Israel divides the Middle East

The conflict between Israel and Hamas is unlikely to turn into a regional war, given the alliances emerging along new axes.

Palestinian woman in a refugee camp
A woman walks through the Bourj el-Barajneh refugee camp in Beirut, Lebanon, on October 26, 2023. The dismal living conditions faced by most displaced Palestinians will fuel resentment against Israel and likely lead to more radicalization. © Getty Images

In a nutshell

  • Sunni-Shia antagonism is no longer the deciding factor in Middle East alliances
  • Washington has been overly optimistic in its approach to the region
  • The interests of Iran, Saudi Arabia and Turkey do not align seamlessly

In the Middle East, three states are now competing for regional hegemony: the theocratic republic of Iran, the republic of Turkey and the absolute monarchy of Saudi Arabia. All three are hostile to Israel, albeit to different degrees. The two Sunni countries – Saudi Arabia and NATO member Turkey – are broadly interested in maintaining the status quo under American auspices. Meanwhile, Shia Iran is pursuing a decidedly anti-Western course geared toward exporting revolutions and relying on an extensive terrorist network in the region.  

Iran’s ‘axis of resistance’

Iran and its Islamic Revolutionary Guard Corps (IRGC) have succeeded in integrating the region’s Islamic militias into an “axis of resistance” against Israel and the United States. These include, among others, the Iraqi Popular Mobilization Forces and the Lebanese Hezbollah, but also the Yemeni Houthis, who fire rockets at Israel – and at ships passing through the Red Sea – from their territories 

Sunni-Shia antagonism, which played a significant role during the wars in Iraq and Syria, has receded into the background in recent years. On November 23, Iranian Foreign Minister Hossein Amir-Abdollahian flew to Beirut to meet not only with the leader of the Shia Hezbollah, but also with representatives of the Sunni terrorist organizations Hamas and Palestinian Islamic Jihad, to whom Tehran has been providing financial and military support for years.

In the Islamic world and in the Middle Eastern diaspora in the West, hatred of Israel and the United States is growing. Islam has established itself politically and culturally in societies that are already largely Westernized. Anyone who traveled to Iran, Turkey or the Arab nationalist states like Syria, Egypt or Iraq 50 years ago rarely encountered veiled women. Now head coverings are omnipresent. In Iran and Saudi Arabia, armed moral guardians ensure compliance with Sharia law. From Asia to the Middle East to Africa, governments are coming under pressure from their populations when they show a willingness to compromise with Israel and the U.S. 

Deceptive lull in the Middle East

A week before Hamas’s barbaric attack on Israel on October 7, U.S. national security advisor Jake Sullivan had said: “The Middle East region is quieter today than it has been in two decades now. Challenges remain. Iran’s nuclear-weapons program, the tensions between Israelis and Palestinians. But the amount of time I have to spend on crisis and conflict in the Middle East today, compared to any of my predecessors going back to 9/11, is significantly reduced.”

From the point of view of President Joe Biden’s administration, given the lull after 40 years of violence, this optimism seemed justified. The Yom Kippur War had been fought in 1973. 

In 1979, Egypt became the first Arab state to recognize Israel through American mediation, followed by Jordan in 1994. Both states subsequently received massive military support from the U.S. Then, under President Donald Trump, Washington succeeded in persuading Bahrain, Morocco, Sudan and the United Arab Emirates to establish diplomatic relations with Israel on the basis of the economic and security commitments of the 2020 Abraham Accords.

Also under American auspices, Israel and Saudi Arabia finally negotiated a normalization of their relations. Many hoped for a new security order in the Middle East, which would ultimately make it possible to settle the Palestine conflict with a two-state solution. An alliance between Arab states, led by Saudi Arabia, and Israel, would be able to contain Iran’s subversive activities, allowing the United States to gradually withdraw from the region. But such a change has now been made impossible by the events of October 7.


