What America Should Do If the Iran Nuclear Deal Talks Fail

U.S. President Joe Biden’s July trip to the Middle East comes at a delicate moment. There is a last gasp effort underway to revive stalled talks between the United States and Iran on restoring the Joint Comprehensive Plan of Action (JCPOA), the deal aimed at preventing the Islamic Republic from being able to develop a nuclear weapon. Since the last round of talks in Vienna, Tehran has accelerated its program and will soon become a threshold nuclear state. When the International Atomic Energy Agency (IAEA)—the UN nuclear watchdog—censured the country for failing to cooperate with inspectors, the Iranian government further curtailed IAEA monitoring of its nuclear program and announced new underground advanced enrichment facilities.

Israel, however, has long promised that it will not tolerate a nuclear-armed Iran, and it is working outside of multilateral institutions to realize that goal. Israel has assassinated Iranian scientists and military officials. It has conducted air attacks on Iranian targets in Syria and expanded its strike capabilities, presumably in preparation for new attacks on Iranian nuclear sites and military facilities. With American backing, the Israelis are also seeking to organize a number of Arab states into a military alliance against Iran. According to The Wall Street Journal, the United States convened a meeting last March with security officials from Egypt, Israel, Jordan, Qatar, Bahrain, Saudi Arabia, and the United Arab Emirates (UAE) to integrate intelligence sharing and air defense systems to combat aerial threats from Iran.

These developments are scrambling Washington’s plans for the Middle East. The Biden administration has argued that the revival of the JCPOA is the best way to control Iran’s nuclear program. But failing that, it appears prepared to adopt Israel’s current approach to containing Iran. That entails further tightening the economic noose around Iran’s neck by forcing the country out of the oil market. And it means the United States would support Israel in carrying out attacks inside Iran and in its effort to weave a coalition of Arab states to contain the country. The latter is, in essence, a new function for the Abraham Accords, the signature foreign policy achievement of the Trump administration, which tied Israel to Bahrain, Morocco, Sudan, and the United Arab Emirates in what amounts to an anti-Iran bloc. Left unspoken is that the accords may evolve into a functioning military defense pact, buttressed by the United States.

The situation recalls the 1970s, when U.S. President Richard Nixon subcontracted Middle East security to the shah of Iran. Similarly, the Biden administration is, in effect, handing over the task of containing Iran to Israel. This is a risky approach: unlike some 50 years ago, this time the U.S.-designated policeman for the region is not trying to avoid conflict but is the regional actor most clearly pushing for escalation. Washington should adopt a different strategy, one aimed at averting conflict by combining beefed-up regional security with encouraging stronger diplomatic ties between Iran and Arab states—one of the few things that could help reduce the mounting tensions in the Middle East.

The Israeli Octopus

Israel has long vowed that it will not allow Iran to become a nuclear power. Outgoing Israeli Prime Minister Naftali Bennett believed that a return to the nuclear deal would give Iran more resources to pursue its nuclear and regional ambitions. But unlike his predecessor, Benjamin Netanyahu, Bennett spent little time campaigning against the deal and instead stepped up efforts to not only sabotage Iran’s nuclear program but to undermine the Islamic Republic.

In early June, in anticipation of the IAEA’s formal censure of the Iranian government for failure to cooperate with nuclear inspectors, Bennett told the Knesset that “the days of immunity, in which Iran attacks Israel and spreads terrorism via its regional proxies but remains unscathed—are over.”

Israel has long vowed that it will not allow Iran to become a nuclear power.

Bennett unleashed a so-called octopus strategy against Iran. This included sabotage, assassinations, cyberwarfare, and attacks on Iran’s military personnel and infrastructure, as well as those of its allies in Iraq, Lebanon, and Syria. The new approach, which goes beyond targeting nuclear facilities to focus more broadly on the Islamic Republic itself, has been less predictable, more aggressive, and more complex than previous Israeli campaigns. In recent weeks, for example, Israel has expanded its assassination targets beyond those associated with the nuclear program, most notably when Mossad agents apparently killed a colonel in the Islamic Revolutionary Guards Corps (IRGC) in Tehran. That was not an isolated incident: there have been many recent reports of mysterious deaths and suspicious explosions and industrial accidents.

