Iran Escalation And Israel Elections

Neri 0:04

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. The Iran front is heating up again and to help us make sense of why exactly the US and Iran are once more trading fire on a daily basis. I'm thrilled to have back on Dr. Nasan Rafati to explain how we've reached this point and where it all may be headed. Nassan is, of course, the senior Iran analyst at the International Crisis Group in Washington and was previously a postdoc fellow at the Iran Corporation, the U.S. Institute of Peace, and the Ifree think tank in Paris. He also holds a doctorate from Oxford University and, more importantly, is an old and dear friend of mine, and of this podcast. This was a great conversation with Nesan on how the Iranian regime and Donald Trump view their respective positions since the initial ceasefire deal was signed last month, what both sides are trying to accomplish with the military escalation in the Strait of Hormuz and really across much of the Middle East. And the question on, if not everyone's minds, then certainly our minds, and definitely my mind, what does this all mean for Israel? But first, a few thoughts for me. So Iran is back in the news in a big way, obviously, which we'll get into with Nassan in just a minute. But it's important to note that we're recording this on Wednesday, late afternoon Tel Aviv time, in case things do develop/slash escalate before this episode goes up, likely tomorrow. But the other big news of the week Israel is heading to elections officially, finally, mercifully. Election date has been set for October 27th, literally the last day possible by law for this current Knesset session and meaning that this current Netanyahu government has run its full four-year term. Remarkable. By Friday, we should add the Knesset will disperse for the final time and head into election season. God help us all. Election day, it's still a long time away. A lot can happen in the next hundred or so days. So stay tuned to this podcast and to Israel Policy Forum more generally for all your Israeli election needs. And there will be many, many needs to unravel everything that will happen in the coming few months. They say uh this ahead of every election here in Israel. I've said it on this podcast for months, but really this coming election will arguably be the most consequential and even existential for Israel and Israel's future. And we also add it will be hugely consequential for Gaza, for Lebanon, for the Palestinian Authority and the West Bank in general, for Syria, for Diaspora Jewry and many more places and fronts. Everyone, literally everyone, believe me, everyone is waiting to see if a change, a real change, will in fact take place in Israel and by extension in Israeli government policy. Come October 27th, it will literally be in the hands of the Israeli voting public. Let's hope for the best. And with that, let's get to Nasan Rafati.

How The Ceasefire Became An MOU

Neri 3:46

Hi Nasan, welcome back to the podcast. Good to be back with you, Neri. Uh it's always our pleasure and my pleasure, Nasan, but especially uh on a week like this week, with a lot happening on your patch, uh, which is all things Iran. Uh fair to say things have gone a bit pear-shaped, as the Brits say, uh since we last spoke in late April, uh and really over the past week, which we'll we'll definitely get into in just a second. Um I wanted to set the table for our audience uh before we we really start um with some key dates and just a refresher on what has actually happened on the Iran front. Um so February 28th, obviously the U.S. and Israel launched the war against the Islamic Republic. That lasted for about 40 days, uh, after which a ceasefire was called on April 8th. Now, a few weeks go by, uh there are threats and counter threats between the U.S. and Iran, uh, but around June 15th, we get this proper agreement, if we can call it that, uh, which they called the Memorandum of Understanding, the MOU, that aimed to ostensibly end the war, uh, laying out this 60-day period where the U.S. and Iran, uh, via the Pakistanis and the Qataris and other mediators would actually thrash out uh a final agreement to fully end the war. Critically for our and everyone else's purposes, um, on the initial April 8th ceasefire, uh, Donald Trump declared that the Iranians had actually committed to reopening the Strait of Hormuz, uh, which didn't actually happen. Um, but as part of the June 15th MOU clause five, as you well know, the Iranians seemingly, uh, and emphasis on seemingly, committed to, again, reopening the Strait of Hormuz, uh, which again hasn't quite happened. And so since last week, especially, we've had this daily and growing escalation between uh Iran and the U.S. Iran has been firing on commercial shipping, transiting through the strait. Uh, the U.S. retaliates, Iran retaliates to that against uh U.S. military bases in the region. And things now seem to be getting worse once again, uh, including earlier today, uh, continued U.S. airstrikes uh actually during the day, which is new. Uh, and again, for our audience, we're recording this on Wednesday afternoon Tel Aviv time, Wednesday morning DC time, where you are, Nasan, just in case anything goes even more pear-shaped. So let's start here. We were promised, or at least I was promised, peace for our time, just a month ago when this MOU was signed, um, or at the very least, you know, a quiet summer or a more quiet summer. So, what's gone wrong, really, Nasan, since the MOU was signed, what, literally a month

Article 5 And Competing Interpretations

Neri 6:34

ago?

