Israel-Gaza conflict spillover risk rises as attacks by non-state actors like Houthi, Hezbollah put diplomacy 'to the test'

With Israel showing no sign of de-escalating its military campaign in Gaza, hopes are fading that the conflict can continue to be contained by the unprecedented levels of diplomatic coordination between rival Middle Eastern powers that has been seen so far.

The region's three main power groupings - broadly comprising Egypt, Jordan, Saudi Arabia and the United Arab Emirates; Iran and aligned non-state militias in Iraq, Lebanon, Syria and Yemen; and Qatar and Turkey - have closely communicated since the Israel-Gaza war broke out on October 7, building on a reconciliatory trend of recent years.

Such diplomacy "has succeeded so far in preventing the war between Israel and Hamas from escalating into a region-wide conflict", said Kristian Coates Ulrichsen, Middle East fellow at Rice University's Baker Institute for Public Policy think tank in the US. It also "reflects the shared interest of states" across the region in preventing escalation, he said.

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But such efforts will be "put to the test by the intensification of attacks on maritime targets in the Red Sea" by Yemen's Iran-aligned Houthi movement, which will "indicate the level of Iran's ability to dictate or control the activities of groups considered by some" to be its proxies.

"This goes for Hezbollah in Lebanon as well," Ulrichsen said.

Visiting Israel on December 18, US Secretary of Defence Lloyd Austin called on Iran-aligned Hezbollah "to make sure that they don't do things that would provoke a wider conflict" with Israel.

"We've been clear that we don't want to see this conflict widen into a larger war or a regional war," he said.

Since Austin's visit, however, Israel has stepped up its military response to Hezbollah's attacks across the Lebanese border, which in October prompted the evacuation of about 80,000 Israelis in nearby towns and settlements.

Whereas Israel had previously mostly retaliated against Hezbollah's provocations, its military has become more proactive since mid-December, targeting the group's command and control centres located as far as 25km inside Lebanon.

Per the terms of a UN-brokered ceasefire agreement reached in 2006, Israel wants Hezbollah's forces to withdraw beyond the northern bank of the Litani river, 29km away from the border.

Defence Minister Yoav Gallant has repeatedly said that Israel would prefer a diplomatically negotiated withdrawal, but if Hezbollah refuses to comply a military campaign in southern Lebanon is also being planned.

Israel's assassination of Sayyed Razi Mousavi - the head of Iran's Islamic Revolutionary Guards Corps in Syria - in an air strike on Damascus on Monday is expected to spark an upsurge of attacks on Israel, following Tehran's vow to avenge his killing.

Nonetheless, Iran's diplomatic engagement with Arab states "is a clear indication of Iran acting through state tools rather than through non-state tools", said Mohammed Baharoon, director general of the Dubai Public Policy Research Centre, an independent UAE think tank.

"The gravity of the situation also requires it. If states don't respond, non-state actors will do and it will be a huge mess that will affect all of those countries."

Baharoon described enhanced diplomatic coordination between the Middle East's rival camps as "a practical outcome of the de-escalation policy" that has been prevalent in the region since 2020.

This rapprochement was crowned in March by the China-mediated restoration of diplomatic relations between Iran and Saudi Arabia after a seven-year break.

But Baharoon warned that the Houthi attacks on Red Sea shipping were a "clear sign of the outcome of the continuation of this war" in Gaza.

"Radicalisation is on the rise both from non-state actors and from individuals," he said.

Enhanced diplomacy between regional rivals has so far prevented tensions over the Houthi attacks from derailing intensified negotiations with Saudi Arabia to end Yemen's nine-year civil war.

After Riyadh refused to join a US-led naval coalition recently formed to escort ships through the Red Sea, Yemen's warring parties - the Iran-aligned Houthis and the Saudi-led coalition backing the internationally recognised government - on December 23 committed to extending a UN- brokered ceasefire that has held since April 2022.

The United Nations' special envoy for Yemen, Hans Grundberg, said the two sides had further agreed to "engage in preparations for the resumption of an inclusive political process".

Rice University's Ulrichsen said "one of the most notable characteristics of regional diplomacy" since the October 7 attack by Hamas on southern Israel had been repeated contact at the highest levels between Saudi and Iranian leaders.

While this represents the continuation of a process that began months before the war, the fact that contacts have intensified "indicates the strong and durable interest on all sides in rapprochement", he said.

On the other hand, he said the war in Gaza "has widened enormously the gaps" that first emerged after the US' Arab allies refused to support Western sanctions on Russia, following its full-scale invasion of Ukraine in 2022.

The Arab states have clearly demonstrated "their reluctance to get drawn into any US great-power competition or strategic rivalry, whether with Russia or with China", Ulrichsen said.

