Iran looks for a Plan B as Israel dismantles its regional proxies

Tehran has spent four decades building Hezbollah into a fighting force on Israel’s northern border. It was Iran’s first and best line of defence. Its crumbling might precipitate a change in approach.

Iran looks for a Plan B as Israel dismantles its regional proxies

It is sometimes forgotten that Hezbollah was originally founded almost 40 years ago to advance Iran’s strategic interests, not long after the Islamic Republic had established itself following the 1979 revolution. Since its inception, Hezbollah has meticulously followed that strategy, reaping the rewards and bearing the costs. Currently bearing the costs, its future is uncertain. Many of its leaders, weapons, and communications systems have been immobilised.

The region has been shaken to its core since the events of 7 October 2023, and for Iran, the bad news continues, compelling it to reassess its posture and consider alternative solutions to its growing challenges.

Strategy in tatters

Iran’s strategy has had two pillars. The first was safeguarding its borders by growing, training, arming, and organising militias who would then penetrate the political and military structures of states like Iraq, Lebanon, and Yemen to establish a foothold. Once ensconced, they would turn their aim on Iran’s regional adversaries or come to the aid of Iran’s regional allies. In part, this strategy is rooted in the Iran-Iraq War in the 1980s, when Iran was invaded by Iraq, with both sides suffering huge losses.

The second pillar is the protection of Iran’s core interests through a well-trained, well-organised, well-funded military force to deter adversaries—namely the United States and Israel—from attacking its nuclear programme or other key regime interests.

For Iran, the bad news compels it to reassess its posture and consider alternative solutions to its growing challenges

Yet Iran's much-vaunted proxies in Yemen, Iraq, and Lebanon have only managed a muted response, which has shown the limits of their capabilities. The occasional drones or rocket they have fired at Israel have been easily intercepted.

Hezbollah—long considered the strongest—is being systematically dismantled in front of the world's eyes. In Yemen, the Houthis' infrastructure around the port of Hodeidah has been heavily bombed, while the leaders of pro-Iranian militias in Iraq have been targeted in precision strikes by Israel.

A change of direction?

The militias' ineffectiveness will have dumbfounded their financiers, whose talk of a "unity of arenas" has been exposed as hollow rhetoric. Even one of Iran's main regional allies—Syria—is now distancing itself from Tehran. Iran's so-called "strategic patience" is also now ridiculed as a euphemism for inaction in the face of significant losses. Its powers of deterrence, such as they were, have collapsed in a matter of months.

This may explain why Iranian President Masoud Pezeshkian, his strategic affairs advisor Javad Zarif, and other Iranian officials made comments at the United Nations in September that analysts interpreted as signalling a shift in approach.

With Supreme Leader Ali Khamenei now aged 85, talk has turned to his successor while the country grapples with an economic crisis exacerbated by international sanctions and endemic corruption at all levels of government. There is now growing speculation that Iran may be shifting away from reliance on local militias and moving toward the development of a nuclear weapon. Some think it will soon conduct its first nuclear test, drawing comparisons to North Korea.

Will Hezbollah survive?

In Lebanon, divisions over Hezbollah's role and influence continue to deepen. Many want Hezbollah gone, angry at the costs it has imposed on their political and economic life, obstructing state institutions and suppressing reform initiatives through intimidation, threats, and worse.

Both Iran and Hezbollah will need to rebuild their damaged security frameworks and prepare for the next phase

Two key factors will determine Hezbollah's fate. One is the disillusionment of many Lebanese with Hezbollah's foreign entanglements and their impact at home. The other is Iran's strategic need for a strong proxy in the East Mediterranean.

Hezbollah may still play a role in Lebanon's political landscape—especially given the ambiguity surrounding the Shiite leadership. Nabih Berri of the Amal Movement could assume a more prominent role following the death of Hezbollah's Secretary-General Hassan Nasrallah. But both Iran and Hezbollah will need to rebuild their damaged security frameworks and prepare for the next phase. The future of Hezbollah is intricately tied to the future of Lebanon itself.

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