SPEAKER_03 6:34

More or less everything. Um, so uh the MOU itself is um is a 14.2 page uh understanding. And there's one uh data point I would add uh to the chronology that you laid out, which is that you know, once the ceasefire uh came into effect, the US and Iran did try to um have negotiations in Islamabad with Vice President uh Vance and the Speaker of the Iranian Parliament, Mohammed Bharat Baliboff. This was the highest level in per in-person meeting uh between the two sides since the 1979 revolution. And when those collapsed, the US also put in its own blockade of uh Iranian shipping. And so leading up to the uh Islamabad MOU, um, you kind of see how the dynamics uh in that shaky ceasefire period informed the structure and the logic and the rationale of the MOU. Uh the MOU is not uh a grand bargain. It's not even really a full diplomatic agreement. What it is, is a set of immediate priorities, immediate deliverables that both sides uh agreed to undertake, leading into a framework, as you mentioned, to start discussing nuclear issues and other things. So the notion behind it, um the rationale behind it, is that both sides were basically experiencing mutually assured economic disruption. The Iranians had a blockade, traffic through the Strait of Hormuz was still being curtailed, you had these tit for tat exchanges, and the MOU basically tries to put a floor underneath that and say, okay, so the Iranians um allow for shipping to go through the Strait of Hormuz, the US uh lifts the blockade, the US also uh allows uh for a waiver um that lets Iran uh ship Iranian uh oil and petrochemical, uh, and it commits the US not to uh adding new sanctions. And um by now we've seen pretty much every element of that understanding uh collapse in less time than it actually took to negotiate. Um the uh there there were tit for dat exchanges, you know, after the MOU was signed, but over the past several days, we've really seen that escalation tried uh sharpen up. Um the Iranians a few days ago attacked uh three tankers uh that were trying to transit the Strait of Hormuz. Uh the US retaliated by revoking the waiver uh on Iranian oil and petrochemical sales. It started to reintroduce uh new sanctions as of as of last week, and then as of uh yesterday, as we're recording, it also reintroduced the uh the blockade of uh Iranian shipping. So um the MOU as a as a functional understanding, let alone a longer-term framework for negotiations, seemed to have um unraveled uh fairly quick. Part of this is um both the Americans and the Iranians arguing uh that that article and the MOU that you referred to, Article 5, both sides are essentially saying that they are observing, were observing the letter of what it says as they interpret it, and the other side was violating the spirit of it. So the Americans say that the Iranians were not making good faith efforts to try to allow shipping through the Strait of Hormuz. The Iranians say that the Americans were basically trying to build up a southern corridor along the shore of Oman, um, and that this was breaching the spirit of the understanding because it was trying to subvert Iran's leverage over the strait and kind of prejudicing against understandings that should have been discussed between Iran and Oman or between Iran and littoral states in favor of trying to build up this alternative um to uh to Iranians, uh to Iran's northern uh side of the Strait of Hormuz. And and from there, we've seen President Trump on the one hand, Iranian officials on the other hand, say that the MOU is essentially uh a dead letter and moving back into you know to to borrow from Clauschwitz rather than war being politics by other means, war being negotiations by other means?

Neri 10:40

Right. Uh that's a good uh a good sum up. Uh literally everything is is unraveled uh fairly quickly as as you mentioned. And I want to kind of spend a moment on this Article V, this clause five of the MOU, because uh obviously, as you mentioned, they both understand it and they're both reading it very differently. But who actually has the higher ground or the better case? Because according to what the Americans understood, or at least what they thought had been agreed to, then Iran would go back to the status quo ante from before the war, that essentially the strait would be open for business, ships would go in, ships go out, by the way, including Iranian ships, and that this kind of distinction between a northern corridor and a southern corridor, the northern corridor hugging the Iranian coast, southern corridor hugging the Yibani coast, was not really an issue or wouldn't be material to the actual reopening of the strait. So what are what are we kind of not understanding in terms of at least the the Iranian understanding of all this?

SPEAKER_03 11:43

It's not so much understanding and not understanding. It's that whenever you have language that is designed to get both sides to agreement, it inevitably kind of runs the risk of being interpreted in different ways, right? Um so the the language of the tech of Article V itself says that the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial ships without tolls, without charges for a period of two months. And so that's you know what the Americans uh you know point to and say, you know, you should be making your best efforts. Uh it also says Iran will conduct dialogue with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz. Uh-huh. And that second bit is a problem. So for the Iranians, the fact that the US was, you know, in their view, trying to actively encourage this southern corridor. And as you can see, the MOU doesn't mention a northern corridor, middle route, southern corridor. Um, the Iranians say, well, you know, the Americans were trying to put their finger on the scale and trying to essentially work on um long-term erosion of Iran's leverage over the corridor by trying to uh support navigation um through the southern route rather than it being a subject of Iran Oman deliberations, being something where the US was more actively engaged in trying to uh bypass uh Iran's um ability to control uh navigation through the strait, which the Iranians say that's that's what the first part says, that that it's up to it's up to them. So it's one of those things where um you can understand why the negotiators try to come up with language that that both sides can accept. Um the the issue is that once you get past that point, you see that essentially everything that can go wrong does go wrong. You have um two sides with with very different interpretation of of what that means. Um absolutely no trust or willingness to kind of say, well, in the spirit of this, we will we will give you the benefit of the doubt type of thing. That that's not um, you know, trust is not a currency that overburdens the US-Iran relationship. Um we also have you know the the fact that a lot of the engagement has been done through mediators. There are obviously direct exchanges between the US and Iran, but if you look back to the periods where US-Iran negotiations and generally made progress, they tend to happen when they are consistent, sustained, bilateral, and and regular, um, rather than you know trying to thrash things out through WhatsApp texts or or uh through you know third-party mediators. And you know, even at the end of June, there were delegations that were back on the ground in in Qatar, they didn't actually physically meet. And uh, you know, they were discussing things like the access to assets, which was part of the understanding, um, and and and other things. So um you see where the the the elegance of the diplomatic craft and trying to give language that that um both sides can sign off to immediately also opens up rooms for different interpretations, misinterpretations, uh mutual allegations of of uh bad faith. I mean, for those who you know followed the JCPOA, there was all kinds of uh debates over the language in in part of the text that refers to nuclear-capable ballistic missiles, right? And the Iranians would say, well, none of our missiles are designed to be nuclear capable, so you don't have to worry about it. And the Americans and the E3 would say, no, when you guys are testing some of these missiles, it's it's it it it these could be nuclear capable, so we don't we don't like that you're testing some of these um uh missile systems. So um where we are uh functionally is that the the US has now gone back to uh having this blockade in effect as of late uh yesterday, our time, right now, and uh the Iranians have been uh attacking uh ships, especially those that are trying to use uh the southern route. The diplomatic path does not seem particularly uh uh likely to be well trodden uh anytime soon. You can see the frustration in President Trump's remarks, um, and you can say that that the Iranians are are kind of signaling their own kind of uh resolute interpretation of their position and their reading of the MOU.

