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A staff member removes the Iranian flag from the stage after a group picture with foreign ministers and representatives of the P5+1 and Iran during the Iran nuclear talks in Vienna, Austria, 14 July 2015. REUTERS/Carlos Barria
Report 173 / Middle East & North Africa

Implementing the Iran Nuclear Deal: A Status Report

The one-year-old Iran nuclear deal has succeeded in its goal of blocking nuclear proliferation and opening the door to Iranian economic recovery. But it remains in jeopardy unless both Washington and Tehran defend and extend the spirit as well as the letter of the accord.

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Executive Summary

One year since its “implementation day”, 16 January 2016, the July 2015 nuclear agreement between Iran and the five permanent members of the UN Security Council plus Germany (the P5+1) – the Joint Comprehensive Plan of Action (JCPOA) – is both a success and in jeopardy. It has delivered so far on its narrow objective: effectively and verifiably blocking all potential pathways for Iran to race toward nuclear weapons, while opening the door to the country’s international rehabilitation and economic recovery. But in its transactional nature lies the accord’s vulnerability: it has not begun to transform the enmity between Iran and the U.S., leaving it exposed to an unstable political environment. If Iran still deems the deal in its national interest, it should not only adhere to its letter and spirit, but also move away from regional zero-sum pursuits. The Trump administration will face a starker choice. It could scuttle the deal, deliberately or by neglect; it should seek to make it stronger for all by a better-for-better bargain.

Over the past year, internal polarisation in Tehran and Washington about the accord’s merits often overshadowed what really matters: that it is working and delivering concrete results. It has put Iran’s nuclear program under the most stringent inspection mechanism ever implemented, while lengthening the breakout time to produce weapons-grade uranium from a few weeks to more than a year. Since January 2016, the International Atomic Energy Agency (IAEA) has verified six times that Iran has fulfilled its JCPOA obligations. The relaxation of U.S., European Union (EU) and UN nuclear-related sanctions has allowed Iran to regain oil market share, recover billions in frozen assets and attract foreign direct investment, turning its once shrinking economy into the region’s fastest growing.

Yet, implementation, as with any complex technical agreement, has not been flawless. Iran committed several technical violations, none, alone or together, material. Paradoxically, they proved the accord’s efficacy: the IAEA quickly detected each and Iran remedied it. There have been more serious problems with sanctions relief. Iran still lacks normal international banking ties, as major financial institutions remain circumspect, hampering its reintegration into the global economy and dashing inflated public expectations of rapid economic recovery.

The most consequential political wildcard remains the U.S. Congress, where hostility toward Iran runs deep, and new sanctions are being considered.

This is because of concerns over Iran’s regional resurgence and ballistic-missile tests, but the accord could not have been negotiated successfully if those issues had been on the table. Today they constitute the primary threat to its successful implementation. This, in turn, is because the JCPOA’s transformational potential has not yet materialised in the face of powerful stakeholders who moved to ensure it was a ceiling on, not a foundation for, détente between Iran, its neighbours and the U.S. The conundrum is that without addressing the broader political antagonism that pits Iran against its neighbours and the West, the JCPOA at best will remain fragile and its implementation halting, but without full implementation, resolving the underlying political antagonism may prove impossible. 

The most troubling uncertainty is the new U.S. administration’s approach. During the campaign, Donald Trump condemned the JCPOA as “the worst deal ever negotiated”. As president, he can repudiate it or refrain from the steps necessary to sustain it. But killing the accord or allowing it to die when Iran is in compliance would lead the other signatories – representing a near international consensus – to blame Washington squarely and likely destroy the broad coalition critical for sanctions enforcement that provided leverage for negotiating the accord in the first place.

Alternatively, Trump could rigorously police implementation while pushing back firmly against Iran’s regional policies, which have helped further inflame Middle Eastern conflicts, frightened U.S. allies and angered the U.S. political establishment. But scrupulous enforcement cuts both ways: lacklustre U.S. implementation would adversely affect Iran’s ability to reap the benefits the U.S. has committed to deliver under the deal. The risk of an overly militarised response to Iran’s regional manoeuvres is that the JCPOA could become collateral damage in a destructive tit-for-tat.

Trump could also try renegotiation to strengthen some of the deal’s nuclear provisions or add non-nuclear ones. But this, as viewed by many in his entourage, would require new non-nuclear sanctions to augment coercive pressure and/or a military threat to induce Iran to return to the table. Iran would almost certainly demand more relief for more concessions, not accept less for more.

Iran has options for responding to attempts to undermine the deal. It could play victim, blame Washington and hope to erode sanctions by trying to drive a wedge between the U.S. and its partners. But this would require restraint in the face of U.S. JCPOA violations or provocations. Or it could ramp up its nuclear program and reduce IAEA access or target U.S. assets in theatres across Iraq and Syria, any of which risks a U.S. (or Israeli) military response. Even a softer, calibrated response would reignite the nuclear standoff and complicate future negotiations.

Trump is the first U.S. president in more than two decades who enters office not needing to worry about Iran crossing the threshold to nuclear weaponisation undetected.

All these scenarios are troubling. Yet, there is another way: a good-faith, consensual, mutually beneficial effort to renegotiate aspects of the accord might achieve a better-for-better arrangement and a more stable outcome. A Republican president backed by a Republican-controlled Congress would have more credibility in offering incentives to Iran than President Barack Obama ever did.

Improving the JCPOA while enforcing it would require a quiet dialogue in which both sides recognised one another’s security concerns and core interests and communicated their nuclear and regional red lines. One outcome might be an addendum strengthening some JCPOA nuclear provisions or adding non-nuclear ones in return for rolling back the U.S. primary embargo. If that is not attainable, the U.S. might focus on non-Iran-specific arrangements, including regionalising or even universalising some of the JCPOA’s restrictions or transparency measures.

On a practical level, Washington should keep communication channels with Tehran open and give its treasury department more resources to unwind sanctions. Iran should strictly adhere to the JCPOA and stop using nuclear or regional brinksmanship as leverage. Other P5+1 members should discourage it from overreacting to a possible change in U.S. tone and approach but also clearly tell Washington that if it unjustifiably walks away from the accord, it will do so alone.

Trump is the first U.S. president in more than two decades who enters office not needing to worry about Iran crossing the threshold to nuclear weaponisation undetected. If he tries to adjust the JCPOA unilaterally through coercion, the accord may not survive, reigniting the nuclear crisis and compounding regional instability. But he also has a chance to succeed on all fronts: a functioning and more stable accord, a framework for managing differences with Iran and perhaps even less bloodshed in the Middle East.

