Introduction
For the time being, the USA-Iran conflict that began in February-March 2026 is set to enter a negotiation phase, with the MoU signed by the USA and Iran on June 18. For Iran, the conflict has been synonymous with significant financial and military damage. For the USA, the conflict has exposed several weak links. It has damaged the impression of invincibility surrounding the US security umbrella and exposed a lack of political will to take the necessary steps to achieve strategic objectives. The third party to the conflict, Israel, has been able to achieve more tactical objectives than the other countries. It has been able to keep itself mostly on the sidelines of the main conflict, focusing its air and military power to degrade Hezbollah’s hold in neighbouring Lebanon and capturing territory to create buffer zones. However, a successful US-Iran deal, ending the US hostilities against Iran, will reverse Israel’s immediate gains. Due to various domestic and geopolitical factors, all three parties to the conflict will perceive the upcoming deal differently, testing its limitations and, as a result, affecting alliances and relationships.
Political Victory for the Iranian Regime
Over several decades, the regime in Iran has perfected portraying its revolution as an Islamic resistance to the ‘Western’ and ‘Zionist’ incursions. This conflict has enabled it to strengthen this perception further. Despite suffering significant damage to its top leadership and armed forces, the upcoming deal will be a political and strategic victory for the Iranian regime and the Islamic Revolutionary Guard Corps (IRGC). By closing the Strait of Hormuz for international trade and using cost-effective one-way Shahed drones against expensive high-end US air defence systems, Iran successfully converted relentless US air strikes into a war of attrition.
Moreover, due to the lack of any credible evidence tying the IRGC directly to the October 7th Attack on Israel, Iran has been able to portray this conflict as a war imposed on it by the US-Israel alliance. The regime has been able to amplify the widespread death and destruction caused by the air strikes through symbolic gestures. With this context in the background, the upcoming negotiations provide the regime with an opportunity to declare a strategic victory. The Iranian state-controlled media, such as Mehr News, had already begun publishing potential terms of the MoU as early as June 13, creating the impression that the US-Israeli alliance has completely surrendered and has almost returned to the Joint Comprehensive Plan of Action (JCPOA) terms and conditions. The early perception management of the news created enough space for Iran to declare victory over the USA and Israel.
A Lose-Lose Situation for the USA
When the USA started this conflict, its stated objective was to change the regime and completely halt the Iranian ballistic missiles and nuclear weapons program. The USA has failed to achieve either. First, the Iranian regime is currently headed by Mojtaba Khamenei, son of the slain former Ayatollah Ali Khamenei, clearly negating any regime-change narrative. Moreover, with an IRGC-based background, Mojtaba may increase the IRGC’s influence in government, further reducing the moderate influence of Iranian President Masoud Pezeshkian. Besides creating an opportunity for hardline clerics and the IRGC to dominate Iranian politics, the USA had also neutralised several political leaders, like Ali Larijani, who were likely to lead talks despite being prominent hardliners. This further weakened the possibilities of an early end to the conflict.
Second, although the Iranian missile and nuclear programs have been degraded to an extent, they have not been completely halted. The major enrichment centres of Furdow, Isfahan, and Natanz had already been destroyed during the Twelve-day War in June 2025. However, Iran still possesses around 400 kilograms of enriched Uranium and the expertise to make a nuclear bomb. Regardless of the MoU clearly requiring Iran not to pursue a nuclear weapon, the Iranian regime is likely to accelerate efforts either to make, purchase, or get a nuclear bomb by some other means to create a deterrent in future. Moreover, President Trump has voiced his support for Iran’s ballistic missile program, calling the restrictions unfair to Iran.
For the US President Donald Trump, who probably began this conflict with the results of the January 2026 Operation Absolute Resolve in mind, the conflict with Iran has become a cause for domestic unpopularity. This dissatisfaction stems from both the anti-Israel sentiment in the MAGA bloc, Trump’s staunchest supporters, and the inflation in fuel prices in the USA. This dissatisfaction might evolve into anti-incumbency in the upcoming mid-term elections. Although President Trump has dismissed his poor approval ratings and the upcoming mid-term elections, his willingness to quickly strike a deal with Iran indicates that the truce is a political necessity to him.
The Islamabad MOU lists various terms and conditions, including the opening of the Strait of Hormuz under Iranian supervision, lifting of sanctions on Iranian petro-chemical products, and a US$ 300 billion reconstruction fund for Iran. Many of these indeed put the Iranian regime in a better position than the pre-conflict time, indicating to the world that the USA has been unable to achieve any of its stated objectives.
Strategic and Political Loss for Israel
Unlike the other two parties to this conflict, Israel was able to make certain tactical gains. One of the most important gains for Israel is the creation of a buffer zone between Israel and Lebanon by capturing territory in Southern Lebanon. Israel has also been able to utilise the conflict to strike Hezbollah’s locations, causing significant damage to the group and reducing its hold. The conflict has also significantly reduced regional trust towards Iran, particularly among the Arab nations like the UAE, which were hit by the Iran-led drone and missile strike during this conflict. These countries are likely to view Israel more favourably than Iran, at least in the near future. Even in neighbouring Lebanon, the Lebanese government, and to some extent the Lebanese people, have started viewing Hezbollah as an Iranian proxy rather than a national party working towards Lebanese interests.
However, the truce between the USA and Iran will reverse these tactical gains. Since a permanent ceasefire to Israeli attacks against Hezbollah is an important condition for Iran to sign the truce, the deal may provide Hezbollah with time and space to regroup, ultimately resulting in a strategic loss for Israel.
The truce also has implications for Israel’s domestic politics. Israeli Prime Minister Benjamin Netanyahu will face elections in the next few months. His Orthodox coalition partners, such as United Torah Judaism, have already threatened to boycott the coalition over the mandatory draft and the Day Care Bill. Besides, other hardline leaders like former Prime Minister Neftali Bennet have also been increasingly vocal against the way the Netanyahu government has prolonged the conflict in Lebanon and Gaza, suggesting a quick end if voted to power in the upcoming elections. As a result, Israelis expect an end to the conflict, along with an assurance that the October 7-type attacks will not repeat. Combined, all these factors have led to immense political pressure on the Israeli government to keep the conflict going till Israel’s safety is assured.
Despite US pressure to halt offensive action in Lebanon, Israel has made it clear that it is not bound by the US-Iran truce, continuing the airstrikes in Southern Lebanon. However, Israel will likely have to either halt or scale down its offensive against Hezbollah as the US pressure increases. In that case, Israel might increase intelligence-gathering operations in Iran, focusing on Iran’s nuclear and missile programs. Such intelligence, when used along with Israeli pressure groups in the USA, can put enough pressure on the US government to resume sanctions on Iran.
Conclusion
A closer look at history shows that, with time, global powers gradually decline in stature, but their decline is often announced to the world by a single event. During the Suez Canal Crisis of 1956, Egypt, led by Gamal Abdel Nasser, stood up to Britain to ultimately control the Suez Canal. The crisis announced the end of Pax Britannica. As with Britain during the Suez Canal Crisis, the USA, too, seems to have bitten more than it can chew. If the upcoming deal favours Iran more than the USA and its allies, it may be the first tangible evidence of reducing US global hegemony. On the other hand, this can be Iran’s ‘Nasser moment’, as it has been able to negotiate a deal with conventionally superior adversaries despite early setbacks. For Israel, the least ideologically motivated belligerent in this conflict, this truce signals a continuing threat to its security and a need to momentarily step away from the US-Israel convergence to pursue its own national interest. The upcoming deal will not just stop the conflict in West Asia; it has the potential to alter national policies and alliances in future.
