Israel, Iran, Saudi Arabia, and the Middle East's Long Cold War

On October 7, 2023, a sequence of events unfolded with which the world is, by now, almost certainly familiar. After an unrelenting wave of rocket attacks forced the sovereign nation of Israel into a war footing, over a thousand militants swearing loyalty to the terrorist organization Hamas surged through Israeli territory near Hamas’ own enclave, the Palestinian territory known as the Gaza Strip. In their attack, Hamas killed well over a thousand Israelis, mostly civilians, in the most brutal and deliberately terrifying of circumstances.

In the hours and days to follow, Israel retaliated with a crushing air campaign, one that devastated Hamas and took the lives of many Palestinian civilians. Israel stood on the brink of a ground invasion, one that would kick off a second stage of the war promising even more destruction than the first. But behind all the carnage on the ground, and behind the war itself, is another side of the story—a vast, decades-long power struggle in the Middle East for which this Israel-Hamas war is just one more violent evolution.

Three Hegemons: Saudi Arabia, Iran, and Israel

Waged between the region’s three biggest power players—the predominantly Sunni Muslim nation of Saudi Arabia, the predominantly Shia Muslim nation of Iran, and the predominantly Jewish state of Israel—this long cold war has embroiled not just those three nations, but their allies, their proxies, their client states, and the ordinary people of the Middle East into a mess that simply defies attempts at resolution. The complexity of international relations in the Middle East is one part a geopolitical comedian’s punchline, and one part immensely depressing reality. From religious orientation to ideological fault lines to military and intelligence rivalries, the many nations of the Middle East have had no shortage of things to argue, and occasionally go to war over, and with the region’s politics often tracing back centuries or even millennia, they’ve had no shortage of time in which to have those arguments.

Saudi Arabia is an immensely wealthy and oil-rich Arabic-speaking nation sandwiched between the Red Sea to the west and the Persian Gulf to the east. Ruled by a massive royal family called the Sauds, from whom Saudi Arabia gets its name, the country follows a predominantly Sunni interpretation of Islam. Sunni and Shia Islam are different from, and sometimes at odds with, each other.

The royal family’s interpretation of Sunni faith has bred a deep conservatism in society and a cutthroat competitive environment for wealth and economic resources. Vast infrastructure projects and lavish lifestyles for the rich and famous are hallmarks of this distinctly Saudi economic renaissance. The country maintains close ties with the US and the European Union, due in no small part to the area’s abundant and strategically critical resources of oil, and it benefits from major arms sales from the United States, and defense pacts with other countries in the Middle East, to position itself at the center of the region’s Sunni Muslim world.

Saudi Arabia is stared at from across the Persian Gulf by the nation of Iran, a mountainous, Farsi-speaking regional power with its own substantial reserves of oil and gas. Much like Saudi Arabia, Iran is a state deeply intertwined with religion, but in Iran’s case, those deep ties manifest through a theocracy—a rule directly through religion and religious authority. It is a profoundly authoritarian nation, one that has even been described as totalitarian, although it is nonetheless a pluralistic society with a range of different ethnic, cultural, and religious groups calling Iran home.

The country lacks some of the wealth of Saudi Arabia, largely because of a bevy of sanctions against it by most Western nations, but nonetheless has more than enough wealth and influence to be a kingpin among Shia-majority nations. Iran’s influence, like Saudi Arabia’s, runs deep across the Middle East, and it is a major benefactor to state and non-state actors alike. Finally, there is the nation of Israel, sitting across West Asia on the shores of the Mediterranean Sea.

The world’s only Jewish, Hebrew-speaking state, Israel sits atop a relatively small strip of land as compared to Saudi Arabia or Iran, with a comparably smaller population, but nonetheless leverages immense economic power relative to its size. Although it has little in the way of exportable natural resources, Israel is an international hub of finance, entrepreneurship, and technology. It maintains exceptionally close relationships with the US and Europe, enjoying the benefits of mutual defense pacts, and it commands one of the most formidable militaries in the world, in order to protect itself from a set of neighbors who have attempted major war with Israel more than once.

