Two years after the US successfully targeted the Al-Qaeda chief in Afghanistan, Israel allegedly conducted a covert operation in Iran, assassinating Ismail Haniyeh, a key Hamas leader. The operation stood out for its mysterious execution and the sophisticated nature of the bomb blast. However, intelligence work in such complex environments often becomes a zero-sum game, where conflicts either spiral out of control or are strategically managed to avoid escalation. Spies operate in a high-stakes world where their actions result in either spectacular successes or catastrophic consequences.

Covert games on the edge of war

During the Iran-Iraq War (1980-1988), one of the longest and most devastating conflicts in the Middle East, covert operations played a critical role behind the scenes. Mossad, Israel’s intelligence agency, made the calculated decision to support Iran, despite their sworn enmity, to counterbalance the threat posed by Iraq under Saddam Hussein. This strategy was part of Israel’s “periphery doctrine,” which sought to build alliances with non-Arab nations to counter Arab adversaries.

Israel covertly supplied arms to Iran, with US approval to sell unsophisticated weapons. However, Mossad deviated from this agreement, secretly providing advanced, American-made arms to Iran to gain its trust and secure intelligence on Iraq’s main nuclear reactor. This intelligence was crucial for Israel’s Operation Opera in 1981, in which Israeli jets successfully destroyed Iraq’s Osirak nuclear reactor to prevent Saddam from developing nuclear weapons.

The arms trade between Israel and Iran ran smoothly until 1982, when The New York Times exposed Israel’s front company in the US, which was purchasing sophisticated weapons for resale to Iran. In response, Israel shut down its operations in the US and relocated them to London by 1983. Despite the US launching Operation Staunch in 1983 — a campaign to prevent arms sales to Iran — American intelligence largely turned a blind eye to Israel’s ongoing violations of the secret agreement.

This espionage episode underscored three key risks: first, Israel jeopardized its relationship with the US; second, it armed an enemy with advanced weaponry; and third, its strike on Iraq’s nuclear reactor during an ongoing war risked escalating the conflict further. Iran retaliated in 1980 by striking Iraq’s nuclear reactors in Operation Scorch Sword, though with less success than Israel’s Operation Opera.

Throughout this period of covert arms deals and strategic strikes, the US intelligence community remained largely silent, observing from the shadows. Israel’s calculated gamble in supporting Iran, despite their animosity, paid off in the short term. However, such high-stakes moves in geopolitics carry significant risks, and while Israel’s actions yielded favorable outcomes, they could have easily backfired, altering the course of the war and regional dynamics dramatically.

Mossad’s missteps and misjudgments

Mossad’s assessment of Saddam Hussein went off track. One key example was Israel’s belief that Saddam would deploy non-conventional weapons against Israel during the buildup to the Iraq War, particularly between 2002 and 2003. This conviction ignored the reality that Saddam was struggling for survival and lacked the capacity to follow through on such threats. This miscalculation, along with similar errors by British MI6 and the American CIA, contributed to heightened insecurity in the region and played a role in the US-led invasion of Iraq in March 2003. The invasion destabilized the region further and contributed to the rise of terror groups like ISIS.

Mossad also misjudged during the 1973 Yom Kippur War when the agency underestimated the threat of an imminent Arab attack. Israel was caught off guard by the Egyptian and Syrian surprise assault on October 6, 1973. This miscalculation could have had dire consequences if not for a timely intelligence input that helped redirect Israel’s military focus, preventing a potentially catastrophic outcome. Despite these lapses, Mossad’s high-risk strategies have at times been necessary, such as in the recent assassination of a Hamas leader.

In October 2024, within a span of just two days, Israel targeted two high-value individuals. On October 15, Israeli forces struck in Lebanon, killing a top Hezbollah commander in an airstrike. The following day, on October 16, Israel carried out a sophisticated operation in Iran, assassinating Hamas leader Ismail Haniyeh. The attack, which involved a bomb reportedly planted two months earlier in an IRGC-protected guesthouse, was triggered using AI technology once Haniyeh entered the room. Although Israel has not claimed responsibility for the operation, Iran has accused Mossad of orchestrating the assassination. Haniyeh had been a marked target for some time, with Israel labeling him a “dead man walking” and systematically targeting his family members in the months leading up to his death.

For Israeli Prime Minister Benjamin Netanyahu, this assassination provided a temporary reprieve from mounting political pressure amid the ongoing conflict and deadlocked hostage negotiations. The operation is seen as Israel’s retaliation for the October 7, 2023 attacks, during which Hamas launched a large-scale assault on southern Israel. However, questions remain about the broader impact of Haniyeh’s assassination. Some experts argue that his removal might facilitate more productive negotiations and increase the likelihood of reaching a deal, while others caution that the complexities of such high-stakes operations make the outcome uncertain.

Risky business, deterrence and escalation 

The core argument remains: Mossad’s risky tradecraft maneuvers, especially in the context of escalating conflicts, carry the risk of crossing red lines and reducing the space for negotiation — something Israel needs to resolve its hostage dilemma. The issue isn’t about protecting national security interests; it’s about the timing and level of risk Mossad chooses to take, which can sometimes lead to undesirable outcomes. Currently, Israel’s aggressive stance could escalate the conflict and complicate its hostage deal efforts.

