Israeli Prime Minister and Iran's President have exchanged threats, highlighting the deepening crisis between their nations. Benjamin Netanyahu vowed a firm response to any threats, while Masoud Pezeshkian pledged retaliation.
At a ceremony in Jerusalem, Israeli Prime Minister Benjamin Netanyahu addressed the nation with a resolute tone. Amid a backdrop of rising regional tensions, Netanyahu declared, “Anyone who harms our country will be held accountable. Iran and its proxies seek to surround us with a stranglehold of terror on seven fronts. Their visible aggression is insatiable, but Israel is not helpless. We are determined to stand against them on every front, in every arena, far and near. Anyone who murders our citizens, anyone who harms our country will be held accountable. He will pay a very heavy price.”
Netanyahu’s comments come in the wake of nearly ten months of conflict in Gaza and the recent assassinations of a senior Hezbollah commander in Lebanon and Hamas’ top political leader in Iran. The heightened hostilities have raised fears of further escalation and retaliation from Iran and its allies.
On his part, Iranian President Masoud Pezeshkian condemned the assassination of Hamas leader Ismail Haniyeh, calling it a violation of international law. “The assassination of a guest of the Islamic Republic of Iran was an act that violated all international laws,” Pezeshkian said. “It was a grave mistake by the Zionists. The audacity will not go unanswered.”
According to media reports, Iranian officials told Arab diplomats that Tehran does not care if an attack on Israel triggers a regional war. But this can also be part of a psychological war both sides have launched.
Israel's channel 12 said that Israel’s security establishment is considering the possibility of “preventive actions or attacks” it could initiate, “including in Lebanon or perhaps in other places as necessitated.”
Siamak Javadi, an economics professor and researcher at the University of Texas, told Iran International, “Aside from its military aspect, war is a full-scale economic project. You can’t wage war with an empty pocket.”
Comparing gross domestic product, per capita national income, and inflation and unemployment rates in Iran and Israel, he added that the Islamic Republic is financially and economically incapable of engaging in a full-scale war with Israel.
Hossein Aghaei, a researcher in international relations and strategic affairs, also told Iran International, “The Islamic Republic is caught in the strategic trap or chain reaction game set by Israel.”
He added that the Iranian government finds itself in a “difficult and enigmatic” situation and has no choice but to provide a “direct and proportionate response” to Israel in order to restore its deterrent power.
Aghaei warned that if the Islamic Republic engages in “a high-risk game” and initiates a “comprehensive and multi-front” conflict against Israel, the region could be drawn into a major military confrontation.
In Israel, the prospect of retaliation has prompted increased vigilance. Citizens are preparing bomb shelters, recalling an unprecedented direct military assault by Iran in April following a suspected Israeli strike that resulted in the deaths of two Iranian generals in Syria. Despite Israel intercepting nearly all incoming drones and missiles, the country remains on high alert.
Citing an Israeli official, NBC News also reported that Israel is bracing for a potential multiday attack by Iran and its proxies in retaliation for the assassination of two senior militant leaders last week.
“They’ll just try to wear us out,” the official said, adding that Israel fears waves of missiles and drones could be fired over several days.
Defense Minister Yoav Gallant sought to reassure the public of Israel’s preparedness. “We are highly prepared in terms of defense and we are ready for both a swift response or attack,” Gallant stated. “If they dare to attack us, they’ll pay a heavy price.”
Israeli President Isaac Herzog, also speaking at the memorial ceremony, emphasized the importance of national unity and resilience. He stressed the need for a swift agreement to return hostages held in Gaza and called for unity amidst internal divisions. “Our national resilience is being tested, and we all feel that internal tensions and polarization are growing,” Herzog said. “I call on public leaders to calm the situation, exercise restraint, refrain from crossing red lines, and protect our social fabric and solidarity.”
The international community is closely watching the situation, with the United States actively engaged in diplomatic efforts to manage the crisis. The US has signaled to Tehran that restraint could improve prospects for diplomatic engagement and warned that any significant strike on Israel would provoke a strong response. Reports suggest that the US has also urged Israel to de-escalate tensions.
The US asked European and other partner governments to convey a message to Iran not to escalate, warning any significant strike on Israel would draw a response, a report by the Wall Street Journal added, citing multiple sources.