Across the Middle East and much of the Global South, both politicians and the public have "contrasted the US response to Gaza with the response to Russia", resulting in a "perception of double standards that has fuelled levels of anger not seen since the US-led invasion of Iraq in 2003", he said.

As with that invasion, launched on the false pretext that Iraq possessed weapons of mass destruction, Ulrichsen said the current claims of hypocrisy will "similarly set back US-Arab relations for years to come".

Washington's refusal to pressure Israel into ending its attacks on Gaza has also created "a serious challenge" to the US' global leadership role and will "create a ripple effect on global governance structures like the UN", Baharoon said.

He said an extraordinary summit of the Brics group of nations on Gaza last month "is a sign that what start as economic cooperation platforms can easily turn to global security cooperation" away from structures like the UN.

Brics currently comprises Brazil, Russia, India, China and South Africa, but Egypt, Iran, Saudi Arabia and the UAE are set to officially join on January 1, along with Argentina and Ethiopia.

"There's a sense among Arab leaders that the Americans are not as reliable any more, that they're not as omnipotent, that they need to build their connections and ties with other outside actors like the Chinese and Russia - not necessarily to counter the US, but just as an insurance policy," said Guy Burton, an independent political analyst who has previously taught international relations at universities in Belgium, Iraq, Malaysia and the UAE.

The Gulf Arab states' continued reliance on the US and its other Western allies as the dominant military powers in the Middle East, and as a deterrent against Iranian aggression, was underlined on December 22 by the signing of a US$1 billion one-year deal for the training of the Saudi military by American instructors.

Similarly, Saudi Arabia and France have recently signed an agreement for "cooperation on capabilities, military industries, and research and development", Saudi Defence Minister Prince Khalid bin Salman announced on December 20.

It remains unclear, therefore, what bearing rival Middle Eastern power groupings' recent flurry of diplomacy will have on efforts to realise a two-state solution to the Israel-Palestinian conflict.

Egypt and the UAE are most likely to assume the lead diplomatic role in negotiations, Burton said, as neither has downgraded its diplomatic relations with Israel since the outbreak of the war - unlike Jordan, which has recalled its ambassador, and Saudi Arabia, which has frozen talks with the US on normalising ties with the Jewish-majority state.

Alongside the Gulf emirate of Qatar, Egypt was deeply involved in negotiations on the exchange of Palestinian prisoners held by Israel for Israeli hostages kidnapped by Hamas during a week-long truce in late November.

The UAE, meanwhile - as the sole Arab and Muslim non-permanent member of the UN Security Council - has garnered global support for three draft resolutions since October calling for a ceasefire in Gaza and unhindered access for humanitarian aid to the 1.9 million Palestinian residents displaced by the war.

The US vetoed the first two resolutions calling for a ceasefire and only agreed on December 22 not to block a UAE-drafted resolution to boost aid to Gaza after its wording was significantly watered down.

By then, support for the US' diplomatic position in the UN General Assembly had dwindled to nought, while support for Palestinian self-determination continued to increase.

Ulrichsen said there may "be a role for Saudi Arabia to insist" that concrete moves towards Palestinian statehood and a two-state solution "are necessary conditions for any resumption of dialogue" with Israel over a normalisation agreement.

"The Saudi leadership is well aware that the White House has prioritised a Saudi-Israeli deal and this opens an opportunity for the kingdom to leverage that desire to ensure that the issue is put on the table if talks are to be unpaused," he said.

With the exception of former prime minister Yair Lapid, however, all of Israel's political leaders remain resolutely opposed to the creation of a Palestinian state. Nor are they likely to come under significant US pressure to accept one.

"It's very hard to see that, given the domestic nature of American politics with a relatively weak president, divided Congress, strong influence of the Israel lobby, and the upcoming [presidential] election, which is going to distract attention and also may even give space for the Israel lobby to put pressure on politicians to demonstrate their support for Israel," Burton said.

But analysts said intensified US support for Israel would only be a recipe for more violence between it and Iran-aligned militias in the Middle East.

"The lesson of the past 75 years" is that the exclusive security of Israel "will not lead to peace", Emirati analyst Baharoon said.

"Investing in the statehood of Palestine is the surest way Israel can make sure that non-state actors will not become the dominant force."

He said the 2020 Abraham Accords, under which the UAE and Bahrain - and later Morocco and Sudan - normalised relations with Israel, have "provided a working prototype of how that works".

"But there has to be a [Palestinian] state," Baharoon said, "without it, there will only be non-state actors seeing resistance and violence as their only way to counter the [Israeli] occupation."

"The whole world will be affected by it and the whole world has a vested interest in pacifying the longest conflict in modern history," he added.

This article originally appeared on the South China Morning Post (SCMP).

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