Tehran’s calculations to avoid all-out war with Israel and the US

Under previous reformist presidents, Iran more than once tried to bring about a grand bargain deal with the United States, entailing compromises over its nuclear program in return for negotiating spheres of influence across the Middle East. This September, speaking on the sidelines of the United Nations General Assembly meetings in New York, the country’s current reformist president, Masoud Pezeshkian, confirmed that he was open to direct talks with Washington to end bilateral hostilities.

Just a couple weeks later, on Oct. 1, Iran responded to the Israeli killing of the heads of Hezbollah and Hamas and a Revolutionary Guard general by launching a missile attack on Israel; this prompted, on Oct. 26, retaliation by the latter, as scores of Israeli jets and drones carried out overnight strikes against military installations in several Iranian regions. Iran’s hardliners have generally overlooked the idea of a bargain with the US. But as the specter of war looms over Israel and Iran, and considering that the incoming second Trump administration might swiftly exert a renewed “maximum pressure” campaign on Iran, they suddenly seem intent on defusing tensions.

Ali Akbar Velayati, a former foreign minister and close advisor to the uncompromising Supreme Leader Ayatollah Ali Khamenei, now says Iran is ready to pursue diplomatic solutions with the West. It expects in return Western respect for Iran’s sovereignty. Western diplomats have noted a discernible shift in Iran’s tone, but they say it must be followed by substantive policy shifts. This means, according to those familiar with the Iranian government’s thinking, the various actors involved will have to realize the following steps.

A collective bargain deal

Iran’s current diplomatic efforts are not geared toward building peace. Iran does not believe Israel will readily abandon settlements in the West Bank, but neither is Tehran willing to stop funding armed Palestinian groups — both conditions essential to an enduring peace. Instead, while insisting that it does not seek war, Tehran wants to contain Israeli strikes against regional allies in Iraq, Yemen, Lebanon, and Syria.

This could be achieved if Washington agreed to pursue a collective deal not just with Iran but also with Tehran-backed Axis of Resistance members currently leading multi-flank military operations against Israeli targets: i.e., Hezbollah, the Houthis, Iraqi Shi'a militia groups, Hamas, and Iran-funded splinter militia groups in the West Bank. The mobility and endurance of these groups have sustained the length and intensity of the war that broke out after the Oct. 7, 2023, Hamas attack on Israel; a discussion of their actions could provide room for negotiations. But since the groups are united and inter-connected, a deal to deescalate must be achieved through a comprehensive approach to settle disputes with all members of this axis.

Washington has thus far resisted recognizing these groups and helps Israel contain their military capabilities and operations, but it has not hesitated to negotiate with some of them. In October, State Department special envoy Amos Hochstein flew to Lebanon to negotiate a cease-fire between Israel and Hezbollah through indirect talks facilitated by Lebanese Speaker of Parliament Nabih Berri. On Oct. 30, Hezbollah Secretary General Naim Qassem said the group would continue to fight Israel, and any end to the war through negotiations would have to begin with a “cease-fire first.”

Iran also wants an Israeli withdrawal from occupied Lebanese territories, specifically Shebaa Farms, Kfarchouba, and Ghajar, and the full implementation of UNSC Resolution 1701, which was passed at the end of the 2006 Israel-Lebanon War and called for the positioning of UN peacekeeping forces along the border. The resolution additionally demands the return of border control to Lebanon’s government, with the UN Interim Force in Lebanon (UNIFIL) monitoring the implementation.

In Yemen, Iran wants Saudi Arabia to sign and implement the UN-mediated deal Ryiadh made with the Houthis, followed by talks between the Houthis and the Yemeni opposition groups, to form an inclusive government, a draft constitution, and an electoral system. This would give the Houthis, who are launching attacks on Israel, coveted legitimacy. It would also discourage US and Israeli attacks on Houthi strongholds in return for halting military operations targeting Israel interests.

In Iraq, as Iran-backed Shi’a militias step up attacks on Israeli targets, the impending conclusion of the UN Assistance Mission for Iraq (UNAMI) mandate in 2025 has led to increased Iranian calls for the US-led anti-terror coalition forces in Iraq to withdraw completely and not simply re-brand their mission and extend their stay. With the Iraqi government needing to quickly and more effectively take charge of its own security after US troops pull out, this would create a situation conducive to integrating those local, Iranian-supported, armed Shi’a groups into the regular Iraqi armed forces

Nuclear compromise in exchange for de-escalation

Tehran, which may have an actual nuclear weaponization program, is willing to review its nuclear file, according to Velayati. This would shift Iranian foreign policy toward strengthening diplomatic bonds with Western countries. At the same time, Iran is open to exploring a Middle East nuclear-weapon-free zone that leads to a collective security system and strategic economic cooperation instead of an arms race.

