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Around the world — Friday morning, 03 July · War day 126

US Warned Iran of Israeli Assassination Plots Amid Strained Diplomacy; Khamenei Funeral Pauses Talks

US officials warned Iran about potential Israeli assassination attempts on top negotiators, highlighting a rift as indirect talks pause for Ayatollah Ali Khamenei's funeral.

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What happened, yesterday

The story

The most striking development today reveals a deep chasm between US and Israeli objectives, as US officials took the extraordinary step of warning Iran about suspected Israeli plans to assassinate top Iranian negotiators Abbas Araghchi and Mohammad Bagher Ghalibaf. This move, reported by The Washington Post and India Today, underscores Washington's concern that such actions could derail fragile diplomatic efforts to end the war and reopen the Strait of Hormuz. Meanwhile, indirect technical talks between the US and Iran in Doha, which mediators described as making "positive progress," have paused for the funeral of Ayatollah Ali Khamenei. During this period, Iran's military headquarters issued stark warnings to the US and Israel against any "miscalculation," threatening "harsh retaliation" and asserting control over Strait of Hormuz shipping routes. The US is also reportedly considering relocating military assets from Gulf states to Israel due to recent Iranian strikes.

Who moved today

ActorWhat changedConsequence
USWarned Iran via intermediaries about potential Israeli assassination attempts on Iranian negotiators.This indicates a significant divergence from Israeli war aims and a commitment to the diplomatic track.
IranIssued warnings of "harsh retaliation" against any US or Israeli "miscalculation" and asserted control over Strait of Hormuz shipping.This signals a hardening stance and a focus on national security during a leadership transition.
IsraelWas reportedly suspected by US officials of planning assassinations of Iranian negotiators.This suggests Israel's continued pursuit of high-level targeting despite US diplomatic efforts.
QatarMediated indirect technical talks between the US and Iran in Doha, reporting "positive progress" before the talks paused for Khamenei's funeral.This reinforces Qatar's role as a key diplomatic facilitator.
PakistanAnnounced its Prime Minister would attend Ayatollah Ali Khamenei's funeral.This highlights Pakistan's continued engagement in regional diplomacy, including mediation efforts.

Three ways this might unfold

A final agreement is reached to end the war and fully reopen the Strait of Hormuz. ~30%

If the US-Iran Memorandum of Understanding is finalized, leading to a broader agreement covering all outstanding issues.

  • Full diplomatic relations could begin between the US and Iran.
  • Iran's nuclear program would be subject to enhanced international oversight.
  • The Strait of Hormuz would see unimpeded international shipping.
  • Regional proxy conflicts could de-escalate as a condition of the deal.
  • US military presence in the Gulf might be reduced over time.
  • Frozen Iranian assets could be released for humanitarian purposes.

Escalation occurs through targeted actions or military retaliation, disrupting diplomatic efforts. ~40%

If Israel pursues high-level assassinations or major strikes, or Iran retaliates forcefully to perceived threats.

  • The US-Iran communication channel, recently agreed upon, could collapse.
  • US-Israel relations would face severe strain and public disagreement.
  • Iran would likely respond with military actions, potentially targeting shipping in the Strait of Hormuz.
  • Regional proxy groups could intensify attacks on US and Israeli interests.
  • Diplomatic efforts, including the Doha talks, would likely be suspended indefinitely.

The fragile status quo persists with intermittent talks and ongoing regional tensions. ~30%

If indirect talks continue intermittently after the funeral, without a breakthrough or major escalation, maintaining the current ceasefire.

  • The US-Iran Memorandum of Understanding would remain an interim measure, with a final deal elusive.
  • Iran would continue its rhetoric regarding regional security and nuclear program.
  • US military posture in the region, including potential base relocation, would remain under review.
  • Israel would maintain its security operations, with ongoing tensions in Lebanon and against Iranian proxies.
  • Mediators like Qatar and Pakistan would continue to facilitate limited engagement.

Threads worth pulling

What others are saying

The Soufan Center. Irrespective of whether a deal is reached to end the ongoing U.S.-Israeli war against Iran, it seems likely that Tehran will continue to cultivate a network of proxy groups, including terrorist organizations, criminal entities, and so-called 'disposable agents' both in the Middle East and abroad.

Carnegie Endowment for International Peace. New pressures stemming from war can encourage zero-sum thinking in the bloc's two main economic powerhouses: Saudi Arabia and the UAE. If these two powers are not on the same page, a bidding war for scarce U.S. air defense stockpiles could drive prices up for both.

Stimson Center. In reaction to its increased sense of insecurity as its regional allies have been attacked and its homeland targeted by Israel, an undeclared nuclear weapons state, Iran has been debating whether to cross the nuclear weapons threshold.

What we’ll be watching

Markets, FX, reserves: fmd-data (). News + analyst voices: grounded via Google Search at publish time.