The Escalating Conflict in the Middle East

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Iran attacked Israel for the second time in five months Tuesday, with a volley of missiles coming hours after Israel launched a ground incursion into Lebanon. 

Today on the Big Take, Bloomberg’s Dan Williams, a reporter in Bloomberg’s Jerusalem bureau, and Joumanna Bercetche in Dubai join host David Gura to talk about the latest on the Middle East and what that means for the region – and the US. 

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Here is a lightly edited transcript of the conversation:

David Gura: The conflict in the Middle East escalated further today with Iran attacking Israel for the second time in five months. 

Iran launched ballistic missiles at key cities in Israel, sending Israelis into shelters for safety. 

US National Security Advisor Jake Sullivan called the attack ineffective and said US warships helped to intercept the roughly 200 missiles Iran fired at Israel. 

Archive Jake Sullivan: We have made clear that there will be consequences -- severe consequences -- for this attack and we will work with Israel.

Gura: Israel has also vowed to respond.

Iran’s state TV is calling this the first wave of an attack, and says it is retaliation for the killing of senior figures in Hamas and Hezbollah.

The volley of missiles from Iran comes hours after Israel launched a ground incursion into Lebanon in the early morning on Tuesday. 

Dan Williams: What happened is effectively Israel launched a significant enough ground incursion into Lebanese territory for it not to be unnoticed by the world.

Gura: The Israel Defense Forces called the ground raids against Hezbollah, quote, “limited, localized, and targeted.”

Williams:  I think at this point in time, with Israelis reeling from the October 7th attack they will accept nothing less than a tangible, observable dislodging of Hezbollah from Southern Lebanon, and a tangible stripping of Hezbollah's means of attacking Israeli sites with strategic weaponry. 

Gura: Dan Williams is a reporter in Bloomberg’s Jerusalem bureau. 

Williams: They will want to see Hezbollah positions being toppled, Hezbollah flags coming down, and a reassurance that there will be no visual, at least palpable, return of those forces in the coming years.

Gura: In recent weeks, Israel has killed almost of all of Hezbollah’s senior leadership, including Hassan Nasrallah, who was the group’s long-time secretary-general. 

And while Hezbollah has vowed to respond, its capabilities have been severely degraded. 

Williams: From what we heard from the Israeli side, Israel's assessment is that compared to its pre-war fighting capacity is now down 60 to 70 percent. That's when it comes to the rockets and missiles that can really hurt Israel. 

This is The Big Take, from Bloomberg News. I’m David Gura. 

On today’s episode, we’ll talk with Dan Williams and Bloomberg’s Joumanna Bercetche, who’s based in Dubai, about the latest attack in the Middle East.

Gura: When I got Bloomberg’s Dan Williams on the phone, it was mid-morning in New York, and late-afternoon in Israel. Dan was in a car near Israel’s border with Lebanon. 

Gura: Dan, Israel has called these ground raids limited, localized, and targeted. Help me with that phrase. What does it mean exactly?

Williams: I think this is code for, we're not going to go into Beirut. We're not going to occupy Lebanon. We're going to try to restrain the already very significant disruption to Lebanese civilian life, and we're doing this in order to prevent an October 7th-style attack from the north, from the northern border on our communities. Keep in mind that the actual anniversary of the actual October 7th attack by Hamas, the first anniversary of this war, is just days away. So, Israel is effectively bookending this year with what it's describing as a necessary ground forces raid, incursion, it's not using the word “invasion.” It's using the word “operation” in order to put paid to any prospects of Hezbollah's special forces doing a copycat strike, a copycat rampage, in northern Israel to what Hamas did from Gaza almost exactly a year ago.

Gura: In recent weeks, Israel mounted a major attack on Hezbollah – detonating pagers and walkie talkies, along with airstrikes. Joumanna Bercetche has been covering the conflict from Dubai. 

