturing, uh, maintains that position as You said there's been reporting that suggests there may be a little bit more wiggle room in terms of prolonged cessations and then leading to some kind of other arrangements. Again, I think we're we're dealing with a different reality that even the Iranians right now, per this same reporting, are conceding on the notion of a moratorium and they're debating over how long that would actually be. Because again, for the first time in 20 odd years of the Iran nuclear crisis, the US actually has Iran where it wants it to be, which is at zero enrichment. So the point is how do you extend that for as long as possible while having verification and handling the nuclear dust, the fissile material, um, to your satisfaction. So conceptually, all of these circles can be squared. Um, you know, if if the reporting is accurate that the Iranians have come back with 5% and the US is asking for 20%, that doesn't fill in a lot of details, right? There are a lot of other things that would happen with the U.S.

Neri 23:06

You mean five years and 20 years in 20 years?

Naysan 23:09

For a moratorium.

Neri 23:10

Yeah.

Naysan 23:10

Now, again, like there's there's a reason the JCPOA was 150 odd pages, is that it also got into a lot of other granularities that would have to be addressed. And and at this point, all of these discussions around Islamabad, success right now would look like a memorandum of understanding, a two or three-page document with bullet point understandings that um that both sides are like, okay, we've we've got a deal. Now let's you know fill in the parameters. And you know, there's question that there's going to be questions about you know, what are the inspection mechanisms that go into place? You know, how quickly does the IAA go in, how who gets the fissile material out? Does an agreement account for Iranian demands on you know research and development? Would it have any centrifuges left? Like there are a lot of um finer details that that would have to be hammered out with with experts. But the big picture would be we've, you know, enrichment, handle, handle the fissile material and then handle the future trajectory.

Neri 24:10

Right. But it does sound like uh what's the the joke? I think it's like a Churchill joke, right? We're we're now just haggling over the price. Uh if the Trump people have actually come down from their very maximalist demands of zero, zero, nothing at all to various permutations of not allowing Iran perhaps to enrich, but some moratorium for X number of years, um some dilution of the facile material that's already enriched. Um it's interesting. I, you know, we'll see if Donald Trump agrees to be flexible. I suppose the Iranians also need to be flexible, um, including, by the way, the second issue you mentioned, which is the reopening of the Strait of Hormuz. I assume that's more of a binary choice, right? Zero one to return it to the pre-war situation where where it was open and the Iranians were not um, well, holding the global economy hostage.

Naysan 25:04

Yeah, I Hormuz is um, I mean, first on on just to close off on the first point, I mean, President Trump, after the reports of 20 years came out, also said that he didn't really like the idea.

Neri 25:15

Right.