Iran, however, remains defiant. In addition to President Pezeshkian’s remarks, Acting Foreign Minister Ali Bagheri Kani affirmed Iran’s right to defend its sovereignty and security. This stance reinforces Tehran’s resolve to respond forcefully to perceived aggression.
Meanwhile, the Israeli Alma Research and Education Center forecasts a significant and coordinated Iranian attack, involving ballistic and cruise missiles and UAVs from multiple sites in western Iran. The report suggests that such an attack could involve coordination with Iranian proxies, including Hezbollah, and might feature a combined launch of various weapon systems.
“In our estimation, this attack will be a combined launch of ballistic missiles, cruise missiles, and UAVs from many sites in western Iran, with both the IRGC and the Iranian Army taking part. We also assess that most of the launches will be carried out from open areas near the underground sites using mobile launchers,” Alma added.
Ghassan Ashour, a Middle East analyst, told Iran International that following the assassination of Ismail Haniyeh on Iranian soil, the Islamic Republic has no choice but to respond to Israel.
Ashour added that, nevertheless, Iranian officials know that "any war with Israel is not in Iran's interest, and any war would benefit Israel."
According to the analyst, a military confrontation would pose less risk to Israel because it would not be alone in this battle, and there is a possibility of US intervention in support of Israel.
Ashour further noted that, in the event of a war, regional countries will not allow the Islamic Republic to use their airspace.
The political leader of Hamas, Ismail Haniyeh, was among those targeted by Israel. Haniyeh was assassinated on Wednesday morning in Iran’s capital Tehran. He had traveled to Tehran to participate in the inauguration of Iranian President Masoud Pezeshkian on Tuesday.
While Israel did not claim responsibility, Iranian authorities and Hamas officials have blamed the Jewish state for the attack, vowing to retaliate.
Haniyeh, who has served as the senior political figure of Hamas, has been a central figure in the organization's leadership, a key bridge between Iran and Hamas since 2017. The New York Times reported that Haniyeh was killed by an explosive device hidden in a complex where he was known to stay. However, IRGC-affiliated Fars News denied the report stating that "the results of the experts' investigation indicate that Haniyeh was struck by a projectile."
Mohammed Al-Deif
Another high-profile figure, Mohammad Al-Deif, head of Hamas' military wing was killed in an Israeli airstrike in Gaza last month. The Israeli military confirmed Al-Deif death on Thursday, a day after Ismail Haniyeh was killed in Tehran. Al-Deif was believed to have been one of the masterminds of Hamas' Oct. 7 attack on southern Israel, but Israel was not certain about his death after he was targeted.
"The IDF (Israel Defense Forces) announced that on July 13th, 2024, IDF fighter jets struck in the area of Khan Yunis, and following an intelligence assessment, it can be confirmed that Mohammed Deif was eliminated in the strike," the military said on Thursday.
Rafa'a Salameh
Commander of the Khan Yunis Hamas unit, Rafa'a Salameh, was also targeted in the July 13 strike alongside Al-Deif. Salameh was responsible for overseeing activities in the Khan Yunis area, a key area in Gaza for Hamas' operations, and considered another mastermind behind Hamas’s missiles and drones attack on Israel in October.
The IDF announced the elimination of Salameh on July 14 stating: “Salameh was one of the masterminds behind the Oct. 7 massacre and commanded over plans for the development of tunnels in the Khan Yunis Brigade.”
Hezbollah Leadership
In addition to the Hamas figures, key members of Iran’s Lebanese proxy militant group Hezbollah have also been systematically targeted by Israel.
Fuad Shukr
Fuad Shukr, the "right-hand man" of Hezbollah Secretary-General Hassan Nasrallah who served as his adviser for planning and directing wartime operations was killed in an Israeli airstrike in Beirut on Tuesday.
"Fuad Shukr has directed Hezbollah's attacks on the State of Israel since October 8th, and he was the commander responsible for the murder of the 12 children in Majdal Shams in northern Israel on Saturday evening, as well as the killing of numerous Israelis and foreign nationals over the years," the IDF said in a statement.