Gura: Joumanna, Dan has given us the backstory here, what's led to this incursion: Israel and Hezbollah exchanging rocket fire for months, Israel bombing the center of Beirut, and then killing Hassan Nasrallah, the head of Hezbollah. How much has that killing destabilized this group? Nasrallah had led Hezbollah for decades.

Joumanna Bercetche: Certainly very destabilizing for the group, and it didn't just start with that of course. The cross-border attacks, as Dan was just articulating, started the day after October 7th and since that point, the daily, almost daily crossfire has continued. 

But within certain parameters, there were almost rules of engagement with these tit for tat responses from Lebanon into Israel ,and Israel back into Lebanon, until a couple of weeks ago. And that all changed. 

The first catalyst was the explosions that went on in the walkie talkies and pagers that critically injured thousands. And then subsequently, airstrikes began, and then we started to see that systematically senior commanders at elite level, they would call red one fighting level, within the Hezbollah group started getting killed. And all of that, of course, culminated with the killing of Hassan Nasrallah himself, who was the secretary general and has held that position since 1992, on Friday's airstrikes. So it has been a deeply destabilizing couple of weeks for the group.

From the perspective of their communication system, their command system and their infrastructure, they have never seen a setback like this, and actually in one of the last speeches that Hassan Nasrallah gave, he conceded that the telecommunications device exploding was actually the biggest setback the group has ever seen.

Gura: Now Hezbollah, which is designated a terrorist group by the United States and the European Union, is supported by Iran. And Iran has responded to the killing of Nasrallah and other senior Hezbollah leaders with today’s missile attack on Israel. 

I asked Joumanna about Iran's support of Hezbollah in the wake of Nasrallah's death.

Bercetche: From Iran's perspective, Hezbollah has been the crown jewel in their so-called axis of resistance. Hassan Nasrallah himself enjoyed very close relationship with the Ayatollah, and so this was a personal blow to the Iranian regime, but also a massive foreign policy blow for them as well.

Gura: Joumanna, we’ve talked about, um, Hezbollah’s capabilities militarily, but I wonder if we could put this in a broader context, and this is a group that’s been so destabilized as a result of what’s happened here in recent weeks. How is that playing out in politics in Lebanon? This is a group that, of course, started out as a militia, but has grown into something much more than that.

Bercetche: Exactly, so the group evolved from a militia group into one that wielded significant political influence, very strong and substantial military arsenal, of course, backed by Iran and later on, increasingly by Syria, but it also had a very strong social influence as well.

And to understand that, you need to understand the way the political system is set up in Lebanon. The Lebanon government system is based on a sectarian power sharing structure. So broadly speaking, you have 18 different religious sects in Lebanon and the constitution guarantees that all of these religious sects in the country are ensured representation in government.

Over the years, what this has done is, it’s created a system of patronage and identity politics represented by certain figureheads across these different sects rather than a coherent central governing system. So under that system of patronage, Hezbollah gradually transitioned away from just being a militia group that wielded significant political influence because it was beholden to a group of very loyal supporters who they in turn offered a lot of social support. They offered schooling, they offered education, they offered health services, and on the back of that, they built up a very loyal base.What this meant was that over the years as Hezbollah gradually gained an influence politically, you saw alliances come and go and change with Hezbollah's relative growing influence as well. And so more recently, it was impossible for any decisions at a government level to be made without the consent of Hezbollah and its allies.

And so the central government effectively lost its decision making capacity because it was beholden to groups that were either loyal to Hezbollah or allied to Hezbollah. And that explains the absence of a functioning central government right now in Lebanon.  

Gura: After the break – how does Israel’s ground incursion into Lebanon fit into Prime Minister Benjamin Netanyah’s broader military strategy? And what does all this mean for Lebanon’s economy, and its future?

Gura: Earlier today we reached out to Bloomberg reporters Dan Williams, who’s based in Jerusalem, and Joumanna Bercetche, in our Dubai bureau, to talk about Israel's ground incursion into Lebanon. 