Reopening the Straight of Hormuz

Naysan 25:15

So um, whether that means he doesn't like the idea but he would accept it or accept a variant thereof, uh remains to be seen. And whether or not the Iranians would accept a moratorium um in practice um that goes into you know several years, maybe a decade, maybe more, again remains to be seen. There's a flip side to that whole debate as well, which is what the Iranians expect in return for nuclear steps, which is sanctions relief. And again, the Iranian, there's there's there's different types of sanctions relief. There's there's Iran being able to access some of these blocked uh financial um assets that it has dotted around the world. That would be one form of financial relief. Another form of financial relief would be uh a lifting or waving of primary or secondary sanctions that the US has in place. Um, so again, all of these things I was saying before, like, you know, you there there are a finite number of possibilities for how how you address each of them. But when you take the nuclear on fissile material, and then you take the nuclear on future trajectory, and then you take sanctions relief, you you do have an indefinite, like an infinite number of combinations because there's zero trust between these two sides, right? So none of this all happens by magic. Um, you know, the the US will say, well, we need to get the fissile material addressed before we get let you have any funds. And the Iranians would say, well, we need a gesture of your good faith, then you have to let us do X, and then we'll do X in return, right? Like you have a lot of um uh sequencing, you know, scope and sequencing and are all how these negotiations typically go and where you get into a lot of um the debates. And I remember in 2022, if I'm not mistaken, when the Biden administration was negotiating a return to JCPOA, you know, we we had gotten to the point where they were litigating over some of the footnotes and it still broke down. Um so these are these are things that the the the draft text of the uh agreement that the Biden administration and European and uh allies and P5 plus one partners were negotiating with Iran in 2022 actually had on the top of the the draft printout, uh nothing is agreed until everything is agreed. And so if you if you if you take that, I mean we're discussing, you know, well, five versus 20. I mean, there's a very big difference between five and twenty, right? So um, you know, there can be movement, but a lot of these things actually need to be signed off and even then need to be implemented. Um on Hormuz, yeah, it's it's um look, the Iranians have discovered this uh this uh tool that they had never really, I mean, they threatened to use before, um, but turned out to be fairly, and we've seen some of the reporting over the weekend that you know President Trump was a bit surprised that you know a couple of drones are enough to put shipping companies, you know, off the notion of transiting through a dodgy strait. There is some precedent for this because we saw it with the Houthi campaign in the Babul Mandeb last year, where they again were able to menace shipping and and uh stop a lot of the traffic flowing through the Red Sea. Um, so I think the interesting thing is that for the first couple of weeks, the Iranians were able to keep sending their stuff out. And the waiver was actually in place to facilitate that. And basically by putting the blockade in place and taking away the um the waiver, the US basically said, if you're going to try to kill off traffic through the Strait of Hormuz, we're gonna make sure that it's a murder suicide for you. That um, you know, others may not be able to access oil exports or LNG or fertilizer and everything else that goes through the Gulf, but Iran will, you know, see its uh its seaborne trade ground to a halt. Now, whether or not the Iranians um uh actually uh are willing to go back to a status quo ante is to be determined. They you know want to get some residual benefit out of this. Um that goes against what the US wants, that goes against the principle of freedom of navigation, that goes against everything the Gulf countries um want. They don't want the Islamic Republic of Iran to essentially have uh a critical strait where you know the UAE and Qatar uh export LNG, several Gulf countries export fertilizer, a lot of Gulf countries export uh crude oil. They do not want that to be subject to um an Iranian sort of damage lease.

Neri 29:59

Yeah. The uh Ayatollah Road. The Ayatollah booth, I think. Ayotol booth, yes. That's right.

Speaker 2 30:09

Israel Policy Forum is a policy organization rooted in the Jewish community. Our mission is to build support for a secure Jewish democratic Israel through a viable resolution to the Israeli-Palestinian conflict, advancing pragmatic US policy towards the conflict, U.S. Israel relations, and regional diplomacy among policymakers and community leaders. We promote policy measures endorsed by credible security experts, develop analysis and commentary, and convene programs that engage and educate leaders across the political, denominational, and generational spectrums. Our young professionals initiative. To learn more about our work, visit us online at Israelpolicyforum.org and follow us on social media. If you rely on Israel Policy Forum for credible and nuanced analysis, please make a tax-deductible gift today at ipf.li slash support the pod or at the support the show link in the show notes.

Neri 31:07

So that's kind of the negotiations, the I mean, the very complicated negotiations that will need to take place, uh, arguably, to get to a deal. What's the scenario in terms of no deal? Talks breakdown could happen even tonight, tomorrow, coming days. What do you expect will happen then?

Naysan 31:27

So we we have these three options, right? That Islamabad comes together and an MOU by magic um actually addresses everything sooner rather than later. And we start to focus on implementation. So that's that's one slide.

Neri 31:45

Why are you so pessimistic for a Middle East analyst? I don't understand where where all this pessimism is coming from.

Scenarios and Consequences of No Deal

Naysan 31:51

Yeah, I've I've generally learned to assume the worst and hope for the best, and you'll never be disappointed. Um I I know you will tease me at some point about being an Arsenal fan, so that applies equally uh to being an Arsenal fan. That that's one option is that we get the miracle of Islamabad, and we have a um uh you know Khalibaf and Arachie and the rest of the Iranian team decide to go meet with the US, are able to bridge these uh remaining gaps or punt on some of the issues, right? So, you know, um the US, we talked earlier on, uh, you know, one of the things they were looking at was restrictions on Iran's um missile uh capacity, both in terms of um the size of the arsenal and also potential limitations on the range of the arsenal. Um that seems to have essentially been punted uh for the time being. And we've we saw um some reporting a week or two ago that in the US uh 15-point proposal, this was essentially left as a to-be-determined kind of uh question, right? So and and that's fair enough. The Iranians aren't are going, it's going to be very difficult to get them to agree on anything related to missiles. So if you're triaging your central concerns, nuclear and hormuz, um, also no real kind of public discussion about the proxies either.

Neri 33:14

That's also seems to be a a climb down from the previous negotiating position of the Trump administration.