Washington/Brussels, 16 January 2017

I. Introduction

The prolonged process that led to the 14 July 2015 Joint Comprehensive Plan of Action (JCPOA) was tortuous. It took more than a decade of diplomatic fits and starts and a perilous sanctions-vs-centrifuges race for Iran and the P5+1/E3+3 (the UN Security Council’s five permanent members plus Germany) to agree to a core compromise that Crisis Group had advocated from the outset and contributed to: acceptance of a limited and tightly monitored uranium enrichment program on Iran’s soil in return for reintegration into the global economy.[fn]See Crisis Group Middle East Reports N°s 18, Dealing with Iran’s Nuclear Program, 27 October 2003; 51, Iran: Is There a Way Out of the Nuclear Impasse?, 23 February 2006; 116, In Heavy Waters: Iran’s Nuclear Program, the Risk of War and Lessons from Turkey, 23 February 2012; 152, Iran and the P5+1: Solving the Nuclear Rubik’s Cube, 9 May 2014; and Briefings N°s 34, The P5+1, Iran and the Perils of Nuclear Brinkmanship, 15 June 2012; 40, Iran and the P5+1: Getting to “Yes”, 27 August 2014; and 43, Iran Nuclear Talks: The Fog Recedes, 10 December 2014.Hide Footnote

More than two years of gruelling multilateral diplomacy culminated in a meticulously parsed 159-page accord that received unanimous Security Council endorsement on 20 July 2015.[fn]UN Security Council Resolution 2231, 20 July 2015.Hide Footnote The agreement then went through a trial by fire in the U.S. Congress and the Iranian parliament. Once it emerged unscathed, it entered into force on 18 October 2015 – designated as Adoption Day per the JCPOA’s calendar. This triggered the start of Iran’s rollback of its nuclear program and cooperation in resolving the International Atomic Energy Agency’s (IAEA) longstanding questions about its past nuclear activities.

Implementation Day occurred on 16 January 2016, after the IAEA certified that Iran had fulfilled its key commitments under the agreement, prompting sanctions relief. The quick progress surprised most observers and dismayed accord critics. Its Iranian detractors were concerned that President Hassan Rouhani’s eagerness for sanctions relief had led him to hasten rolling back the nuclear infrastructure, irreversibly damaging it and depriving Tehran of leverage to ensure that the West delivered its end of the bargain.[fn]The just under three-month time span between Adoption and Implementation Days was significantly less than the P5+1’s six-to-nine month estimates. Crisis Group interviews, U.S. and European officials, New York, September 2015. A letter to Rouhani by parliamentarians charging that the pace of centrifuge deactivation exceeded the supreme leader’s directive (which conditioned implementation on the IAEA settling allegations on Iran’s past nuclear activities) caused the government to temporarily stop the process. “Iran stops dismantling nuclear centrifuges under pressure from hardliners”, Reuters, 10 November 2015. The government justified the rush, implicitly confirming the accusation, by reiterating the $100 million daily cost of sanctions’ continuation for Iran. “ضرر تاخیر اجرای برجام” [“Damage of the JCPOA’s delayed implementation”], ISNA.ir, 21 September 2015. The February 2016 parliamentary election was also part of the calculus. Crisis Group Middle East Report N°166, Iran After the Nuclear Deal, 15 December 2015.Hide Footnote U.S. opponents were deeply dissatisfied with how the IAEA closed the file on allegations of the program’s past military dimensions, saying the JCPOA Joint Commission (the seven negotiating parties, coordinated by the EU) had made exemptions allowing Iran to skirt some obligations.[fn]See “Final Assessment on Past and Present Outstanding Issues regarding Iran’s Nuclear Program”, IAEA, GOV/2015/68, 2 December 2015, and the related Board of Governors resolution, GOV/2015/72, 15 December 2015. Leaks about the Joint Commission’s confidential decisions gave credence to these suspicions. David Albright and Andrea Stricker, “JCPOA Exemptions Revealed”, Institute for Science and International Security, 1 September 2016. The decisions exempted liquid, solid and sludge wastes, particularly those in pipes of Isfahan’s Enriched UO2 Powder Plant (EUPP), and irradiated uranium enriched to below 3.67 per cent, from the 300kg threshold the JCPOA set; near-20 per cent enriched uranium in unrecoverable “lab contaminant”; and nineteen “hot cells” (radiation containment chambers for handling radioactive material) that are larger than the deal permitted. “Decision of the Joint Commission”, EU External Action Service, 6 and 16 January, and 18 December 2016.Hide Footnote

The criticism missed the bigger picture. Speeding implementation accelerated the core trade-off that motivated the deal: unshackling Iran’s economy from sanctions while closing all potential pathways for weaponising its nuclear know-how. The decisions to grant exemptions, known as memorialisations, are standard for implementing a technically complex agreement; none impinged on the constraints that render nuclear weaponisation virtually impossible.[fn]For instance, plutonium produced in hot cells is neither sufficient nor usable for nuclear weapons without a reprocessing facility Iran lacks and is banned from constructing. The same applies to weaponising waste contaminated with low-enriched uranium needing further processing to highly-enriched uranium prohibited under the JCPOA. Julian Borger, “Obama administration denies secret loopholes in Iran nuclear agreement”, The Guardian, 1 September 2016.Hide Footnote Their confidential nature – likewise hardly exceptional in the non-proliferation field – was the result of the procedural requirement that all eight Joint Commission members approve publication of internal documents. Several refused: some out of concern for a political backlash over details of what critics on both sides viewed as additional concessions, and others not wishing to politicise the IAEA’s work.[fn]A senior U.S. official said, “the U.S. and the EU are for more transparency, but our hands are tied as Iran, Russia and China oppose publication of memorialisations”. Crisis Group interview, Washington, 13 September 2016. The documents are at https://eeas.europa.eu/headquarters/headquarters-homepage/2281/iran-and-eu_en. Tim Mak, “Trump team wants you to see the Iran nuke documents Obama’s kept from view”, The Daily Beast, 5 December 2016.Hide Footnote

Events have shown it was naïve to believe the JCPOA was secure and could be sustained routinely from that point. It remained as fragile as forces against it were formidable; implementing its technical requirements was taxing, especially where its language left room for diverging interpretations and disagreement; and restructuring a multi-dimensional sanctions regime that reached deep into global commerce proved a herculean challenge. This report analyses the one-year record of implementation, draws lessons and offers suggestions for improving and sustaining an accord that remains a net positive for non-proliferation.

II. So Far, so Good?

Controversy and concerns over issues outside the nuclear accord, mainly Iran’s growing regional posture and ballistic-missile tests, have often overshadowed that the JCPOA’s two key components – restricting and rigorously monitoring Iran’s nuclear program and sanctions relief – are working and delivering concrete results. The accord could not have been reached if those issues had been on the table, but today they are the primary threat to its successful implementation.

A. Nuclear Commitments

Since January 2016, the IAEA has verified on six separate occasions that Iran is fulfilling its JCPOA obligations.[fn]See “Verification and Monitoring in the Islamic Republic of Iran in light of United Nations Security Council Resolution 2231 (2015)”, GOV/INF/2016/1, 16 January 2016; GOV/2016/8, 26 February 2016; GOV/2016/23, 27 May 2016; GOV/2016/46, 8 September 2016; GOV/2016/55, 9 November 2016; and GOV/2017/1, 16 January 2017.Hide Footnote The agency has had no problem reaching sites to which Iran had previously blocked access; is using live, online enrichment monitoring systems; and is surveilling the nuclear fuel chain in real time. Noting that Iran’s is the most monitored nuclear program in the world, an IAEA inspector said, “one thing is indisputable; post-JCPOA we have more rigorous inspection of a program that has become much smaller”.[fn]According to IAEA officials, every month between six and sixteen UN nuclear inspectors are on the ground in Iran. Crisis Group interviews, Vienna, November 2016. The IAEA’s human resources dedicated to Iran increased by 120 per cent, while days on the ground grew by 100 per cent and surveillance images received per day increased by 90 per cent. IAEA fact sheet available at www.iaea.org/sites/default/files/jcpoa-iaea-and-iran-infographic.pdf.Hide Footnote That said, implementation has not been without imperfections, but these are attributable largely to the predictable difficulties such a technically complex effort faces in a highly charged political environment.