Critical to Bennett’s strategy has been building Israel’s capabilities on Iran’s borders. According to sources in the region, the Israeli sabotage and assassination campaign inside Iran has relied on bases in Azerbaijan, which shares a border with Iran in the north, and Iraq’s Kurdistan region, which borders Iran in the west. Bennett also hoped that the Abraham Accords would provide a regional counterweight to the Islamic Republic. The accords have already expanded Israel’s reach in the Persian Gulf through security arrangements with Bahrain and the UAE, whose leaders share many of Israel’s concerns about Tehran’s nuclear and regional ambitions. It is now concluding free trade agreements with the UAE, as well as supplying sophisticated air defense systems, radars, and cybertechnology to its Gulf allies. Washington is also encouraging Egypt and Jordan to deepen security ties with Israel and supporting efforts to bring Saudi Arabia into the accords to solidify an Arab axis to contain Iran. That issue will likely be on the agenda when Biden speaks with his Saudi counterparts on his trip to the Middle East.

Iran’s Long Game

While Israel is going on offense, Iran is seeking to buy time. By avoiding direct confrontation with Israel, Tehran can fortify its nuclear program, enhance its missile and drone program, and expand its military capabilities in Iraq, Lebanon, Syria, and Yemen. Iranian officials also believe that if Israel managed to draw Tehran into a larger conflict, the Biden administration would be compelled to intervene militarily. Furthermore, mounting hostilities would increase the probability that more Arab states would cast their lot with Israel.

That said, Iran is attacking Israel, mostly through proxies such as Hamas and Hezbollah. Over the last few months, Hezbollah flew a drone inside Israeli territory, Iraqi militias aligned with Iran allegedly carried out a cyberattack on Israel’s primary airport, and Hamas launched rockets at Israeli planes. Iran is also showing a growing willingness to target Israeli intelligence outposts close to its borders and increase the costs to states that facilitate Israeli operations against Iran. That is particularly true when Israel has gone after members of the IRGC, the branch of the armed forces that exercises profound influence over the Iranian government. After Israeli airstrikes killed two IRGC commanders in Syria and a presumed Israeli drone attack launched from Iraqi Kurdistan territory in Iraq decimated a military facility in western Iran, Tehran carried out military drills on its borders with Azerbaijan and attacked targets in Iraqi Kurdistan, including an alleged Mossad base.

Tehran has also pressured its Iraqi allies to pass a law that criminalizes normalization of ties with Israel. Ambiguous in its text, the law intends to keep Iraq out of Israel’s expanding sphere of influence and also pressure the semiautonomous Kurdistan Regional Government to reduce its cooperation with Israel. These steps have not gone unnoticed in Israel. After the Israeli attack on Damascus International Airport, the Israeli government advised its citizens to stay away from Turkey, a popular tourist destination among its citizens, out of concern that Iran was planning to retaliate by attacking Israeli nationals.

Reviving the Nuclear Deal

In the midst of this brewing turmoil, members of the Biden administration are negotiating in Doha, in coordination with EU officials, to revive the JCPOA. That is, in many ways, an exercise in damage control: U.S. President Donald Trump’s decision to withdraw from the nuclear deal in 2018 has shortened the period of time Tehran would need to create a bomb and strengthened the hand of hardliners in Iran. Under the original deal, Iran would have been a year away from acquiring enough fissile material for one bomb. Now, under a new deal, that timeframe will be shaved down to six months.

The pressure and sanctions the Trump administration placed on Tehran forced much of Iran’s oil trade underground, leading the IRGC to secure its budget by managing a good deal of this illicit trade directly. Since 2018, Iran has sold oil surreptitiously, and the bulk of its trade has gone through black markets, allowing the IRGC to sell its own share of oil and build economic conglomerates. As a result, the bulk of the IRGC’s revenue now sits outside the official government budget.