"As the Head of Hezbollah's Strategic Unit, Fuad was responsible for the majority of Hezbollah's most advanced weaponry, including precise-guided missiles, cruise missiles, anti-ship missiles, long-range rockets, and UAVs. He was responsible for force build-up, planning, and execution of terror attacks against the State of Israel," the statement added.
Mohammed Nasser
Top Hezbollah commander Mohammed Nasser was killed in an Israeli strike near the city of Tyre in south Lebanon on July 3. The IDF confirmed it successfully eliminated Nasser, whom they identified as the commander responsible for firing at Israel from southwestern Lebanon.
A Hezbollah official told the Associated Press that Nasser who went by the name “Abu Naameh” was head of the group’s Aziz Unit, one of three regional divisions in southern Lebanon.
Taleb Sami Abdullah
Top Hezbollah commander, Taleb Sami Abdullah known as Hajj Abu Taleb, was killed in an Israeli airstrike on June 11 in the Jouaiyya area of southern Lebanon.
Abdullah was the most senior member of the group to be killed in eight months of hostilities with Israel, Reuters reported citing a security source.
Hezbollah vowed to intensify its attacks along the Lebanon-Israel border to avenge Abdullah’s killing.
“Our response after the martyrdom of Abu Taleb will be to intensify our operations in severity, strength, quantity, and quality,” senior Hezbollah official Hashem Saffieddine said during Abdullah’s funeral ceremony which was attended by hundreds of the militant groups' members.
Abdallah was also a close friend of former Iran’s Islamic Revolutionary Guards Corps commander Qasem Soleimani who was assassinated by the United States in 2020.
On Sunday, Pezeshkian named Ali Tayyebnia, a long-time economic planner and manager, as his top economic advisor. Tayyebnia, who served as Minister of Economy during President Hassan Rouhani’s first term, earned a solid reputation before the United States reimposed economic sanctions in 2018.
Throughout Pezeshkian’s campaign and after his victory, many in Tehran believed Tayyebnia would be appointed First Vice President, a role that can carry significant influence depending on the officeholder. However, Tayyebnia announced in late July that he could not take on critical responsibilities due to personal reasons.
Pezeshkian’s second appointment on Sunday was Hamid Pourmohammadi, an economist and veteran manager in Iran’s predominantly state-controlled economy, as head of the Planning and Budget Organization. This organization is crucial for long-term economic planning and budget oversight.
Like Tayyebnia, Pourmohammadi is seen as a reliable expert, who held managerial position with both Mahmoud Ahmadinejad's government and with other administrations. Tayyebnia is closer to Iran's so-called reformists rather than the hardliner “revolutionary forces” that held power until President Ebrahim Raisi’s death in a helicopter crash in May and the subsequent elections.
Iran’s economy has been in crisis since 2018, but the Raisi administration, which relied heavily on political appointments from among hardliners, worsened the situation. The national currency, the rial, lost 50% of its value under Raisi, contributing to a persistent annual inflation rate of around 50%. Even conservative politicians and media criticized Raisi’s administration for mismanagement, calling for significant changes. However, the hardliners did the opposite, purging universities and institutions of reputable educators and managers.
While Tayyebnia’s reputation is solid by the standards of Iran’s clerical government, Pourmohammadi was implicated in a major corruption case in 2011 involving corruption in clandestine efforts to circumvent UN oil export sanctions imposed due to Iran’s nuclear program. He was arrested as a main suspect but later released on bail, though the fate of nearly $3 billion remains unknown. Some others involved served lengthy prison terms or fled the country. In the Islamic Republic, legal cases involving well-connected insiders often disappear into obscurity without clear resolution.
Pezeshkian faces pressure to improve the economy, with Tehran hoping for renewed negotiations with the United States that could lead to reduced sanctions. However, the ultimate decision-maker on the nuclear program and foreign policy is Supreme Leader Ali Khamenei. The president’s ability to improve the economy is limited by the resources available, and a significant portion of oil revenues is allocated to the military, the nuclear program, and support for regional proxy forces across the Middle East—policies over which the president has no control.
Years of state control over the economy have also led to a deeply inefficient system plagued by corruption. Even without sanctions, creating a competitive global economy would be a significant challenge.