Will Iran leave the nuclear deal and how do we interpret recent events in Gaza?

Iran and the JCPOA

In response to accumulating US sanctions, including the latest in the nuclear field, the Iranians have announced that they will cease complying with parts of the JCPOA nuclear deal – without exiting it. Specifically, they will stop exporting excess material of enriched uranium and heavy water, which they were required to do under the terms of the nuclear deal. Very recently the US administration lifted the exemption of these activities as sanctionable so the Iranians are no longer allowed to export them. But this means that if they continue enriching uranium or accumulating heavy water, they will soon be in violation of the limits they can hold of each material as set in the JCPOA.

Iran also said that if, within 60 days, the other parties to the JCPOA do not provide relief from sanctions applied to the Iranian banking and energy sectors, Iran will increase uranium enrichment to higher levels than the 3.67 percent allowed under the JCPOA.

I do not think Iran wants to exit the deal for now, as they stand to lose more than they can gain, such as the option of a future US President returning to the deal and support from the EU, so it continues to play a game of brinkmanship, stepping on the line but not over it. Iran wants the EU to facilitate more trade because the tool that the Europeans built to evade US sanctions, INSTEX, is not effective enough and applies only to humanitarian assistance and medical supplies.

The Iranians are hoping there will be a Democratic president in the White House in 2020 and that he/she might navigate the US back to the deal. At least until then, I do not see the Iranians returning to the negotiating table but they will likely play more and more on the brink of violating the JCPOA.

Article 26 in the JCPOA stipulates that if sanctions are re-imposed on Iran (not in response to any Iranian violation of the deal), Iranians may cease to comply with part or whole of the deal. It seems that Iranians are pushing down that road right now.

Iranians feel they are forced to react to US sanctions while simultaneously seeking to avoid direct escalation with the United States. They therefore chose very carefully the measures they have taken – so as not to give the US any reason to employ the military option against them. They are also being careful to not drive the Europeans away but rather instead to drive a wedge between them and the US.

However, the Europeans have been unable to significantly cushion Iran from the impact of US sanctions and provide relief. Companies make commercial calculations, not political ones, and therefore more and more companies have decided to leave Iran. The choice between the US market and the Iranian market is clear, so there is not very much the Europeans can do to save Iran from the pressure of economic sanctions. I believe that the impact of the European economic measures to save the JCPOA has been marginal, yet for now they have provided the Iranians the excuse for why they have not left the deal. That excuse however is coming under increasing pressure, which raises the question as to whether the US administration really wants Iran to leave the nuclear deal or stay in it. When you ask that question in Washington you do not get a clear answer.

If Iran resumes enrichment to levels beyond 3.67 per cent then it will shorten its break-out time to producing enough fissile material for a bomb, and that will raise concerns in the West and possibly elsewhere, including Israel. It could return the international community, Israel and Iran  to the tensions that existed before the JCPOA. For now I believe that Iran wants to avert this situation but there is potential for escalation later on.


The last round of hostilities in Gaza and southern Israel was not initiated by Hamas but by Palestinian Islamic Jihad (PIJ), funded by and close to Iran and whose leadership is based in Damascus and Beirut. It started when Israeli soldiers were injured by PIJ sniper fire during the weekly violent demonstrations along the border. Israel responded by firing at a Hamas military position and killing militants there, and PIJ then launched rocket fire. I suspect that Iran wants to drag Israel into a war in Gaza, inter alia as a response to Israel’s attempts to prevent Iran from advancing its military entrenchment in Syria. There most probably was an Iranian hand present here.

Hamas joined for its own reasons. Not only were it operatives killed but Hamas saw an opportunity to extract more concessions from Israel and the international community in the humanitarian and economic fields, including getting more funding, electricity and goods into the Strip. Hamas probably calculated that as Israel was about to commemorate  Memorial Day and Independence Day and then host the Eurovision song contest, this was the best time to squeeze Israel.