Influential individuals within the IRGC now have a powerful incentive to argue against a new nuclear deal, because Iran’s oil revenue would once again go to the Iranian government. The IRGC would have to submit its budget to civilian oversight and would likely face public pressure to relinquish a portion of it. That development would be particularly unwelcome at a time when the IRGC is seeking to increase its military capability to maintain strategic parity with Israel. Mounting Israeli attacks have strengthened the IRGC’s resistance against the deal, which they suspect is a U.S. machination to undermine Iran’s capability to respond militarily. 

To be sure, a deal would breathe life into Iran’s economy at a time when popular discontent is growing. And it would generate trade opportunities with Iran’s neighbors at a time when Israel is extending its ties with Arab states. Those among Iran’s leaders who favor a deal could overcome IRGC resistance if the economic promises of a deal are significant and immediate, and if Iran could be confident they will be realized. Failing to reach a deal also heightens the risk of escalation with Israel. But the IRGC holds powerful sway over the Iranian government. Ironically, both Israel and IRGC oppose the nuclear deal and are preparing for a looming conflict.

A Path Forward

In the coming weeks, U.S. engagement will be critical to keeping the shadow war between Iran and Israel from spiraling out of control. Escalating attacks by Israel and Iranian proxies could explode into a larger confrontation, inflaming tensions from the Levant to the Arabian Peninsula. This could prolong the political crises in Iraq and Lebanon; derail a fragile truce between Iranian-backed Houthis and Saudi-led forces in Yemen; and even reignite the conflict in Syria. It would drag the United States back to deal with the region at a moment when it wishes to focus on Russia and China.

To avoid these outcomes, the Biden administration must set redlines with the Israeli government and insist on limits to provocative attacks. The United States also must outline a strategy for Middle Eastern stability that is not merely based on containment and confrontation with Iran or securing a short-term reduction in oil prices. Rather, it must establish a durable framework for preventing conflict. The most effective way to do this would be to conclude a new nuclear deal with Iran. To be sure, a deal will not go far enough to satisfy Israel, nor will it shut down the activities of the IRGC and its proxies in the region. It will, however, hold the line on Iran’s nuclear program in a way that would make urgent Israeli action unnecessary. And that would lessen the likelihood of Iranian retaliatory actions in the region—including against tankers and oil facilities—that could roil world energy markets.

A breakthrough could also transform Iran’s relations with its Gulf neighbors. Tehran has attempted to strengthen its ties with Kuwait, Oman, and Qatar. Iran also has been keen to improve relations with Riyadh and Abu Dhabi. After five rounds of talks between Iran and Saudi Arabia, a cease-fire in Yemen is now entering its third month. A nuclear deal will add impetus to this initiative. Conversely, more sanctions and an Israeli offensive against Iran’s nuclear program are likely to stop it in its tracks, setting the region on a dangerous escalatory path.

U.S. engagement is critical to keeping the shadow war between Iran and Israel from spiraling out of control.

Even without a nuclear deal, greater Arab-Iranian engagement could serve as a brake on Iran’s more aggressive regional activities. But that is only if there is a veritable path to improving Arab-Iranian relations. Although Persian Gulf monarchies fear Iran and have deepened their security ties with Israel, they do not want a war between Iran and Israel. Arab states want Israeli security protection but fear they would become collateral damage in a military showdown. Persian Gulf countries also have an interest in ending regional conflicts, most notably in Yemen. Building on the current cease-fire in that country requires continuation of Saudi-Iranian dialogue, divorced from the fate of the nuclear deal.

The growing push for stronger diplomatic relations between Iran and its Arab neighbors presents Washington with an opportunity to reorient regional security. By working closely with Arab states—not just signatories to the Abraham Accords, but those with a vested interest in Persian Gulf and the Red Sea security—Washington can build broader support for controlling escalation between Israel and Iran. It must couple the imperative of containing Iran militarily with encouraging regional diplomacy to influence its behavior. Israel is wooing Arabs to join an anti-Iran security umbrella. Iran has every reason to dissuade Arabs from taking that step. Arab states can use this leverage to encourage both Iran and Israel to desist from risky provocations and keep in check their shadow war. Biden should use his trip to the region to encourage them to do just that.