Naysan 33:20

Aaron Powell Yes, although again, I think that there are, you know, if if a deal is finessed into a kind of wider regional de-escalation, right, where you where you have now this process going on between the Israelis and and the Lebanese, um, the the Houthis have held fire throughout this, and then you know, the US-Iran, uh, the Israel-Iran uh ceasefire kind of takes an effect, you know, the proxies would would be disengaged, right? And that's a starting point. Um, funding and things like that. I mean, the first issue is um, you know, whether or not the Iranians would ever accept any of this stuff when it's such a core element in their in their national security doctrine. But secondly, how you enforce it, right? Like how do you with nuclear, you have inspectors, you have um uh quantities, you know, and and when it comes to you know uh proxies, let's take Hezbollah as an example. Um, the Iranians, as you know, because you report on this stuff, it's it's it's a bit of a um uh challenge for them right now to send military supplies, right? Uh the land bridge through Syria is gone. Um so they you know the the stuff that you know you've covered in terms of Iran sending suitcases laden with GPS devices that can turn rockets into uh into guided uh munitions, like those Halcyon days for the Iranians seem to have passed to a certain extent. But if Iran says, you know, uh the south of de uh of Lebanon has been destroyed, we're gonna send some funds for reconstruction um to our to our Shiite brethren um and things like that, uh you know, there again, is that a is that a supporting a proxy or is it something that might be less intolerable?

Neri 35:10

Right. So so wait, you were we were getting on the no-deal scenario.

Naysan 35:15

Right. Okay. So yeah, so so these are so these are the parameters for for the magic of Islamabad. An Islamabad miracle um where you know things actually fall fall into place. Then you've got essentially an extension of where we've been the last two weeks, which is that there's enough understandings and and to to basically everyone's kind of holding fire. Maybe there's some understandings that the Iranians let commercial traffic back through and and the Americans kind of you know ease the blockade or or or you know allow for you know uh tankers to go into Iran but not leave Iran, you know, some kind of um working around the margins, but uh bottom line, you don't have an active return to hostilities. You don't have an active resumption of US airstrikes against Iran. Iran does not attack Israel, Iran does not attack the Gulf, and you kind of keep this process open because A, there's enough progress for there to be light at the end of the tunnel, and B, the pain of watching the tunnel collapse is mutually shared by everyone. So there's no you know uh desire to go into something that's gonna lead to a spike in oil prices, gonna lead to uh to you know further attacks on on Iran, further fire on the Gulf. So everyone kind of decides on a muddle-through um approach, and and we we carry on kind of where we've been the last two weeks, where it's not you know hostilities, it's not peace, Iran's economy is continuing to be squeezed through through sanctions, um, but no one really has an interest in going back and and um and and start restarting the war. And then you have the third option, which is going back to essentially what we had or picking up from where we were before the ceasefire, where we know that you know Iran still has drones, still has missiles, was able to maintain a certain rate of fire throughout the five, six weeks of of uh of conflict. And we know that President Trump has laid out exactly what the US target package might be if that happens, which is you know, going after Iranian uh infrastructure, uh power plants, uh bridges, and and so on. And you know, you can add to the to that the asterisk of a potential military operation to retrieve the fissile material, because that you know will will remain uh a consideration. Um so again, it's pretty unlikely, but potential. High risk for sure. I don't uh I I've I've gotten out of the business of saying that anything is is unlikely at this point, but um it I mean I think for for and we've seen Israel's defense minister also point out the other day that you know um having some kind of resolution to that FISA material is a an objective without which this campaign cannot end.

Neri 38:10

Well, the Israeli defense minister says a lot of things on a near-daily basis. Let's leave it at that.

Naysan 38:16

Okay. Um yeah, so so yeah, so we get into a scenario where we essentially pick up from where we left off um prior to the ceasefire. Um the US still has targets, the Israelis still have targets, there are um, you know, uh there are uh both in terms of uh military assets, critical infrastructure, and perhaps personnel. You know, there's uh the Israelis started this campaign by going after the Supreme Leader and uh later took out the Secretary of the Supreme National Security Council, Ali Lari Jani, and you know, other high-ranking officials in the Revolutionary Guard, um uh naval officials, uh Basiege officials, intelligence ministry people. So all of that could essentially continue from where everyone left off, uh, and the Iranians could go back to uh striking ships, striking uh US bases in the region, striking uh US allies in the Gulf. Um, and again, uh I think from the US perspective, uh, you know, everyone's talked about this, you know, escalate to de-escalate. And so far we've gotten a lot of the escalate, a little bit of the de-escalate, but you know, that cycle could be upon us again.

