Israel, Iran and the Gaza endgame

No victims, very little damage, over 90% of drones intercepted. Iran’s attack on Israel was a mighty show of force of Israeli defense, a blessing in disguise. US President Joe Biden wanted Israel to call off further retaliations, and Israel complied.

There might have been backdoor talks between Washington and Tehran behind Iran’s poor performance.

A stop to the escalation would facilitate dialogs with Iran to stop the Houthis’ attacks, which have been disrupting international trade from Suez in the Gulf of Aden. If transportation over the Red Sea resumed at full speed, insurance premiums would go down, oil prices could drop, and inflation would follow.

The US Federal Reserve could then cut interest rates and the middle class in America and the whole world could begin to enjoy the benefits of the US’s booming recovery.

Some in Israel may feel it necessary to retaliate to discourage further attacks and encourage the many Iranians who lined up at the gas stations, scared of Israeli revenge and disgruntled with the regime. Yet, revenge is a dish best served cold.

A pause could be welcomed in Beijing. China is patching up with the US and may not want to be dragged into an escalation, forced to choose between Iran and America. China needs at least a modicum of peace and stability to sustain its trade. Besides, things are politically confused until the US elections, when it will be clear whether the president will be Biden or Donald Trump.

Until then, Beijing may want all its options open, i.e., it may not be keen on the end of the war in Ukraine with a US deal with Russia or Russia’s defeat, but it could oppose a further spread of the fighting in the Middle East.

All of this brings the situation back to Israel and Gaza, where