Shipping Reality And Iran’s New Leverage

Neri 16:06

Yeah, trust me, we'll get to Donald Trump in in just a second. Um just a final question with regard to the Strait of Hormuz, because even kind of analysts, journalists have a hard time actually ascertaining to the extent possible what is actually happening in the strait today and in recent weeks. I mean, to the best of your understanding, traffic has kind of picked up, right? Or had picked up after the signing of the MOU. Um, you know, maybe not all of it kind of official and public. Uh a lot of the ships put going in and out are they shut off their transponders, right? So it's kind of the shadow fleets going in and out. But there had been, I think, an increase in shipping in and out of the strait. So is that kind of your understanding? And is that what Iran didn't like to see happening?

SPEAKER_03 16:54

You're right. Traffic after the MOU uh came into effect, the blockade was lifted. We did see an uptick both in terms of Iranian traffic and non-Iranian traffic uh going through the strait. You're you're also absolutely right that that getting exact numbers on some of this stuff is an inexact science because um part of it is uh that uh not everything can necessarily be seen through through tracking systems. And there are you know market firms that spend uh a lot of time doing satellite imagery trying to get uh precise counts of of um who's going through, what route they're using, what they're actually carrying, because the Gulf is, you know, we all we think of it as you know a gas entrepot of uh oil, uh LNG, but there's also fertilizer and humanitarian goods and all sorts of other traffic that goes through. Um so uh the Iranians, I think uh the the issue is not so much that traffic was was rebounding, it's that in their conception, um the uh the development of the southern route was you know, with US encouragement, something that was meant to um essentially erode Iran's leverage over time, that this would be a card that they would not be able to continue playing. Um and um you know you you have to you know bear in mind, I mean I mean you know this uh very well, that you know, the US and Iran go into negotiations for the most part, uh assuming the worst of the other side. And we've seen uh you know, President Trump say, you know, the the the Iranians you know were lying, they they couldn't uh be trusted to abide any aspect of the deal, and the Iranians you know say the same in the other direction. Um so I mean I think big picture, you know, the Iranians over the course of this war, it's a bit of a paradox, right? They are uh militarily and economically weakened, but they have accrued this new form of leverage in the negotiations through flexing control over the Strait of Hormuz, which they had not traditionally done, right? When we were having negotiations between Iran and the US in June of last year or February of last year, the discussions weren't about hormones. The discussions were around the nuclear program and maybe trying to get other issues on the table, it's ballistic missiles and proxies, uh, et cetera, et cetera. But the fact that you know the US was willing to put um economic uh concessions on the table, including um access to Iranian assets and uh general license, the the GLX that was issued uh last month. GLX. GLX was the light, so uh Iranian crude and petrochemical sales were were under sanctions. Uh, you know, prior to the war, they were able to circumvent those sanctions, particularly to China and get you know a million and a half to two million barrels a day to China. GLX uh General License X was issued by the Treasury and basically uh waived those sanctions and said that Iran can conduct oil and petrochemical sales and get paid for it. So the fact that the US was putting those incentives uh on the table in return for not nuclear steps, there were, you know, there would be additional steps on sanctions relief if they got to a final deal that also addressed nuclear. Um, but it it shows that, you know, despite the fact that the war has left Iran uh economically weakened and militarily weakened and in a politically ambiguous place, um, it also gave it this new card to play. And it was of sufficient value that it became the fulcrum of negotiations, right? It it became the bit that the MOU puts up front. The MOU's like operable clauses uh are about uh restoring freedom of navigation, not about the nuclear program, not about ballistic missiles, not about proxies, not about anything else. So for Iran, that leverage is something that you know they want to maintain or at least not cash in on until down the line.

Neri 20:55

Okay.

Why Tehran Chooses The Hard Line

Neri 20:56

And if we delve into the Iranian side of this equation, right? So they've started um firing in earnest once again at uh shipping that's going through the Strait of Hormuz. I mean, are they trying to flex their muscles? Are they trying to shut down shipping entirely? I mean, what what are they trying to achieve? And when you talk about leverage, is it to kind of establish this principle that not only do they have kind of control and authority over the strait, but that they need to get paid for the access in and out of the strait? Or is it, you know, they're trying to maybe just assert more leverage in the context of the overall negotiations, but really um it's more kind of a leverage play as opposed to, okay, we this is a non negotiable demand that we are now trying to assert via force, via fire on these ships, um, and not at the negotiating table.