There are two perspectives on the risks Mossad is taking. The first suggests that maintaining an offensive posture will deter and weaken the “axis of resistance” (a coalition of anti-Israel groups), forcing them to negotiate and eventually de-escalate. The second perspective warns that prolonging the conflict could dangerously expand Middle East brinkmanship, creating external and internal consequences for Israel.

While a prolonged conflict isn’t in the best interest of the region, it offers Iran a strategic opportunity to pressure the US-Israel alliance, potentially forcing negotiations on Iranian terms. In this context, Mossad may once again engage in high-stakes gambles to weaken Iran’s proxies politically and militarily. However, Mossad’s actions might also prompt the CIA to intensify deterrence efforts to preserve regional stability, illustrating the fragile balance of power in West Asia.

The historical example of Abu Jihad’s assassination by Mossad in 1988, one of the founders of the Palestine Liberation Organization (PLO), had unintended consequences. Rather than weakening Palestinian resistance, it fueled the First Intifada, which lasted until 1993 and resulted in 227 Israeli deaths. Mossad’s assessment seemed to contradict that of Israel’s Foreign Minister Shimon Peres, who believed Abu Jihad was a moderate leader who could have restrained Yasser Arafat. According to Israel’s Military Intelligence Chief, Amnon Lipkin, Abu Jihad’s charisma might have prevented Hamas from gaining the significant foothold it did among the Palestinian population. This illustrates the long-term risks of Mossad’s operations, where tactical successes may lead to strategic setbacks.

Iran-Israel conflict: “grey” in the balance of power

The Middle East has faced the complexities of Cold War 2.0 and grey zone conflicts since the end of the Cold War and the beginning of the 2000s. However, the current grey zone dynamics are more pronounced than ever, suggesting that the region may oscillate between states of “no peace, no war” and periods of heightened conflict. In the near term, the “no peace, no war” scenario seems more likely, which could strategically shift the balance of power in favor of Israel. This shift would not only undermine Iran’s credibility but also set the stage for Israel’s resurgence, reminiscent of the post-1967 Arab-Israeli War period.

Such a reconfiguration of power could encourage more active US involvement in the Middle East, as a weakened Iran and a strengthened Israel open the door to diplomatic and political opportunities that serve both Western interests and regional stability. However, this strategic realignment may also heighten security concerns, disrupting the economic and political potential of Gulf states like the UAE and Saudi Arabia, which rely on stability for growth.

On the other hand, if the region settles into a prolonged “no peace, no war” scenario, security concerns will persist but at more sustainable levels. In this context, Iran could find space to regroup and rebuild its proxy networks. While Israel’s rise and the weakening of Iranian proxies might seem like a strategic advantage, history shows that such situations can lead to the resurgence of these very factions. For instance, the US failure to capture Osama bin Laden during the Battle of Tora Bora in 2001 eventually facilitated the Taliban’s resurgence. Similarly, Israel’s 1982 invasion of Lebanon, known as Operation Peace for Galilee, is often seen as a strategic miscalculation that contributed to the emergence of Hezbollah.

This historical precedent suggests that Iran’s weakened proxies could regroup and wage an enduring proxy war against Israel. While this dynamic may disrupt peace and stability, it is unlikely to escalate into full-scale war. Iran seems to have learned crucial lessons about the effective and restrained use of proxy forces, leading to a more cautious approach. Thus, while the potential for conflict remains, the likelihood of another extensive war seems low, leaving the region in a state of fragmented peace.

Iran’s options and future

Having run out of strategic patience, Iran has escalated tensions by launching ballistic missile strikes against Israel. These actions are almost certain to trigger a strong retaliatory response. In this volatile situation, Iran faces two main choices.

First, it could engage in a limited war with Israel. While this option risks significant damage to Iran, which is already at a strategic disadvantage, it could also help revive its proxy networks, allowing Tehran to reassert its regional influence.

Alternatively, Iran could pursue backchannel diplomacy to initiate serious negotiations with Israel, seeking to avoid direct conflict. This option becomes more attractive as Israel deals with urgent concerns about hostages, making negotiations a more viable path to de-escalation.

Following Iran’s rocket attack, which may have caused moderate damage in Tel Aviv, Israel has vowed to retaliate. However, this escalation raises concerns about a broader regional war. While the US is advocating for a measured response, Israel prefers a swift and decisive strike. Recent comments by Israeli Prime Minister Netanyahu suggest that Israel will focus on military targets rather than civilian infrastructure like oil and gas facilities, which Iran has previously targeted. A moderate but effective strike is expected.

Iran’s reaction to Israel’s retaliation will be crucial to watch. Although Israel has received THAAD missile systems for defense, targeting Iran’s military, particularly IRGC sites, could lead to direct confrontation between the two rivals and increase US involvement. A limited strike on key locations could have a similar impact as targeting strategic sites in Iran. Israel’s calculated, swift offensive will be a decisive response, but Iran’s next move remains uncertain and will be critical in the coming days.

[Tara Yarwais edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.