The assassination of Ismail Haniyeh is a catastrophic humiliation for the Iranian regime, and one that pushes its shadow war with Israel into its most dangerous phase yet.

Haniyeh’s demise is not particularly shocking: Israel, a country famed for its ability to assassinate its foes abroad, named him a “dead man walking” after the Oct 7 massacre.

Haniyeh, the political and symbolic figurehead of Hamas, was killed in the heart of Iran, the one place in the Middle East where he would have expected total protection. The assassination happened as many of Iran’s regional allies and proxies had travelled to the safety of Tehran for the inauguration of the new president.

There can be little doubt that Iranian leaders will be under immense pressure to launch an unprecedented response to this killing. Whether they will yield to that pressure is less clear.

This was arguably a more daring attack than the Israeli strike on the Iranian consulate in Damascus earlier this year, which had in turn prompted Tehran to launch a choreographed long-range missile barrage at Israel.

The assassination also comes after Israel says it killed a military leader of the much more powerful Iran-backed Hezbollah in Beirut.

However, during all the ups and downs of heightened tensions since Oct 7, Tehran has shown little appetite to escalate its so-called shadow war with Israel into an open regional conflict.

Its massive barrage of missile attacks on Israel in April, which was in response to the Damascus consulate strike, may have looked terrifying but it was meticulously planned to avoid causing any major damage or deaths.

It was intended primarily as a show of force and, the regime no doubt hoped, an act of deterrence – though clearly it has not achieved that goal.

The Iranian security system is also struggling under the weight of internal dissent. It brutally suppressed mass demonstrations calling for an end to the regime in 2022, and is probably expending much of its efforts trying to contain fresh rebellion from within. That may partly explain why Haniyeh’s assassins succeeded in the first place.

On Wednesday, Masoud Pezeshkian, Iran’s new president, signalled Tehran would indeed retaliate.

“We will make the occupying terrorist regime regret its action,” he said, adding that “Iran will defend its sovereignty, dignity, reputation and honour.”

Precedent suggests it may be contained or choreographed in a similar way to the missile barrage.

After all, the Iranian regime has so far shown itself unwilling to commit the full might of its military forces in aid of Hamas. Its most dramatic interventions have followed Israeli attacks on its own Islamic Revolutionary Guard Corps commanders.

Another big question that emerges from Tuesday’s news is what this all means for the hostages in Gaza. In the short term, it is hard to see any other outcome than the Israel-Hamas peace talks completely breaking down. Haniyeh, after all, was seen as the more moderate voice in the negotiations.

Critics of Benjamin Netanyahu, the Israeli prime minister, may even claim that was part of the rationale here: they allege he is deliberately prolonging the war in order to remain in power.

Conversely, the death of Haniyeh could give Mr Netanyahu grounds to declare victory over Hamas, something that Israel’s weary population may welcome after ten months of war.

Yahya Sinwar, the leader of Hamas in Gaza, remains at large, however.