The country also occupies a territory called the West Bank and maintains de-facto occupation of a territory called the Gaza Strip, both of which host a predominantly Arab Palestinian population.

The Broader Regional Chessboard

The Middle East is not so easily broken down along these lines alone. Nearby Turkey is a military and economic powerhouse of its own, allied with NATO and forming a buffer state between Europe and the Middle East. Egypt is a similarly relevant political player, sitting on the doorstep to North Africa, while Gulf states like Bahrain and the United Arab Emirates command wealth of their own that demands they be counted among the important entities in the region.

Even the nation of Oman deserves recognition as the Middle East’s most proudly neutral mediator country. But it is Iran, Israel, and Saudi Arabia that are the region’s most powerful players, and it is the long, trilateral conflict between them that has defined this part of the world for the better part of a century. When considering the dynamic between these three nations, there are two issues that take precedence over all else: the recognition of Israel as a sovereign state, as well as how that issue is squared with the situation in Palestine, and who, between Saudi Arabia and Iran, gets to act as the regional leader in the Middle East.

This is, of course, an oversimplification, and it is important to remember that with issues of recognition and leadership come a very long list of benefits for whoever wins that argument. But by and large, most individual issues between these three countries can be at least partially attributed to those two overarching conflicts. Israel is a nation made up predominantly of Jewish people, and representing itself as a Jewish state, located in and around the city of Jerusalem, Judaism’s holiest site.

However, the land in and around Israel happens to have been home to Palestinian Arabs for some two thousand years before the Jewish diaspora arrived there during and after World War II, and Israel’s land is also incredibly important in the practice of Islam. To both Saudi Arabia and Iran, Israel has been an unwelcome intruder on Middle Eastern, predominantly Muslim affairs, bringing a new, strong military, close ties with the West, and a population of people who, in the eyes of many people in the Middle East, are fundamentally unlike them.

Historical Fault Lines: Recognition, Religion, and Rivalry

On the question of Israel, Saudi Arabia has long held a stance in support of Israel’s Arab population in the Palestinian territories, and during the many active years of the Arab-Israeli conflict, when Israel saw itself at war with neighboring powers like Egypt, Syria, and Jordan, Saudi Arabia always stayed firmly on the side of the Arab coalition. On the other hand, Iran was once an ally of Israel before the 1979 Islamic Revolution, but has since developed into a theocracy that relies on Israel as a perpetual nemesis. Iran’s ruling government makes a habit of regularly calling for Israel’s destruction, and Iran has sent direct financial, weaponry, and training support to Islamist organizations like Hamas, in Palestine, and Hezbollah, in Lebanon, that actively work to undermine the Israeli state.

Neither Iran nor Saudi Arabia recognizes Israel as a sovereign nation, and neither has any formal diplomatic relations with their Jewish neighbor state. Then there is the question of Iran and Saudi Arabia, and their own struggle for dominance in the Middle East. On paper, each of those two nations overlaps in a lot of areas: both are deeply religious autocracies, both have the potential to be global energy and oil exporters, and both are enthusiastic about participating in the domestic affairs and civil conflicts of their smaller neighbors.

In practice, the Iranians and the Saudis have found themselves on opposing sides of all those fault lines, compounded by Saudi Arabia’s cozy relationship with the United States, which Iran considers itself firmly and enthusiastically opposed to. Each country’s religious majority is the other’s religious minority, and in both nations, minority communities come calling to the opposite regime when their situation grows worse in their home country. The balance of power between the three nations, and the way they interact more generally, is informed by the means each nation uses in order to assert itself against the two others.

