Some analysts have argued that the unprecedented Israeli and American June 2025 assault on Iran has created a “new regional order” in the Middle East. But what the so-called 12-Day War has spawned instead is an expanding landscape of disorder, one in which the rules of deterrence that had limited the conflict between Israel and Iran have been upended. In the aftermath of the war, Israel’s leaders feel emboldened. Prime Minister Benjamin Netanyahu’s August 21, 2025, decision to launch a “final” assault on Gaza City, Israel’s August 24 strike in Sanaa (after Houthi rebels launched a missile at Israel), its August 27 drone assault that killed six Syrian soldiers near Damascus, and its two-hour ground operation at a former military barracks southwest of the Syrian capital the very next day—all of these actions illustrate that Israel can impose its military might at will.
Israel’s lack of military restraint poses new challenges for Iran, which had already lost much of its network of regional proxies, the so-called Axis of Resistance. Now, Iran’s leaders have been struggling to figure out what to do next. At the core of the debate is not only the future of Iran’s nuclear power program, but also the ruling elite’s central concern: regime survival. Iran’s next steps, decided through an opaque process of intra-elite negotiation, will have lasting consequences for the country’s domestic and foreign policy. With the key question looming of who will succeed 86-year-old Supreme Leader Ayatollah Ali Khamenei, the stakes could not be higher.
Iran at a Crossroads?
The 12-Day War has intensified a public feud within Iran’s fractious ruling class over how to bridge the gap between the regime and the public. That gap has widened with the regime’s failure to address Iran’s growing economic woes and its earlier efforts to suppress the “Women, Life, Freedom” movement in 2023 and 2024. After the June 2025 attacks by Israel and the US, the regime launched a massive campaign of arrests to identify lapses in its security apparatus that had clearly been compromised, but it also played up nationalist themes to foster a sense of solidarity. Arrests and popular nationalism illustrate the competing imperatives of combating domestic threats while also appealing to the wider population.
These competing impulses are unlikely to play out in a way that leads Iran to a crossroads. As in the past, Iran’s hardliners—with Khamenei’s support—might defuse the legitimacy crisis by using grandiose rhetoric or by pursuing a dangerous path in foreign policy, such as withdrawing from the Nuclear Non-Proliferation Treaty or permanently banning the International Atomic Energy Agency (IAEA) from inspecting Iran’s nuclear facilities. Such a move would herald a regime shift as hardliners in the Islamic Revolutionary Guard Corps (IRGC) sought uncontested power with the support of Khamenei. Alternatively, the elite’s debate about “what is to be done?” could produce a winning coalition of reformist and pragmatic conservatives that contains the hardliners and that adopts a logic of détente both domestically and internationally.
No fewer than five political groupings are currently competing to set the agenda for Iran’s new direction.
No fewer than five political groupings are currently competing to set the agenda for Iran’s new direction: hardline absolutists who seek total power; pragmatic conservatives who want to keep the circle of elite leadership open to all groups that accept the legitimacy of the Islamic Republic; mainstream reformists who want a slow but forward moving opening of the political arena; the militant opposition, which is outside the regime and wants to replace it with a pluralist democracy; and Supreme Leader Khamenei, who is a center of political gravity in his own right. All want to show that they can move Iran beyond its present crisis.
Pezeshkian Walks a Thin Line
President Masoud Pezeshkian and his reformist allies advocate an approach to domestic politics based on “patience, rationality and national cohesion,” as he said on July 22, 2025. Pezeshkian’s preference for consensus over confrontation requires him to tread a fine line. He must convince both his reformist allies and the militant opposition—those who reject the legitimacy of the Iranian regime and the Islamic Republic’s official ideology—that a policy of accommodation can successfully tackle Iran’s mounting challenges. At the same time, Pezeshkian cannot afford to antagonize the hardline absolutists or the security forces at his hardline rivals’ disposal.
