Under Shah Mohammad Reza Pahlavi, Iran became the second Muslim-majority country after Turkey to grant de facto recognition to Israel in 1950. For nearly three decades, Tehran and Tel Aviv maintained discreet but substantive cooperation. Iran supplied oil that helped Israel circumvent Arab boycotts, while intelligence ties between Mossad and Savak facilitated military coordination, arms transfers, and technological and agricultural collaboration. Within Israel’s “non-Arab periphery” strategy, Iran emerged as a pivotal partner.
The 1979 Islamic Revolution dismantled this alignment. Ayatollah Ruhollah Khomeini recast Iran’s relationship with Israel in stark ideological terms, branding Israel the “Little Satan” and elevating the Palestinian cause from Arab nationalism to a sacred religious duty. Tehran’s transfer of Israel’s former diplomatic mission to the Palestine Liberation Organisation symbolised Israel’s transformation from a covert partner into the central antagonist of Iran’s revolutionary worldview. Ironically, this shift also reshaped Israel’s security calculus. After concluding that Arab militaries no longer posed an existential threat, Israel increasingly identified Iran as its principal adversary. This convergence drew Israel closer to Gulf Arab states and later found expression in the Abraham Accords, even as recent conflict has disrupted this trajectory.
This perception reoriented the Begin Doctrine—preventive action against any regional state pursuing nuclear weapons—squarely onto Iran. Israeli strategy has since focused on blocking Iran’s nuclear ambitions, degrading its ballistic missile programme, weakening its allies known as the “Axis of Resistance,” and preserving deterrence through covert and overt operations.
Until the early 2010s, the partial convergence of U.S. and Israeli interests imposed limits on Israel’s regional adventurism. Washington’s engagement was driven primarily by concerns over energy security and regional stability, while Israel’s strategic focus remained firmly fixed on Iran. The U.S. shale gas revolution of 2012 fundamentally altered this equation. As America transitioned from a net energy importer to exporter, its direct economic stake in the region weakened, and Israel’s agenda in West Asia became the de facto agenda of the US i.e opposition to diplomacy with Tehran, including the nuclear agreement.
Iran, meanwhile, consolidated power internally by embedding revolutionary ideology within an extensive political network linking the state, the clergy, and the security apparatus. Within this religious–political framework, it developed parallel democratic institutions—regular elections, local councils, and municipal bodies—in which clerics exercise supervisory and ideological authority rather than day-to-day executive control. Drawing on Shi’a historical narratives of injustice and martyrdom, rooted in the deaths of Ali ibn Abi Talib and Imam Hussein, sacrifice and resistance were elevated into sources of political legitimacy. Ayatollah Khomeini’s doctrine of Wilayat al-Faqih (Rule of the Jurist) marked a decisive break from Shi’a traditions of political quietism, institutionalising clerical authority and anchoring it in an independent financial base through khums. This religious tax has endowed Iran’s clerical establishment with autonomy and resilience.
Externally, the U.S. invasion of Iraq in 2003 proved pivotal. Iran-aligned actors gained influence over Iraqi state resources, parliamentary representation, and key security institutions, reshaping the country’s political order and significantly expanding Tehran’s reach. In parallel, Iran fostered a broad network of militia groups in Iraq, closely aligned with the ideology of Wilayat al-Faqih and Iranian strategic interests, operating alongside—and at times overlapping with—the Iraqi security forces.
Beyond Iraq, Iran cultivated a network of allied militias. Hezbollah in Lebanon— also deeply embedded in Wilayat al-Faqih—remains weakened but intact. The Houthis in Yemen, a Zaidi Shia group though doctrinally distinct, have closely aligned with Iran. They have demonstrated their capacity to disrupt critical maritime choke points. In Bahrain, too, Iran cultivated some militant groups that extend Iran’s strategic depth. Any attempt to dismantle the regime and its religious networks without confronting the underlying ideology risks catastrophic escalation—an outcome rendered even more perilous by Iran’s leverage over some of the world’s most vital shipping routes.
The recent conflict has laid bare the costs of this strategy for all major actors. Israel’s overwhelming military power has failed to deliver security or legitimacy. The October 7 intelligence collapse, prolonged hostage crisis, massive economic strain, internal political fractures, and unprecedented legal and moral isolation have eroded deterrence rather than restored it. The brief but intense 12-day Iran–Israel confrontation shattered long-held assumptions, as Iran demonstrated its capacity to strike deep into Israeli territory, puncturing the aura of missile-defence invulnerability. After spending more than $30 billion and offering unqualified diplomatic cover, the United States found itself overstretched—seen less as a stabilising force and more as a partisan actor. Their trademark rhetoric on democracy and human rights has no takers now. Iran, too, has paid heavily—Hezbollah’s leadership has been hollowed out, Syria has slipped further from Tehran’s orbit. The conflict further battered Iran’s already fragile economy, as oil exports plunged.
Already uneasy, Gulf states are in deep panic. Qatar’s hosting of major U.S. military bases proved no shield. The episode marked a turning point: Israel’s expanding reach is now viewed as more destabilising than Iran’s revolutionary regime—a stark reversal of earlier assumptions. A strike on Iran would almost certainly invite retaliation against U.S. installations embedded in Saudi Arabia, Qatar, Kuwait, the UAE, and Bahrain, dragging them into the conflict. Compounding this vulnerability is the region’s delicate social fabric: Shi’a communities constitute between 10 and 15 per cent of the population in most Gulf states, and a majority in Bahrain, raising the risk of internal sectarian tensions. Russia, China, and North Korea could intervene diplomatically or provide covert military support, thereby complicating global alignments.
Thus, striking Iran would be less an act of deterrence than one of self-inflicted harm—triggering consequences that would echo far beyond national borders, destabilise West Asia, ripple the shipping lanes, and further unsettle an already fragile world. In the end, those who choose to attack Iran would not so much weaken an adversary as wound themselves.
Dr. Bhaskar is a former Ambassador, Economist and a specialist in West Asia and Gulf Affairs.