For Saudi Arabia, the country’s conduct is largely determined by its wealth, which it uses to provide security, financial, and sometimes military support to neighbors from the United Arab Emirates to Yemen to Afghanistan. It prefers to pull economic levers of power rather than go to war, and it cultivates friendships abroad via economic exchange. Iran’s conduct is largely dictated by its attempts to circumvent the sanctions levied against it, partnering not only with internationally recognized sovereign states like Iraq and Syria, but non-state organizations like the Palestinian Islamic Jihad, Hamas, and Hezbollah.

Iran has been a major benefactor to both Iraq and Syria in their recent wars, and props up those non-state organizations almost by itself. Finally, Israel does business in two main ways: international diplomacy, with the help of the US, NATO, and a few other global partners, and deterrence, both via military and intelligence means. Situated on a very small plot of land, Israel does not have the luxury of risking that another country would launch a military assault, and certainly not on the scale that Iran and Saudi Arabia are capable of, so Israel prefers to show a formidable military and diplomatic presence that nobody would want to mess with directly, while working to tamp down dissent and potential revolt in its Palestinian territories.

A Proper Cold War: Deterrence, Proxies, and Nuclear Shadows

It is not uncommon for the spiderwebbing influence of all three of these nations to clash quite often, whether on the international stage, in the economic sphere, or in the long series of conflicts that have defined the Middle East for decades. But like any cold war, it is important to note that Iran, Israel, and Saudi Arabia do not attempt to play their issues out by going to war with each other. Make no mistake, all three would rather see their competitors greatly diminished, if not taken out of play entirely, but the military and economic devastation that each can wreak upon the others is too big to stomach.

Israel not only has the support of a Western coalition in its own defense, but an unconfirmed nuclear arsenal that is believed to include dozens, if not hundreds, of weapons. Saudi Arabia has so much oil that the world simply cannot afford to end up on the Crown Prince’s bad side, and Iran has not only a nascent nuclear program of its own, but networks of support that are more than capable of carrying out terrorist attacks and even mass assaults on either Israel or Saudi Arabia. So, instead of fighting, all three nations choose to engage in the long process of expanding their own influence and security, while diminishing that of the other two.

They compete for the loyalty of various partners in the Middle East, they consolidate their intelligence networks and trade relationships, and they curry favor with a wide range of global powers, some of whom hold loyalty to more than one of these three nations at once. It is a proper cold war, similar to the one waged across decades between the United States and the Soviet Union, and one that could well place the whole Middle East on a platter, if any one of the three major factions is able to win out. It is critical to understand that this conflict is about a lot more than just religion and sectarianism; while the question of Sunni versus Shia and Islam versus Judaism is certainly important, and often used by each nation to justify its actions to its own people, the conflict is, at its highest levels, deeply pragmatic.

There are a lot of real, tangible benefits to being the Middle East’s most prosperous, most secure, and most globally esteemed nation, and it should be no surprise that all three countries consider that a distinction worth chasing.

Shifting Alliances: Normalization and the Road to Rapprochement

In some ways, the years leading up to Hamas’ recent invasion of Israel have been relatively standard for the Middle East’s three hegemons. Iran and Saudi Arabia found themselves on opposite sides of wars in Yemen, Iraq, and Syria, and Iran and Israel were at odds over Palestine, the Lebanese Hezbollah organization, and Iran’s progression along the path that would allow it to acquire nuclear weapons. But the last couple of years have been utterly unlike anything the modern Middle East has seen to this point.

What changed was normalization, and specifically, the normalization of many Arab nations and their relations with the nation of Israel. Over the long history of the Arab-Israeli conflict, Israel found itself refused basic recognition by every Arab nation at one point or another, and many such nations have never made an attempt to change this situation, even in the modern day. Egypt was the first to find peace with, and recognize Israel in 1979, something that Lebanon would replicate a few years later, and Jordan would repeat in the 1990s, but until 2017, those three Arab nations were the only ones to have crossed the Rubicon on Israel.

