• Iran

July 7, 2025, 12:01 AM View Comments ()

The 12-day war between Iran, Israel, and the United States has ended, but the dust has not yet settled. Many official voices in Tehran are warning that the war can resume at any moment. Iran now faces deepening economic turmoil, political uncertainty, and hard choices about its nuclear future. The central question is whether the Islamic Republic will emerge stronger through nationalist mobilization or weaker, exposed by vulnerabilities it long sought to deny. No doubt, Iran’s leaders stand at a true crossroads. Beyond a video message, Supreme Leader Ayatollah Ali Khamenei’s continued absence from public view raises doubts about his ability to dictate policy, particularly as Israeli threats linger. This possible gap in authority could open space for pragmatic voices within the regime, but such a shift is far from certain.

Israeli strikes and subsequent U.S. bombings on June 22 focused overwhelmingly on Iran’s nuclear sites and ballistic missile program. On the 11th day of the war, Israel did hit elements of the regime’s coercive apparatus—the headquarters of the Basij (which includes anti-riot forces), Islamic Revolutionary Guard Corps security units, law enforcement intelligence, and even the notorious Evin prison—but these attacks came late and almost as an afterthought. By prioritizing nuclear and missile targets over the regime’s machinery of domestic control, Israel signaled that toppling the Islamic Republic through popular uprising was not its core objective, nor is there any evidence that Israel has such a policy option given the magnitude of what regime change in Tehran would require. Still, these late strikes served as a stark warning to Iran’s leaders of what could await them if the war continued.

While no visible fracture has appeared within the leadership, the pressure on Tehran is undeniable. The war has not resolved Iran’s domestic conflicts or tensions with its foreign enemies; it has merely transformed them. Nor has the U.S.-brokered cease-fire ended the underlying crises driving escalation. Instead, the war has changed the context in which Iran’s leaders operate, forcing a possible reassessment of doctrines and alliances. Iran now faces a threefold challenge: securing its airspace and borders, maintaining stability for its citizens, and managing public opinion before another potential round of confrontation—or a fragile return to talks with Washington, whether through mediators such as Oman or direct negotiations, as the United States increasingly demands. There are many variables, but one thing is clear: Iran cannot return to what it was before Israel’s attacks on June 13.

Inside Iran, the war has compounded severe economic hardship. Economists warn that the government lacks a coherent postwar recovery plan, even as lower-income groups who suffered most from internet shutdowns and instability demand relief. An estimated 13 million Iranians, including gig workers and delivery drivers, lost income during the conflict, fueling public discontent. “Ignoring poverty can turn a poor society into an insecure one,” economist Hossein Raghfar warned. Raghfar argued that without cash aid, food subsidies, and wage protections, desperation could push some toward collaboration with foreign adversaries. This fear of unrest is forcing the regime to balance repression with calls for unity.

Meanwhile, the cease-fire is fragile. A return to war would deepen economic devastation, from the estimated $1.4 billion in lost oil revenue during the conflict to the high cost of missile barrages, likely hundreds of millions per round. Israeli cyberattacks on Iran’s financial system—a key reason why the Iranian authorities shut down the internet for most of the war—inflicted further damage. Unlike the 1980-88 Iran-Iraq War, the resumption of this conflict threatens vital economic assets such as petrochemical facilities and other industrial bases, raising the stakes to a level Iran has never faced before.

Ideologically, a striking feature of this early postwar environment is the regime’s pivot from revolutionary Islam to Iranian nationalism. This shift is significant in a political system that since 1979 has prioritized pan-Islamist ideology over nationalism. Khamenei, President Masoud Pezeshkian, and figures such as former Foreign Minister Mohammad Javad Zarif and top Khamenei advisor Ali Shamkhani now regularly invoke “national dignity” to rally the public, sidestepping acknowledgment of the Islamist system’s failures. For instance, in Khamenei’s June 18 speech, one of three he gave from his hiding place during the war, Islam and the Palestinian cause were conspicuously absent, replaced by appeals to homeland defense aimed at a war-weary population.

The war has triggered genuine calls for a policy reset, with many arguing that the regime must embrace domestic reforms to preserve fragile wartime calm. Pezeshkian’s outreach and calls for redefined state-society relations hint at a hope for possible recalibration, though it remains unclear if this is genuine or tactical. Former President Hassan Rouhani and opposition leader Mehdi Karroubi, too, have echoed calls for unity while urging for an expansion of space for dissenting political voices. This “unity” is less a sign of public support than an acknowledgment that anti-regime riots did not erupt during the war and could still break out. And whether such calls will be heeded remains doubtful. For now, the security services are in survival mode, arresting hundreds of people for alleged collaboration with U.S. and Israeli intelligence and singling out Kurds, Jews, and Bahais for crackdowns.

