Escalation with Hezbollah is likely
The consequences, however, will include severe economic disruption in Israel, the discrediting of the idea of Zionism, and making direct Israeli-Iranian conflict more likely.
Executive Summary
The coming firing of rockets from Gaza into Tel Aviv will signal either the end of the war, or, more likely, a region-wide much larger war.
Hamas has resumed intense fighting in northern Gaza as well as firing rockets into the Gaza envelope.
Israel appears unable or unwilling to clear and hold territory, preferring instead to launch incursions, weaken Hamas’ resistance and then withdraw. That in turn ensures that Hamas survives and returns to areas the Israeli military vacates.
Israel’s last remaining step is to attempt to take Rafah, which it will likely succeed in doing within one to three months.
At that point, there is a very high likelihood that Hamas will continue fighting and holding its captives, meaning that the Israeli campaign in response to the 7 October attacks will have been a failure.
Israel – Hezbollah fighting is escalating. We place the likelihood of a full-scale Israel – Hezbollah war at over 50%.
This would trigger far larger attacks on Israeli infrastructure by Iran’s allies in Iraq, Syria and Lebanon, and may well end up involving the US, UK, Iran and others.
The net result of such escalation will include the defeat of the idea behind Zionism, namely, that the Jewish people can build a first world safe haven on the territory of mandatory Palestine.
The economic impact of such escalation will include severe damage to Israel infrastructure and private industry, leading to higher taxation and the downgrading of Israeli debt.
Such a defeat at the level of ideas will be more important than, and a prelude to, material defeat.
Analysis
Rocket fire from northern Gaza and the intensification of fighting there reflect Israeli military failures and Hamas’ endurance.
Hamas fired rockets into Sderot and the “Gaza envelope”, that is, the settlements around Gaza. Recall that northern Gaza was the first target of the Israeli ground campaign. This shows that Hamas can still reconstitute its forces and impose its will in Gaza. That in turn demonstrates that Hamas would probably continue to govern Gaza after the war if the war ended tomorrow. Israel’s declared objective in the war is to end Hamas’ rule and the threat from Gaza, and it has yet to attain either objective. The resumption of rocket fire especially shows that Hamas has resources at its disposal still, despite Israel’s attempts to destroy the tunnel network. Israel’s last remaining battle in Gaza is Rafah. Israel may well require one to three months to enter and exit this battle. However, like the battles of Gaza City and Khan Yunis, the Rafah battle will also be inconclusive, with Israel demonstrating that it can deploy forces wherever it wishes - inflicting significant damage on Hamas in the process - but that it cannot hold or thoroughly clear terrain.
Hamas will fire a salvo of missiles into Tel Aviv in the coming weeks, demonstrating that Israel has failed to even keep the heartland secure.
Hamas and the Resistance Axis use measured and steady escalation, intended to demoralise the enemy through the “David’s Sling” effect. That is, the Resistance Axis use strategic surprises, or the revelation of new capabilities, or the demonstration of continued capabilities even in the face of intense bombardment, to demonstrate that they can still win and that the onslaught against them has been pointless. The Houthi did this in 2022, attacking fuel storage facilities in Jeddah to demonstrate their ability to strike core Saudi assets even after seven years of war, thereby forcing a ceasefire. A strike on Tel Aviv in the coming weeks is all but certain, given the resumption of rocket fire into the Gaza envelope. That will have an enormously demoralising effect on the Israeli public, punditry and leadership.
At that point, Israel will face a choice between region-wide escalation and defeat.
The impact of a strike on Tel Aviv from Gaza will be to show that Hamas remains a threat to the Israeli heartland even after several months of fighting, and that it would remain so after another few months. Simply, such a strike would demonstrate that Israel cannot win the war, regardless of its duration. Even though Hamas would have been severely weakened, such a strike would demonstrate that Israeli actions so far have been, and likely will remain, futile.
