Three scenarios for regional escalation in the Middle East

There are a number of factors to consider: Israel’s killing on 16 October of Yahya Sinwar, the leader of Palestinian Islamist militant movement Hamas; Israel’s launch of ground operations in Lebanon; Iran’s direct ballistic missile attack on Israel on 1 October and Israel’s retaliation on 26 October; and the victory of Republican US presidential candidate Donald Trump on 5 November.

Developments to date

More than a year after Hamas attacked Israel on 7 October 2023, the region’s geopolitical and security environments have durably changed. Israel’s operations in Gaza (Palestinian Territories) have succeeded in drastically weakening Hamas. With its organisational capabilities highly degraded, Israel in September assessed that Hamas was militarily defeated and now operated as a disjointed guerrilla group. Sinwar’s death will further exacerbate the movement’s fragmentation.

In the weeks that preceded Sinwar’s killing, Israel dramatically expanded its operations against Lebanese Shia movement Hizbullah. On 17 September, Israel added to its war goals the return of Israeli evacuees to communities along the de facto border with Lebanon, and on 17-18 September it targeted Hizbullah’s communication network, detonating explosive charges hidden in pagers and hand-held radios. It then carried out series of deadly strikes targeting Hizbullah’s leadership across the Hizbullah-dominated areas of southern and eastern Lebanon and the southern suburbs of the Lebanese capital Beirut. On 27 September, Israel succeeded in killing the movement’s long-standing then-secretary general Hassan Nasrallah – who was replaced on 29 October by his former deputy, Naim Qassem.

Days later, on 1 October, Israel launched ground operations in southern Lebanon, which have since seen the Israel Defence Forces (IDF) take control of several Lebanese villages within a couple of kilometres of the border and conduct controlled demolitions of what it says is Hizbullah infrastructure. Meanwhile, Israel has intensified its airstrike campaign in Lebanon, expanding its targeting to include Hizbullah’s civilian interests, including in the economic realm, and areas beyond those perceived as under Hizbullah control.

In parallel, Israel’s long-standing, mostly shadow confrontation with Iran escalated on 1 October, when Iran launched fast-travelling ballistic missiles at Israel, allegedly aiming at intelligence and military targets, with a few hours’ notice. Most of the missiles were effectively intercepted by air defence systems and the attack caused little damage. Regardless, it was perceived as a significant escalation, and Israel retaliated on 26 October targeting air defences and missile facilities in Tehran, Ilam and Khuzestan provinces.

All the while, Israel has continued to come under cross-border fire from Iran-backed actors in the region, particularly Yemen’s rebel Houthi movement, which has occasionally hit central Israel – prompting retaliatory strikes on Hodeidah (Yemen). In addition, the IDF on 4 October experienced in the Israeli-occupied Golan Heights its first two casualties from a drone attack carried out by an Iraq-based, Iran-backed paramilitary group (IBPG), and Israel came under increased fire from such actors during October.

Our most likely scenario

Under our most likely scenario, Iran responds to Israel’s 26 October strike but takes some time to do so – preserving a period of relative calm in the Israeli-Iranian confrontation. When Tehran finally conducts its attack, it opts to fire a similar number of projectiles from its own territory as it did in the 1 October attack, while also leveraging the cross-border capabilities of the groups it backs in the region.

In the meantime, Israel maintains its focus on its ground offensive against Hizbullah in Lebanon. Its stated aim remains to degrade the movement’s capability to launch short-range attacks on Israel and to create a buffer zone along Israel’s border with Lebanon. Israeli operations remain contained to Lebanese localities within a few kilometres of the border over the coming months as negotiations for a ceasefire make little progress – the appointment of Naim Qassem as secretary general of Hizbullah points to continuity in the movement’s negotiating position. In parallel, Israel maintains its intense airstrike campaign across the country, with regular strikes outside of Hizbullah-dominated areas and close to civilian infrastructure, such as Beirut’s airport and port.