There have been numerous objections to the IAEA’s positive reports, but none amounts to proof of a violation of the deal.[fn]A former U.S. nuclear negotiator referred to these objections as “technical quibbles”. Crisis Group interview, New York, 27 September 2016.Hide Footnote One has to do not with what they contain but what they omit: details on Iran’s low-enriched uranium stockpiles and advanced-centrifuge research. The IAEA, however, has no mandate for publicly reporting on these issues. (The P5+1, however, receive a detailed, confidential report that covers these issues.) An agency official explained: “Before the JCPOA, six UN Security Council resolutions required the agency to provide that much detail, but these have been overridden by a new resolution that has no such requirement, and there is no basis for breaching confidentiality”.[fn]Crisis Group interview, IAEA official, Vienna, November 2016. Critics contend that lack of data made it impossible to determine Iran’s compliance independently. David Albright, Serena Kelleher-Vergantini, and Andrea Stricker, “IAEA’s First Post-Implementation Day Report: Key Information Missing”, Institute for Science and International Security, 26 February 2016. Iranians see the generalised format as a stepping stone towards normalising their nuclear program. Crisis Group interview, Iranian official, Vienna, November 2016.Hide Footnote

There were also several technical infringements. Iran’s heavy-water production exceeded the JCPOA’s 130-metric-ton cap twice – by 0.9 and 0.1 tons in February and November 2016 respectively. Iranian officials, trumpeting their country’s change of stature from pariah to nuclear materials supplier, contend that overproduction resulted from improved efficiency and did not violate the JCPOA, since it neither sets a rigid threshold – it estimates Iran’s needs at around 130 tons – nor a timetable for exporting the excess for sale.[fn]An Iranian official boasted of the high quality of Iran’s heavy water and its ability to take over 70 per cent of the international market. Crisis Group interview, Vienna, November 2016. The JCPOA’s language is quite vague; paragraph 14, Annex I, “estimates” Iran’s heavy-water needs to be 130 metric tons and requires all excess material to “be made available for export to the international market … and delivered to the international buyer for 15 years”Hide Footnote U.S. officials, however, say they saw it as a signal by Iran that it could retaliate against what it perceived as U.S. Treasury foot dragging on sanctions relief. Europeans agreed, but blamed Washington for encouraging the behaviour by being first to purchase Iran’s excess heavy water. In Jerusalem, this and other infringements were seen as attempts to test the deal’s boundaries.[fn]A European official said, “the U.S. committed the original sin by buying 32 tons of Iran’s heavy water at the price of $8.6 million, whetting their appetite”. Crisis Group interview, Brussels, November 2016. A senior U.S. official said, “we sought to destigmatise the issue so that others would buy as well”. Crisis Group interview, Washington, 13 September 2016. Iran also sold heavy water to Russia. “Iran sold 70 tons of heavy water to Russia, US”, Tass, 27 September 2016. An Israeli diplomat said, “the Iranians are testing the boundaries and will continue to do so. It’s a decision to defy”. Crisis Group interview, 4 January 2017.Hide Footnote

Paradoxically, these infringements are a testament to the agreement’s efficacy: in each case, excess heavy water was shipped to Oman within days, despite not posing a proliferation threat since Iran no longer has a functional heavy-water reactor. One should expect further episodes of this nature – not necessarily because of nefarious intent in Tehran or spurious accusations from Washington, but because the JCPOA’s language is not always clear. There are also ambiguities, for instance, around the definition of recoverable low-enriched uranium and procurement of material for manufacturing rotors used in advanced centrifuges. In the past year, these caused tension and lengthy negotiations among the parties.[fn]The issue of what should or not be counted toward Iran’s 300-kg low-enriched uranium has been contentious because, as an IAEA official put it, “unlike ‘inventory’ that includes everything, the word ‘stockpile’ used in the JCPOA needs definition of what is and is not counted”. Crisis Group interview, Vienna, November 2016. Iran’s demand to procure a large amount of carbon fibre used to manufacture centrifuges was equally contentious. The P5+1 indicated it preferred Iran do so in smaller instalments. Crisis Group interview, European officials, London, December 2016. “EU demands Iran disclose details of nuclear parts making”, Associated Press, 16 September 2016. Supreme Leader Ayatollah Ali Khamenei forbade Iranian negotiators from yielding on either issue. Khamenei.ir, 15 June 2016.Hide Footnote

Likewise, other aspects of the agreement, for instance foreign cooperation to advance Iran’s nuclear technology, have been more drawn out than Tehran had hoped. Yet here, too, there is no violation. Transformation of the bunkered Fordow enrichment plant into an international physics centre with Russian help, where 358 centrifuges will produce stable medical isotopes, has been slow; so has modernisation of the heavy-water reactor in Arak, a project China and the U.S. co-chair.[fn]Crisis Group interviews, Iranian and European officials, New York, September 2016.Hide Footnote While Iranian scientists have regained access to the IAEA’s nuclear safety and security workshops, nuclear cooperation with other countries has lagged, except for nuclear fusion with France, particle accelerators with Spain and Italy and nuclear safety with the EU.[fn]Nuclear cooperation, as outlined in JCPOA Annex III, is a key component of the accord. Richard Stone, “Iranian Sun”, Science, vol. 353, no. 6304 (2016), pp. 1083-1087. Iran has reached agreements with other countries, but they have yet to bear fruit. “Iran, Switzerland sign agreement on nuclear safety”, Press TV, 28 September 2016; “Iran, Czech Republic sign nuclear cooperation document”, Tehran Times, 14 December 2016.Hide Footnote

The JCPOA’s procurement channel for Iran to access dual-use material and equipment was activated in January 2016. The channel is unprecedented, complementing existing export control arrangements while largely delegating the UN Security Council’s authority to the Joint Commission’s procurement working group. In its first six months, it received only one application, but in the second half of 2016, after Iran established its internal procedural framework for end-use certification, it received and processed nearly a dozen.[fn]Barbara Slavin, “Channel to monitor Iranian procurement awaits real test”, Al-Monitor, 14 July 2016. States seeking to export dual-use items to Iran submit proposals to the Security Council, which forwards them to the Joint Commission’s procurement working group (all seven negotiating parties, coordinated by the EU) for review; the latter provides recommendations to the Security Council within twenty working days (up to 45 in case of disagreements), which has five days to reject the Commission’s verdict or it is deemed approved. An Iranian official noted: “After years of encouraging murkiness to skirt sanctions, it took time to put procedures in place for transparency”. Crisis Group interview, Vienna, November 2016. A German intelligence report on Tehran’s procurement gave ammunition to critics, though the activities occurred in 2015 and pre-dated JCPOA implementation. “Germany says Iran kept trying to get nuclear equipment after deal”, The Wall Street Journal, 8 July 2016. U.S. and European officials said they had no information on continued procurement efforts outside permitted channels in 2016. Crisis Group interviews, Washington, Berlin, London, August-December 2016.Hide Footnote