My conclusion from this round is that Hamas may not possess a monopoly of control over  matters in the Gaza Strip, as we have assumed until now. It appears that PIJ, with Iranian funds, was able to strengthen itself at the expense of Hamas. They appear more independent under their new leader (Ziad Nakhale) and during this round made warmongering statements about how they were going to escalate things, which I suspect were uncoordinated with Hamas. This is perhaps a new emerging dimension whereby Islamic Jihad with Iranian guidance tries to assume a policy independent of Hamas and inflame the situation in Gaza. There may come a moment when Hamas is unable to stop escalation even if it wishes to do so.

Tactically, PIJ/Hamas concentrated fire with numerous rockets in each salvo in order to overwhelm Iron Dome, a total of around 700 during the two day period. The IDF publically denies that Iron Dome was overwhelmed however this is a challenge for the IDF. Also, in this last round Hamas employed shorter-range (up to 10km) rockets, called Burkan. These rockets have much heavier payloads than the primitive Qassam rockets. They also fired an anti-tank missile at a civilian car, killing an Israeli civilian, although this was not the first time they have done so (having previously fired at a school bus). Hamas and PIJ calculated their targets, allowing for gradual escalation – from local communities along the border to the major cities in southern Israel up to Beer Sheba. They refrained from firing toward Tel Aviv, keeping it as a higher grade of escalation which fortunately didn’t come.

The IDF also adjusted its tactics in this round. First, it focused on what we call ‘value targets’ which were mostly military/security headquarters located in high-rised buildings. Second, it demolished the homes of some key figures in Hamas’s and PIJ’s leadership. Finally, the IDF carried out a targeted assassination of a Hamas operative in charge of providing Iranian funds to the Hamas war machine – something Israel has not done for a long time in Gaza.

Looking ahead, whilst it is true that neither side has an interest in a major confrontation, accumulating pressures in Israel following this round and the 500 rockets fired on Israel in the previous round in November may well lead the Israeli government in the not too distant future to escalate the situation far beyond a short exchange of fire, which could potentially include a ground operation in Gaza. There is a limit to Israeli patience.

The Israeli government, so far, has not wanted to go into Gaza because it has prioritized the northern front, namely the military challenges posed by Iran and its proxies in Syria and Lebanon. Moreover, there is a constant conundrum in Gaza – once you go in, destroy military infrastructure and possibly remove Hamas, who exactly do you turn the Strip over to?

Notwithstanding these valid considerations, given the accumulating pressures in Israel it is likely that the next time we witness a similar eruption of violence from Gaza like the one last week, there will be a more serious escalation by the Israeli government. Israel is not willing to accept a situation whereby every few months hundreds of rockets are fired from Gaza into its cities. No government would tolerate that for very long.

Invading Gaza

The IDF is confident it could go into Gaza and destroy Hamas’s key military infrastructure, but any ground invasion will be tactically and strategically complicated. Tactically because Hamas has an underground tunnel network inside Gaza from which they will aim to conduct the war; and strategically because if you go in and destroy Hamas it is not clear that the alternative to Hamas would be better.

There is a plan to rehabilitate Gaza. Israel is part of an effort led by Egypt and the UN Envoy to provide humanitarian and economic solutions for Gaza, which includes a desalination plan, a new electricity line from Israel into Gaza, sewage solutions and more jobs. While the plans exist, they are being implemented very slowly due to the lack of funds and for other reasons, including Palestinian Authority (PA) economic sanctions against Gaza. The PA has cut many of the funds to Gaza (where it has paid for most public services) due to its rivalry with Hamas and the economic crisis in the West Bank – exacerbating the crisis in the Strip. I suspect PA President Mahmoud Abbas would like to see Israel and Hamas at war. Unfortunately, the only external partner willing to put big money into Gaza is Qatar, which now committed $480 million to both the PA and Gaza in order to stabilise the situation.

If we find ourselves in another major round of violence in Gaza then it must be followed by a major humanitarian and economic plan to rehabilitate Gaza in a way that benefits the local population and not Hamas and PIJ.

Trump peace plan

Having met some of the officials in the Trump administration my conclusion is that Gaza is not central to their thinking; they are more focused on the political horizons of a potential peace deal. While the US is mindful of the challenges of Gaza, their plan is not a Gaza-first plan. They seem quite serious in their intention to present the plan in June, but haven’t made a final decision on the issue.