The three ways Israel could respond to Iran's attack: Expert

Iran's recent attack on Israel has investors around the world concerned over potential fallout. Global economic challenges may continue to mount if the Middle East region becomes embroiled in further escalations in its various conflicts.

Atlantic Council Senior Fellow of Middle East Programs Carmiel Arbit joins Market Domination to discuss Iran's missile strikes against Israel and what the fallout could look like.

Arbit lays out potential options for Israel's retaliation: "The first is going to be a question of timing. The Israelis are likely to take a beat, not respond today but perhaps to wait a little bit longer as they navigate through the different options.... The second is one of covert or overt responses. Israel, of course, has extensive cyber technology that they can use to respond to the Iranians. The third is a question of whether or not they're going to directly respond to Iran or reduce the temperature to what had been happening before these missile strikes which was engaging with proxies."

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This post was written by Nicholas Jacobino

Video transcript

- Iran's attack on Israel, over the weekend, has many on Wall Street concerned about growing conflict now in the Middle East. Joining us now is Carmiel Arbit, senior fellow for Middle East programs at the Atlantic Council.

Carmiel, it is great to see you. So the Biden administration, Carmiel, is reportedly pressuring Israel to show restraint after this Iranian attack over the weekend how do you think, Carmiel the Israelis will respond?

CARMIEL ARBIT: Yeah. I think that US pressure is only one of three main considerations the Israelis are going to have while they think through the appropriate response. The first thing on Israel's mind is restoring deterrence. How to ensure that Israel is sending a message to the region, that it will not tolerate this type of attack on its sovereignty, on Israeli soil, which was really unprecedented?

The second consideration for the Israelis is whether or not they have an ability to be in a major three-front war. Let's not forget, the war continues in Gaza right now. And there are also continuing skirmishes back and forth between Israel and Iranian proxies like Hezbollah. And then I think the third consideration will be whether or not the US would support any kind of operation, which it is indicating it will not.

- And so is it possible to thread that needle? How does Israel do that?

CARMIEL ARBIT: Yeah, I think Israel has a number of different options in terms of how it responds. The first is going to be a question of timing. The Israelis are likely to take a beat, not respond today, but perhaps to wait a little bit longer as they navigate through the different options. So that's the first question, is timing.

The second is one of covert or overt responses. Israel, of course, has extensive cyber technology that they can use to respond to the Iranians. And the third is a question of whether or not they're going to directly respond to Iran or reduce the temperature to what had been happening before these missile strikes, which was engaging with proxies? And so it's a question of if they will say, go after the Iranian nuclear program, which they might do over time or in different ways, or respond to other Iranian leaders as they're operating overseas?

- I'm also interested, Carmiel, how you think October 7th, the impact that had on the Israelis. I mean, they, of course, saw 1,200 Israeli men, women, and children killed. What kind of impact do you think that had on the Israelis in terms of how they are thinking about geopolitical risk and threats?

CARMIEL ARBIT: Yeah, I think Israelis have felt vulnerable in a way that they had not felt, really, in decades. And we see that in Israel's response in Gaza. And suddenly realizing that perhaps the military wasn't as equipped to prevent or respond to attacks as many Israelis had really taken for granted that they could.

What was quite remarkable about what happened over this past weekend is how effective, not only the Israeli response was, but Israel's response in coalition with allies in preventing any of these Iranian missiles from causing any serious damage? There was, of course, one girl who was harmed and a few missiles that landed on the base that was the intended target, but there has been no significant damage to Israel.

So I think in many ways, what happened over the weekend restored some of Israelis sense of security at home, but still underscores the need to really reassert itself as a powerful actor in the region.

- Now, the main concern of the markets here in the United States, which is our usual primary focus, is that this does not grow into a broader conflict in the region. So right now, given what we know at this moment, how do you sort of game that out? What is the likelihood that it will be contained?

CARMIEL ARBIT: Yeah. Oil prices dropped slightly, and after these attacks. And I think that's, in part, due to the fact that the impact of the attacks had been so minor, really, but the prospect for retaliation remains very high. And that could, of course, have significant impact on oil prices moving forward, especially if this boils out into a large scale conflict between the two.

I would expect the temperature to continue to simmer and rise. So we've still not hit a boil over point of regional contact-- of regional conflict, but what we've seen, instead, is this slow increasing of temperatures and I would expect that to continue.

- And Carmiel, I'm just curious, what do we think, if at all, what kind of leverage Beijing has over Tehran? You know, China buys a lot of oil from Iran.

CARMIEL ARBIT: Yeah, I think it's really important to pay attention to all of Iran's allies around the world, or those who are working with and supporting them, or vice versa. And that includes Russia, Beijing, and others. I think they do have an ability to influence the Iranians but it's marginal. And so far, Iranian ambitions for hegemony in the region remain completely unchecked if not exacerbated, by the war in Gaza.

And so I think Iran is going to continue to listen to some of its friends but ultimately is going to respond to what it believes is in its best interest as Israel responds to its attack.

- Carmiel, thank you very much. Appreciate your insight.

CARMIEL ARBIT: Thanks for having me on.