But Tehran needs Washington to enable these processes and to convince Israel to play along. Contacts with the US over these issues have been made through Arab intermediaries like Oman and Qatar and other diplomatic channels, such as the Swiss Embassy in Tehran. Although such attempts have helped de-escalate some tensions, they frequently fail to deliver longer-lasting results. Under a new Trump administration, Iran will have less reason to believe that de-escalation will happen in any meaningful way, but it will still consider it an important goal to pursue.

Iran is currently interested in trying to prevent a war, so it needs conditions that are conducive to a temporary solution. It is signaling to Arab neighbors, and through them to Washington, that the region’s security is indivisible. In turn, Arab governments warn that a confrontation between Iran and Israel risks destabilizing the entire Middle East.

To get the point across, Iran’s Foreign Minister Abbas Araghchi went as far as to share detailed maps of US military bases in the Middle East when he recently toured Arab countries, promising that if the US or any Arab country aided Israel in attacking Iran, Tehran would retaliate against American and Arab military targets and interests. And in October, Iran temporarily halted indirect Iranian nuclear talks with the US, through the so-called Muscat process, in an effort to convince Washington to heed Tehran’s demands and prevent further regional instability. Together, this gave the Biden administration additional incentive to urge Israel to recalibrate the scale of its military retaliation against Iran, although Tehran still vowed revenge for that latest round of Israeli strikes on Iranian territory on Oct. 26.

Elections to resolve the Palestinian crisis

Any conflict-prevention mechanism that takes place might mitigate tensions, but it will not lead to peace, which has eluded Israel since its establishment in 1948. In addition, Tehran is unwilling to recognize Israel or ever enter into a peace agreement with it. From Iran’s standpoint, it is Israel under Prime Minister Benjamin Netanyahu that is the root cause of the region’s crisis over Palestine. But the Iranian government insists that it does not see war as a solution — starting a war is easier than ending one.

Not surprisingly, Iran will measure any settlement against what it thinks can be realistically delivered. Tehran’s official position on Palestine, expressed time and again on the floor of the UN General Assembly and at the Arab League and the Organization of Islamic Cooperation, suggests that it is seeking a consensus with other Muslim countries calling for Israel to end the occupation of Palestinian lands.

At the same time, Tehran is practical about what a resolution to the current crisis could entail, understanding that a resolution might not lead to a two-state solution in light of the ongoing Israeli campaign to control Gaza. A deal that establishes an independent state of Palestine might be ideal, but it is unclear whether it is achievable without Israel on board.

This leaves Iran with only one other viable option — to seek an alternative solution that might not immediately lead to statehood for Palestine. Instead, it would start with a cease-fire to save lives and enhance the delivery of humanitarian aid. This would be followed by the creation of conditions that would allow the Palestinians to achieve their right to self-determination and to elect their own leaders. This would entail unified governance, reconstruction efforts, and the resumption of trade and commerce concurrent with the integration of the administration of Gaza and the West Bank.

Moving forward

The UN’s role in establishing peace in Gaza and stopping a wider war in the Middle East is irreplaceable, and Iran will continue to support it. Although it is unclear precisely what actions the UN Security Council (UNSC) could take, its key decisions will have an impact on a peace settlement in Gaza. But since Washington is unlikely anytime soon to allow a resolution to pass under Chapter VII of the UN Charter that would grant statehood to Palestine, Iran would likely try to raise the costs for the US to exercise its power within the UNSC, hoping to compel Washington to cast votes of abstention so as not to paralyze the body’s decisions to deliver humanitarian assistance to Gaza.

Iran could also initiate a movement to ostracize Israel by triggering debates calling for the UNSC or the UN General Assembly to suspend the latter country’s membership. The State of Israel was established by a 1947 UN resolution that called on the parties to settle disputes by peaceful means, potentially giving the international body the capacity to revoke this status should the conditions for Israel’s continued membership no longer be met In practice, this is highly unlikely to happen, in part because the US would prevent it, it could paint Israel as an outcast member of the UN.

Iran also cannot realistically seek to overthrow Israel, which is impossible at this stage through military action. That said, as long as armed Palestinian groups like Hamas and Islamic Jihad seek Iranian support to end the occupation of Palestinian land, Iran will continue to assist them.

While Iran could explore a wide range of other possible conditions between war and peace, it has clearly resolved to meet any and all future Israeli military strikes with what it thinks is a proportionate response. Failing to act would disrupt the deterrence equation that, to date, has prevented a full-scale war and might embolden Israel to strike harder.

Finally, Tehran insists its actions against Israel have been carried out within the framework of legitimate self-defense and in accordance with international law that grants states such a right. In return, it for now has pledged to confine strikes and counter-strikes strictly against targeted military and security interests, to minimize and prevent civilian casualties on both sides. If Israel refrains from further military action and no renewed necessity arises, Tehran is likely to remain somewhat restrained  in its response, notwithstanding its promise to deliver another harsh counter-attack at an unknown time in retaliation for last month’s Israeli strikes on its military sites.

Banafsheh Keynoush is a scholar of international affairs, a Non-Resident Scholar with MEI’s Iran Program and a visiting fellow at the Kroc Institute for International Peace Studies at Notre Dame University.

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