This would leave Israel two options. The first option is to accept the reality of a political defeat. Thus far, Israel has insisted on rejecting truces, mainly because Hamas insisted that a truce bring about a complete end to the war. Hamas, for its part, has insisted on its conditions of a total ceasefire, full Israeli withdrawal from Gaza, additional aid and the return of internally displaced persons. These would be tantamount to defeat and have been rejected by Israel.
The second option would be to escalate even more dramatically, especially against Hezbollah.
Escalation makes more sense to Israel than accepting a defeat by Hamas.
For Israel, including both Benjamin Netanyahu’s cabinet and the military we establishment, escalation now is a necessity, as Israel’s society has been prepared, through the 7 October attacks and their aftermath, for the need to take heavy casualties. Previous psychological barriers to high intensity wars with the associated high casualties have been broken. It would be extremely difficult to remobilise society for another big war with Hezbollah after this conflict with Hamas. It therefore makes sense to escalate now. Furthermore, escalation would delay holding the military and political establishments to account due to their failures, giving them a chance to improve their standing by claiming to have weakened Hezbollah. A wider war would severely damage Hezbollah in Lebanon – or so Israel would hope – and therefore pave the way for another few years of peace, as the 2006 war did. Or so Israel would hope. This borrowed time would help Israel prepare for the next conflict. Last, a wider war would force the US and the West into giving Israel greater support, up to directly confronting Iran.
Israel believes it has no choice but to escalate against Hezbollah.
Attacks and counterattacks between Hezbollah and Israel have continued since 8 October, a day after the 7 October attacks. However, we note that the depth and breadth of these attacks has increased steadily, with both sides clearly showing that they are both deterred, but with deterrence fraying significantly. This makes it more likely that at some point, all-out war between Israel and Hezbollah will break out.
The situation on the Israel – Lebanon border is not in Israel’s favour. Between 60,000 and 100,000 Israeli citizens have evacuated from the north. A survey of residents of the north’s biggest city, Kiryat Shimona in the Galilee, found that 40% of its residents do not intend to return. With the war going on for over seven months now, most families have found alternative sources of income, reducing their incentive to return. This trend, if normalised, can be repeated by the Resistance Axis in the West Bank or Gaza or the Golan, or expanded further from the Lebanese border. As such, Israel believes that it must prevent this trend from being normalised. The only way to do so is to fight.
Hezbollah believes that backing down is not an option.
For Hezbollah, a similar dynamic is at hand. The group has suffered heavy losses in this war, and most of its announced casualties were middle aged, suggesting that they are experienced and are in command positions. This reflects deep Israeli infiltration of the group, human and electronic. However, Hezbollah has committed itself to the Resistance Axis. It must show Israel that it has established and can maintain deterrence.
Hezbollah likely believes that it must also support Hamas and prevent its defeat, especially in Rafah, as that would reverse the Resistance Axis’ strategy of expanding its military power gradually, and surrounding Israel with a network of rockets, drones and militants. Hezbollah also fears that Israeli success in Gaza would result in a similar campaign against Lebanon. If such a campaign occurs after Hezbollah shows some willingness to compromise with Israel at Hamas’ expense, then its ability to call on the rest of the Resistance Axis for support would be reduced.
There is a religious element to both sides’ need to escalate, but we have excluded that from this discussion.
Escalation involving Hezbollah during or after Rafah will be fundamentally different due to Israel and Iran crossing the psychological threshold of direct attacks on one another.
When considering further escalation, we ought to recall that critical thresholds have been crossed. Israel openly attacked Iranian territory in the Damascus consulate, Iran retaliated with a spectacular strike of 350 munitions, which required US, French and UK intervention to intercept, and then Israel retaliated against Iran proper. Iran and Israel are now, as a result, more likely to resort to direct attacks against one another if there is broader escalation, given that this threshold or psychological barrier has been crossed. This is how we may end up slipping into uncontrolled escalation.
Furthermore, Iran’s need to protect Hezbollah is far greater than its need to protect Hamas and the Palestinian Islamic Jihad in Gaza, given Hezbollah’s role in Syria, Iraq and Yemen.