That all changed in a process that started with direct coordination between Israel and the American presidential administration of Donald Trump, in an effort to start drawing Israel into diplomatic contact with a number of Middle Eastern and North African states that had previously denied its right to exist. In the last several years, Israel normalized its relations with Sudan, the United Arab Emirates, Bahrain, and Morocco, and Israel and the UAE even signed a free trade agreement in 2022. But the big prize at the end of Israel’s normalization effort has always been Saudi Arabia.

Even today, the Saudis have never had formal diplomatic relations with the Israelis, but that does not exactly tell the whole story. Saudi Arabia and Israel have worked through backchannel negotiations and other behind-the-scenes efforts in order to bring their intelligence and military apparatus closer together. Saudi and Israeli officials are believed to have coordinated directly with each other on a regular basis in military matters, and the two sides are rumored to have discussed everything from clearing Saudi airspace to enable Israeli strikes on Iran, to Israeli offers to procure an advanced missile defense system for the Saudis.

Many experts believe that the cascade of smaller Arab nations normalizing their relations with Israel have been an attempt to test the waters for Saudi Arabia, making sure that the simple act of nations normalizing their relations with the Jewish state would not automatically kick off a major war. The reason for this appears to be a mutual recognition for both countries that while they may not particularly like each other, they have a decent chance at sharing the Middle East while both enjoying prosperity in their own spheres. All this is in direct contrast with their relationships with Iran, a nation that seeks to directly undermine both Saudi Arabia and Israel through the work of its paramilitary forces, and in proxy conflicts.

Adding to Israel and Saudi Arabia’s probable reasoning for a change in the status quo is the increased role of Turkey in Middle Eastern affairs, which both Israeli Mossad and the Saudi regime have named as a new threat to regional peace. Israel and Saudi Arabia have also been able to cross-coordinate through a mutual ally in the United States, a global superpower that almost always favors the establishment of forces it sees as building stability in a given region, even when stability might require a re-thinking of how an area’s regional order may work.

The China-Brokered Détente and a Fleeting Geopolitical Breakthrough

There is another complicating factor to consider: a recent pattern of outreach between Saudi Arabia and Iran. At first glance, this may seem like it did to many international analysts when news first broke in 2022—that Saudi Arabia was trying to have its cake and eat it too. Finding a diplomatic resolution with either Israel or Iran could be something less than impossible, but most geopolitical wisdom would suggest neither country would tolerate overtures from Saudi Arabia knowing that it was simultaneously working with the other.

So imagine the world’s surprise when the announcement that Saudi Arabia was looking to thaw relations with Iran, through negotiations overseen and mediated by the People’s Republic of China, did not totally derail Saudi Arabia’s normalization efforts with Israel. In the China-brokered deal, announced to the world as complete in March of 2023, Saudi Arabia and Iran agreed to resume their normal relations and restore older agreements on trade, security, and more, while pledging that neither nation would try to meddle in the internal affairs of the other. But despite some initial dismay at the announcement, mostly from former government officials who might not have known about Iran and Saudi Arabia’s talks, Israel appeared to go along with the new arrangement while working toward its own reconciliation with the Saudis.

With two normalization efforts ongoing, one brokered by the US and one by China, where many saw potential for even an eventual Iran-Israel peace and a possible end to the Middle East’s cold war in its entirety, it appeared, for the briefest moment, that a geopolitical breakthrough could finally be realized. And then the war came.

Hamas as Chaos Agent: Proxy, Government, and Independent Actor

The Hamas organization has been just as much a player in the Middle East’s cold war as any other faction. Administrating the Gaza Strip, a small stretch of land that is home to some two million Palestinians, Hamas has waged a low-grade insurgency against Israel for years—and its primary benefactor during those hostilities has been the nation of Iran. Between Iran’s decision to continually supply rockets and other munitions to Hamas, their shipment of small arms like rifles, and their apparent willingness to dispatch elite personnel from Iran’s Quds Force to train Hamas in their mission, Iran has used the existence of Hamas to start up a proxy conflict with Israel.