SPEAKER_03 21:49

Aaron Powell Well, I think that for like the Iranians are trying to maximize leverage on all fronts, right? And and we've we've seen this to a certain extent that um they've they've uh one When the negotiations were happening, they were pushing on the uh the assets, they were pushing on control over Hormuz or some kind of recognition of their, you know, self-determined authority over the strait, pushing back the nuclear discussions, you know, um uh to the extent they could, because especially when it gets to nuclear concessions, you know, things like giving up fissile material are fairly irreversible, right? So they the there th those things from their perspective make sense to try to defer on. It sort of makes sense from the US perspective as well. Uh, we can probably come back to that. Um, but I think that they have established now that this is uh a fairly powerful card. I think they took away from um the war that you know their uh ability to create economic disruption is a powerful card, right? They they they are outgunned uh by the US, but what they can do is spread uh the damage, and it can be both in terms of uh striking US bases and striking US allies, but also um uh putting a significant economic global cost. Um, you know, and they you know look at the midterms, they look at the price of gas, they look at the fact that you know some some parts of uh uh the US in parts of the US, this has not been a particularly uh popular war, especially. Well, uh yeah, um I mean certainly within segments that there are there's still quite a bit of support for it, but uh I think overall there is a degree of skepticism, especially, you know, uh when the question arises that, well, you know, what is the exact uh end game here? And with all of those uh considerations in mind, I think the Iranians basically uh think that um that they can um it's it's some somewhat mirror image of the logic that they had during the war itself, uh, which is that you know the imposition of economic costs is something that will push the administration here to make certain concessions. I mean, maybe they'll just say, okay, fine, you know, accept a toll, right? Even though that has a lot of um uh problems, both in terms of US policy, international law, GCC states, precedent it sets elsewhere in the region. Um, but to basically say, okay, maybe that's just the quickest way is that fine, you now now the likelihood of that actually being um uh acknowledged or formalized is is not particularly high. Um but I think it's it's uh it's in part a negotiations game. It's it's in part this sense that this newfound you know form of leverage is something that the US is trying to atrophy and the Iranians need to need to kind of preemptively prevent the atrophy and and uh keep asserting it. And uh, you know, uh and and we go back to essentially the the same questions that were the strategic debates you know before the MOU is is um you know who can who can withstand, who can tolerate pain for a longer period, whether it's economic pain or you know, military pain in the case of Iran.

Neri 25:11

Okay. So they've gone, I'm gonna get to the US side of this in just a second, trust me, the the Donald Trump of it all. But I just have to kind of follow up with regard to the Iran side. All that being being true, uh wouldn't it have been maybe the path of lesser resistance or dare I say the smarter path, just to actually try to move forward with the MOU and the Hormuz issue, okay, resolved, keep it open. Part of it very early on, they were supposed to get, like you said, frozen assets and possibly sanctions relief. Um could have gotten an economic bump that way. Uh, and then maybe with an eye towards, I don't know, if not a grand bargain, then a lot more economic relief at the tail end of this of this MOU, and maybe trying to negotiate some compromise over the Festelle material, the nuclear material and the like. Um and by the way, the missiles and the proxies were completely not included in the MOU. So that's already kind of a point Iran relative to where they were, say, in January when they were negotiating with the Trump administration. So this may be this may be a stupid question, but like why are they taking the harder line and not maybe the smarter line?

SPEAKER_03 26:23

To start with with a premise is that the the the Iranians desperately do need economic relief. They needed it before the war, they need it even more now. The Iranian economy is, I mean, I think we talked about it the last time I was on. When the protests started at the end of December, it was an economic trigger that kind of led that um uh protest. Um, this latest kind of round of nationwide unrest against the regime to kind of uh uh be sparked in the first place. The currency was collapsing, the bazaar was unhappy, and that quickly led to this uh spread of protests in the first couple of weeks of of January. The the bill has continued to mount uh after the infrastructure damage. You know, some Iranian officials talk about a million to two million people being directly affected in terms of unemployment as a result of the strikes uh over the course of the war, the blockade compounding that effect. So all of that economic imperative that's been there in past negotiations is even more so there now. But I think the Iranians also come at it with this um deep, deep uh cynicism and and skepticism that the US um will follow through on its um on what it commits to. And so, you know, they say, or they would argue, or I think some people in the system would argue that look, what the Americans are basically doing is trying to buy themselves breathing space. And what they are trying to do is essentially have a hudna, uh, which is you know, I I know you're well familiar on in your own um uh neck of the woods. Arabic word for um, you know, a temporary truce pause. A temporary truce, yeah, right. Um, and that uh you know the the US was basically trying to bring down the price of gasoline uh before the midterms, give its, you know, uh give its military some some reprieve after a couple of months of fairly consistent bombings, maybe bolster some of its assets in the region, um, and then uh try to build up this southern corridor as a as an alternative, and that um you know everything the US committed to turned out to be reversible, right? The the waiver was reversible, the assets were never accessed. The undermining of Iran's self-declared leverage over the Strait of Hormuz was being eroded, and that therefore, you know, this was always going to end up in grief, um, in the sense that the the incentives turned out to be reversible, and the the US interpretation of the MOU was you know one that was basically trying to undermine what the Iranians thought they were they were getting out of it in terms of recognizing their uh role over the strait. So if you view it in terms of um uh you know commercial interests, uh uh yes, the the Iranians um in uh by allowing the MOU to collapse uh are giving up a uh you know fairly robust waiver uh if it had been fully implemented in terms of um sanctions relief. Selling oil, et cetera, selling petrochemical, being able to repatriate the proceeds, um the you know, billions that would have been um uh accessed in in terms of financial assets. But I think if you are uh sitting in Tehran, the the promise of that was you know kind of set against the peril that all of this could be a mirage, that the the US could just be trying to restock, rearm, rehabilitate. Get through the midterms. Yeah, I think I think among some of the Iranian establishment, that was always you know the the kind of underlying uh pessimism. Um and again, you know, the the proof would have been in the pudding if we'd actually moved into um you know, pivoted immediately from the MOU into kind of a consistent, solid level of engagement where they actually hammered all of these details out. And and like we said, sometimes the language you need to get a deal isn't the language you can execute a deal on. And so I think that's where um at least some within the Iranian system uh see it, that that this was you know never really going to uh go anywhere because the US had no intent of of keeping up its side of the bargain, which is exactly how some people in in DC argue uh the Iranians were were going to go along with it as well.