The biggest threat to smooth implementation and to the procurement channel in particular is the continuation of Iran’s ballistic missile program – a particularly sensitive issue that the JCPOA does not address. Iran deems missile research and development a sovereign right and legitimate form of defence, but the P5+1’s Western members do not. Security Council Resolution 2231, which endorsed the JCPOA, “calls upon” Iran not to undertake until 2023 any activity related to ballistic missiles “designed to be capable of delivering nuclear weapons”. However, the language is non-binding, and lack of an internationally-agreed definition of nuclear-capable missiles invites diverging views on the Iranian program.[fn]See paragraph 3 of Security Council Resolution 2231‘s Annex B. Louis Charbonneau, “U.S. vows to push for U.N. action on Iran despite Russian opposition”, Reuters, 14 March 2016. “Iran statement following UNSC Resolution 2231 endorsing JCPOA”, foreign ministry, 20 July 2015. According to the Missile Technology Control Regime (MTCR), missiles able to carry a 500kg payload at least 300km could carry weapons of mass destruction.Hide Footnote

B. Sanctions Relief Commitments

A vast array of U.S., EU and UN nuclear-related sanctions on Iran were relaxed on Implementation Day. In the ensuing months, the impact on Iran’s economic performance become increasingly tangible: oil production and exports returned to pre-sanction levels of 3.85 million barrels per day, of which around two million are exported; the country absorbed more than $11 billion of foreign direct investment – the highest annual level in nearly two decades; trade with the EU increased by 42 per cent; Iran regained access to $55 billion of previously frozen assets; inflation dropped from a peak of 45 per cent in 2013 to less than 8 per cent in December 2016; Iranian companies signed contracts worth $150 billion with major European, Asian and even U.S. firms. The International Monetary Fund (IMF) forecasts that the economy will grow 4.5 per cent during the 2016-2017 fiscal period, up from 0.5 per cent the previous year.[fn]Annex II, JCPOA; U.S. Executive Order 13716, 16 January 2016; Council Decision (CFSP) 2015/1863, 18 October 2015; Council Regulation (EU) 2015/1861, 18 October 2015; and UNSC Resolution 2231. “Iran oil exports hit pre-sanctions high on run-up in condensate shipments”, Reuters, 3 October 2016; “میزان سرمایه‌گذاری خارجی اعلام شد” [“Amount of foreign investment was announced”], ISNA.ir, 3 December 2016; “Inflation rate drops to 7.2% in Iran”, Tehran Times, 23 December 2016; Crisis Group interviews, Iranian entrepreneurs, Frankfurt, 16 November 2017. Regional Economic Outlook: Middle East and Central Asia”, IMF, October 2016.

Still, sanctions relief has yet to reach its potential. Perhaps most important, Iran still lacks normal international banking relations. While some second and third-tier international banks have resumed providing financial services, first-tier banks have not.[fn]Crisis Group interview, New York, September 2016. “Iran’s Supreme Leader says U.S. lifted sanctions only on paper”, Reuters, 27 April 2016; “Iran’s President Rouhani slams US ‘lack of compliance’ with nuclear deal”, CNN, 22 September 2016.Hide Footnote This has hampered reintegration into the global economy, which, along with low oil prices, has dashed highly-inflated public expectations of a rapid recovery. Each side has blamed the other. Iranian Foreign Minister Javad Zarif complained:

[The U.S. Treasury] goes out and tells people that “it’s OK to do business with Iran, but”… and then there are five pages of ifs and buts. So at the end of the day, the banks say, “we’ll take the safe road” … As far as the U.S. government is concerned … it took [it] seven months to issue licenses for seventeen out of the 118 planes Airbus plans to sell [to Iran].[fn]“A Conversation with Javad Zarif”, event at Council on Foreign Relations, New York, 23 September 2016. A senior U.S. official explained that preparing the licenses – given the technology’s complexity and legal requirements of ensuring they do not violate lingering UN restrictions on Iran – took a long time, as did Iran’s negotiations with Boeing and Airbus. Crisis Group interview, Washington, September 2016.Hide Footnote

This, as another senior Iranian official put it, is not a material breach of the deal, but “at best procrastination, at worst deliberate harassment” and has deepened mistrust. He added: “The JCPOA is moderately healthy, but Iranian confidence in dealing with the U.S. has been bruised and is ailing and failing”.[fn]“A Conversation with Javad Zarif”, event at Council on Foreign Relations, New York, 23 September 2016. A senior U.S. official explained that preparing the licenses – given the technology’s complexity and legal requirements of ensuring they do not violate lingering UN restrictions on Iran – took a long time, as did Iran’s negotiations with Boeing and Airbus. Crisis Group interview, Washington, September 2016.Hide Footnote

U.S. officials point to the unprecedented complexity of untangling the sanctions and to their extensive efforts, from publishing hundreds of pages of guidelines, to dozens of multi-agency trips to explain sanctions relief to Iran’s trading partners, to U.S. Secretary of State John Kerry’s efforts, including personally encouraging European banks to engage Iran.[fn]Crisis Group interviews, U.S. officials, Washington, September-December 2016. “Kerry: Businesses using US sanctions as excuse to avoid Iran”, Associated Press, 10 May 2016. For a critical take on Kerry’s initiative, see Stuart Levy, “Kerry’s peculiar message about Iran for European banks”, The Wall Street Journal, 12 May 2016. A senior Iranian official said, “the reality is that a junior officer at the U.S. Treasury Department could erect more obstacles for legitimate business with Iran than Kerry can remove”. Crisis Group interview, New York, 24 September 2016.Hide Footnote A senior U.S. official said:

Never before has the U.S. had to repeal its sanctions and demonstrate results in a short period of time. And, of course, unanticipated complexities abounded. Who would have thought converting billions of Iran’s unfrozen oil revenue from an uncommon currency like the Omani rial to euros would be so complicated without disrupting their economy and access to the U.S. dollar?[fn]Crisis Group interview, Washington, September 2016.Hide Footnote

The Europeans blame both sides. An EU official said:

U.S. Treasury officials are often as uncompromising as Iranians are unrealistic. The JCPOA isn’t a trade and investment agreement. Our commitment was to repeal sanctions and provide clarity, not to make commercial decisions for private-sector actors.[fn]Crisis Group interview, EU officials, Brussels, 15 November 2016.Hide Footnote

Finger-pointing notwithstanding, both sides have tried to resolve the remaining obstacles by frequent communication and consultation.[fn]Crisis Group interviews, Iranian, European, U.S. officials, New York, September 2016. The Joint Commission has met once at the ministerial level and six times at the deputy level.Hide Footnote Yet, reality is more nuanced than either likes to admit; the causes of sluggish relief are manifold.

The primary U.S. embargo, which since the 1980s has broadly prohibited U.S. persons from engaging in transactions with Iran, is still in force with a few exceptions, such as for civilian aviation, food and humanitarian goods, Iranian caviar, pistachios and carpets; so are secondary U.S. sanctions related to Iran’s regional policies, ballistic missiles program and human rights record.[fn]For more background, see Crisis Group Middle East Report N°138, Spider Web: The Making and Unmaking of Iran Sanctions, 25 February 2013. One of the most arduous elements of U.S. primary sanctions has proven to be their requirement that multinational companies wall off their U.S. staff and board members from business with Iran. Crisis Group interviews, European entrepreneurs, Zürich, Frankfurt, London, September-November 2016. “BP ring-fences CEO Dudley from Iran decision-making”, Reuters, 21 November 2016.Hide Footnote Moreover, 32 U.S. states and the District of Columbia maintain their own sanctions against Iran that target contracting, public trust and insurance divestment and banking.[fn]These have not been affected by the JCPOA, since as an executive agreement – unlike a ratified treaty – it is not binding for U.S states. Eli Lake, “Obama administration urges states to lift sanctions on Iran”, Bloomberg, 18 April 2016.Hide Footnote There are also sanctions of individuals and entities: of the 600 sanctioned pre-JCPOA, more than 200, including ones with links to the economically omnipresent Islamic Revolutionary Guard Corps, remain blacklisted by the treasury department’s Office of Foreign Assets Control (OFAC).

