Iran's leaders at strategic crossroads in Mid-East as bet on Israel backfires

When Hamas, the militant Palestinian group, hit Israel on Oct 7, 2023, inflicting on the Jewish state its single most significant blow since the Holocaust of World War II, Iran found itself in the place it always wanted to be - on the sidelines of a major regional conflict, untouched by the fighting yet with plenty of levers to influence the conflict's outcome.

- Jonathan Eyal

But as the Middle East marks the gruesome one-year anniversary since the outbreak of the Gaza war, what initially looked like clever strategic positioning has turned into Iran's worst nightmare.

The Islamic republic is now very much at the heart of the regional conflict, and it has few options to influence its outcome. How Iran responds in the days and weeks to come will determine whether the current showdown between Israel and Iran is contained, or morphs into a much bigger regional war.

The stakes can hardly be higher.

No understanding of today's Iran is possible without going back to the fragile beginnings of the Iranian theocracy, which overthrew the country's monarchy in 1979.

After fighting a devastating war with neighbouring Iraq, the authorities in Tehran decided that wars must no longer take place on Iranian territory.

Iran would train and arm friendly militias in the Shi'ite communities of the Arab world to promote its interests beyond its borders.

A programme to acquire a nuclear bomb - started by the overthrown shah - was then revived by his Islamic successors, together with the rapid development of an extensive range of missiles.

Missiles, militias and the Bomb - these were the bedrock of the Iranian regime's defence.

For decades, the strategy worked brilliantly, as Iran turned every regional crisis to its advantage.

The 2003 US-led invasion of Iraq removed from power Saddam Hussein, a Sunni leader in charge of a Shi'ite-majority country; all Iraqi leaders since then have had to court various Shi'ite militias funded by Iran.

The 2011 civil war in Syria pitted President Bashar al-Assad, a Shi'ite leader, against an overwhelmingly Sunni Muslim population; the Iranians supported Mr Assad, and he remains in power.