Who won the latest Iran-Israel standoff – and who lost?

It appears that the recent escalation between Iran and Israel won’t lead to an all-out war that could threaten regional stability, at least for now. This much is clear after the Iranian regime’s measured reaction to Israel’s limited strike on a military base in Isfahan on Friday.

The de-escalatory path currently being taken by the two adversaries gives the impression of a tacit understanding between them. Even though they conducted direct strikes against each other during the past week, their battlegrounds will continue to be outside their respective territories.

China and Russia have publicly taken stands to push Iran to settle for a limited retaliation, affirming their opposition to a regional war. Beijing is especially wary of a full-blown conflict, given its military and strategic relations with Tehran, and its ties with Israel in the high-tech sector.

Remarkably, the latest conflict seems to have been telegraphed and co-ordinated through the administration of US President Joe Biden. Iranian Foreign Minister Hossein Amirabdollahian said that Tehran informed Washington before and after its missile and drone strikes inside Israel more than a week ago. “We made it very clear in these conversations, we told the Israelis that Iran does not want escalation,” Mr Amirabdollahian said.

So what happens next? Who benefits from the latest confrontation? And who pays the price?

The winners are primarily Iran and Israel themselves. The losers are ordinary Palestinians in Gaza, where Israel’s war has killed more than 34,000 people over the past six months. Moreover, the Israeli war cabinet intends to invade Rafah, with its stated aim to eliminate Hamas’s infrastructure with implicit western approval, while issuing Gazans only promises of humanitarian relief.

The other losers include the countries that have become arenas for Iran’s proxy wars, namely Iraq, Lebanon, Syria and Yemen. Major powers such as Iran, Israel and those in the West are all exploiting these countries as a pretext to avoid a direct Iran-Israel confrontation.

This level of strategic shamelessness, as I call it, is unparalleled.

Previously, when the administration of former US president Barack Obama and its European allies agreed to a nuclear deal with Iran in 2015, there was an understanding that they would acquiesce to Tehran’s condition not to interfere in its regional policies. Today, that strategic shamelessness has reached a troubling level under the guise of saving the Middle East from devastating regional wars.

But no major regional war will break out as long as Iran and Israel continue to have a tacit agreement with each other. There will be no more than occasional skirmishes, such as the one we witnessed over the past month, as the two adversaries maintain a shadow war that is within their regulated rules of engagement.

The Iranian regime’s most significant gain from its strikes on Israel is the domestic support it has rallied for itself. This has served to contain domestic discontent and dissent by dispelling the notion that the regime had become weak.

It has also imposed its priorities on the US and European powers to safeguard its own interests, particularly in preventing Israel from targeting its nuclear facilities. Tehran’s nuclear weapons programme, meanwhile, has made significant strides towards acquiring a bomb.

I am given to understand that the Biden administration had warned Israel against any unilateral actions to strike Iranian nuclear facilities, making it clear that it would stand alone in such a scenario and would not receive the necessary air cover from Washington. This was a clear message conveyed not only by the US to Israel but also by key European powers involved in deterring Iranian missile attacks against Israel.

In exchange, Israel may have extracted an approval from the West to carry out its long-intended invasion of Rafah. If true, this presents a dangerous trade-off with significant implications. Among these is Tehran’s willingness to sacrifice not only the Palestinian cause, which it claims to champion for the sake of shoring up domestic support, but also Hamas, which has apparently outlived its usefulness.

This brings us to Iran’s third achievement, which is sending a message to other powers in the Middle East that after demonstrating its capability and readiness to launch missiles at Israel, it is an even stronger regional force to be reckoned with.

While it’s true that Tehran has initiated a new phase in its relations with Saudi Arabia, there are no indications that it intends to revise its doctrine to cease using proxies across the Arab world.

It’s also true that while Israel seeks to establish relations with Riyadh, it has so far refused to meet the necessary conditions, notably recognising the inherent Palestinian rights to statehood. Instead, it adheres to its fundamental doctrine of forcibly displacing Palestinians, and seizing their homes and land to complete, once and for all, its occupation and then remove that word from existence.

In other words, Iran and Israel have once again converged in a tactical manoeuvring that is aimed at diminishing Arab influence in the grand scheme of things.

How do the roles of Iran’s partners and proxy groups figure in the equation of appeasement and carefully calculated escalations?

The Houthis will remain essential as a tool for Tehran to use to coerce and intimidate the US, Europe and Israel – even as the Yemeni people remain hostage to Iran. Hezbollah will persist in what it perceives to be a war of attrition against Israel, but the reality is that the attrition is mutual – with the people living in Lebanon’s south paying the price for Hezbollah’s decision to serve Iran’s interests.

The Iranian regime will continue to dominate Iraqi politics through its affiliated factions. And Syria will remain an open arena for Israel to send messages to Tehran, sniping at the regime while avoiding Iranian territory.

It is possible, therefore, that Iran and Israel will settle for their so-far limited responses and move on.

For now, both parties seek a price – a reward for de-escalating – from the West. For Israel it is weapons and ammunition, which it is due to receive after the US Congress approved military aid on Saturday. For Iran it is the preservation of its nuclear weapons programme with promises from the West to lift sanctions against it.

The two countries, meanwhile, will continue to adhere to extremist ideologies that – counterintuitively – serve both their interests.