Neri 30:40

Got it. So from a certain Iranian perspective slash logic, you press your advantage now as opposed to waiting a few more months down the line where you won't have as as strong a card uh over over the Americans.

Trump’s Escalation And The Blockade

SPEAKER_01 30:57

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Neri 31:54

Let's get to the Americans. Uh, it seems like Donald J. Trump uh finally lost patience around last week. So at the NATO summit in Turkey, uh he didn't hold back, uh, even in Trumpian terms, very high bar. Uh he said he thought the ceasefire was, quote, over. He called the Iranians scum and liars and cuckoo uh and said they were, quote, incompetent because they've, if they were, quote, competent, they would have made a deal a long time ago. Um, so that's kind of from the Trumpian-American perspective. Uh and now we've had these escalating uh strikes by the US, uh, primarily, and correct me if I'm wrong, targeting kind of military assets um in the strait, on the Iranian coast, southern Iran, uh, but maybe a bit farther afield, once or twice. And please correct me if I if I got that wrong. Um, like you said, he also re-imposed a naval blockade um on Iranian shipping out of the uh out of the Gulf, um, which seems like a big deal. Uh, and yesterday in a White House interview with my uh with my good friend Trey Yengst from Fox News, uh, he threatened that next week uh he'd start hitting bridges, power plants, uh, and maybe more down the line. So uh, same question, but just to pose to the other side. Uh what is Trump thinking um and what is he trying to accomplish with his own kind of escalation?

SPEAKER_03 33:20

Just to add some color to the uh the comments that he was making uh during the NATO summit, um, we also now know that there was apparently some intelligence reporting conveyed to the administration about potential threats to the president's life. The Iranians have um you know talked about that uh one way or another, and it and all of that was uh was happening at the same time as these uh funeral processions for the Supreme Leader of Iran where there were no shortage of provocative posters and and and language.

Neri 33:50

And apparently it was Israeli intelligence that um gave the Americans that information that there was a some kind of plot against Trump's life.

SPEAKER_03 33:58

Yeah, and and you can see how, you know, regardless of you know strategy and negotiation dynamics, that issue probably uh kind of um contributed to to his uh degree of frustration and and uh disappointment um with the Iranians. Um you're right. The the US uh strikes that we've seen over the past week um have been growing, right? Uh you look at the Centcom readouts that come out and you know it goes from 40 targets to 50, 60 targets to 140 targets. Um and so it's uh it's a steady kind of degree of erosion, particularly in terms of Iranian air defenses and um drone launch facilities and production sites and and uh uh launch uh sites along the southern coast. And again, you know, the the rhetoric around uh moving up the ladder is something that we saw throughout the war. It's something that we've seen uh the the president refer to in terms of um you know going up the ladder and and targeting critical infrastructure. Um and the U.S.

Neri 35:02

does which he which he hadn't he he never did. You know, there were a lot of ultimatums and a lot of threats.

SPEAKER_03 35:09

Right. Uh and I think that that's in in part because, you know, one, uh there may be legal considerations about what constitutes a dual-use uh bridge or a dual-use um uh energy facility and things like that. Um there's also the risk of uh you know what Iran does in retaliation, right? And over the past, you know, uh we didn't touch on this, but I mean I think over the past week, the Iranians have targeted no fewer than five regional states in these retaliations, right? It's been uh you know, Qatar, it's been Kuwait, it's been Jordan, it's been uh you know several countries where where um the Iranians say they're targeting US bases. Yeah. Um and so the risk in terms of escalating on the um the infrastructure side, whether it's in terms of energy facilities or desalination or or um or oil um is that the Iranians may still have a capacity to retaliate in kind against Gulf um energy uh structures. And that you know, so so the possibility is there, and the US does have um a ladder to go up if the president uh decides to do so, the Iranians um would appear to have at least sufficient remaining drone and and missile stocks to be able to threaten um you know US allies in the Gulf. And so that's where you get into what is right now kind of a um a return of the the dueling blockade efforts into something more that becomes you know potentially a regional energy crisis.

Neri 36:44

Yeah, well we'll get to um the scenarios um moving forward and and trying to project ahead. But just on the Trump question, um he's clearly lost patience. He's angry that the Iranians are backfiring at shipping going through the strait. He's also angry that they're not, you know, in in his words, competent uh enough to make a deal. Uh he even told Trey in his interview yesterday on Tuesday uh on Fox News, quote, I think they have no choice uh but to make a deal. So I mean, is it just as simple as he's trying to coerce the Iranians into uh what? Making a deal, capitulating, backing down.