Pezeshkian walked this fine line on July 13, 2025, saying that “those who oppose us are not necessarily our enemies,” and that Iran’s leaders “should not favor insiders over outsiders through coercion.” A week later, he echoed his case for peacefully widening the circle of political inclusion when he declared that “we are even prepared to hold dialogue with the opposition based on fairness and justice.”
The fact that Pezeshkian made this point so publicly was surprising. Hardline parliamentarians alleged that Pezeshkian was planning normalization with Israel and went so far as to say that he was effectively plotting a coup. The most pointed criticism came from a hardline social media activist who asked, “Does the president not even understand what ‘opposition’ means?” Indeed, it is not clear if his definition includes the militant opposition, and Pezeshkian’s imprecise usage of the term was itself politically dangerous.
Conservatives to the Rescue?
In a sign of troubled waters, several conservative voices have tried to support Pezeshkian by defending his call for inclusion. On July 21, 2025, Ali Akbar Velayati, a stalwart of the conservative establishment and a close foreign policy advisor of Khamenei, called for moving beyond the “expired methods” previously used to create unity. “National cohesion,” he added, “as emphasized by the Supreme Leader, may now require changes in the state’s prioritizing the people’s satisfaction in tangible ways.” Conservative media outlet Nour News said that Pezeshkian’s call for dialogue with regime critics represented a “historic” opportunity to move beyond “zero-sum confrontations.”
Conservatives have already tried to improve public satisfaction with the regime by delaying the implementation of the so-called chastity and hijab law, which would impose harsher punishments on Iranian females for exposing their hair, arms, or legs. They also have withdrawn a bill criminalizing dissent on the Internet. Although these moves are unlikely to fully satisfy a large urban middle class that is disillusioned with the regime’s religious dogma, they signal differences of opinion between pragmatic conservatives and absolutist hardliners within Iran’s political elite.
As the chief arbiter of such differences, Supreme Leader Khamenei needs to sustain a close alliance with hardliners while also remaining above the fray of everyday politics. After the 12-Day War, his ability to perform both roles—and thus to embody the authority of “supreme” leader—may have been weakened, but Khamenei still appears to be trying to walk this line.
Khamenei called for the unity of all Iranians, regardless of political or religious affiliation.
One potential sign of this balancing act is Khamenei’s reaction to hardliners’ attacks on Pezeshkian. In addition to condemning “prolonged and unnecessary disputes” (a remark clearly directed at the president’s critics) on July 16, 2025, Khamenei reportedly called for the “unity of all Iranians, regardless of political or religious affiliation.” If indeed he used this language, his choice of words is striking, as they seem to echo the appeal of Pezeshkian himself not to impose too narrow a restriction on the boundaries of participation within the existing political system.
To be clear, Khamenei is not extending an olive branch to the militant opposition. But the idea of including Iranians who oppose the system has a resonant history. In the early 2000s, former President Mohamed Khatami antagonized his hardline rivals when he first dared to suggest that all Iranians, regardless of ideology, had the right to vote and the right of expression. For Khamenei to echo the same idea would be telling; it might suggest Khamenei knows that he cannot allow the regime’s legitimacy crisis to worsen. His much-reported public indulgence of pre-Islamic and Iranian nationalist symbolism on Ashura, the most sacred day in Twelver Shi’ism, seems to be evidence of the regime’s underlying fear of alienating the public too much. With the challenge of the succession not far down the road, the elderly Khamenei could find himself struggling to defend the very credibility of the position of “Supreme Leader.”
The Future of the Islamic Republic
All these challenges raise an important question: can the regime survive? The answer is yes, but the real puzzle is how it will survive. Divisions within the regime might evolve in three directions. The first is a coup in which absolutist hardliners in the Islamic Revolutionary Guard Corps (IRGC) and their shock troops—the volunteer Basij militia—impose their will by pushing for a new supreme leader who will crush all dissent. The second possibility is that President Pezeshkian and his allies will harness popular dissent to increase their leverage to contain the hardliners, positioning Iran’s fractious reformists to have some influence in the battle for Khamenei’s successor. The third scenario is an elite compromise of the kind seen before in the Islamic Republic since the 1979 revolution: to postpone major domestic or foreign policy decisions for another day.
