The Islamic Republic of Iran suffered a major military defeat at the hands of Israel and critical setbacks to its nuclear program. After decades of building up its military capabilities, regional militias, and nuclear program, all three sectors have suffered losses that cannot be replaced for the next several years or decade.

Tehran is now left with few choices on how to proceed between diplomatic talks and potentially reinvesting in a nuclear program that will almost certainly be struck militarily again by Israel and the United States. Iran, with a decimated military, a constrained economy, and internationally isolated, will have to recalibrate its next steps, as the regime faces its worst crisis since the Iran-Iraq War.

The Twelve-Day War

Amidst a report from the International Atomic Energy Agency that Iranian enrichment had crossed the threshold for weaponization, the Israeli government pushed the Trump Administration to authorize military action. After months of negotiations between the Administration and the Iranian government, talks stalled and, reaching the exact sixty-day deadline, the United States gave the green light to Israel to incapacitate the nuclear program.

During Israel’s preemptive strikes, known as Operation Rising Lion, not only did the Israeli military (IDF) strike nuclear targets, but Iran’s ballistic missile program as well. Around 200-250 of Iran’s missile launchers with 1,000 ballistic missiles were destroyed by covert Mossad teams and the Israeli Air Force (IAF).

The majority of Iran’s Air Force and air defense systems were destroyed, including critical radars, which took away their ability to deter the IAF. With Iran’s defenses weakened, the Trump Administration ordered Operation Midnight Hammer to take out the most fortified Iranian nuclear facilities such as Fordow, Isfahan, and Natanz, and the President would later broker a ceasefire between the two Middle Eastern countries.

A Degraded Nuclear Program

The extent of damage to Iran’s nuclear program is debated. Current assessments indicate that the nuclear program was halted for at least several years, with other reports stating that the Fordow facility sustained partial damage.

On July 10th, 2025, Israeli officials acknowledged some of Iran’s enriched uranium survived. However, it will be difficult for Iranian officials to retrieve it due to the extent of the facilities’ entrances being incapacitated. An analysis from CSIS noted the low risk of nuclear contamination but noted heightened risks if the facilities were struck again.

A week later, on July 17th, a report by NBC News, referencing an assessment from a senior U.S. official, stated that Natanz was the only major facility fully destroyed, which would take Tehran several years to rebuild. Parts of Isfahan and Fordow escaped destruction, but much of the enriched uranium is buried deep underground, and for now, Tehran has not attempted to dig it out, as the Trump Administration and Israel hinted willingness to strike the nuclear program again.

No Longer Having the Trust of Proxies

One of Iran’s greatest deterrence thresholds against direct Israeli military action was its proxies located across the Middle East that could strike Israel on several fronts and potentially overwhelm the IDF’s air defense systems. Paramilitary organizations such as Hezbollah, the Houthis, the Popular Mobilization Forces, Hamas, and others received training, funding, and weaponry from Tehran’s Iranian Revolutionary Guards Corps (IRGC).

In the past several decades, the Islamic Republic was able to coordinate various attacks in various countries such as Yemen, Syria, Lebanon, and Iraq between their proxies and Tehran’s proxy force provided a shield, as initially Israel and the West feared regional retaliation for striking the heart of Iran. Following October 7th and Iran’s lukewarm reaction, this calculation underwent a change.

One of Hamas’ key calculations post the October 7th massacre was hoping Iran and other powerful allies would directly intervene and join the fight against Israel, which did not come to fruition. Simultaneously, as Hezbollah was faced by an Israeli shock and awe campaign, the IRGC also sat out. When Israel battered Iran for twelve days, its proxies stayed out of the fighting due to factors such as decimation and betrayal because Tehran did not come to their aid.

Currently, Hezbollah, formerly the world’s most powerful non-state actor, has had its leadership and rocket force eliminated, and it could take a decade for the Shiite militia to regain its pre-2024 strength. Similarly, in Gaza, Hamas has been decimated to the point where it is now a guerrilla force attempting to survive nearly two years of full-scale war.

The only current proxy that continues to act at the behest of Tehran is the Houthis, who are deeply entrenched in large swaths of the population centers of Yemen. Despite the Houthis resisting several operations conducted by the United States, Saudi Arabia, and Israel, the group seldom launches ballistic missiles that are frequently intercepted and cannot effectively deter Iran’s enemies as the Mullahs wish they could.

Tehran’s Minimal Options

The Islamic Republic faces a conundrum in the aftermath of the disastrous 12-day war, with not just renewed threats of military action from Israel, but further international sanctions and a brewing resource crisis. Tehran is facing a looming decision on snapback sanctions from the United Nations Security Council that, if pushed through, could see some of the strictest resolutions re-implemented, such as UNSC 1929 that calls for military action to prevent weaponization of Iran’s nuclear program.

Iran’s current missile stockpile, launchers, and air defense are severely degraded and could take several years to rebuild to pre-June 2025 levels. Russia is unlikely to backfill Iran’s pre-war stocks due to having degraded stockpiles themselves from the attrition from their invasion of Ukraine, and China could send air defense batteries but not toe the line of drawing the ire of the West with major offensive weaponry. Iran would be unlikely to resist any renewed Israeli attacks for several years, which the IRGC command would factor.

Finally, Iran is facing a growing nationwide water crisis due to decades of mismanagement and rising temperatures. The director of the United Nations University Institute for Water stated the warnings of a ‘day zero’ of no water or electricity. If such conditions were to worsen, a dire humanitarian situation could arise among the population of over 92 million.

Decades of neglecting the general population to export its archaic forms of extremism could now fester an even greater uprising than the ones previously if Tehran continues to focus on its regional disputes instead of addressing the urgent needs of its people.

Iran will likely continue to neglect its population and attempt to rebuild its rocket force and air defense capabilities—albeit at a slower pace due to a lack of concrete allies capable of backfilling Tehran’s needs. Furthermore, Tehran will explore avenues to see if it can revive its nuclear program without triggering an immediate military response—perhaps hoping to buy time as Israel’s standing in the international community has also faded alongside Iran’s.

The Islamic Republic now faces a myriad of prominent situations its leadership never thought it would find itself in. Facing hardline sanctions, a more emboldened Israel, a growing socioeconomic crisis, and having a decimated military with little deterrence, Iran’s dreams of being unopposed in the Middle East have been reset, akin to its nuclear program.