SPEAKER_03 37:26

I think he'd probably take any of those three. It's a question of you know which one of them actually happens, right? And and and the theory of the case, you can you can say that you know we it's it's uh we you know we had in his first term, you know, maximum pressure, which was you know particularly, you know, primarily economic coercive tool that was intended to get a deal. And then in his second administration, you know, the maximum pressure on the economic side, which has more recently been dubbed, you know, economic fury, has been complicated, complemented by the by the military um elements uh through through epic fury and and now um the resumed blockade and and and everything else. And I think that you know uh you could say that there's this, you know, one of the kind of strategic uh uh tensions here is that at least you know in terms of his outward-facing remarks, President Trump's belief is that you know the Iranians have lost. And the Iranians' belief is that they have won. And when when you have that kind of um uh kind of inherent tension that you know, and and he's not wrong on a lot of what he says. The Iranians, you know, uh air defense capacities. I mean, we've seen today, you know, air sentcom is conducting airstrikes in daylight. You know, that you have to have a pretty good degree of confidence in your ability to um not be facing significant air defenses to be able to conduct those kind of operations. Um and their economic situation is uh poor. Like, you know, there it there is a lot in in terms of um like painting a picture of Iran uh having a lot of vulnerabilities, having a lot of weaknesses, having a lot of issues that a deal would would uh you know start to put a balm on. Um the flip side of it is that they still clearly have enough capacity um to uh create problems, whether that's in terms of uh, you know, and and we saw we saw this a couple of years ago in in um in Operation Rough Rider and and the Houthi attacks um in the Red Sea, that it doesn't take a huge amount of disruptive capacity in order to um uh strangle or at least uh subdue uh shipping going through uh a choke point. And for the Iranians uh as well, you know, this this campaign uh you know started with the you know targeted killing of Iran's supreme leader, right? Like they, if you're sitting in Tehran, this is the the standoff that had always been um uh you know on the cards, you know, that that this was the campaign to overthrow the regime, this was the campaign to get rid of the Islamic Republic, this was the or you know, if not change the regime, then at least you know lead to a failed state or a collapsed economy or collapsed government. That means that the Iranian, at least the Iranian system's pain threshold right now is is uh pretty high. Uh and you know the the the blockade will compound the economic ills. The the the military strikes will uh will add to Iran's uh you know military vulnerabilities. The question is now that we get into this renewed cycle or perhaps even escalatory cycle, going after um uh infrastructure sites or or additional military targets beyond just the southern coast of Iran, will it lead to a fundamentally different uh outcome? Um, either in terms of eliminating Iran's disruptive capacity against shipping and letting shipping going through because the Iranians can't target it anymore. And that seems like a fairly high bar when you need a drone or a missile to at least put a chill in in terms of uh the maritime sector. Um, or um that the Iranians, you know, finally get to this point where they really have to do make uh make an existential uh choice about you know, do we make concessions uh beyond what the MOU expected at the risk of just a real kind of collapse of the economy, collapse of Iranian infrastructure, collapse of services, uh and and all the rest of it. So I think that you know that that also means that it seems unlikely as we're speaking right now that we could get a true social post in um you know, by the time this comes out saying, you know, regional countries have you know reached out and we're we're you know sending mediators back to Islamabad or Geneva or or Doha.

Neri 41:56

We've seen it before.

SPEAKER_03 41:57

We have seen that before. I mean, I it at this point it would be trying to make a diplomatic turduccin in the sense that we would be trying to put a truce inside an MOU within a a ceasefire. It's it's you know, you can't rule that out either.

Neri 42:14

I like that.

SPEAKER_03 42:14

Yeah, thank you. Um so yeah, I I think that it is a question of of the the um the fact that the the one thing that the US was immediately hoping to get out of the MOU was you know um relief from the economic disruption that affects not just the US, not just the GCC, but the wider global economy. That bit uh has not worked. Um the uh the Iranians have continued to fire. The Iranians have they've not backed down, they've played hardball. And so I think that we are now back in a position where the president is uh is uh leaning to either that that the blockade will, you know, the blockade did have an economic effect, it will have uh more of an economic effect against the Iranian economy now, um, that the US can um up the ante in terms of escalation, and there are retaliatory risks, but if if that means you know, kind of quote unquote finishing the job, uh whatever uh you you interpret the specific job to be, um, then at the very least you put the Iranians in a position of having to make harder choices and maybe coming up with different answers than they did in Islamabad.

What Happens Next And Miscalculation Risks

Neri 43:26

Yeah, you put that very diplomatically, as you normally do. Um uh knowing knowing you for for a number of years, um, I sense uh a twinge of skepticism. But it brings me to my to my next question, right? Uh, where do we go from here? Um you know, it's fair to say neither side, as we've been talking about now for nearly 40 minutes, neither side is really willing to actually back down and make the necessary compromises. Um it still seems like neither side really wants to go back to full scale war, like we saw in Well, for all of March and a bit of April and February. So what are the scenarios that we're actually looking at? You know, people talk about uh three scenarios, right? Status quo, kind of this low-level contained hostilities, call it what you will, right? Centered around the Gulf and the Strait, but this kind of just continuing, um, mowing the grass, as I've heard one person um in Washington call it, mowing the grass, at least from the US side, and then kind of Iran, I don't know, mowing the MOU grass or however you want to determine it on their side, uh go up and back to kind of escalate like full-scale war, right? So one day after the next, after the next, they start ramping up both the US and the Iranian side. So that's scenario number two. Um, or scenario number three, an off-ramp, some kind of deal. Um, I don't want to, you know, a truce turducan, but maybe uh MOU 2.0, uh a bigger and better and greater MOU. Uh, I don't know. I mean, what do you think is a likelihood?

