The assassination of Ismail Haniyeh, a senior Hamas leader, in Tehran on July 31, together with the killing of Hezbollah leader Fouad Chaker in Beirut, poses a severe test for new Iranian President Masoud Pezeshkian just one day into his tenure. 

In the presidential election campaign, Pezeshkian positioned himself as a “moderate” who would try to rebuild links with the West. However, he will now be under severe pressure from Iran’s security apparatus to retaliate against Israel – widely assumed to be behind the assassinations – which would make any rapprochement stillborn. If he resists retaliation, however, it would undermine his rule before he has had a chance to establish his authority.

The pressure to respond decisively is immense, particularly from the hardline Islamic Revolutionary Guard Corps (IRGC). They issued a swift and strongly worded statement promising a "harsh and painful response” against Benjamin Netenyahu’s government in Tel Aviv.

However, Pezeshkian must weigh internal pressures against broader strategic considerations. Western powers, especially the United States, are likely to react strongly to any significant Iranian counter-attack. A significant military response could potentially escalate tensions dramatically, causing further international isolation at a time when Iran is already grappling with economic challenges and diplomatic hurdles and a potential Donald Trump presidency after November’s US presidential election. 

On the other hand, maintaining the current policy of relative restraint risks appearing weak, potentially undermining Pezeshkian's legitimacy among more hawkish elements within Iran's political establishment and leading to his removal. Allowing Israel to attack its proxies with impunity might also hasten the collapse of Iran’s so-called “resistance axis” across the region.

The assassination has exposed vulnerabilities in Iran's security apparatus, and represents a humiliating blow to the nation's image as a regional power. The inability to protect a high-profile guest like Haniyeh not only raises questions about Iran's intelligence capabilities but also sends a troubling message to other allies and proxies who rely on Iran's support and protection. As one Israeli commentator noted following the hit on Haniyeh, “[Yemen’s] Houthis and Khamenei will not sleep easy tonight.”

Israel's actions demonstrate a calculated strategy of targeting key figures in Iran's proxy network while maintaining plausible deniability. This approach also allows Israel to assert its power without crossing thresholds that would cause a full-scale conflict. In essence, Israel is playing a long game, methodically weakening Iran's regional influence while avoiding direct confrontation.

Netanhayu's actions, however, may be born out of weakness rather than strength. Arguably Netanhayu is resorting to assassinations to compensate for Israel’s growing isolation over its war crimes in Gaza, something that was on display even during his recent trip to the United States, where he was denied the standing ovation from Congress he had been expecting.

Israel's recent actions suggest a pattern of escalation. These assassinations indicate that Netanyahu is not seeking a ceasefire or the release of prisoners but rather aims to expand the scope of the war. He may reason that this would maintain his government and stave off his prosecution for alleged fraud.

Haniyeh, who was based in Qatar, was seen as a moderate within Hamas and was one of the key negotiators for the terrorist organisation in trying to reach a peace deal in Gaza.

Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani said: “Political assassinations and continued targeting of civilians in Gaza while talks continue leads us to ask: how can mediation succeed when one party assassinates the negotiator on [the] other side?”

How Pezeshkian reacts to Netanyahu’s escalation will mark his presidency, and could destroy any hopes for peace in the region.