Gura: Dan, what has Prime Minister Benjamin Netanyahu said about the goals here? How does this sort of fit into the broader military strategy as we approach the anniversary of the attacks on October 7th?

Williams: Some three weeks ago, the Israeli cabinet passed a third war goal in addition to the two war goals it set out in Gaza, quite soon after the Hamas attack that precipitated the war. Those war goals were explicit. They were aggressive. One was the defeat of Hamas, the second was the recovery of all hostages taken by Hamas.

The new war goal that applies to Lebanon is comparatively recessive. It's restrained. It talks rather simply about the safe return of some 60,000 Israeli civilians who were displaced from their homes in the north by Hezbollah attacks. The effect of this has been to basically tell the world, listen, if you want to come in and provide a diplomatic solution, welcome. This is the result we want. 

Now, Israel appears to have run out of patience when it comes to months-long efforts by the United States, by France, by others, to come up with a consensual and negotiated solution that would stop Hezbollah attacks and withdraw Hezbollah from the border area. And now it has gone aggressive, very aggressive, with this cascade of quite extraordinary attacks. First, sabotage and now, open barrages and now a ground campaign, albeit limited.

Israel's aim is the safe return of its citizens, it says, and that would suggest that it's not looking for a long-term conflict on the Lebanese front – indeed it might be open to an arrangement whereby once Hezbollah is dislodged from southern Lebanon, the Lebanese army would come in and secure it, perhaps a stronger United Nations peacekeeper force. No doubt the Israelis would want some role in that to ensure they call it trust and verify, the American phrase, to ensure that Hezbollah would not abuse this, would not come back. 

Gura: Joumanna, the ground incursion came at an especially sensitive moment economically for Lebanon which I know has been struggling with debt and inflation. What can you tell us about that situation? 

Bercetche: Lebanon economically was on its knees even before the war started. You may recall that it defaulted on its debt a couple of years ago.

They have not been able to even negotiate a restructuring. The country experienced rampant inflation over the course of the last few years. The currency has devalued more than 90%. The World Bank estimate that up to 80 percent of the population are now living under the poverty line. So this is just to give you a snapshot of the starting point, and all of this rapid economic deterioration happened in the last couple of years in the absence of a functioning government. There is no government. And therefore, no institutional decisions have been made in the last couple of years.You add to that now the country is actively engaged in what it says is wartime defense. You add to that the fact that, per the prime minister, more than one million people from across the country have been displaced. Many of them would have been, Shia, the Shia population living in the south, who historically would have been very loyal to Hezbollah. They're now scattered around the country looking for a place of safety, looking for security, looking for shelter, looking for food. And per the UN numbers, 100,000 Lebanese have actually fled into Syria, which tells you how dire the situation is, the fact that people in Lebanon are moving to Syria, and seeing it as a safe haven. 

And so there is a lot of pressure on the country institutionally, economically, also politically. And you've got to think, given that set up, the international community may want to step in, as a last chance to stop Lebanon from turning into a full-fledged failed state, in which case that could wreak havoc across the broader region.

Gura: Dan, what has the response been to this incursion globally? We've seen Israel increasingly isolated on the world stage. This was an incursion that the U. S. desperately didn't want to happen. There was a lot of back-channel negotiation, and it did. What's the response been to it?

Williams: I think there's a great deal of consternation. I think, the world does not want to see a second front to this war, at least a second ground war following on to Gaza, and that's what this looks like to them, hence the Israeli messaging about not only this being limited in scope and depth, but effectively this having been going on a smaller scale for months now, with no one really being the wiser – apart from presumably the commanders involved in the Hezbollah members observing them from a safe distance.

So, the American view, which is probably the one, the only one that Israel is really taking into account right now, is hard to appreciate without factoring in the U.S. electoral clock. The fact there is a U. S. Election here. It's unlikely that the Biden administration or Vice President Harris, would want to publicly lock horns with Israel over what Israel is describing as a war for its very survival, especially given the extent of pro Israel's sympathy In Congress in the United States in general.

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