The dynamic is comparable to the United States funding the Afghan mujahideen in their war with the Soviet Union, or the Soviets supporting the North Vietnamese in their war with the United States. Saudi Arabia, by contrast, has had a strained relationship with Hamas, but has had historical ties to a number of Palestinian groups resisting Israel, and has been an ally to those groups in the past. Hamas is a Sunni Islamist group, so at least on that level, it stands to reason that Sunni Saudi Arabia should have some degree of willingness to work with them.

But as much as Hamas is a tool for Iran’s, and to a much lesser extent Saudi Arabia’s, long-standing antagonism with Israel, Hamas is also an independent actor. It is a group made up of a range of leaders and followers, all with their own motivations, but one motivation that Hamas’ members almost certainly share is its own survival. Moreover, the group is founded on the basic principle that it exists to eradicate the nation of Israel, and that is an end goal that the developments of late would indicate they still hold dearly.

The problem is that if the broader Arab world starts to open ties with Israel—or, worse from Hamas’ perspective, to start developing a desire to see Israel continue being a sovereign nation—then that could be the beginning of the end for the Hamas organization itself. Hamas is both a terror network and a government administrator, and it relies on a flow of hundreds of millions of dollars from Iran, Qatar, and elsewhere in order to fill both roles, but it also relies upon the implicit support of the rest of the Arab world. After all, even if the Arab world does not like or agree with how Hamas does its work, Hamas’ regional neighbors have historically still agreed that Hamas is the least-worst option to guarantee Palestinians the few protections they still have.

Juxtapose that against a world where Saudi Arabia is willing to work collaboratively with Israel to improve the lot of the Palestinian population through peaceful means, and the list of reasons for Hamas to be allowed to exist immediately gets a whole lot shorter. Add in the prospect that Saudi Arabia could then pressure Iran to draw down its support of Hamas, and this promising process of regional normalization sounds a whole lot like the death knell of the Hamas organization itself.

War as Disruption: Normalization Paused and the Paths Ahead

One surefire way to disrupt that normalization process is to start a war that forces Israel into a massive, large-scale retaliation against Hamas. Hamas is a known and prolific user of human-shield tactics to hide its operations and prevent airstrikes, relying on Israel’s knowledge that it will harm innocent Palestinians by attempting to strike Hamas. Whether the domino effect that comes with provoking a large-scale response by Israel into Gaza was an intentional or an unintentional creation by Hamas is unknown, but in reality, it may not matter.

Israel responded to Hamas’ initial attack by engaging in thousands upon thousands of airstrikes, with a total Palestinian death toll that, at the time of writing, was creeping northward of three thousand—including hundreds of children. That retaliation has the immediate effect of forcing countries like Saudi Arabia to choose a side: stand with Israel, thus allowing the normalization process to survive but sending a message to the entire region that they will choose the Israelis over their fellow Arabs, or stand with Palestine, sacrificing this new peace accord but preserving loyalties across the Arab world that run far deeper. The idea that Saudi Arabia could pull out of its normalization plan is no longer a hypothetical.

On October 13, just one week after Hamas made its attack against Israel and Israel’s retaliatory airstrikes began, Saudi Arabia made the decision to pause its normalization process. At the same time, the nation reached out to Iran to engage in high-level talks, including a call between the political leaders of each nation, where the concept of strategic unity among the Islamic world was apparently a prime subject of discussion. At the time of writing, it does not seem that Israel’s war with Hamas has led Saudi Arabia to throw out the idea of normalization entirely, but the concept is on a full and complete hold until one side or the other can eliminate the risk that Saudi Arabia would have to overlook the death and suffering of fellow Arabs in order to come to the table.

As for where things go from here, it is hard to say for sure. Possibly, the carrot-and-the-stick of normalization, or an increase in hostilities, will encourage Israel to eventually draw down its military response and work for peaceful settlements in collaboration with Saudi Arabia. Perhaps this war will be bloody, but quick, like most in the region, and once the dust settles, Israel and Saudi Arabia will be able to pick up the pieces.