The dream of regime change in Iran endures in parts of the US foreign policy community and, of course, in Israel. Netanyahu’s August 12, 2025, video message to Iranians highlighted the country’s severe drought and called on the people to topple the regime. Netanyahu does not necessarily believe that the Tehran regime will collapse over a water crisis that, as Iranians know, is largely a product of corruption and ineptitude. Netanyahu’s intention was more likely simply to taunt Iran’s leaders.
In response, Pezeshkian mocked Netanyahu’s call for a popular uprising as a “mirage” and insisted that the Islamic Republic remains strong and able to address its challenges. Nevertheless, Pezeshkian clearly fears Iran’s growing isolation and its diminished military and diplomatic clout following the Israeli and US strikes, a point that he emphasized on August 13, 2025, when he warned, “If we don’t talk, what should we do? Do you want to fight? Well, they will hit us, we rebuild, and they hit us again.”
Some hardliners denounced Pezeshkian’s forthright characterization of Iran’s quandary. Others, however, quietly agree with the president’s assessment, though they believe that the dire situation should not be acknowledged in public. The deputy chief of the IRGC, Aziz Ghazanfari, notably warned that “the foreign policy field is not a place to express every reality.” Ghazanfari’s surprisingly unguarded remark suggests that some of Iran’s leaders know that if they do not make some crucial choices soon, the country will pay a very high price.
President Trump and the Prospects of a New Nuclear Deal
Iran’s controversial nuclear program may be the first casualty. On August 26, 2025, France, Germany, and the United Kingdom reiterated their threat to impose ‘snapback’ economic sanctions if Iran refuses to allow IAEA inspections to resume after suspending them following the 12-Day War, or to account for its stockpile of 60 percent enriched uranium, which Western security officials believe was moved to a different location just before the June attacks, but the ultimate fate of which even Iran’s leaders may not be entirely certain.
The threat from the three European countries seems to have grabbed Tehran’s attention. Iran has allowed the return of IAEA inspectors and is reportedly considering scaling back its enriched uranium from 60 to 20 percent, potentially signaling that Iran is looking for a diplomatic exit ramp.
Yet Tehran’s overtures—the scope and seriousness of which are as yet unclear—will have little effect unless President Donald Trump decides to resume indirect negotiations with the Islamic Republic. Coming on the heels of his disappointing Alaska meeting with Russian President Vladimir Putin and his failure, so far, to end the Ukraine war as he promised, Trump may be hesitant to adopt diplomacy towards Iran. Yet he might explore the possibility of talks with Tehran, considering that there is now a real prospect that Iran could rebuild its nuclear program in one or two years, as Pentagon officials have noted. The possibility of such a scenario makes it very likely that Israel will carry out periodic military attacks on Iranian nuclear facilities in the coming months, thus opening the door to the renewed regional instability that Arab Gulf leaders—and Trump himself—want to avoid.
Despite the logic of diplomacy, it is very hard to imagine any US-Iran initiative now that the region’s attention has returned to Gaza, where Israel is preparing a major assault on Gaza City. Against the grim background of the near-total destruction of Gaza, the killing of dozens of innocent civilians every day, the escalating hunger, and Trump’s extraordinary call for Netanyahu to “finish the job,” Tehran will not send negotiators to Doha. For now, Iran’s leaders will focus on trying to manage a fractured domestic arena that could become even more contentious and unpredictable as the inevitable struggle to determine Khamenei’s successor emerges on the not-too-distant horizon.
The views expressed in this publication are the author’s own and do not necessarily reflect the position of Arab Center Washington DC, its staff, or its Board of Directors.
Featured image credit: President.ir