Everyone benefits, but everyone knows it will come to an end

Ever since indirect U.S.-Iran talks began, mediated by Qatar and Pakistan, the Middle East appears to be going through a period that could be described as “neither peace nor war.” U.S. CENTCOM military forces in the Gulf and the wider region remain on high alert, not hesitating to carry out isolated strikes against Revolutionary Guard positions. Similarly, over the past ten days, Iranian drones have been launched against U.S. positions in Bahrain and Kuwait, with Tehran attempting to establish a fait accompli regarding the maritime corridors it has designated in the Strait of Hormuz. At the same time, Iran is seeking to impose transit fees in cooperation with the government of the Sultanate of Oman, which has taken on the role of a messenger between Washington and Tehran, though it does not wish to assume the role of mediator on issues already being handled by the “key mediators” in Doha and Islamabad.

The Lebanese Wound

At the same time, Israel is seeking to consolidate its presence in southern Lebanon, a move that essentially serves the pro-American government in Beirut, which sees IDF forces as “relieving” it of the burden of disarming Hezbollah—a task that the regular Lebanese army, by common admission, is neither capable of nor willing to carry out.

Meanwhile, President Al-Sarra’s Syria has tactfully avoided showing enthusiasm for President Trump’s recent “idea” that it should shoulder the burden of disarming Hezbollah. Syria’s hesitation is viewed as a shrewd strategic choice, since a direct military intervention by Damascus in the intra-Lebanese balance of power would upset Israeli interests, which would then gain a pretext to act even more aggressively in southern Syria, drawing in the Druze factor as well. Such a sequence of events would lead to a status quo of long-term occupation—whereas at the moment, everything remains up in the air for everyone, even for the Israelis.

The Unfreezing of Iranian Funds

It is an open secret that the indirect Iran-U.S. negotiations are highly unlikely to lead anywhere. Although the impulsive military leadership of the Revolutionary Guards has ruled out such a possibility, it nevertheless appears to realize that the opportunity for even a partial release of Iranian funds by the Americans should not be missed. The leak reported by Saudi media in the middle of last week, according to which the U.S. is reportedly agreeing to unfreeze $3 billion in Iranian funds (out of an estimated total of $24 billion), has not been denied by either side. If we take into account recent statements by the spokesperson for the Iranian Ministry of Foreign Affairs, Emra’im Bakai, namely that “the primary issue for negotiation with the U.S. is regaining control over Iranian funds,” demonstrates the importance that Iran’s political leadership attaches to the entire issue, with the result that the Revolutionary Guards are forced to realize that, at least for the time being, their weapons must fall silent. Finally, there is no need to further explain how important it is for international markets and global stock indices to maintain a—albeit temporary—climate of “non-war” in the Strait of Hormuz.

But let’s not get carried away. There are additional factors contributing to the current period of “neither peace nor war” that we are experiencing.

“Bread and Circuses” in the U.S., Iran, and Israel

President Trump’s extremely frequent public statements, asserting that “everything is going well” and that “an agreement with Iran is very close,” are an attempt to mask, through public relations, the White House’s anxiety that the indirect talks with Iran will eventually end without a result. The visible horizon is the end of the 60-day deadline set for August 21. Even the possibility of a further extension of the current of “neither peace nor war” does not necessarily mean that a final agreement will be reached, ultimately making it necessary to take military action from which there will be no turning back. For now, with market prices having returned to pre-war levels, the World Cup in the U.S. and the celebrations marking the 250^th anniversary of U.S. independence are providing plenty of bread and circuses for American (and international) public. But what will happen when the TV lights at the soccer stadiums go out?

From the Iranian side, the burial of the remains of the former Leader of the Revolution, Ali Khamenei, as a show of strength against the U.S., since the start of the ceremony was chosen to coincide with the national holiday of the American imperialists (July 3–4). The arrival of representatives from foreign governments in Tehran to honor the memory of the assassinated national leader is being exploited for propaganda purposes for domestic consumption. However, it is also being used diplomatically, giving Iranian diplomacy the opportunity to leverage the presence of foreign officials in various ways to pull strings that would otherwise be difficult to manage.

But from Israel’s perspective as well, the current period of “neither peace nor war” is extremely important. Just as the U.S. is “benefiting” this summer from the “sports” factor, by a strange coincidence, the exact same is true for Israel. From July 1 through 13, the 22nd Maccabiah Games are being held in Israel, with 8,000 athletes from the Jewish diaspora in 55 countries (including Greece) participating. It is clear that, especially at this time, the Israeli government wants to present the country in the best possible light to the Jewish athletes and not force them to suddenly run for cover.

Beyond that, however, during this “non-war” period, both Netanyahu and the parties in the coalition and the opposition have the opportunity to weigh their strategic options ahead of the October parliamentary elections. The current period is ideal for party leaderships to prepare their candidate slates as well as their communication campaigns, which in this election will focus on what Netanyahu’s government has and has not achieved on the war fronts—especially at a time when everything remains up in the air.

Military preparations are in full swing

However, we must not get carried away. The current state of “neither war nor peace” will eventually come to an end, and regional actors have already begun to prepare. Early last week, the IDF announced that it had completed the technical upgrade of the Iron Dome. Statements by Netanyahu and Katz regarding “the army’s presence in southern Lebanon and southern Syria will last as long as necessary, regardless of U.S. intentions” are not mere rhetoric. The leak of a classified report from the military security services addressed to the IDF chief, Lt. Gen. Eyal Zamir, according to which Hamas is reportedly growing stronger and recruiting militants with the aim of carrying out “a new attack like ^{the one on} October 7,” but in reality aims to prepare Israeli society for the fact that the Gaza issue is not over. Furthermore, it is by no means a coincidence that the recent meeting of the Peace Council in Cyprus received absolutely (absolutely!) any media coverage or commentary whatsoever from the Israeli media, demonstrating that the Israeli government neither ever expected, nor does it continue to expect anything from the Trump Plan to end the war in Gaza.

Finally, given the veiled (but very real) atmosphere of war preparations in Israel, it would be naive to assume that Iran is not undergoing a similar period of preparation.

Thus, it is absolutely clear that the current period of “neither peace nor war” will come to an end, with the likelihood of a resumption of military operations remaining extremely high.