Navigating this complex web of residual sanctions within Iran’s opaque economy is difficult. Due diligence is costly and cumbersome, and its standard is ill-defined, adversely affecting businesses’ risk-reward calculus of trying to comply while operating within the Iranian economy’s opaque ownership structure. The costs are not theoretical: since 2004, the U.S. has levied more than $15 billion in fines for violations.[fn]Businesses often find OFAC guidelines legalistic and vague. In October 2016, it issued one noting that business dealing with an entity not blacklisted but “minority owned, or controlled in whole or in part” by a blacklisted Iranian “is not necessarily sanctionable for a non-U.S. person”. See M.10 in “Frequently asked questions relating to the lifting of certain U.S. sanctions under the JCPOA”, U.S. treasury department, 12 October 2016. John Smith, OFAC’s acting director, said, “we will not be playing ‘gotcha’ for companies that conducted the appropriate due diligence, collected the documentation, but unwittingly found themselves dealing with a Revolutionary Guards front company”. Atlantic Council, Washington, 16 June 2016.Hide Footnote  

One of the most challenging sanctions bans access to the U.S. financial system. There have been various work-around attempts: OFAC clarifications (as abstruse as the restriction is severe); Iran’s efforts to circumvent by denominating its trade in other currencies; symbolically significant deals like Boeing’s sale of 80 civilian aircrafts – the largest Iran-U.S. contract in 37 years that both sides hoped would have a snowball effect. None did much to resolve the problem.[fn]A senior U.S. official said, “no one wants to be the first to take a leap of faith, but many are keen to be the second or third big bank to return to Iran”. Crisis Group interview, Washington, September 2016. Both Boeing and Airbus agreements, however, are financed by a consortium of large financial institutions and denominated in euros. Crisis Group interviews, European officials, Berlin, London, November 2016. “Boeing-Iran deal for $16.6 Billion of jets is first since 1979”, Bloomberg, 11 December 2016. “Total to finance Iran project with euros to avoid U.S. sanctions”, The Wall Street Journal, 8 November 2016. Republican opposition prevented the Obama administration from easing this restriction during and after the negotiations. “Rubio, Kirk introduce bill to block Iran’s access to US money”, The Hill, 6 April 2016. In October, OFAC explained that non-U.S. financial institutions may process dollar transactions provided they “do not involve, directly or indirectly, the U.S. financial system”. This implies banks can only use dollars at hand, ruling out financing for large development and infrastructure projects.Hide Footnote

No less chilling for investment – particularly since Donald Trump won the U.S. presidential election — is the threat of reimposition of sanctions suspended under the JCPOA. Unilateral U.S. sanctions can be resumed by executive order; a snapback mechanism embedded in the accord can reinstate UN sanctions if one party contends that Iran has reneged on its commitments. These would not be reapplied retroactively, but the eventuality increases the risk and potential reputational costs of doing business with Iran.[fn]Per JCPOA paragraphs 36-37, any agreement participant can complain to the Joint Commission, which has fifteen days to resolve the issue; an unresolved issue is referred to the foreign ministers, who have another fifteen days. The Joint Commission then has another five days to resolve the issue. If, after this 35-day process, the complaining party is still unsatisfied, it can refer the issue as significant non-performance to the Security Council, which within 30 days must vote on a resolution to continue suspension of sanctions – a resolution the complaining party can veto (except Germany, not a permanent Council member), thus snapping back the sanctions. European officials complained OFAC remains inflexible on extending the standard 180-day grace period for foreign firms to wind down business in Iran in case of snapback. A U.S. official said, “whoever needs more time has to explain it to OFAC, and it will consider it”. Crisis Group interviews, Berlin, Washington, November-December 2016.Hide Footnote

The Iranian government, for its part, failed to pave the institutional ground adequately for the economic opening, while raising unrealistic expectations about the deal’s potential payoff in order to build support for it. With rampant corruption, lack of transparency, poor infrastructure and a cumbersome legal and regulatory environment, Iran remains a difficult place to do business.[fn]Iran is 130th of 168 countries in Transparency International‘s corruption perceptions index, 120th of 190 in the World Bank‘s 2016 ease of doing business index, and 76th of 138 in the World Economic Forum‘s Global Competitiveness Report 2016–17. In its first quarterly report to parliament on JCPOA implementation, Iran’s foreign ministry admitted to these problems impeding trade. “گزارش وزارت امور خارجه به مجلس درباره اجرای برجام” [“Foreign Ministry’s report to the Parliament”], MFA.ir, Fars News, 17 April 2016. A European oil executive said, “many developing countries are plagued with similar problems, but in the case of Iran perception is worse than reality”. Crisis Group interview, London, August 2016.Hide Footnote The banking sector, saddled with many non-performing loans, is considered high-risk by the international Financial Action Task Force (FATF), which sets anti-money laundering and counter-terrorist financing standards for financial institutions worldwide.[fn]FATF has suspended countermeasures against Iran until June 2017 to allow time to update financial regulations, comply with modern banking standards and address strategic deficiencies. FATF Public Statement, 24 June 2016. An Iranian Central Bank official complained that “the West isolated Iranian banks for a decade and now asks why we aren’t up to date. If they can’t take our hand, they should at least unchain our feet”. Crisis Group interview, Washington, October 2016. Cooperation with FATF became highly politicised inside Iran, as JCPOA opponents saw it as yet another concession to the West. Saheb Sadeghi, “Financial watchdog worries Iranian hard-liners”, Al-Monitor, 28 September 2016.Hide Footnote

Volatile politics in Washington and Tehran add to business unease. The election of Trump, a vocal JCPOA critic, and doubts, given the sluggish economic recovery and death of his mentor, former President Akbar Hashemi Rafsanjani, about Rouhani’s ability to obtain a second mandate in Iran’s May 2017 presidential poll deepen uncertainties. Infighting in Tehran over economic priorities and vested interests has complicated and slowed economic reform.[fn]The quarrel over a new contract for oil-sector investments, the Iran Petroleum Contract (IPC), is a case in point. It was delayed more than two years, until the first was awarded to state-affiliated entrenched interests. Yeganeh Torbati, “Iran signs key oil contract with Khamenei-linked firm”, Reuters, 4 October 2016; “Shell signs provisional oil and gas deal with Iran”, Financial Times, 7 December 2016.Hide Footnote The most consequential political wildcard remains the U.S. Congress, which continues to try to impose new sanctions.[fn]In 2016, Congress considered more than two dozen bills that could potentially undermine the accord. Among the first bills introduced in the 115th Congress, sworn in on 3 January 2017, were two on Iran: to authorise the president to use military force against it; and to levy sanctions against its missile program. Per JCPOA paragraph 26, “the U.S. Administration, acting consistent with the respective roles of the President and the Congress, will refrain from re-introducing or re-imposing the sanctions specified in Annex II that it has ceased applying under this JCPOA, without prejudice to the dispute resolution process provided for under this JCPOA … and will refrain from imposing new nuclear-related sanctions”.Hide Footnote Tehran’s response has been what a senior Iranian official called a “zero-tolerance policy” toward any new measures.

