Analysis: A battered Iran faces an uncertain future after its grinding war with Israel

DUBAI, United Arab Emirates (AP) — The bombing has quieted in Iran’s 12-day conflict with Israel. Now its battered theocracy and 86-year-old Supreme Leader Ayatollah Ali Khamenei must regroup and rebuild in a changed landscape.

Israeli airstrikes decimated the upper ranks of Iran's powerful Revolutionary Guard and depleted its arsenal of ballistic missiles. Israeli missiles and American bunker buster bombs damaged the — . Khamenei went into deep isolation in an undisclosed location, appearing only twice in videos as the Israelis had free rein over the country’s skies.

Iran's self-described “Axis of Resistance,” a group of allied countries and militias in the Mideast, has been mauled by the Israelis since Hamas’ Oct. 7, 2023, attack. Foreign support Tehran may have expected from China and never materialized. At home, old problems remain, particularly an economy wrecked by international sanctions, corruption and mismanagement.

“Iran’s leadership has been dealt a heavy blow and will be conscious of preserving the ceasefire, which gives the regime breathing room and allows space to focus on internal security and reconstruction,” the Eurasia Group said in an analysis Wednesday.

Shoring up loyalty

One thing Israel’s campaign showed was how much its intelligence agencies have infiltrated Iran — particularly its swift pinpointing of military and Guard commanders and top nuclear scientists for strikes.

The No. 1 task for Khamenei may be to root out any suspected disloyalty in the ranks.

“There must be some sort of purge. But who will implement it? That is the question,” said Hamidreza Azizi, a visiting fellow at the German Institute for International and Security Affairs.

“This level of distrust that apparently exists now is going to paralyze any effective planning or security overhaul,” he said.

In that atmosphere, rebuilding Iran’s military, particularly its Revolutionary Guard, will be a challenge. But the forces have a deep bench of officers. One top survivor of the war, , in charge of the Guard’s expeditionary Quds Force, was seen in videos of a pro-government demonstration in Tehran on Tuesday.

On the civilian side, Foreign Minister Abbas Araghchi found himself empowered to the level of almost a de facto prime minister, publishing announcements on even the ceasefire while others in Tehran remained silent.

Khamenei also has to rethink the security policy he wove together over the past two decades. The “Axis of Resistance" alliances allowed Iran to project its power across the Mideast but also was seen as a defensive buffer, intended to keep conflict away from Iranian borders. That buffer has now been shown to be a failure.

Race for a bomb?

After Israel’s campaign exposed Iran’s vulnerabilities, Khamenei might conclude that his country can only protect itself by turning its nuclear capability into an actual bomb, .

Iran has always said its nuclear program is peaceful. But it is the only non-nuclear armed state to have enriched uranium to 60%, a short step from weapons-grade.

Many observers believe Khamenei opposed taking that step to a weapon to avoid a war, Azizi said.

But now voices within the system demanding a bomb are likely growing, he said. “We might have already passed that threshold for Khamenei’s viewpoint to change.”

Still, any drive for a nuclear weapon would be a major gamble. The extent of damage from the U.S. and Israeli barrages remains unclear, but Iran certainly needs to rebuild its nuclear facilities and centrifuge infrastructure, whether that takes months or years.

And it would have to do all that in extreme secrecy, concealed from Israeli and U.S. intelligence. Were Israel to catch wind, it could resume strikes.

Khamenei could also take the opposite path, resuming talks with the United States in hopes of winning sanctions relief.

U.S. Mideast envoy Steve Witkoff, appearing Tuesday night on Fox News’ “The Ingraham Angle,” called the chance for future negotiations “promising.”

“We’re already talking to each other,” he said. “We are hopeful we can have a long-term peace agreement that resurrects Iran.”

Challenges at home

Many also fear an intensified crackdown on dissent, as a leadership battered by war regroups amid mounting problems at home. Iran’s frail economy has been wrecked by international sanctions, corruption and years of mismanagement.

For months, the ailing power grid has been plagued by hourslong, rolling blackouts. The flight of much of Tehran’s population during the war temporarily eased the strain. But as they return, even longer blackouts are likely to come roaring back during the worst of the summer months, disrupting everything from bakeries to factories.

The war also shut down Tehran’s stock market and currency exchange shops, pausing a collapse of Iran’s riyal currency.

Back in 2015 when Iran reached its nuclear deal with world powers, the rial traded at 32,000 to $1. Today, it is near 1 million rials to the dollar. Once businesses reopen in force, the plunge could resume.

The economy has sparked unrest in the past. After state-set gasoline prices rose in 2019, protests spread , with gas stations and banks burned down. In the ensuing crackdown, at least 321 people were killed and thousands detained, according to Amnesty International.

Then there’s , a young woman who had been detained by security forces allegedly over not wearing her headscarf, or hijab, to their liking. A monthslong crackdown killed more than 500 people and saw over 22,000 detained.

Many women in Tehran still refuse to wear the hijab. But activists worry the war will trigger new restrictions.

In an open letter last weekend, wrote that “the Islamic Republic is a religious, authoritarian, and misogynistic regime — incapable of reform and systematically violating the fundamental rights of the Iranian people.”

But she called for a ceasefire in the war “because I firmly believe that democracy and peace will not emerge from the dark and terrifying corridors of war and violence.”

Questions persist over Khamenei’s successor

Despite Israel's talk of eliminating him, Khamenei survived this confrontation. What comes after him remains unknown.

The war could fuel a change in the Islamic Republic itself, pushing more towards a military-style rule.

Under the Islamic Republic, leading Shiite clerics stand at the top of the hierarchy, drawing the lines to which the civilian government, the military and intelligence and security establishment must submit. As supreme leader, Khamenei symbolizes that clerical power.

A panel of Shiite clerics is tasked with choosing one of their own as his successor. Several names have been touted, including Khamenei’s son and the grandson of Ayatollah Ruhollah Khomeini, the father of the 1979 Islamic Revolution. Some candidates are seen as more hard-line, some more open to reform.

Whoever is chosen, military and Guard commanders may more than ever be the power behind the robes.

“People have been talking of a transition from clergy-dominated Islamic Republic to a military-dominated Islamic Republic,” Azizi said. “This war has made that scenario more plausible. … The next government will be more military-security oriented.”

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Keath reported from Cairo.

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EDITOR’S NOTE — , the news director for the Gulf and Iran for The Associated Press, has reported from each of the Gulf Cooperation Council countries, Iran and other locations across the Mideast and wider world since joining the AP in 2006. , the chief editor for feature stories in the Middle East for the AP, has reported from Cairo since 2005.