Israel will likely declare its aim to be pushing Hezbollah back from the border, but this will fail spectacularly.
Hezbollah can rely on a network of Iranian-made missiles deployed in Iraq, Syria and Lebanon, as well as manpower support from Syria and Iraq. Hezbollah is likely to attempt to seize a string of villages which the mandatory French authorities ceded to the mandatory British authorities in 1923, which would give it the ability to oversee the Galilee region and some roads going into the Golan. This would be paired with an operation to capture the Shebaa Farms, highlands along the border of the Golan and Lebanon (or a Lebanese part of the Golan, depending on whose narrative one accepts). This would make the Galilee uninhabitable for Israel, and would be the first time Israel loses territory in a conflict. Israel’s declared aim would very likely backfire, and the war would likely end with Israel struggling to regain control of its own territories.
The consequences to Israel of the war escalating would be severe, including much greater deficits and the discrediting of the idea of Zionism.
Already, the Hamas attacks of 7 October 2023, and Hamas’ very likely subsequent survival, have shown that southern Israel near Gaza is not a safe haven for the Jewish people. Since the attacks, Hezbollah demonstrated that northern Israel is also not safe. Since both campaigns against Hezbollah and against Hamas are likely to end in failure, and, most likely, in far more intense attacks on the Israeli heartland, including ports, airports and industrial facilities, from Lebanon, Syria and Iraq, the perception of lack of safety is likely to spread throughout Israel. Furthermore, such escalation is likely to cost Israel financially. Recall that intercepting the 14 April attacks cost Israel USD1.3 billion in interceptors alone. The US’ latest USD17 billion package for Israel included USD5.2 billion for air defence – four Iranian strikes’ worth.
Multiple waves similar to the 14 April wave are likely in an escalation against Hezbollah scenario, with launches from Syria, Iraq and Lebanon. Furthermore, the financial cost of a war with Hezbollah will be considerably higher than the Gaza war – aside from just air defence costs. The extent of damage to key Israeli infrastructure is likely to be severe, with both private industry and the public sector severely impacted. As such, Israel is likely to raise taxes, print money and suffer very high inflation, as well as further credit rating downgrades.
As Modad Geopolitics argued at the outset of the war, demonstrating that Israel is not a first world safe haven for the Jewish people is an integral part of the ongoing Resistance Axis campaign. Contrary to the beliefs of materialists, defeating ideas is more important than inflicting a material defeat, and the former precedes the latter.
Lebanon’s infrastructure would be damaged at a scale comparable to Gaza in the event of all-out Israel-Hezbollah war.
Israel will likely attempt to permanently destabilise Lebanon by destroying the Lebanese state, in the hope of trapping Hezbollah in civil conflict in Lebanon after the war. This will include severely damaging Lebanon’s ports and airport, fuel storage and electric infrastructure. A conflict would also include severe damage to Lebanon’s industries, with a focus on warehouses and logistics infrastructure. Lebanon will need extensive aid, including humanitarian aid, in such a scenario. This is the main reason that Hezbollah remains deterred from all-out escalation against Israel. Hotels in Beirut, the North and Mount Lebanon would be safe from attacks aimed at total destruction, but not from localised strikes targeting specific floors or rooms.
The risk of broader escalation between Iran and the West would increase if Hezbollah was drawn fully into the war.
Furthermore, in a full-scale war, Hezbollah would be able to fire at Israeli ports, airports and airbases far more intensely than in any previous war. This would severely increase risk to civilian aviation and shipping. As witnessed during Iran’s 14 April strike, this can easily draw Western intervention. That in turn would make repeated Iranian attacks much more likely. It is likely that Iran would engage in several additional rounds of strikes in this scenario, under the pretext of Israeli attacks on key Islamic Revolution Guards Corps commanders (which itself is an almost certain occurrence).
At that point, we would be in a regional direct conflict scenario. Modad Geopolitics had highlighted that Iran has two nuclear weapons: one literal, as we assume that Iran can build a nuclear weapon at will, and one economic, in that it can shut down energy exports from the region.