SPEAKER_03 45:06

In terms of I mean, these are they're they're also uh you know more or less the scenarios that we would we would have been discussing, you know, during the ceasefire, even even during the war, right? We we are in, I mean, if you look at the trend line just of the past week, the the they they have been moving up the escalation ramp, but not yet into that uh uh scenario of you know full out hostilities. Um Israel is not in the picture at this point, um, uh either in terms of Iran striking Israel or Israel conducting strikes in Iran. Um but you know, even if you design the idea as the kind of status quo, or like in you know, we've talked before about you know uh the Iran-Israel rivalry in terms of Syria and the phrase people used for years was kind of the war between the wars. Now it's kind of a war within a war, right? Like the the this kind of um uh uh can like jostling for leverage, trying to um uh kind of keep things below a certain threshold, um, keeping infrastructure out of play, keeping, you know, uh uh you know energy and water and and and all sorts of things.

Neri 46:19

Yeah, I mean certain I mean they call it in Israel kind of equations. So the equations on both sides, certain rules of the game that are kind of unwritten but understood by both sides. Right.

SPEAKER_03 46:30

Right. And and the issue there is that um it leaves a lot of room to get into a bigger escalation even when you don't necessarily want it, right? So to move up from that scenario of like, yes, we can stay roughly where we've been the past few days, which is the Iranians take shots at boats, the US takes shots at central Iran, the Iranians target a couple of bases, don't cause major damage, major injuries. Um the blockade starts to you know uh creep in, so the Iranians may, you know, start to uh up the ante there. The US may start to up the ante as President Trump has said. You know, he's he said yesterday, you know, to your to your friend Trey, like maybe next week the infrastructure will come into play. And again, he has said this before and not followed through. It's not always, you know, you you can't assume that past is always prelude, and it may be the case that at some point he does make a decision to do that. Right. You also have a scenario where one of the strikes that Iran conducts against a US base does harm. Um, and you know, uh thankfully, you know, uh touch on wood, at least in in terms of the public reporting of what's happened over the past few weeks, there have not been um uh injuries or fatalities reported in these Iranian attacks uh on US bases. If that changes, then the US retaliatory options could also change and and the US could move into greater targeting of either Iranian individuals or or or you know infrastructure or or um or or other things um in response to that. Now, you know, we did have uh back channel uh engagement mediated conversations during the war, during the the uh the ceasefire, um even after um uh you know over the week um last weekend, I think the Iranians uh were were in uh talking to the Qataris and the Omanis about some kind of fix in terms of hormuz. Um so the channels you know on that side don't close. Um the question is, you know, how substantive are they and how how uh how much are they likely to come up with a with a new solution at this point, right? Um so there's um you know, and and and it's not just the US and Iran, right? Like the MOU side as it related to to Hormuz was something that some of the GCC were a little bit worried about, right? Like that language around you know Iran uh being you know involved in in facilitating transit and things like that was kind of read uh by some as like you know a little bit of a warning signal. Like so you and and at the same time as the MOU, there was at least plans for some kind of regional track as well, like in an Iran GCC um uh discussion. And right now the the Iran GCC discussions are happening you know through fire, including against countries that have been involved in mediation efforts, right? Like the Iranians have been been targeting uh Qatar um uh as part of uh the last uh couple of rounds of exchanges. The problem with with giving a kind of soundbite response to which of those three scenarios is is uh most likely is that they can all happen at the same time, right? And you can have you can have an escalation at the same time as you have more intense diplomatic outreach. You can have the status quo of what we've had for the past few weeks um just kind of uh continuing. You can have the escalation without kind of any kind of off-ramp. And you can have the off-ramp and things kind of uh the the what seems to be an increasing simmer goes back uh goes back down. All of these things are possible. It's it's what happens when you're dealing with a um very, very dynamic set of facts on the ground um to governments that have you know absolutely zero um belief in the other one's uh noble intentions. And um the the fact that it it doesn't always have to be um a strategic choice to escalate, but can also be the result of a miscalculation or you know uh an an individual incident that then cascades into uh into a set of uh responses and counter responses. But right now, in terms of the functioning kind of dynamic, it's kind of this return to a belief that mutually uh short economic disruption serves one side's purposes better than it serves the others. Right.

Neri 50:56

Um I think that's a fair answer. And uh despite the fact that as a journalist, uh, well, we love soundbite quips, short, short quotes that we can use uh very, very uh very diligently. Um I think that's that's the right answer. Uh no one is quite sure where where things can head. Thankfully, we're we're doing a podcast in terms of me giving you a soundbite quote. Yeah, but we also, you know, they also break these out into kind of social media clips. So um you you dodged a bullet right there. You know, Nathan Rafati says escalation imminent, um, etc. etc. Uh by the way, GCC, uh that's uh the abbreviation uh the Gulf, the Gulf Cooperation Council. So it's uh basically the Gulf states. That's uh shorthand for the for the Gulfies.

