The dispute between the United States – as well as most of the world – and Iran over the Straits of Hormuz continues to fester.
Israel and Hezbollah’s ceasefire also remains on the edge of collapse.
Combined, these two issues have banished into obscurity the real reasons why Israel and the US went to war with the Islamic regime: the ballistic missiles and nuclear threats.
There was a brief period of euphoria mid-war when some officials also hoped for regime change in Iran, but that ship has long sailed – at least in terms of the capability of Washington and Jerusalem to impose it solely by using air power. (The Iranian people might still topple the regime at some later, undefined date.)
Putting off regime change is not a security problem in the sense that, before the war, top military officials believed that their military operation could at best improve the conditions for the Iranian opposition to take control, but never believed they would achieve it on their own.
Global economic crisis is a priority
In contrast, putting off the ballistic missiles and nuclear issues could be problematic.
At this stage in negotiations – which ran parallel with the continuing Israel-Lebanon war for over a week – the priority is opening Hormuz to stop the bleeding of the global economic crisis that Iran's closure of the strait has caused.
At the end of last week, the apparent deal was Iran opening Hormuz in exchange for the US forcing Israel to agree to a ceasefire with Hezbollah, though Jerusalem had been interested in continuing to pound the Lebanese terror group for an additional period of weeks or even longer.
That deal took some hits when Israel interpreted the deal as requiring a ceasefire only north of the Litani River – meaning that it could still attack any Hezbollah fighters left in southern Lebanon who did not immediately surrender.
There was some logic to this Israeli position, given that the IDF controls southern Lebanon and withdrawing from that area was clearly not part of the US-Iran negotiations relating to Hormuz.
However, Iran saw this Israeli interpretation as undermining its claim that it was protecting Hezbollah and had silenced the Israeli offensive in Lebanon by using its Hormuz leverage.
The other hit came when US President Donald Trump said he would continue to blockade Hormuz and Iran until a final deal between the parties was reached, including regarding the nuclear issue.
In theory, with less talented negotiators, this might have been a smart move to keep the pressure on the Islamic regime and to show them that their leverage is thin.
But the move was shortsighted with the Iranians who – after all of their massive losses – believe that in some ways they now have the upper hand over the US, the Sunni Arab states, and to some extent, even Israel.
Top Israeli officials have emphasized that Iran was damaged in the hundreds of billions of dollars by US and Israeli bombing during the nearly 40-day war.
They have said that senior Islamic regime officials still do not themselves understand the full scale of their losses because many of them are still in hiding and cut off from broader society.
But Iran’s economic GDP in recent years has been well-above $300 billion every year and in the recent past hit $700 billion, such that it could make a recovery over time.
More importantly, the Islamic regime believes it has been hit so much that it has little to lose.
In contrast, the US has not yet felt the full economic brunt of what the closure of Hormuz could mean over time – a threat Trump is painfully aware of, and the main reason why he stopped bombing Iran in the first place on April 8.
Responding to Israeli moves against Hezbollah in southern Lebanon, Trump’s threats about Hormuz from the US side of things, and some criticism internally from Iranian hardliners, the regime’s negotiators (or the IRGC, overriding their own Foreign Minister Abbas Araghchi) reversed their readiness to open up Hormuz.
They connected any future decision to open it to the US’s giving up its blockade of Hormuz and also called on Trump to prevent the IDF from attacking Hezbollah even within southern Lebanon.
This latest move is critical.
The most important issue - ballistic missiles and nuclear
Whereas before the trade was ending the Lebanon war in exchange for opening the strait, now Iran is showing that it could pretend to compromise on Hormuz, but then pull out the prospect of closing it again to gain more leverage.
The most important issues to the US and Israel in the long-term, the ballistic missiles and the nuclear issues, are, as yet, unresolved. If Israel has to end the war in Lebanon to open Hormuz, but the Islamic regime has spent that card fully, the deal makes sense. It will enable Trump to lean hard on Iran on the ballistic and nuclear issues without Hormuz hanging over his head.
Rather, Iran will need to make various concessions to Trump on those issues in order to end the threat of a return to war.
However, if the Lebanon war ends and Iran succeeds at keeping Hormuz on the table as leverage, suddenly, Trump’s ability to coerce Iran into real concessions could drop considerably.
Negotiations involve give and take, and the US and Israel were always going to need to make concessions.
But lining up those concessions properly is critical to making sure that when the war is fully ended, the reasons that started it are resolved: ballistic missiles and nuclear issues.