Tensions reached their height with the ten-year renewal of the Iran Sanctions Act (ISA), the bedrock of U.S. sanctions architecture, in November. Iran deemed it a “gross violation” of the JCPOA; the Obama administration viewed it as unnecessary, since re-imposing sanctions in case of violations does not require the ISA to be in force, but Congress acted with an overwhelming majority. President Obama allowed the legislation to take effect without his signature on 15 December, though his rare procedural protest did not win him points in Tehran.[fn]The administration blocked efforts to add poison pills. The renewal passed 99-0 in the Senate and 419-1 in the House of Representatives. This was the first time in 27 years that a bill was enacted without the president’s signature. Carole Morello, “Iran sanctions extended, but without Obama’s signature”, The Washington Post, 15 December 2015. As during the 2014-2015 negotiations, when the parties could not agree on the ISA extension, they agreed to mitigate the issue once it arose. Crisis Group interviews, Iranian and U.S. officials, Vienna, June 2015.Hide Footnote Rouhani in response ordered planning for design and construction of a nuclear propeller for marine transportation. That was carefully calibrated to satisfy domestic politics and signal discontent to Washington, while remaining within the bounds of the accord, which permits such research if it remains on the drawing board.[fn]“Blasting U.S. nuke-deal ‘violations’, Iran vows new nuclear project”, Associated Press, 13 December 2016. An official from Iran’s atomic energy organisation said that developing nuclear propellers would take years and is uneconomic. Quoted in “برگزاری کمیسون برجام 21 دی” [“Joint Commission will meet on 10 January”], ISNA.ir, 20 December 2016.Hide Footnote

Posturing aside, the ISA extension leaves the status quo unaltered as long as the president continues to waive the provisions the JCPOA suspended. Still, a series of tit-for-tats could lead to mutual escalation that spirals out of control.[fn]Addressing Zarif’s complaint about the ISA’s extension, the Joint Commission concluded that it does not affect Iran’s ability to benefit from sanctions relief as long as the suspension of relevant provisions continues. “Press release on behalf of the Joint Commission of the JCPOA”, EU External Action Service, 10 January 2017.Hide Footnote

C. Transactional, not Transformational

JCPOA ambiguities and technical implementation hitches in both the nuclear and sanctions realms become outsized political storms because the deal has done little to alleviate Iran-U.S. animosity. To ensure success, the parties negotiated it as a narrow arms-control accord not to usher in broader détente or collaboration in areas of shared concern, though some had hoped (or feared) that it would.

In both Tehran and Washington, powerful stakeholders moved to ensure the nuclear deal was a ceiling on, not a foundation for, rapprochement. Iranian provocations have included ballistic-missile tests, harassment of U.S. Navy ships in the Persian Gulf, alleged arms shipments to Huthi rebels in Yemen, arrest of dual Iranian-American nationals and hostile rhetoric toward the U.S. and its allies.[fn]A conservative Iranian parliamentarian explained: “If you were in the shoes of Ayatollah Khamenei and listened to U.S. officials boasting about how sanctions brought Iran to the table, would you move to make more compromises? No. You first demonstrate that you did not compromise from a position of weakness”. Crisis Group interview, Tehran, May 2016. “Reports: Iran fires missile marked with ‘Israel should be wiped’”, USA Today, 8 March 2016; “Iran’s Khamenei says U.S., ‘evil’ Britain can’t be trusted”, Reuters, 3 June 2016; “Americans sentenced to 10 years in Iranian prison”, CNN, 18 October 2016; “U.S. Navy says it seized weapons from Iran likely bound for Houthis in Yemen”, Reuters, 4 April 2016. Paragraph 5, Annex B, Security Council Resolution 2231, extended the conventional-arms embargo on Iran until 2020. The U.S. Navy contends it had 35 dangerous encounters with Iranian Revolutionary Guards patrol boats in 2016, compared to 23 in 2015. Whether the naval tangles in the Gulf were in Iranian or international waters is disputed. Dan Lamothe, “Navy destroyer opens fire after ‘harassing’ behaviour by Iranian patrol boats”, The Washington Post, 9 January 2017.Hide Footnote

Congress has evinced its own hostility and seems determined to derail any détente, as well as the JCPOA itself, through its own provocations. It lifted the U.S. visa exemption for citizens of 38 countries who had visited Iran (or Syria, Iraq and Sudan) since 2011, a move Iran deemed contrary to the JCPOA’s spirit, as it affected its tourism and business ties with Europe. Congress also manoeuvred the administration into sanctioning eleven Iranians and entities involved in ballistic-missile launches just a day after Implementation Day.[fn]“Iran warns Obama over visa waiver restrictions”, The Hill, 21 December 2015. The provision was attached to the $1.1 trillion federal spending bill at the last minute, making veto impossible. Crisis Group interview, U.S. official, Washington December 2015. “Treasury sanctions those involved in ballistic missile procurement for Iran”, Treasury Department, 17 January 2016.Hide Footnote A Supreme Court decision to compensate U.S. victims of overseas attacks with $2 billion of the Iranian central bank’s impounded assets further enraged the Iranian leadership.[fn]Rick Gladstone, “Iran threatens lawsuit in Hague court Over U.S. ruling on $2 billion”, The New York Times, 25 April 2106.Hide Footnote

This highlights a significant conundrum: not addressing broader disagreements makes the JCPOA fragile and implementation problematic, but without full implementation, resolving underlying antagonism is impossible. The dilemma is nowhere felt as strongly as in the linkage between nuclear and non-nuclear issues, which already complicates sanctions relief; the accord’s U.S. opponents are bound to play on this distinction, penalising Iran’s regional and domestic policies, which the JCPOA does not bar, to undermine the JCPOA itself.[fn]Indira Lakshmanan, “Inside the plan to undo the Iran nuclear deal”, Politico, 15 July 2016.Hide Footnote

Without improvements in Iran’s relations with the U.S. and its neighbours, the accord could eventually collapse even if it endures in the short term. A danger point could come when in 2023-2024, per the JCPOA calendar, Iran starts expanding its nuclear capacity in parallel to the U.S. permanently winding down its nuclear-related sanctions.[fn]In October 2023, per paragraphs 21.1-21.3 of JCPOA Annex V, the U.S. administration will seek appropriate legislative action to terminate statutory nuclear-related sanctions (eg, ISA). Six months later, per paragraph 63, Annex I, and Iran’s research and development plan, Iran will be permitted to test up to 30 IR-6s and 30 IR-8s (five to fifteen times more powerful than its existing IR-1 centrifuges) and produce up to 200 machines per year of each type for the next six and a half years. George Jahn, “Iran nuclear constraints to ease in about a decade, secret document reveals”, Associated Press, 18 July 2016. While caps on the uranium stockpile and enrichment level will continue until 2030, the ramping up of nuclear capability is bound to unsettle sceptics.Hide Footnote The immediate challenge, however, is the Trump presidency.

