Is the Iran War Entering a Dangerous New Phase?

A major escalation in violence between the United States and Iran could mark a dangerous new phase in the conflict. Initially sparked by the two countries’ deep differences over the disposition of the Strait of Hormuz, the renewed conflict is now spiraling in unpredictable ways. Yet, as the conflict has intensified, both sides are signaling an openness to diplomacy. The coming days will be important to watch: Will the United States and Iran continue up the escalation ladder, perhaps leading to all-out confrontation? Or will quiet mediation efforts yield an off-ramp? 

A Notable Escalation

The past several days witnessed a dramatic return to war: escalating tit-for-tat military strikes that led to the first U.S. fatalities in months; a U.S. reimposition of the naval blockade on Iran amid continuing Iranian attacks on shipping through the critical global chokepoint; and expanding target sets that once again include civilian infrastructure. While the catalyst for this latest escalation centered on the disputed Strait of Hormuz, the renewed conflict has now expanded beyond the strategic chokepoint. Propelled by the self-perpetuating logic of escalation, the conflict could evolve in ways not anticipated or controllable by its key adversaries.

In successive days of operations, U.S. strikes have targeted Iranian critical infrastructure and expanded geographically across several regions of the country. Iran has retaliated by hitting civilian targets in neighboring Gulf countries—repeatedly striking a desalination facility and electrical plant in Kuwait as just one example. Iran has also broadened the geographic scope of its strikes, hitting Saudi Arabia for the first time in three months and targeting Aqaba on the Red Sea in southern Jordan, among other countries.

More to Come?

A further intensification of the war may be in the offing. Following a July 16 National Security Council meeting that reportedly considered several military options, the United States has deployed more fighter jets to the region, potentially presaging a broader attack. Speculation includes U.S. operations on Pickaxe Mountain, Iran’s secretive nuclear facility, or an effort to take Kharg Island, where Iran maintains major oil export facilities, but these operations would entail significant risks.

Iran could also escalate further. Tehran has reportedly asked the Houthis—its Yemeni partner force—to prepare to close the Bab al-Mandab strait, the region’s other critical chokepoint. Iran could also turn to more concerted attacks on Gulf energy infrastructure to inflict greater pain on Gulf economies and global energy markets. It could target alternative energy structures such as the Red Sea port of Yanbu, which has served as a critical workaround for Saudi Arabia amid the closure of the Strait of Hormuz. Meanwhile, Israel is also bracing for potential Iranian strikes that would bring it once again into the conflict. 

And should Iran further intensify its strikes against Gulf critical infrastructure, Gulf countries may end up in an open military confrontation with Iran, further expanding the conflict. While these countries have downplayed direct confrontation with Iran and are seeking paths of de-escalation, their calculus could shift should they feel cornered by Iranian aggression.

Whither Diplomacy?

A diplomatic unraveling has accompanied the war’s re-escalation. First, on the sidelines of the NATO summit on July 8, following an Iranian drone strike targeting shipping in the strait, President Trump declared that the MOU was “over” and called the Iranians “scum.” Then Iran announced the suspension of its MOU commitments on July 18, with Supreme Leader Mojtaba Khamenei saying President Trump’s signature was “worthless and invalid.” Iran has also accompanied its anti-Trump rhetoric with provocative framing; a prominently placed mural in downtown Tehran depicts the president in an open coffin. This latest escalation has only deepened the distrust between the two sides, undermining faith in the agreement and raising the bar for successful diplomacy in the next round.

The conflict’s principal mediators—Pakistan and Qatar—are scrambling behind the scenes to develop an off-ramp for the escalating conflict. Iran reports having received several proposals from the mediators, which they are reviewing. Pakistan and Qatar remain committed to the MOU and continue to insist on its implementation. Yet, they must contend with the challenge of its purposefully vague language, which both facilitated the agreement’s successful negotiation and its ultimate unraveling.

A Potential Olive Branch

Despite the spiraling of the conflict, both the United States and Iran retain an interest in avoiding all-out war. Both sides have recently reaffirmed their willingness to resume talks. U.S. Secretary of State Marco Rubio welcomed an “open door” to talks should they occur, and Iran’s foreign ministry spokesman similarly highlighted a positive role for diplomacy. Some subtle signs have already emerged. Iran recently released an American woman who had not been allowed to leave Iran since December 2024. And the United States has not significantly ratcheted up its escalation in response to Iranian strikes that killed at least two American soldiers, despite the president’s earlier threats to the contrary. Instead, the president’s statements have remained relatively restrained since the attack.

For now, both Washington and Tehran have doubled down on military escalation. While this return to war initially focused on breaking the impasse over the Strait of Hormuz—a challenge that didn’t exist before February 28—the escalation has unleashed a self-perpetuating dynamic of reprisals and retaliation. Each side is calculating that it can inflict enough pain on the other side to compel it to relent, a recipe for continuing war. Yet, although immediate off-ramps are apparent, the pain inflicted by both sides could contain the opening for a new path toward de-escalation.

Mona Yacoubian is director and senior adviser of the Middle East Program at the Center for Strategic and International Studies in Washington, D.C.