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Mideast enters dangerous new phase with Iran's attack on Israel

Bloomberg • 7 min read
Mideast enters dangerous new phase with Iran's attack on Israel
File photos of Israeli tanks / Photo: Bloomberg
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Israel and allies including the US, UK and France managed to mostly foil an unprecedented attack by Iran on the Jewish state.

The Islamic Republic fired more than 300 drones and missiles against Israel on Saturday evening. Almost all were intercepted before they reached Israeli airspace and there were no fatalities reported. A 10-year-old girl in Israel was badly injured by falling shrapnel, while an army base was lightly damaged.

US President Joe Biden said he condemned the assault — the first from Iranian soil against Israel — in the strongest terms and Israeli officials warned it was “a severe and dangerous escalation” from Tehran.

Yet neither said they would retaliate against Iran, which had promised an attack against Israel after its embassy compound in Syria was hit by missiles on April 1, killing seven Iranian officers.

Iran said it would not carry out further assaults in the absence of a strong reaction from Israel. Stock markets in Israel, Saudi Arabia and elsewhere in the Middle East fell on Sunday, but only slightly.

“We see this operation as achieving a complete result and there’s no intention to continue” it, the chief of staff of Iran’s military, Mohammad Bagheri, told state TV on Sunday. Iran was capable, he said, of an attack “tens of times” bigger but deliberately limited it.

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Biden will speak with Group of Seven leaders on Sunday “to coordinate a united diplomatic response,” according to a White House statement.

He spoke to Israeli Prime Minister Benjamin Netanyahu and reiterated Washington’s support for the country was “ironclad.” However, he said the US wouldn’t support an Israeli counterattack against Iran, Axios reported, citing an unidentified White House official.

Israel’s cabinet is expected to meet on Sunday afternoon to discuss the country’s response.

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“This campaign is not over yet and we need to remain prepared,” Israel’s defense minister, Yoav Gallant said. “Israel withstood the attack tonight. The IDF blocked this attack in the most impressive way, together with our partners. The entire world saw tonight what Iran is, a country of terror.”

Oil prices rose in the wake of the Syria strike, with Brent climbing above US$90 a barrel and analysts saying it could reach US$100 on a direct conflict between Iran and Israel. The Israeli shekel weakened and neared its weakest level this year.

On Sunday, Israeli stocks increased as much as 0.7% in early trading, but reversed those gains as of 11:40 a.m. in Tel Aviv. Saudi Arabia, which said it had “deep concern over the military escalation developments in the region,” saw its main bourse drop 0.5%.

“Iran designed its retaliation to cause maximum symbolism, but minimum damage,” said Ziad Daoud, chief emerging-markets economist for Bloomberg Economics. “By itself, it shouldn’t move markets. But if it triggers an Israeli counter-response, then we’re spiralling into somewhere very dangerous. Key to what happens next is whether the US can restrain the Israeli reaction.”

Israel’s military said Iran launched about 170 drones, 30 cruise missiles and 120 ballistic missiles. Only the latter penetrated Israeli airspace and in “very small numbers,” according to the Israel Defense Forces. The drones and cruise missiles were all intercepted before they got to Israel.

Multiple alarms sounded in various locations in Israel: Jerusalem, Beer Sheva and Dimona in the south, and the Jewish settlement of Ariel in the West Bank. Residents of Jerusalem heard blasts. Alarms also sounded in Israel’s north. The IDF said it cut off GPS services in some areas to help counter the attack.

A US defense official confirmed its forces in the region — bulked up since the Israel-Hamas war erupted on Oct 7 — shot down Iranian-launched drones. UK and French forces were also involved.

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“Thanks to these deployments and the extraordinary skill of our servicemembers, we helped Israel take down nearly all of the incoming drones and missiles,” Biden said.

Israel has upgraded its air defenses considerably over the past decade and a half, adding new systems for interceptions of ballistic missiles fired from as far away as 2,400 kilometres. That range includes Yemen, Syria and Iraq, where militant groups allied with Iran are based, as well as Iran.

Israel’s most active and well-known air defense is Iron Dome, which has intercepted thousands of rockets fired by Palestinian militants in Gaza since 2011. But Iron Dome is designed for missiles and drones with a short range, and is just one of the advanced missile-defense systems in place. 

Israel also has a medium-to-long-range interceptor known as David’s Sling and the Arrow defense system.

UK Prime Minister Rishi Sunak was among the first leaders to respond to Iran’s attack. “The UK will continue to stand up for Israel’s security and that of all our regional partners, including Jordan and Iraq,” Sunak said in a statement.

France, Germany, the European Union and Japan also condemned Iran’s actions.

So did United Nations Secretary-General Antonio Guterres, who called for an immediate halt to the hostilities, citing the risk of a “devastating region-wide escalation.” Israel asked for an emergency session of the UN Security Council.

The assault could worsen a Middle East conflict that began when thousands of Hamas operatives broke into Israel from Gaza, killing about 1,200 people and abducting 250. Israel’s retaliatory air and ground assault on Gaza has killed more than 33,000 people, according to the Hamas-run health ministry there, provoking anger in the Muslim world and beyond.

Hamas is designated a terrorist organization by the US and EU.

A direct clash between Iran and Israel could draw in the Lebanon-based group Hezbollah, which like Hamas is backed by Iran, and heighten the possibility of a regional war. Oil supplies from the Persian Gulf could also be affected.

Iran’s Supreme Leader, Ayatollah Ali Khamenei, repeatedly warned Israel would be “punished” for the deadly strike in Damascus, which destroyed the Islamic Republic’s consulate building and killed at least 13 people. Israel didn’t claim responsibility for the attack, but didn’t deny it either.

One of the officers killed was Mohammadreza Zahedi, an Islamic Revolutionary Guard Corps general and the highest-ranking Iranian killed since the US, under then-President Donald Trump, assassinated Qassem Soleimani in Iraq in 2020.

After Soleimani’s death, Iran launched attacks US military bases but didn’t kill anyone. Iran threatened on Sunday to hit US bases in the Middle East again if the White House helped Israel respond to Saturday night’s attack.

Iran backs anti-Israel and anti-US groups across the region. Together, they are often called the “axis of resistance.” They include Hamas and Hezbollah, as well as the Houthis in Yemen and militias in Syria and Iraq.

The Houthis used the war in Gaza as a pretext for missile attacks on commercial ships in the Red Sea and Gulf of Aden, while Hezbollah has exchanged fire across the border with Israel almost daily since the incursion.

The Iran-backed groups in Iraq and Syria regularly targeted US bases with missiles and drones late last year and in January. Those attacks mostly stopped after three US soldiers in Jordan were killed by a drone strike in late January and the Pentagon responded by striking Iran-linked facilities in the region.

Also on Sunday, Israel said Hamas had rejected the latest cease-fire proposal from mediators.

Hamas turned down the outline presented by mediators, according to Mossad, the Israeli external-intelligence agency.

While Mossad didn’t directly say the Iran drone and missile strikes on Israel were to blame, it said Hamas’s leader in Gaza, Yahya Sinwar, “is continuing to exploit the tension with Iran” and “does not want a humanitarian deal and the return of the hostages.”

The US, Qatar and Egypt are brokering the talks.

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