Facts & figures

The regional powers of the Middle East

Iran (Islamic Republic of Iran)
Capital: Tehran
Government: Islamic Republic
Population (approx.): 88 million
Major language: Persian (Farsi)
Economy: Largely state-owned, with significant oil and natural gas reserves

Israel (State of Israel)
Capital: Jerusalem
Government: Parliamentary democracy
Population (approx.): 9 million
Major languages: Hebrew, Arabic
Economy: Advanced, high-tech industry and services

Saudi Arabia (Kingdom of Saudi Arabia)
Capital: Riyadh
Government: Absolute monarchy
Population (approx.): 36 million
Major language: Arabic
Economy: Dominated by oil production, with moves toward diversification

Turkey (Republic of Turkey)
Capital: Ankara
Government: Unitary parliamentary constitutional republic
Population (approx.): 85 million
Major language: Turkish
Economy: Diversified with key sectors in manufacturing, agriculture, and tourism

Earlier, relations between Israel and Turkey were also looking up. Israeli President Isaac Herzog’s visit to Turkey in March 2022 launched a process of normalization. Israel hoped to be able to transport natural gas to Europe via Turkish pipelines, which promised high revenues for economically weakened Turkey. In the conflict with Armenia, Azerbaijan was able to rely on the support of both states. About 70 percent of the Azerbaijani army’s weapons come from Israel. 

Turkey and Israel share a common interest in the Caucasus. Ankara is competing with Tehran for supremacy; Israel wants to put pressure on Iran’s northern border. Tehran suspects the two countries of supporting Iran’s strong Azerbaijani minority to destabilize the mullahs’ regime. On the sidelines of the United Nations General Assembly, Israeli Prime Minister Benjamin Netanyahu met Turkish President Recep Tayyip Erdogan for the first time on September 20, 2023, during which they agreed on wide-ranging cooperation in the fields of energy and technology, as well as reciprocal official visits. The thaw came to an abrupt end with Hamas’s invasion and subsequent Israeli military intervention in Gaza. 

Washington’s misguided optimism

After October 7, Mr. Sullivan had to backpedal and emphasize that “at no point did the Biden administration take its eyes off … threats to Israel.”

In fact, American Middle East policy under Presidents Barack Obama and Biden was based on a far too optimistic assessment. Washington, hoping to withdraw from the Middle East and focus on the Asia-Pacific instead, had fallen victim to its own wishful thinking. But the American superpower cannot afford to neglect trouble spots in other regions at will. 

Even after Russian President Vladimir Putin annexed Crimea in 2014, Mr. Obama continued to describe Russia as a major regional power that posed no serious geopolitical threat. However, Russia’s invasion of Ukraine in February 2022 forced Washington to massively increase its engagement in Europe. President Biden has behaved similarly toward the Islamic Republic of Iran. His goal was to integrate the Islamist-revolutionary regime into a stable, rules-based order.  He reinstated the nuclear agreement with Tehran that had been terminated during the Trump presidency. 

Prime Minister Netanyahu and President Erdogan
Turkish President Recep Tayyip Erdogan (R) receives Israeli Prime Minister Benjamin Netanyahu at the Turkish House in New York on September 19, 2023. While the recent rapprochement between the two countries has been interrupted by the war with Hamas, it is also unlikely that Turkey will join Iran’s anti-Israel axis. © Getty Images

In October 2023, Henry Kissinger, who had initiated the rapprochement between Israel and the Arab states in the 1970s, granted an interview to the Swiss newspaper Neue Zurcher Zeitung. Forty years ago, Israel was stronger compared to the surrounding powers, he said. In his assessment, compared to 2005, the situation had deteriorated considerably. At that time, the Gaza Strip was granted independence “to test the possibility of a two-state solution.” The two-state solution, he argued, is no guarantee “that what we have seen in recent weeks will not be repeated.” As long as Hamas is involved in the conflict, a peaceful solution is a long way off. 

The new face of terror

In the Middle East, terrorism is closely linked to the Palestinian conflict. In the aftermath of the 1948 Arab-Israeli War, approximately 700,000 Palestinians were displaced. Around the same number of Jews were expelled or felt compelled to leave Arab countries due to persecution and violence, leading to a major demographic shift in the Middle East.

The UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) defines a Palestinian refugee as descendants of “persons whose normal place of residence was Palestine during the period 1 June 1946 to 15 May 1948.” Under this definition, some 5.9 million people are eligible for assistance. No other refugee group is granted such a broad status by the United Nations.

UNRWA cares for 1.5 million Palestinians in refugee camps. Decades of dependence on international aid and a lack of future perspectives have demoralized Palestinians and accelerated their radicalization. In the camps, hatred becomes a breeding ground for terrorism.

As Arab societies gradually became more Islamic, Palestinian organizations have also changed and radicalized. Arab nationalists and Marxists have lost importance. The nationalist Fatah, which in June 2007 was ousted from power by Hamas in the Gaza Strip, could now lose control of the Palestinian Authority in the West Bank. The massacre on October 7 and the subsequent Israeli retaliation have further increased the prestige of radical Islamists in the eyes of the Palestinians. 

A poll conducted between October 31 and November 7, 2023, among Palestinians in the West Bank and Gaza Strip found the highest approval ratings for the Islamist terrorists of the al-Qassam Brigades (89 percent), Islamic Jihad (84 percent), al-Aqsa Brigades (80 percent) and Hamas (76 percent). The Palestinian Authority came in at only 10 percent. Ninety-eight percent of respondents said they would never forget and forgive Israel’s actions.

Hamas is deeply intertwined with Palestinian society. In Gaza, the boundaries between the civilian population and the armed groups are blurred. Underground, the area is spanned by three hundred kilometers of tunnels. Hamas bases are located close to schools, mosques and hospitals. All this is hardly conceivable without the active participation of broad sections of the population, or at least their complicity. 

More by Karl-Peter Schwarz

Hamas leadership had benefited from Israel’s military response. The more civilians die in the Gaza strip, the more Muslims’ hatred of Israel grows and the more sympathy the Palestinians receive in the West and the Global South, and the fewer prospects there are of a settlement through negotiations with Israel. Hamas leaders call for the annihilation of Israel and the establishment of an Islamic state “from the river to the sea.” The massacre of Israeli civilians and the hostage-taking was the dress rehearsal for the destruction of the Jewish state. Israel is fighting for survival, and a willingness to compromise can no longer be expected on its part.

A second goal pursued by Hamas has not been achieved: a united front against Israel and the U.S. The American plan to integrate Saudi Arabia into an anti-Iranian alliance is on hold for the time being, but it is not off the table. The interests of Middle Eastern states are too divergent for them to unite against Israel. A planned meeting in Ankara between Iranian President Ebrahim Raisi and Turkish officials, aimed at coordinating a response to the Gaza Strip conflict, was canceled without explanation. Turkey and the Arab states are fully aware that Iran wants to exploit the crisis for its hegemonic ambitions.



A war between the countries of the “axis of resistance” against Israel is unlikely. Iran is using the crisis to present itself as the leading Islamic power. But if Hamas had hoped to provoke a military confrontation with Israel and the U.S., it was disappointed. Not least for domestic political reasons, the regime in Tehran does not want to risk war. None other than Iran’s Supreme Leader Ayatollah Ali Khamenei has ruled out military intervention on behalf of Palestinian militants. Neither was Iran involved in the planning and execution of the October 7 attack.

The U.S. will not withdraw from the Middle East. Attacks on its personnel and bases in Iraq and Syria continue, and Washington will likely increase its military presence regardless of the outcome of the 2024 presidential election. An American withdrawal would encourage a consolidation of the Iran-Russia-China axis in the Middle East and alienate allies in the region and the Global South. 

There will be neither a conventional war nor a resilient peace in the foreseeable future. There is no chance of a two-state solution in sight, as neither Israel nor the Palestinians would accept it at this stage. Even if Israel succeeds in destroying Hamas militarily, similar Islamist organizations will take its place. There is no sign of a political or military solution between Jews and Arabs over a territory to which both sides claim exclusivity. New waves of terrorist attacks in the Middle East and Europe are to be expected.

For industry-specific scenarios and bespoke geopolitical intelligence, contact us and we will provide you with more information about our advisory services.

Related reports

Scroll to top