Neri 39:34

And just to touch on this issue of uh escalating to de-escalate, is is there a pain point or a pressure point at which the Iranians may change their tune?

Naysan 39:46

Look, the Iranians are under I think several different uh uh points of pain, right? I mean, leadership is is one, right? Like that they have lost some some senior officials. You've got this kind of not sure team of rivals is the right phrase, but you've got these um ascendant figures like you know Ghaliboff, who's kind of a person that that uh straddles the political and IRGC you know elements of the system, you've got more hardline figures from the IRGC who are taking on positions in the National Security Council and and and all the rest of it.

Neri 40:23

You have a zombie supreme leader that has yet been seen in public?

Naysan 40:28

We have a a zombie supreme leader who has not yet been uh seen in public. That's also uh true. If you want to understand the points of pain for the Iranian system, part of it is is appreciating how difficult the situation was before the war started, right? So on the one hand, they're dealing with an economy that was in very rough shape even before the war, right? Uh part of the reason that the protests started at the end of December was that the currency was basically uh you know uh falling apart. Um inflation was 40 plus percent. Um, you had regular problems with you know power outages and flooding and like a creaky national infrastructure. That was all before the war. Right. And you also had this massive uh gap between state and society that that once those protests started over economic grievances quickly kind of escalated into uh a very uh uh widespread anti-regime uprising that the system put down with absolute violence and brutality. Right. So they're they are you know even before the war, they were dealing with these, you know, two major challenges. One, a economy and national infrastructure that was in rough shape, and the other one, the fact that a lot of Iranians, now I don't I can't give you a percentage because these things are very difficult to ascertain, but a lot of Iranians who are just, and we've seen this not just with the 2026 protests, but the Masa Amini protests in 2022 and going back, um, that there are a lot of these grievances against the government, whether it's over uh political rights, social freedoms, economic malaise. You know, that that's their that's the situation into which they started this war. And um a lot of those problems are now worse off, especially when it comes to the economy. I mean, the the internet has been out uh for uh weeks, essentially since the start of the war. That has a social impact, obviously. It makes it much more difficult for anyone outside to see what's going on in the country. It has an economic impact because there are a lot of small businesses that sell off of Instagram and Telegram and all of these other channels. Trade right now is going to be depressed because of the blockade. The infrastructure damage will run into the tens of billions. And all of those things, uh in a sense, the the state will face a lot of challenges that it's papering over during the war as soon as the the war is over. And that's gonna be partly economic and partly it's gonna be you know social, like social and political.

Neri 43:09

Okay. Then logical next question is all that being equal, all that being true, doesn't the current Iranian leadership, this uh, well, the same regime, but this this these this new Iranian leadership, quote unquote, uh understand that?

Naysan 43:24

Look, I think this is why they're in Islamabad, right? Or why why they've agreed to these ceasefires. They they they know that there is a financial imperative, they know that um you know they are militarily mismatched, but there are also certain things that uh they will not capitulate on, right? And um, you know, I I think if if there's a if there's an you know if there's an so part of it is getting the right terms, right? And and I think part of the negotiating uh team's position is that you know we'll talk About enrichment, but we won't give up everything in one go. We want sanctions, but we want it to be uh sanctions lifting, but we want it to be maximized. Uh, we want we're we may discuss hormuz. So they know that I mean there is an imperative for them to come to the table. Uh the question is uh, you know, I I remember um there was a quote uh before the war actually started where uh the US special envoy Steve Whitkoff said that, you know, the president asked me why haven't the Iranians capitulated?

Neri 44:30

Yeah.

Naysan 44:30

Um and the Iranians will concede, but especially with you know, with the the guys that are in charge right now, capitulation is is is going too far. They don't believe that they are a defeated party. They believe that they still have cards that they can play. They believe that if they capitulate on one point, it will invite further capitulations. And and the US, because in their view it cannot be trusted, if you agree on one, they'll ask for two, and even if you agree on two, they'll ask for three. And then I think there's also an element of um you know hardline doctrine, which is that there's some within the system who think that agreeing to a ceasefire in June was a mistake, right? Because uh Iran basically looked for an off-ramp and in the process made a resumption of hostilities inevitable, right? That that that it it it it should have you know pushed um a little bit longer because in this narrative, right, and and we can debate how you know accurate it is, it was Iran's ability to absorb pain and carry on a battle of attrition that is its calling card.