III. If it Ain’t Broke, Don’t Fix it

The most troubling uncertainty about the JCPOA’s future is the new U.S. administration’s approach. During the campaign, Trump condemned the accord as fundamentally flawed, calling it “horrible”. But it is not clear how he will act. His appointees have voiced conflicting views. Though they share antipathy toward Iran and the JCPOA, his national security adviser designate, Lt. General (ret.) Michael Flynn, has said he believes “regime change in Tehran is the best way to stop the Iranian nuclear weapons program”; his CIA director designate, Mike Pompeo, looks forward to “rolling back this disastrous deal”; while his candidate for secretary of state, Rex Tillerson, has promised a “full review”, and his defence secretary designate, former four-star General James Mattis, said that “there is no going back” on the accord.[fn]“Michael Flynn’s Testimony on Iran”, Joint House Foreign Affairs and Arms Services Subcommittees, U.S. Congress, 10 June 2015; “Mike Pompeo’s Iran file”, The Wall Street Journal, 21 November 2016; Rex Tillerson confirmation hearing, Senate Foreign Relations Committee, 11 January 2017; Ilan Goldenberg, “How James Mattis could stop Trump from ripping up the Iran Nuclear Deal”, Fortune, 17 December 2016.Hide Footnote

Washington’s P5+1 partners, who are highly satisfied with the agreement’s implementation so far, have weighed in forcefully in its support. EU foreign policy chief Federica Mogherini suggested a unilateral U.S. effort to scuttle the deal could put it on the opposite side of the EU, as well as Russia, which has warned that the accord’s demise would be “unforgivable”. China has said the deal should not be affected by “changes in the domestic situations” of countries involved.[fn]Mogherini said, “case by case, you will find issues where I wouldn’t be surprised to see the Europeans and the Russians on the same side — Iran deal, Middle East peace process, possibly the role of the U.N”, quoted in Laurence Norman and Julian E. Barnes, “Top EU diplomat, says bloc is Ppepared for Trump”, The Wall Street Journal, 14 December 2016; “Council conclusions on Iran”, European Council, 14 November 2016; “Russia says loss of Iran nuclear deal would be unforgivable”, Interfax, 15 December 2016. “China warns Trump: Iran nuclear deal must stand”, Agence France-Presse, 5 December 2016.Hide Footnote

Even some regional critics appear loath to see it scrapped. Saudi Prince Turki al-Faisal, a former senior official, warned that doing so “willy-nilly, as it were, will have ramifications”.[fn]“Senior Saudi prince says Trump shouldn’t scrap Iran deal”, Reuters, 11 November 2016. The Saudis sent a delegation to advise the Trump team shortly after his election to keep and strictly enforce the JCPOA. Crisis Group interview, European diplomat, Abu Dhabi, December 2016.Hide Footnote Prime Minister Benjamin Netanyahu of Israel, perhaps the deal’s most vocal opponent, still appears keen on scuttling it, but Israel’s military and security establishment favour its preservation. An Israeli intelligence official said that even in the Trump era, “various parts of the Israeli government deem the JCPOA as a done deal and want to focus on its rigorous implementation”.[fn]Crisis Group interview, Jerusalem, November 2016. “Netanyahu aims to discuss ‘various ways’ to undo Iran deal with Trump”, The Guardian, 12 December 2016; Graham Allison, “Is Iran still Israel’s top threat?”, Atlantic, 8 March 2016; “Israel’s Policies After the Iran Deal”, The Iran Primer, U.S. Institute of Peace, 19 September 2016. An Israeli diplomat in Europe said its official position is the deal should be kept but rigorously enforced. Crisis Group interview, 5 January 2017.Hide Footnote

While it is too soon to judge the next U.S. administration, its opposition to the JCPOA appears to stem less from the implementation record than its narrow focus: it is a non-proliferation deal that temporarily restricts an adversary’s nuclear program but has legitimised it and empowered the country to pursue what many view as a push for regional domination. Trump has several options:

  • Repudiate the deal or refrain from taking the affirmative steps necessary to sustain it, eg, renewing the waivers every 120 or 180 days that suspend nuclear-related U.S. sanctions.[fn]The Obama administration aimed to issue final waivers on or slightly before inauguration day (20 January 2017), so the incoming Trump administration would have at least around four months for a considered decision. Crisis Group interview, U.S. official, Washington, 9 December 2016. This also postpones the matter until after Iran’s 19 May presidential election.Hide Footnote He could snap back the unilateral U.S. sanctions with a stroke of the pen or even unilaterally reimpose UN sanctions, notwithstanding the JCPOA’s dispute resolution mechanism, likely opposition in the P5+1 and absence of a legitimate basis for redesignating Iran a threat to international peace after closure of the dossier on its nuclear program’s past military dimensions.

But abrogating the accord when Iran complies with it, even some Republican critics have warned, would lead the international community to squarely blame the U.S., thus eroding, if not completely unravelling, the broad coalition critical for enforcing sanctions that provided leverage for negotiating the accord in the first place.[fn]Republican Senator Bob Corker, chairman of the Senate Foreign Relations Committee and a prominent critic of the deal, said, “we gave up ... all of our leverage on the front end when we gave away the moneys that were stashed in various countries around the world, and so now the leverage is with them. I think the beginning point is for us to cause them to strictly adhere [to the deal] … we have to keep the Europeans and others with us in this process”. Quoted in Nahal Toosi, “Iran deal critics to Trump: Please don’t rip it up”, Politico, 16 November 2016.Hide Footnote This would likely put the U.S. in a weaker position to renegotiate the deal or reshape Iran’s regional and domestic policies. Brazen unilateralism also could weaken both the centrality of the U.S. financial system to the global economy, if other states organise to work around it, and the effectiveness of sanctions as a tool of its statecraft, if U.S. adversaries conclude Washington habitually shifts the goalposts for their lifting.

  • Rigorously police the deal and in parallel push back firmly against Iran’s regional policies. This could take two forms. Trump could seek to maintain the deal so long as Iranian compliance remains scrupulous in letter and spirit. If he pursues this path, he would need in parallel to ensure U.S. compliance; the deal’s upkeep requires Washington’s constant good-faith, pro-active management: granting licenses in a timely fashion to allow legitimate business with Iran, issuing guidelines to clarify sanctions relief ambiguities, providing assistance in modernising Iran’s Arak heavy-water reactor and shielding the accord from external pressures, particularly attempts by Congress to obstruct implementation.[fn]Congress tried repeatedly, for example, to block the sale of civilian aircraft to Iran contrary to Paragraph 5.1.1 of the JCPOA’s Annex II. “U.S. House votes to stop sales of Boeing jetliners to Iran”, Bloomberg, 17 November 2016.Hide Footnote Alternatively, the administration could carefully police Iran’s compliance while neglecting its own commitments, eg, by giving Congress a free hand to impose more sanctions or delay granting OFAC licenses, in the hope of provoking Iran to abrogate the deal, thereby avoiding some global blame and loss of leverage.