Will Israel Get Pulled In

Neri 51:41

Nathan, uh final question to you, and uh, well, it's the most important one to my mind. Uh it's about Israel. Uh basically how how does this impact me? And by me, I mean uh people here in Israel and and not just in Israel, but people uh who are concerned, worried, um interested in whether Israel will actually get involved or be dragged into this renewed US-Iran uh escalation. I mean, what do you think the chances are that I mean, I know what my answer is, but you know, essentially that Iran at some point fires on Israel and then Israel gets involved, or I think less likely that the Trump administration give Israel the green light to actually get involved again to help out.

SPEAKER_03 52:22

Yeah, I mean, the the Iranians have, you know, uh made their their usual uh set of threats uh against Israel. Um they have not yet acted on it. Uh and part of that is that, you know, um what they are targeting right now, or what they say they are targeting, are are US bases directly involved in um the strikes on Iranian soil, right? So if there's a Iranian radar system, an American radar system somewhere, or an Iranian uh or a US uh rather um uh uh base or something like that somewhere in the Gulf, they say that that is what they're targeting. And that includes you know, close to where you are in in Jordan. Right. Um now if if your Iran in you know striking Israel is very certainly going to lead to an Israeli retaliation. And I I don't think at this stage the Israelis would you know be following the same target packages as as the Americans, right? It would it would not just be coastal defenses. Uh and it would um, if passed as prelude, be against um, you know, either um whatever uh missile sites Iran has been able to rehabilitate since the ceasefire, maybe going after um uh any uh indicators of resumed nuclear activity at any of the enrichment facilities or elsewhere. Um it could be infrastructure, and we saw that you know during the war the Israelis did take a few shots at infrastructure, steel production sites and things like that that you know are a significant um uh source of revenue for the Iranian state. Like they are big business um, or going after personnel again, right? And um, you know, uh one of the questions has been, you know, where's Mujtaba, um, the Supreme Leader of Iran? Yeah, he wasn't seen in his father's uh funeral services, and you know, you you have uh three interpretations. One is that he's unavailable, um uh and a second one is that um there there's a security concern, and I suppose uh uh a third one is that you add aura to mystery uh by by not having him trotted out. But I mean it you know the the the security one doesn't not make sense. Um and and you know the fact that uh so many of the the regime's upper echelons some made guest appearances you know at the funeral having not been seen for some time, uh already probably means that the Israelis have been tracking them rather closely uh to see where they went off to after after those ceremonies were conducted. So uh in terms of the Iranian calculus right now, the if if the motives are retaliating against the US military and increasing US economic pain indirectly through the straits and and um and and also by targeting its allies, then uh to go from there, the the striking of Israel doesn't add a whole much at this stage, especially weighed against the risks of having you know the Israelis uh double up US capacities um in terms of air power. But uh I I could be wrong, and they they could make a decision to either directly or indirectly start targeting Israel. Um but that is one front that you know, among all the others that is heating up has thus far uh stayed uh as it is, and and hopefully for your sake and your ability to keep watching the World Cup without too much trouble of going into a shelter, that will remain the case.

Neri 56:02

Yes. Uh the the priorities in life, um, and I I agree I agree. I mean, all cutting aside, I it doesn't quite make sense for Iran to take that step, um, at least not not right now, because it would definitely mean uh, you know, a major, major escalation. Um But uh since you raised it, Nassan, uh I lied. That wasn't my last question.

World Cup Detour And Closing

Neri 56:23

My last question is is this uh the World Cup is still on as we speak on Wednesday afternoon. In just a few hours, there's going to be um, I want to call it, you know, another world war, but a separate world war on the pitch. Uh England versus Argentina uh in the semifinal. Uh yesterday France uh handily beat Spain. So uh last question to you, Nathan. Spain handily beat France. Right. Spain handily beat France, yeah, of course. Um it wasn't even close for any, for all of you who who are following. La Roja are in the final. Um, but England v. Argentina, uh Nissan is is football coming home or England going to the final? What's your prediction? Uh I'll I'll press you on this prediction.

SPEAKER_03 57:04

My my uh allegiances lie to Arsenal Football Club. And uh as long as as long as all of the Gooners who are uh playing in the semis and the finals come home healthy, and ideally one of them comes home uh with a trophy, that's good enough for me, regardless of what kit he's wearing uh when he's uh in in the US, Canada, or Mexico.

Neri 57:26

That is such a cop-out, unbelievable. Um I will take it step further. Uh, I think England will beat Messi and Argentina in just a few hours, but Spain um I think are just too strong, and alas, football uh will not be coming home. But uh our audience will be smarter tomorrow with regard to the semifinal, and then uh we'll find out what happens on Sunday. And uh hopefully Trump and the Iranians cooperate and that everything will remain at least on an even keel, relatively speaking, uh, until after Sunday, and then we can deal with a a summerless World Cup uh and a lot more free time on our hands. Maybe it won't be occupied by a war. Um with that, uh Nathan, I'll let you get back to what I'm sure is a busy day back in DC. So thank you as always for breaking it all down for us. Great to be with you, Neri. Thanks very much. Okay, thanks again to Nathan Rafferty for his generous time and insights. Also a special thanks to our producer, Jacob Gilman, and our editor, Tracy Levy, as always, and to all of you who support Israel Policy Forum's work. Do consider making a donation to Israel Policy Forum so you can 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 and please, please subscribe and spread the word.