Neri 45:41

Right.

Naysan 45:42

So in their um approach, you know, it's not just getting the sanctions relief dividends and getting a ceasefire, it's changing the strategic equation so that the US and or Israel will not do a uh another mowing of the lawn in six months or a year. You know, that's how they're approaching it. That if if we're gonna get terms, it has to be such that our adversaries uh are deterred from striking us again.

Neri 46:10

So to leverage this war, and arguably the last war, uh into something more beneficial to them strategically, economically, however you want to define it, uh moving forward and not just kind of cutting their losses right now. So basically pulling both the US, Israel, the Gulf, maybe the global economy further into the abyss because they think they have a better ability to uh to absorb the pain.

Naysan 46:40

I think among some in the system that that's probably where where they're coming from. So it's it's not just a question of um of uh you know getting a deal that gets you out of the binds you're in right now, um, but you know, kind of ensuring that over the longer term, um, you know, this you know, Hormuz is now one form of deterrent that they've realized that they now have. It was always a conceptual kind of deterrent. I was always a bit skeptical that they'd be able to pull it off very successfully, especially because of the murder-suicide scenario. But as it happened, the murder-suicide scenario kind of happened five, six weeks in rather than at the start. And that gave them a bit of a um uh certain degree of proof of concept, I suppose.

Neri 47:29

Right. And we can also uh well, this will be debated by uh military historians in the future, uh, whether CENTCOM was in fact ready for that scenario.

Naysan 47:41

I think they were they were ready because CENTCOM has planned, I mean, the notion of Iran shutting down the Federal Moose was was not considered. Sure. Um but I think there was, again, from from the accumulated reporting over the past kind of month or two uh on the decision to go to war. I think there's suggestions that the US also accepted uh expected the Iranians to fold sooner rather than later before this actually became um uh a factor in the in the conversation.

Neri 48:12

Yeah, uh that was one that was one scenario. I don't think the Americans fully expected the um the attacks on the Gulf and the impact on the Gulf itself. I think that also took them took them by surprise. Um Nissan, I mean you kind of answered the question, but I want to pose it in more of a kind of immediate term context. Let's say there's there's a no-deal, but not a return to full-scale open fighting, this kind of Twilight Zone zombie, again, zombie scenario muddling through. Uh, who does that better serve in the immediate term? Is it uh the Iranians who is like, all right, well, you know, the global economy will get will keep taking hits. The Americans are burning billions keeping uh the beautiful armada uh just outside the Gulf, or uh will the Iranians actually take a bigger hit now that potentially, ostensibly, there's a blockade even on their own oil.