But there is a third possibility that absolutely must be considered: that Israel, instead, might press its offensive to a point that Saudi Arabia no longer sees any point in chasing normalization. If that possibility came to pass, then in a long cold war where each player has demonstrated interest in forming a two-on-one alliance, it could be Saudi Arabia and Iran who choose to band together and stand firm against Israel. What that would mean is hard to pinpoint, but the options include a larger-scale attack on Israel from a variety of non-state actors, a potential attack by a neighbor state with the financial backing of Saudi Arabia and Iran, or even the worst-case scenario—a major war in the Middle East with nuclear-armed Israel surrounded on all sides, and Saudi Arabia and Iran ready to rally the entire Arab world in opposition.

What would happen then would almost certainly result in an incomprehensible loss of life on all sides, and an out-of-control cycle of escalation that could draw the United States, Russia, China, India, and the European Union all to this single corner of the world before all is said and done. That worst-case scenario is not nearly the likeliest one, but in this seemingly localized war between Israel and Hamas, the entire balance of power in the Middle East could be overturned in a whole range of possible directions.

Frequently Asked Questions

Why is the conflict between Israel, Iran, and Saudi Arabia called a cold war?

The three nations choose not to fight each other directly because the military and economic devastation each can inflict is too costly to stomach. Israel holds an unconfirmed nuclear arsenal, Saudi Arabia controls oil supplies the world cannot afford to lose, and Iran maintains proxy networks capable of large-scale attacks. Instead, all three expand influence through proxies, intelligence networks, and economic partnerships while competing for regional loyalty—mirroring the US-Soviet Cold War dynamic.

How does Iran use non-state actors to wage indirect war against Israel?

Iran has been the primary financial and military benefactor for Hamas in Gaza, supplying rockets and other munitions, small arms, and dispatching elite Quds Force personnel to provide training. Iran similarly props up Hezbollah in Lebanon and supports Palestinian Islamic Jihad. These non-state organizations allow Iran to maintain pressure on Israel and Saudi Arabia without risking a direct military confrontation that would expose Iran to devastating retaliation.

What progress was made on Saudi-Israeli normalization before the October 2023 war?

Coordination between Israel and the Trump administration produced normalization agreements with Sudan, the UAE, Bahrain, and Morocco, with Saudi Arabia as the ultimate prize. Saudi and Israeli officials engaged in backchannel negotiations, reportedly discussing Israeli access to Saudi airspace for potential strikes on Iran and Israeli offers of advanced missile defense systems for the Saudis. A free trade agreement between Israel and the UAE was signed in 2022, and most experts viewed the cascade of smaller normalizations as preparations for an eventual Saudi-Israeli deal.

What was the significance of China brokering a Saudi-Iranian détente in 2023?

In March 2023, China announced it had mediated an agreement restoring Saudi-Iranian diplomatic relations and reviving trade and security accords, with both nations pledging not to meddle in each other’s internal affairs. This created a parallel normalization track running alongside the US-backed Israel-Saudi effort, and despite initial alarm, Israel appeared to continue pursuing its own Saudi reconciliation. For a brief moment, analysts saw potential for a comprehensive Middle East peace before the October 7 war disrupted everything.

Why might Hamas have calculated that triggering a massive Israeli retaliation would serve its interests?

Hamas faced an existential threat from the Saudi-Israeli normalization process: if Saudi Arabia partnered with Israel and began supporting Palestinian welfare through peaceful means, the rationale for Hamas to continue existing would weaken dramatically. Saudi pressure could have compelled Iran to reduce its financial support. By provoking a large-scale Israeli retaliation in Gaza, Hamas forced Saudi Arabia to choose between continuing normalization—appearing to stand with Israel while Arabs died—or pausing the process to preserve solidarity across the Arab world, which Saudi Arabia ultimately did on October 13, 2023.

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