Iran vows to 'punish' Israel over strike on Damascus embassy compound


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Iran’s supreme leader Ayatollah Ali Khamenei and President Ebrahim Raisi vowed on Tuesday to retaliate and "punish" Israel over the strike against Tehran's embassy compound in Syria as the Gaza war spillover continues to expand across the region.

The attack on Monday evening in Damascus killed at least 14 people. Senior Islamic Revolutionary Guard Corps commanders, including the head of the Quds Force in Lebanon and Syria, Mohammad Reza Zahedi, were among the dead.

“The evil regime will be punished by the hands of our brave warriors. We will make them regret this crime and the like by God’s grace,” Iranian state media quoted Mr Khamenei as saying.

Mr Raisi said Israel "has put blind assassinations on its agenda in the struggle to save itself,” describing the strike as a “cowardly crime that will not go unanswered”.

While Israel did not officially acknowledge responsibility for the attack, an army spokesman said the embassy compound, in the central Mezzeh area of Damascus, was a military site “disguised” as a diplomatic site.

“According to our intelligence, this is no consulate and this is no embassy,” Rear Admiral Daniel Hagari told CNN. “I repeat, this is no consulate and this is no embassy. This is a military building of Quds forces disguised as a civilian building in Damascus.”

Israeli Defence Minister Yoav Gallant said that Israel would “act everywhere, every day to prevent the force build-up of our enemies”, adding that Israel is making it “clear to everyone who acts against us, all over the Middle East, that the price for acting against Israel will be a heavy price”.

Tehran's Supreme National Security Council met late on Monday to discuss the attack and decided on a response, state TV reported, without providing further details.

Meanwhile, the regime's supporters in the capital held protests against Israel and the US, burning flags and brandishing photos of the dead.

Brig Gen Mohammad Hadi Haji Rahimi and Brig Gen Mohammad Reza Zahedi. Photo: Tasnim News/ Fars News
Brig Gen Mohammad Hadi Haji Rahimi and Brig Gen Mohammad Reza Zahedi. Photo: Tasnim News/ Fars News

In Lebanon, Hezbollah warned Israel that the killing of two Iranian generals in Damascus will not go unpunished.

“This crime will not pass without the enemy being punished,” Hezbollah said on Tuesday, in reference to Israel. The powerful Lebanese armed group and political party has engaged in near-daily exchanges of cross-border fire with Israel since October 8.

Iran's Supreme Council of the Cultural Revolution, chaired by Mr Raisi, also hit out at Israel and its closest ally, Washington, over the strike. Israel, with US backing, “has committed so many crimes in Gaza that history will not forget”, it said in a statement carried by state news agency Irna, praising Gazans for “fierce resistance”.

“This criminal act is against all international legal standards,” it added, saying Iran reserves “the right to answer to this shameless crime”.

The strike is the most significant attack against an Iranian target since the Gaza war began and risks pulling Iran into a direct confrontation with Israel.

It also raises concerns about further aggression on other fronts against Israel, including from Iran-backed groups in Yemen and Lebanon.

A source close to Iran's allies in the region said that the US "knows the gravity of what Israel did and that it should expect that Iran carries out some kind of response. Washington already fears the possibility of the collapse of the Iraqi truce that has been in place since last February".

Last month, Iraqi militias backed by Iran halted their attacks against US forces in the region in the context of an “unannounced truce” that involves Tehran and the Iraqi government, sources in Lebanon and Iraq told The National. Indirect talks between the US and Iran have attempted to build on that in Iraq to expand it across conflict-hit areas of the Middle East.

Mondays' strike is one of several suspected Israeli attacks on Syria since the war in Gaza began on October 7, and comes just days after dozens of regime soldiers and Iran-backed fighters were killed near Aleppo.

The main facility hit in Aleppo comprises Soviet-era production lines of weapons and is thought to be undergoing modernisation by the IRGC, sources told The National on Tuesday.

The site produces heavy mortar rounds, munition for tanks and ballistic missiles, according to the sources.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: April 02, 2024, 4:01 PM