Which Side May Benefit From Not Concluding a Deal

Naysan 49:13

I mean, to the extent that living to fight living to fight another day is is a win, um, you know, there there are there are downsides and upsides for everyone here. I mean, unless there's resolution on the Strait of Hormuz, oil and gas prices will remain um elevated beyond what they otherwise might be. They're going to continue to be disruptions, and I mean the knock-on effects of this um uh de facto you know all-in closure are substantial, right? I mean, everyone focuses on gas prices, and there's there's good reason for that, you know. But but you know, we've we've done some work at a crisis group on some of the you know the impacts in thing in terms of things like fertilizer, where uh countries like Sudan get 52%, if I'm not mistaken, of their fertilizer through the Gulf. And so um when you get into planting season, you know, this becomes uh a serious problem. So, you know, because the the Gulf is so central to uh energy but also non-energy trade, this is not a good situation. Um it's it's a situation where could be worse with active return to hostilities and active firing at ships, but it's not a great place to be. And the Iranians, um, and and also for the for you know Israel and the US, there's another downside, which is that Iran may use um the period of ceasefire to to go after some of the uh entombed you know missile launch sites and things like that. For the Iranians, the opposite is all also true. The the US now has three um aircraft carriers in the region. Additional troops continue coming into the region. Iran continues to be under economic fury sanctions, which is you know the newly branded uh reverse uh revision of maximum pressure. Okay. Economic fury to complement epic fury. Right. Their shipments inbound are going to be um you know curtailed. Um so again, the the Iranians deal with limited trade, uh continued economic pressure. The rest of the world lives with um uh uh a risk embellishment to prices on energy and gas. Everything is subject to a tweet or a misunderstanding where suddenly traders decide to go up and down based on the vibes of what a tweet suggests. Don't we know it? Yeah. So all of that stuff and you know the fundamentals on the nuclear program and things like that are still kind of up in the air. So um is that better than you know, bombs falling and you having to go to shelter and Iranians losing power because plants are attacked and US ships coming under attack? Yes. Uh is it is it the ideal scenario? Not quite. Um, but you can see an argument being made that the fact is that you know Iran is now under the truest form of maximum pressure, right? That this is really the the peak leverage that you can have, and that if you just leave it, the Iranian system will move towards a kind of failed state scenario because goods are not coming in or going out, um, financial sanctions are at their peak, the government's you know dealing with uh an uncertain leadership, um, and that maybe this is the time that you know where finally this uh system kind of implodes from within. The Iranians have also s shown a significant you know capacity for the absorption of pain. So, and they are also able to continue inflicting it. And you know, the the the the phrase you know, mutually assured economic disruption, you know, comes to mind like nobody's really destroying it, but it's it's putting enough of a of a press uh here, you know, in terms of gas prices, elsewhere in the world for you know, you know, everything from fertilizer to inflation, helium, helium, yeah, inflationary. And and I mean in Iran inflation is going to skyrocket. And and some of the estimates that are coming out from um either Iranian like financial uh press or international organizations like the IMF and um and and UNDP, like Iran is what if and when it comes out of this, is going to be dealing with very high inflation, currency, currency volatility that it's already had. And I think the IMF estimate was something like negative 6% GDP growth. Um and that's even without having gotten to the stage where potential US attacks against critical infrastructure could complement previous Israeli strikes on a couple of their major gas fields and things like that, uh, on top of an economy that was already running on a certain degree of fumes. So that that's the kind of muddle-through scenario. Um it's it's kind of where we've been the last two weeks, where you know the two sides don't really have a massive interest in you know trying to uh they they know that the return to hostilities carries a lot of um uh problems, but getting to an MOU also might require compromises. So if you if you don't want that, you kind of continue where we've been with these kind of um uh kind of second-tier violations and misunderstandings and and jockeying for leverage and position, but not going back to uh a scenario of full-out hostilities.

Neri 54:50

Aaron Powell Jockeying for leverage and position uh vis-a-vis the negotiating table. So remains to be seen whether that that actually succeeds. And uh this uh the scenario you were just uh laying out kind of this is like the the peak maximum pressure on Iran after five and a half weeks of of heavy, heavy war, now a naval blockade, but no deal, right? And most importantly for some here in Israel and and some kind of Iran hawks in Washington, no sanctions relief as part of an overall agreement with Iran. Uh and yet, right, the there's no resolution to the the big fissile material stockpile, uh, and there's no resolution first and foremost to Hormuz.

Naysan 55:36

That's right. I mean, look, there's I think whether in your Tehran or whether you're in DC, there's going to be a constituency that wants everything and wants to give up nothing, right? That that's that's pretty normal. Um, you know, there are going to be Iranians who who will make the same argument on the other side that say, you know, uh we can inflict more pain on the Americans. They need to accept minimal, you know, uh some degree of enrichment, and uh we demand not just assets, but primary and secondary sanctions relief. We want it all, we want to give up nothing. So there there is, you know, uh that side of it as well. And you're right, here in the US, there will be uh those who say, you know, even zero enrichment isn't enough. There has to be missile restrictions, and even if Iran agrees to missile restrictions, there have to be um, you know, proxy limitations, and if there are proxy limitations, all of that should be for minimal sanctions relief, if at all. Um and if you don't get that, then the coercive tools are still available. Let Iran you know continue being under financial pressure and and we can you know bomb the fissile material if we see satellite imagery suggesting that they're trying to access it. And that is, you know, uh, in in the view of some uh a reasonable um alternative.

