Middle East Dangers Escalate With Iran’s Attack on Israel

Galit Altstein, Patrick Sykes and Paul Wallace
·8 min read
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(Bloomberg) -- Israel and allies including the US, UK and France managed to mostly foil an unprecedented attack by Iran on the Jewish state.

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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.

The White House and European officials urged Israel to show restraint as they try to prevent a direct conflict with Iran, which could hit the global economy and send oil and gas prices higher. Biden’s especially keen to avoid that in an election year.

Iran promised an attack against Israel after its embassy compound in Syria was hit by missiles on April 1, killing seven Iranian officers. Saturday night’s assault was a legitimate response, it said.

Tehran said there would be no further attacks as long as Israel didn’t retaliate aggressively. It warned of “considerably more severe” strikes if Israel chose that option.

“We see this operation as achieving a complete result and there’s no intention to continue,”, the chief of staff of Iran’s military, Mohammad Bagheri, told state TV on Sunday.

The attacks were flagged to the extent that Iranian state media announced the firing of drones several hours before they were due to enter Israeli territory. Many Western diplomats said that was to ensure the damage was limited and the casualties minimized.

Stock markets in Israel, Saudi Arabia and elsewhere in the Middle East fell on Sunday, but only slightly.

Read more: Markets Weigh Risk of Retaliation Cycle Following Iran’s Attack

“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 spiraling into somewhere very dangerous. Key to what happens next is whether the US can restrain the Israeli reaction.”

‘Crushing’

Still, some Israeli ministers called for an aggressive reaction. National Security Minister Itamar Ben Gvir said there should be a “crushing attack” on Iran, while Foreign Minister Israel Katz said the country will directly strike back at Iranian territory.

Israel’s military emphasized that Iran meant to cause plenty of harm.

“Iran meant to get results and didn’t get results,” Daniel Hagari, the IDF’s main spokesperson, said. “She wanted much more significant damage than what happened.”

Iran said there was a “new equation” between itself and Israel. It suggested it was prepared for a more direct role in the shadow war with Israel that’s usually fought via its proxy militias in the Middle East.

“From now on, if the Zionist regime attacks our interests, assets, people or citizens at any point, we will counter attack from the Islamic Republic of Iran,” an Islamic Revolutionary Guard Corps commander said on state television.

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.

“The president’s been clear: We don’t want to see this escalate,” John Kirby, a spokesman for Biden, told NBC. “We’re not looking for a wider war with Iran.”

European Commission President Ursula von der Leyen condemned Iran’s attacks and said “all actors must now refrain from further escalation and work to restore stability in the region.”

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

“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 Israel Defense Forces blocked this attack in the most impressive way, together with our partners. The entire world saw tonight what Iran is, a country of terror.”

In the wake of the Syria strike, gold and oil prices rose. Brent climbed above $90 a barrel and analysts said it could reach $100 on a direct conflict between Iran and Israel. The Israeli shekel weakened.

On Sunday, Israeli stocks swung between losses and gains. They were up 0.3% by 4 p.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 0.3%.

Missile Barrage

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 IDF. The drones and cruise missiles were all intercepted before they got to Israel.

Alarms sounded in various locations in Israel, including Beer Sheva and Dimona in the south and Jerusalem, as well the Jewish settlement of Ariel in the West Bank. Residents of Jerusalem heard blasts. The IDF said it cut off navigational services in some areas to hinder incoming GPS-guided projectiles.

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.

“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 2,400 kilometers (1,500 miles) away. That range includes Iran, which earlier this year showcased ballistic missiles able to go as far as Israel.

Read more: Iran Attack Tests Limits of US-Backed Israeli Air Defenses

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.

British 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,” he said.

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

China said Iran’s attack was “the latest manifestation of the spillover of the Gaza conflict” and called for an immediate cease-fire there.

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

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

Read more: OPEC+ Push for a $99.99 Oil Price Just Got Trickier: Javier Blas

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 curtailed.

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, but didn’t deny it either.

One of the officers that died was Mohammadreza Zahedi, an IRGC 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 on 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.

Read More: As Iran Threatens Attack, These Are Israel’s Defenses: QuickTake

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 in late January and the Pentagon responded by striking Iran-linked facilities in the region.

Hamas Talks Stall

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

Read More: Hamas Rejected Cease-fire Proposal After Iran Attack, Says Israel

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.

(Updates with comments from US, EU, Israeli, Iranian officials.)

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