Others within the regime are also shifting to nationalist appeals over vague pan-Islamist slogans. “Goodwill brings goodwill, and respect brings respect,” Foreign Minister Abbas Araghchi remarked in response to U.S. President Donald Trump’s demands that Iran abandon its nuclear program while essentially dismissing Iranian sovereignty. Araghchi’s choice of words was no coincidence. In his 1989 inaugural address, President George H.W. Bush used the phrase “goodwill begets goodwill” to signal that the United States would be willing to improve relations with Iran if reciprocity could be achieved.

Yet whether this nationalist pivot will hold remains uncertain. Further conflict could unite the public—or deepen cynicism toward a leadership many blame for leading Iran into a war it was unprepared to fight. Inside Iran and among the diaspora, a clear conclusion is forming: Khamenei’s ideological vision led Iran into confrontation with Israel and the United States but failed to prepare it for the consequences.

Iran’s leaders now face a stark choice: continue down a path of revolutionary overreach and isolation or pivot toward pragmatic diplomacy prioritizing regime survival and basic national interest over Islamist ideology. This is reminiscent of past moments, such as the Qajar dynasty’s territorial losses to Russia in the 19th century, the 1941 Allied occupation of Iran when Tehran was too soft on Nazi Germany, and the costly, unnecessary prolonging of the Iran-Iraq War. In each, pride overtook pragmatism, and Iran paid the price for ignoring technological and strategic inferiority. Today, Israel and the United States have demonstrated that modern wars are fought with superior air power and intelligence operations, drones, cyberattacks, and precision missiles, not slogans.

Iran’s retaliatory strikes may have shown resilience and inflicted pain on Israel, but they failed to deter the attacks in the first place. Tehran’s overreliance on ties with Russia and China has left it strategically isolated and alone. The war has made it clear that Iran is not prepared for a prolonged high-tech conflict and that Iran has no true friends to come to its aid. The question, therefore, remains: Will Iran learn from its past or repeat it?

On the nuclear question, the war has also left Iran at a strategic crossroads. Years of hedging, developing the capacity for weapons-grade enrichment while stopping short of weaponization, have failed to deter attack and instead exposed the limits of ambiguity. Trump’s strikes, launched after Israel degraded Iran’s air defenses, demonstrated Iran’s military weakness. Yet Iran’s nuclear program was bruised, not broken. Technical expertise, stockpiled enriched uranium, and basic industrial capacity remain intact, preserving Iran’s latent potential should it choose to build weapons. Inside Iran, voices such as Araghchi’s hint at shifting from claimed transparency to strategic ambiguity, while hard-liners are pushing for missile and nuclear expansion, arguing that only maximum deterrence—not diplomacy—can guarantee security.

This leaves Tehran with stark choices. It can remain within the Nuclear Nonproliferation Treaty and continue hedging, risking future strikes and sustained vulnerability, or it can withdraw and pursue a clandestine deterrent, risking severe sanctions and isolation. Covert rebuilding now appears more likely than overt reconstruction, with Iran potentially dispersing salvaged centrifuges to hidden sites and quietly preparing a deterrent should its security environment worsen. The war has closed the chapter on ambiguity without much cost.

The post-cease-fire phase presents both opportunities and dangers. Nationalist sentiment can temporarily unify the public, but economic hardship and political discontent remain potent. The regime’s efforts to reframe the war as a triumph may ring hollow if it fails to address systemic vulnerabilities. Meanwhile, assumptions that China and Russia would offer meaningful support, that regional proxies would deter attacks, and that gradual nuclear hedging would protect against direct confrontation have been undermined.

There is a lesson in all of this for Washington, and Israel, as well. Regime change in Iran is not easy. There is no armed opposition for defectors to join, nor are there external actors willing to intervene militarily to topple Khamenei’s regime. Yet the regime retains the capacity to change course if it chooses to listen to its people and abandon rigid policies whether on the domestic or foreign front.

Splits within the political system are possible, as in 2009 when Mahmoud Ahmadinejad’s contested reelection fractured the leadership and ignited the Green Movement. Internal change, rather than external overthrow, remains the most realistic path for transformation in Iran. In the meantime, Tehran’s next nuclear decision will go a long way in shaping the nature of its ongoing confrontation with Israel and the United States.