Neri 56:52

Yeah. Uh in the view of many here in Israel. I've heard it myself that they prefer uh no deal over a deal whose contours we discuss at the top of the episode, which uh would not only have some kind of time period, time limitation on whatever nuclear work, um, I guess in terms of enrichment, but also sanctions relief. And that runs directly against the idea that you've heard here now for many weeks after the regime uh remained intact, regime change did not happen, despite uh certain promises made by certain people at the very beginning of of the war uh that it would happen, that uh, well, um in three months, six months, two years, the end of the regime will it's almost inevitable coming out of this war. Uh maybe, maybe, but with actual economic sustenance and sanctions relief and whatever money in their frozen assets that may come, that may arise out of part of this overall deal, um, it'll be a bit easier for the Islamic Republic to actually endure, and that's what um is uh keeping many people here uh awake at night. That Trump will actually go for that kind of deal just to end this, and with that, uh many people's uh hopes of regime change. Indeed. You're smiling. You you want to remain you want to remain up diplomatic.

Naysan 58:17

No, I look, I I think that that is uh if if I were uh in Israel, I I I I agree that that is the view. I I don't think it's necessarily shared by everyone, because uh I know that there are some other people who uh are worried about the nitty-gritty granularities of you know what are the strategic threats, it's it's nuclear, it's um uh and that is the one that's always been the existential one. So having eyes on fissile material does matter and things like that. Um but I think you're right that if your um if your proposition is that any deal that requires concessions only makes the Iranian regime stronger, even if it dissipates some of its most concerning threats. If that's your proposition, then um you know sanctions relief is um you're working on the assumption that you know maximizing this pressure over time will lead to those fissures and fractures. Um whereas it also could just lend to people in Iran being more miserable, but the state still having a coercive apparatus to be able to quell internal threats, right? Like that's that's also uh one outcome. It's not necessarily that you get um, you know, a manifestation of of uh misery that that leads to you know a collapse of the system, but that you end up in the situation where um the system still has a monopoly over the use of force, despite the fact that you know some of its repressive apparatus has been weakened, right? The Israelis in particular, one element of their uh air campaign in in March was going not just after the military, you know, the missile sites and the naval facilities and and the nuclear facilities, but going after up and down the spine of the repressive apparatus, right? Going with from the head of the basis down to like local level checkpoints. So, you know, I I said it before and I I think it's worth reiterating. I think the challenge for the Iranian system comes at the end of this war. Um if if it gets that far, right? If we come to some kind of resolution, it hasn't fundamentally been able to all it's done is defer some of these challenges. It's never really tried to address them. Um, you know, the the January 2026 protests were just repressed by brute force. Um, that doesn't mean that you know people are no longer angry, it just means that they're not out in the streets getting shot to express that frustration. And while a war is happening, you know, there are there are additional reasons not to mobilize en masse. Um but um you know the the system uh has these challenges that it faces at home that compound. Um and you know, this new leadership doesn't necessarily seem more inclined to open political space. If anything, it looks you know, uh set to do the opposite because it has, you know, the harder liners uh calling some of the shots. Maybe it's able to get some economic reprieve, but in the past, even when Iran has had sanctions relief, there have also been protests because it's not just money comes in, there's also corruption and mismanagement, and you're working off of a very, very um uh poor base of development where you know infrastructure has been destroyed and what hasn't been destroyed wasn't working that well in the first place. Um But yeah, if you're if you're um if your end game is President Trump and that endgame appears to uh for him, seems to be some kind of deal that has some kind of satisfactory nuclear element and some kind of addressing of Hormuz and ends this, um then you're diff you know you're you're debating over the terms. But if your um if your point of view is that any deal, regardless of how uh strong its non-proliferation provisions are or how quickly it reopens traffic through the Strait of Hormuz, or even how much it restricts the US the use of assets, right? Like the the you know, some of the Iranian assets that are in that are in Qatar, for example, when they were transferred, they were set up under a mechanism that would only allow for humanitarian trade, right? So if um, you know, those are already restricted funds and they were never actually dispersed because after the 7th of October 2023, the Biden administration said, you know, the Iranians can't have any of these assets. But um, you know, so those are assets that uh would be limited in one scenario for Iran to buy food and drugs and medicine. Um, but then you you can make an argument that, yeah, but if they if they have if they save that money, then they can use that money for other things. Fungible. And that's yeah, it's fungible. So if if that's your uh starting position, unless Iran basically is no longer the Islamic Republic, any degree of relief only buys it time. Conversely, not not giving that relief doesn't mean that its fall or demise is hastened. It may exacerbate the challenges it faces, but that doesn't necessarily take it from a you know failing system of government to a neatly replaced um system of of state.