In Gaza, Israel maintains operations it says are aimed at further degrading Hamas. In the absence of credible negotiating capabilities on Hamas’s side, particularly after Sinwar’s death, Israel continues to regularly engage with small pockets of militants and seeks to destroy the movement's tunnel network. Little progress on a ceasefire is made in the absence of coordinated international pressure, particularly in the context of the victory of US Republican President-elect Donald Trump on 5 November. Meanwhile, Israel works towards securing physical security guarantees by creating buffers and access routes.

What to watch:

Our credible alternative

Under our credible alternative, Iran retaliates, conducting an attack with no forewarning and leveraging a much larger salvo of sophisticated projectiles than in its previous attacks. Israel is effective at intercepting the attack and sheltering protocols preclude large-scale casualties, but significant physical damage occurs. The pattern of tit-for-tat attacks accelerates, causing increasingly lasting and frequent disruptions to regional air traffic. Meanwhile, the targeting of Iranian oil infrastructure – which Trump fails to oppose – leads to spikes in oil prices.

As Iran seeks to re-establish deterrence, it makes very extensive use of the regional forces it backs against Israel. These players, primarily the Houthis and Iraq-based IBPGs, very significantly step up cross-border attacks on Israel. These attacks cause limited damage in Israel but prompt Israel to launch a one-off intense airstrike campaign against targets in Iraq and Yemen. Furthermore, Iran seeks to conduct operations in third countries against Israeli assets. State-backed terrorist incidents become increasingly frequent, particularly against Israeli diplomatic assets in Western capitals as well as in countries with comparatively low counter-terrorism capabilities.

Meanwhile, Israel maintains its operations in Lebanon and the Palestinian Territories. The pace of airstrikes starts converging across Lebanon, irrespective of whether the areas are historical Hizbullah strongholds. The frequency of high-impact, indiscriminate airstrikes causing significant collateral damage increases markedly as Israel seeks to undermine unity within the Lebanese polity. The IDF simultaneously expands its ground offensive against Hizbullah, with the goal of clearing all areas south of the Litani river of its operatives. In parallel, Israel lays the foundations for permanent security infrastructure within Gaza – including with physical deployments within the strip – in anticipation of a supportive second Trump administration.

What to watch:

Our outlier scenario

In an outlier scenario, Israel assesses that it needs to effect regime change in Iran to guarantee its own long-term survival. It aims to fully destroy oil and gas infrastructure and nuclear facilities and kills several political leaders and top commanders in the Islamic Revolutionary Guard Corps (IRGC) and the military. The US, after Trump has been inaugurated as president, plays an offensive role in supporting an Israeli attack on Iran, including offering extensive direct support to Israel’s targeting of underground nuclear sites. As Iran prepares to retaliate further, Arab states come under US pressure to participate in defensive missile interception missions.

In response, Iran actively widens the conflict to countries hitherto spared. The Islamic republic and the groups it backs in the region extensively target Gulf Arab states – in addition to targeting Israel and US interests in Iraq and Syria – particularly energy and logistical infrastructure as well as military bases hosting Western forces. Attacks are not primarily aimed at causing civilian casualties, though strikes on certain targets, such as airports, pose a significant risk of collateral casualties. In parallel, Iran seeks to disrupt international trade and energy exports by targeting shipping in the Gulf and the Arabian Sea. As a result, global energy prices soar to unprecedented levels, and supply chains to the Gulf are heavily disrupted.

At the same time, Israel maintains troops operating in Gaza and conducts expansive ground operations in Lebanon across the country’s south, including north of the Litani river. Israel’s airstrike targeting pattern in Lebanon leads to civil strife, with the Lebanese Armed Forces’ capability to maintain order increasingly diminished. In the West Bank (Palestinian Territories), Israeli forces step up operations targeting Palestinian militant capabilities. In response, a growing number of radicalised Palestinians in the West Bank, and to a more limited extent within Israel, seek to conduct widespread, high-impact terrorist attacks in Israel.

What to watch: