What’s happened: A large military exercise in Iran over recent days has heightened alert levels in the region and brought to the fore discussions in Israel, US, and elsewhere regarding the possible resumption of hostilities following the last June’s Twelve Day War.
- Iranian state media reported missile tests in several regions of the country, including Khoramabad, Mahabad, Isfahan, Mashhad, and Tehran. Israeli intelligence assessments were that, although war was unlikely, Iran could use a broad missile test such as the one it carried out this week as a cover for launching a surprise attack on Israel. These concerns were conveyed by Israeli officials to their US counterparts, including by IDF Chief of Staff Zamir to Admiral Brad Cooper, the head of CENTCOM, in a call on Saturday.
- The Iranian Foreign Ministry characterised the Iranian missile programme as purely defensive and non-negotiable. “Iran’s missile programme has been developed solely for the defence of the country and is fundamentally not a matter for negotiation,” the ministry’s spokesman, Esmaeil Baghaei, told reporters. “The media hype is also part of a hybrid war that the Zionist regime, with the help of the United States and affiliated media networks, has long designed and pursued against the Islamic Republic of Iran,” he added.
- In the days leading up to the missile tests, multiple western intelligence agencies reported “suspicious movements” of Iran’s Revolutionary Guards, heightening concern that war might break out, either by design or by miscalculation by one of the sides. These movements were connected not just to the missile test, but also to drone activity and air defence drills.
- Prime Minister Netanyahu referred to the Iranian threat yesterday in remarks made after meeting the leaders of Cyprus and Greece, “We know that Iran has recently been conducting exercises. We have been following this, and we have been maintaining the necessary readiness. I want to make it clear to Iran: any action against Israel will be answered with very harsh retaliation.”
- The consensus among observers is that Iran is actively seeking to restore and augment missile capabilities that were lost in the Twelve Day War in preparation for a future confrontation with Israel. US officials believe that, left unchecked, Iran could produce up to 3000 ballistic missiles per year.
- The IDF has revealed that one of three Hezbollah operatives who were eliminated yesterday in southern Lebanon was serving simultaneously in the Lebanese Armed Forces (LAF). The Israeli Air Force struck a vehicle in the Sidon area, killing the three men that were, “engaged in efforts to repair terrorist infrastructure.” The IDF revealed that one of the Hezbollah terrorists had a dual role, serving simultaneously in a LAF intelligence unit. This disclosure comes amid numerous complaints that the LAF is not doing enough to enforce the ceasefire mechanism and some of its personnel are affiliated with Hezbollah.
Context: The Iranian threat to Israel over the years leading up to the October 7 War and since has been understood in Israel as ranging over three categories: the nuclear programme, proxies, and missiles.
- Current Israeli assessments are that Iran suffered major setbacks on all three, and that it has struggled to restore its capacities on the first two. On missiles, however, the picture is more daunting. Only 36 Iranian ballistic missiles made impact in Israel during the Twelve Day War, but these killed 32 Israelis and caused extensive property damage. Moreover, the threat of missiles during those days shut the Israeli economy down completely.
- Besides ramping up missile production, the Iranians are also fortifying and modernising launch sites. They retain up to 75% of the mobile launchers they had at the beginning of the war, and are manufacturing new ones. And as for fixed sites, Iran is reportedly working to build hardened silos that are more resistant to Israeli and US attacks.
- All this is happening on the backdrop of a severe domestic crisis in Iran. Tehran, the capital city and home to ten million people, is unable to supply its population with water. Local reservoirs operate at only ten percent capacity. Electricity throughout the country is limited to a few hours a day, and petrol is severely rationed. The Iranian rial is trading at historic lows, and emigration of educated Iranians continues despite the governments efforts to stop it.
- The regime’s censorship and restrictions of internet access have not succeeded in dampening public dissent. Iran’s second-largest city, Mashad, was the scene of wide scale protests against the regime. Israeli officials are concerned that the Iranian leadership may see a new war with Israel as a way of distracting the public and shoring up support.
- In addition to the domestic political crisis in Iran, the renewed Iranian armament project takes place in an evolving geostrategic environment. Western countries have long complained about Iranian-Russian cooperation on drone production, particularly as it impacts the war in Ukraine.
- China is widely believed to be helping Iran on ballistic missile production, both in supplying raw materials and in providing technology transfers. Turkey’s role is murkier. Iranian proxies planning terror attacks on Israeli targets were believed to be operating in Turkey. Attacks on Israeli targets in Latin America were recently foiled by local police and intelligence forces. These are believed to have been planned by Hamas and Hezbollah command centres located in Turkey.
Looking ahead: Prime Minister Netanyahu is due to meet President Trump in Florida on December 29. He is expected to present the President with an Israeli dossier on Iran’s efforts to restore its ballistic missile arsenal as well as renew its nuclear programme and fund its network of terrorist proxies, including Hezbollah, Hamas, and the Houthis.
- The two leaders are also expected to discuss the further implementation of ceasefire agreements in both Lebanon and Gaza, with the US side expected to exert pressure on Israel to move forward on promised territorial withdrawals in spite of the fact that other commitments — return of the last deceased hostage in Gaza and disarmament in both Gaza and Lebanon — have not yet been achieved.
- Gaps exist as well between the Israeli and American positions regarding both Syria and Turkey, and these are expected to be discussed and possibly resolved during the leaders’ meeting.