Neri 1:03:41

That all uh makes sense. And I'll say it once again, this would all have been a I guess a neater conversation or a simpler conversation if it wasn't for one big, big matzo ball uh still hanging out there, which is a straight of Hormuz, right? Which is the major leverage that the Iranians have over everyone globally.

Naysan 1:04:04

I mean, yes and no, in the sense that if if it were that easy, we would have negotiated it in before the June war or negotiated in the February negotiations, right? Like now Iran does come to the table with one thing that it did not have before, which is Hormuz. It also comes in with a knowledge that its infrastructure could be destroyed and you know a multi-decade setback to its system to the nation.

Neri 1:04:34

Yeah. This this is very interesting. I'm arguing on behalf of the Iranians, you're arguing on behalf of Bibi Netanyahu. So this is I think a good play. I'm kidding, but only slightly. But I think this is a good look.

Naysan 1:04:49

I I think there's an there's enough reason for everyone or elements within every like all three players in this three-body problem of Israel, the United States, and Iran to want to see some kind of resolution to this, however you define its terms. And there are also going to be constituencies who believe that you know it's always one more push that gets you um the the victory you've you've been anticipating. In the case of um the US or Israel, it's one more set of sanctions, it's one more set of strikes, and then either the regime implodes or one more war. And and on the Iranian side, it's you know, um, you know, if if the midterms are coming up and and the US is dealing with gas prices that are elevated, or another couple of attacks at the Gulf will get them to push Trump to um um kind of concede on some of those terms, there's always an element of, you know, um we're so close to getting everything, we just need to push a little bit more. And that that exists as much on the Iranian side as as it does everywhere else. And conversely, everyone's, you know, of the same, I think, view that you know, if we If we get enough of what we want, we can live with it. Um, but it's it's getting that that kind of Venn diagram of of what they actually want aligned. And I again, based on the reporting, they're not crazy far apart on some of these things. But um they're also, you know, un unless you actually get there, and even we we've seen this with like the discussion over, you know, was Lebanon part of the ceasefire? The Pakistanis and the Iranians say yes, the Israelis and the Americans said no. And that was supposed to be something that they'd actually, you know, figured out. So if if you have that element of ambiguity over things that you think you've agreed on, just extrapolate that to how much ambiguity there is on the things you haven't.

Neri 1:06:45

Yeah. I mean, the Lebanon uh I think I've reported it, uh, who remembers at this point, but uh yes, it was originally in the deal. Uh Israel, Bibi Netanyahu, protested. Trump took it out of the deal. Uh Israel continued its offensive, especially in Beirut, what was it, last week for a few more days. Uh, and then the Iranians and the other mediators uh protested to Trump, and then Trump backtracked and uh made Netanyahu stop in Lebanon. So again, yet another concession uh by Trump to the Iranians. I think it's true that he he is looking for a deal. I think it's a question of whether they can they can get the terms.

Naysan 1:07:27

Maybe by the time this comes out they will have, and maybe they will will not, and we're back to a full-scale uh series of offensives.

Neri 1:07:36

Yeah, uh, I think we can both agree, as can our listeners and viewers, that the coming days uh will be quite interesting. Nassan, thank you so much for coming on uh once again and to break it all down for us, regardless uh of what happens. Uh and it's sporting of you to to come on just a day after the uh the the major defeat by Manchester City of Arsenal uh in the Premier League football league race, I suppose you would call it in in American terms. So uh very sporting of you to uh to come out today.

Naysan 1:08:08

Yeah, I'm I'm sure that's meant with absolute sincerity. Um but but uh thank you nonetheless. I'll go back to what I said at the beginning. If you're if you're pessimists in this line of work, you'll never be disappointed, and that applies equally to the Arsenal Football Club uh as it does to U.S.

Neri 1:08:23

Iran diplomas. Uh well, I do mean this when I say best of luck, both uh on the pitches of uh English Association Football and uh the negotiating tables of the Middle East. Thanks, Nysan. Thanks for having me. Okay, thanks again to Nissan Rafati for his generous time and insights. Also a special thanks to our producer, Jacob Gilman, our editor Tracy Levy, and our assistant producer Eden Jesselson, as always, and to all of you who support Israel Policy Forum's work. Do consider making a donation to Israel Policy Forum. So keep being a credible source of analysis and ideas on issues such as these that we all care deeply about, including this podcast. And most importantly, thank you for listening. Please, please subscribe and spread the word. And yes, Chakzam Ech and happy birthday to Israel.