War clouds are looming over the volatile area of the Middle East once again. The smell of gunpowder and human blood is in the air. Violence has engulfed the state of Israel and the Gaza Strip after Hamas the ruling militant group in the Gaza area launched an unprecedented multi front attack on Israel in the early hours of 7 October. Israel declared war on Hamas and retaliated with brute force. The death toll is mounting on both sides as Israel continues with a fierce and deadly airstrike campaign.
Hamas militants fired over 5,000 rockets from Gaza into Israel and effectively overwhelmed the Israeli Iron Dome Defence System, enabling its foot soldiers to knock down security barriers and attack several towns near the border, inflicting huge casualties on the Israeli army and kidnapping many Israelis. So far over 900 Israelis have been killed and 680 Palestinians have lost their lives and about 130 Israelis are being held hostage. Hamas is an Islamist militant group dedicated to the destruction of Israel and the establishment of an independent Palestinian state. It has been declared a terrorist organisation by the US and the EU for its armed struggle and attacks on Israel. Hamas has political control of the Gaza Strip and has the support backing and financial assistance of Iran.
Hamas came into being as a spin-off from the Palestinian branch of the Muslim Brotherhood in the late 1980s after defeating its rival political party, Fatah which dominates the PLO and is in complete control of the Palestinian territory of the West Bank. The Gaza Strip is a narrow, 40-kilometre-long parcel of land between Israel, Egypt and the Mediterranean Sea, home to more than 2 million people. It is the smallest of the Palestinian territories and is one of the most densely populated areas in the world.
Iran’s assistance and backing of Hamas at this crucial stage has some serious and profound consequences and repercussions for nations of the Middle East and the West Asia region. Tensions are likely to increase manifold as Iran today is the greatest regional threat to Israel. Qatar, Kuwait, Syria, Lebanon, Afghanistan and Pakistan have all supported and praised the Hamas attack and condemned Israel for the current conflict. The US, UK and some other European countries have pledged their full support to Israel. Saudi Arabia, UAE, Oman, Egypt and Morocco expressed deep concern at the deteriorating situation and asked international communities and organizations to activate a credible peace process.
The involvement of Iran suggests that the motive of the attacks may be related to the ongoing Saudi-Israel peace negotiations as well. Iran has consistently opposed the normalisation of ties with Israel. Saudi Arabia, a leader of the Muslim world, advocates the Palestinians’ cause while being engaged in negotiations with Israel. Iran today has the opportunity to show that it is the leader of the Muslim nations by backing the Palestinian cause. The geopolitical stakes are extremely high for every country in the region and this conflict could affect the region very adversely.
This new conflict has great chances of derailing the recent peace initiative and rapprochement between Iran and Saudi Arabia. It was believed by scholars and analysts in the Western world that regional hostilities will be reduced after the Chinese initiative of brokering a peace deal between Iran and Saudi Arabia but the Hamas attack has come as a rude surprise for all.
Tensions have escalated on the Israel-Lebanon border, where Hezbollah launched multiple rockets at the Israel-occupied Shebaa Farms. In a written statement, Hezbollah said the attack targeted three sites, including a "radar site" in the Shebaa Farms, a piece of land controlled by Israel since 1967 that Lebanon claims as its own. The Israel Defence Forces (IDF) retaliated by attacking Hezbollah posts in Lebanon. The possibilities of further escalation and multi-front war are highly anticipated, which may bring International players to the court. The recent attack by Hamas may not result in greater sympathies for the Palestinian cause and may have everlasting effects in West Asia.
This war could result in the death of the two-state solution to the Arab Israel conflict. And the possibility of co-existence between Israelis and Palestinians may be ended forever. Until 1967, Gaza was under the control of Egypt, before it was seized by Israel during the Six Day War. Israel controlled the strip and enabled the construction of Jewish settlements until 2005 when it responded to mounting international pressure and withdrew from the territory. However, since 2007 Israel has imposed a strict land, sea and air blockade over the region, restricting the flow of goods and people. The Hamas militant group has been the de facto authority since that time and fought multiple wars with Israel since taking control of the area, where it has established a judiciary and authoritarian institutions.
Hamas’ founding document called for the destruction of Israel, although leaders in recent years have shown a willingness to see the establishment of a two-state solution based on borders that existed before 1967, without fully recognising the statehood of Israel.
If the conflict is not ended soon and some other countries jump into the fray, the consequences could be much worse – something like the Arab Israel war of 1973 when oil prices started skyrocketing. Iranian oil production has increased substantially, and the US and other governments have turned a blind eye because it has eased price pressures caused by OPEC+ production cuts. This would likely not continue, which would place more significant upward pressure on oil prices. And if Iran were to become directly involved in the war, it could impact the flow of Persian Gulf exports because of its proximity to the Strait of Hormuz. Gold prices and US Treasury prices would likely rise more substantially than in the first scenario as investors flock to ‘safe haven’ asset classes.
Turkey is one major Muslim country that has had diplomatic relations with Israel since 1949. This conflict will impact turkey in political and economic ways. The Turkish Energy Minister was supposed to visit Israel for natural gas pipeline talks. It will not be wrong to say that this and many other joint projects will now be shelved until the Israel-Hamas conflict is resolved. The attempts of Arab States such as Saudi Arabia and UAE for closer ties with Israel will also likely be placed on the back burner.