A week ago, Washington was abuzz with talk about the negotiations between President Joe Biden, Prime Minister Benjamin Netanyahu of Israel, and Crown Prince Mohammed bin Salman of Saudi Arabia to normalize Israeli-Saudi ties in return for a U.S.-Saudi defense treaty.

The conventional wisdom at that time was that a mega-deal could be concluded early next year and would constitute a major diplomatic coup and geostrategic game changer.

Indeed, a peace agreement between a leading Islamic power, joined by other Arab countries, and the Jewish State, that would also involve a security agreement between Washington and Riyadh could have helped contain Iran and reinforce the American alliances with Saudi Arabia and Israel.

It would have created a pro-American Middle Eastern military and economic bloc powered by the energy resources of the Persian Gulf and Israel’s high-tech industries and scientific centers. That would have been the most effective way to respond to the threat posed by Iran and its regional satellites.

But in the aftermath of Saturday’s surprise attack by Hamas fighters on Israel, it is hard to imagine Saudi-Israeli peace talks progressing. This suggests that Hamas launched the assault to disrupt the normalization of relations between Saudi Arabia and Israel. From a geopolitical perspective, if there had been a Saudi-Israeli agreement, the power balance between Iran and Saudi Arabia would have shifted significantly in favor of the U.S.-aligned Saudi Arabia and Israel.

In addition to a formal security treaty with the United States, the Saudis would have had access to U.S. nuclear technology, including uranium enrichment, making it possible for them to close in on Iran’s nuclear threshold advantage.

Under present conditions of all-out war by Israel on Hamas and the prospect of a bloody incursion into Gaza by the Israeli Defense Force, the conventional wisdom is now that it is unthinkable for Saudi Arabia to proceed with normalization of relations with Israel. This could be a severe blow to the Biden administration’s foreign policy.

Cui Bono? Iran. According to the Wall Street Journal, Iranian security officials helped the Hamas attack on Israel and gave the green light for the assault at a meeting in Beirut last Monday. Officers of Iran’s Islamic Revolutionary Guard Corps (IRGC) had worked with Hamas since August to devise the air, land, and sea incursions, reported the Journal on Sunday.

Hamas and the IRGC worked out the operational details during several meetings in Beirut attended by IRGC officers and representatives of four Iran-backed militant groups, including Hamas, which holds power in Gaza, and Hezbollah, a Shiite militant group and political faction in Lebanon.

Iran has an obvious interest in hurling a torpedo at the American strategy of creating a chain of American allies linking three key choke points of global trade—the Suez Canal, the Strait of Hormuz, and the Bab El Mandeb Strait connecting the Red Sea to the Arabian Sea.

In a way, what is emerging now in the Middle East is a new and very fragile balance of power under which the United States, Israel, and Saudi Arabia face an Iran-led bloc that includes Hamas and Hezbollah.

The concern is that if Israel, as expected, launches a ground attack into the Gaza Strip, Iran could order its Hezbollah proxies to open a new front in the war with Israel in the north, eventually igniting a regional war involving Israel and Iran.

U.S. Defense Secretary Lloyd Austin announced Sunday that he had ordered American military ships, including an aircraft carrier and additional aircraft, to move closer to the eastern Mediterranean, sending a clear warning to Iran not to take steps that could lead to a multi-front war with Israel, and perhaps to direct U.S. military intervention in support of the Israelis, creating the conditions for an all-out war in the Middle East.

The Iranians may assume that, distracted by the war in Ukraine and China’s military challenge in East Asia, the Americans would lack the resources and the political will for a new military intervention in the Middle East.

The Iranians may test this assumption and order their Hezbollah proxy to attack Israel just as it is trying to destroy Hamas’ infrastructure in the Gaza Strip. This would place Israel under enormous pressure, especially if the Lebanese-Shia para-military decided to attack civilian centers inside Israel, including Tel Aviv.

Under these conditions, Israel may directly strike the Islamic Republic itself and—depending on the Iranian response—threaten the use of its nuclear weapons.

To avert this dangerous scenario, the United States and its European allies should clarify that they would not allow Iran to intervene in the war in the Levant and demand that it tame its Hezbollah allies. 

At the same time, the Americans should discuss with the Israelis ways to deliver a military blow to Hamas, including a possible ground incursion into the Gaza Strip to wipe out the Hamas command structure with the fewest possible Palestinian civilian casualties.

Moreover, a full-blown Israeli occupation of the Gaza Strip would benefit Iran by drawing the Israelis into a deadly military quagmire, with the Iranians directing Palestinian operations against the Israeli occupier.

If anything, the defeat of Hamas could provide an opportunity for a regime change in Gaza under which the leadership of the Palestinian Authority (PA) takes control of the area. Financial support from the Saudis and other Arab oil states could help reconstruct the Gaza Strip and a multinational Arab force led by Egypt and possibly establish order there.

That could open the road to the renewal of the American-sponsored talks to normalize ties between Israel and Saudi Arabia and shift the balance of power again from the Iranian-led bloc to America and its regional allies.

Dr. Leon Hadar is a contributing editor with The National Interest, a Senior Fellow at the Foreign Policy Research Institute (FPRI) in Philadelphia, and a former research fellow in foreign policy studies at the Cato Institute. He has taught at American University in Washington, DC, and the University of Maryland, College Park. A columnist and blogger with Haaretz (Israel) and Washington correspondent for the Business Times of Singapore, he is a former United Nations bureau chief for the Jerusalem Post.

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