Regardless of whether the U.S. implements the pact in good faith or not, the risk of an overly militarised, unilateral approach toward Iran’s regional manoeuvres and/or provocations is that the JCPOA could become collateral damage in a tit-for-tat spiral. If the new administration hopes to kill the deal by a thousand cuts, it would need to be sustained long enough for those cuts to be inflicted. However, tactical decisions – such as interdicting illegal arms shipments or targeting Revolutionary Guards commanders and Iranian proxies in Iraq or Syria – could invite Iranian retaliation with rapid consequences. A U.S. official fretted: “Do you think the deal could survive a confrontation between Iranian and U.S. navies or the detention of U.S. sailors in the Persian Gulf? I’m not so sure”.[fn]Crisis Group interview, Washington, 14 December 2016.Hide Footnote

  • Renegotiate the deal to strengthen some of the nuclear-related provisions or add non-nuclear ones. Most sceptics seem to prefer this option, which in their view requires new non-nuclear sanctions to incrementally augment coercive pressure and/or a credible military threat to induce Iran to return to the negotiating table.[fn]Trump wrote: “A Trump presidency will force the Iranians back to the bargaining table to make a much better deal”. Donald Trump, “Amateur hour with the Iran nuclear deal”, USA Today, 8 September 2015. Joseph Lieberman and Mark D. Wallace, “How Trump should renegotiate the Iran deal”, The Washington Post, 6 December 2016; Dennis Ross and David Petraeus, “How to put some teeth into the nuclear deal with Iran”, The Washington Post, 25 August 2015; Michael Makovsky, “Five ways for Trump to put Tehran on notice”, The Wall Street Journal, 3 January 2017.Hide Footnote The challenge of devising new sanctions that are consistent with U.S. commitments under the JCPOA notwithstanding, this approach could harm Iran’s economy, as a prominent sanctions advocate put it, if simply “by increasing uncertainty in the marketplace”, prompting Tehran to take retaliatory measures of its own.[fn]“Trump team looks at new non-nuclear sanctions on Iran”, Financial Times, 2 December 2016. Identifying non-nuclear sanctions will not be easy, as nuclear-related sanctions targeted all the economy’s key sectors, and reimposition under a new guise would violate the JCPOA. The U.S. should, per JCPOA paragraph 29, “refrain from any policy specifically intended to directly and adversely affect the normalisation of trade and economic relations with Iran”, and according to Paragraph 33, “agree on steps to ensure Iran’s access in areas of trade, technology, finance and energy”. In his directive approving the JCPOA, Ayatollah Khamenei wrote: “Throughout the [accord’s] eight-year term, imposition of any sanctions at any level, under any pretext will be violation of the JCPOA”. Khamenei.ir, 21 October 2015.Hide Footnote

A senior Iranian official said Ayatollah Khamenei may have opened the door to this by criticising his negotiators for overlooking important details related to sanctions relief by negotiating in haste.[fn]Crisis Group interview, Berlin, November 2016. “دیدار فرماندهان نیروی دریایی ارتش با رهبر انقلاب” [“Supreme Leader meeting army, navy commanders”], Khamenei.ir, 27 November 2016.Hide Footnote But this criticism does not augur well for securing additional Iranian concessions: even if Iran were to agree to renegotiate, it would almost certainly demand more relief in exchange for more concessions, not accept less for more, especially given its discontent with sanctions relief under the JCPOA. The prospect of an Iranian leader acceding, even under duress, to terms significantly more favourable to the U.S. strains credulity and ignores the lessons of the decade-long nuclear standoff and the realities of Iranian politics.

Iran, whose leaders appear highly invested in the JCPOA for now, has several options to respond to an attempt to undermine the agreement:

  • Play the victim and shift blame to Washington in the hope of driving a wedge between the U.S. and its partners and eroding, if not neutralising, sanctions.[fn]Hamid Aboutalebi, Rouhani’s chief foreign policy adviser, tweeted: “If the JCPOA is a multilateral commitment, its breach by one party cannot be retaliated by another party’s breach. Any violation is an act against all signatories … who should move in unison to isolate the violator”. Tweet by Hamid Aboutalebi, @DrAboutalebi, chief foreign policy adviser, 7:11am, 2 December 2016.Hide Footnote A U.S. official pointed out: “The Iranians are good at this. They even played victim when the highly controversial [Mahmoud] Ahmadinejad was president, and Iran was a nuclear pariah”.[fn]Crisis Group interview, Washington, 14 December 2016. The same is true regarding Iranian reactions to ramped-up regional pressure: if Tehran reacts aggressively to U.S. provocations and precipitates the deal’s collapse, it likely will sacrifice the victim card.Hide Footnote Isolating Washington would require restraint in reacting to real or perceived U.S. violations of the JCPOA.[fn]An EU official said, “If Iran revives its nuclear activities or even tinkers around the JCPOA’s edges, we will be between a rock and a hard place”. Crisis Group interview, Brussels, 14 November 2016.Hide Footnote If abiding by the deal and playing victim seem to reinforce Iran’s position globally, those who advocate doing so might be strengthened internally.
     
  • Resuscitate the nuclear program. The Iranian parliament has mandated the government to ratchet up uranium enrichment and reduce cooperation with UN inspectors should the U.S. renege on the accord.[fn]The law instructs the government to halt voluntary cooperation with the IAEA and rapidly expand the nuclear program so that “within two years the country’s uranium enrichment capacity increases to 190,000 SWU [Separation Work Units, amounting to ten times Iran’s pre-JCPOA capacity]”. “Law on the Proportional and Reciprocal Measures of … Iran in Implementing the JCPOA”, Library of Congress, 15 October 2015. Decisions on Iran’s appropriate response, however, are in practice taken not by parliament but by the Committee for Supervision of the JCPOA’s implementation, headed by Rouhani and including Foreign Minister Zarif, Ali Larijani, speaker of the parliament and former nuclear negotiator, Hossein Dehghan, defence minister, Ali Shamkhani, secretary of the supreme national security council, Ali Akbar Salehi, head of Iran’s atomic energy organisation, Saeed Jalili, former nuclear negotiator, and Ali Akbar Velayati, the supreme leader’s chief foreign policy adviser.Hide Footnote The leadership has also put itself in a rhetorical corner by pledging to revive the nuclear program should the other side renege.[fn]Ayatollah Khamenei said, “the Islamic Republic won’t be the first to violate the nuclear deal … But if the threat from the American presidential candidates to tear up the deal becomes operational, then the Islamic Republic will set it on fire”, Khamenei.ir, 14 June 2016.Hide Footnote If it does so with more advanced centrifuges, it could restore its uranium enrichment capacity rapidly, which might prompt a nuclear-arms race in the region and/or in the extreme provide the rationale some regime-change advocates have been looking for to justify a U.S. or Israeli military strike.[fn]An IAEA official said that Iran could reach a “highly problematic” enrichment capacity within six months. Crisis Group interview, Vienna, November 2016.Hide Footnote To prevent this, Tehran might escalate gradually, creeping past some limits. This would conform to its previous strategy; but even a softer, calibrated response would reignite the nuclear standoff and complicate future talks.
     
  • Retaliate regionally. Proximity of U.S. to Iranian forces in several theatres across Iraq and Syria could provide another option for retaliation: increasing force protection costs for the U.S.[fn]Crisis Group interviews, U.S. officials, Washington, December 2016.Hide Footnote Rising tensions could also push Iran to double down on means of deterrence it considers essential to its national security: its ballistic missile program and what it calls its “forward defence policy” of empowering regional partners in Baghdad, Damascus and Beirut. This would undoubtedly provide ammunition for those in Washington who seek to bring more pressure to bear against Tehran, triggering escalation.

The above scenarios – individually or in combination – are troubling, especially as the JCPOA is delivering results. Any attempt by the Trump administration to undercut the deal in the hope of “fixing” it is likely to backfire. A senior Obama official said, “the paradox is that if he tries to strengthen the deal to 120 per cent of what it is, he might end up eroding it to 60 per cent”.[fn]Crisis Group interview, Washington, 14 December 2016.Hide Footnote Moreover, by destabilising the JCPOA, the new administration could usher in what it says it seeks to prevent: greater Iranian assertiveness, more regional instability and lower odds of resolving the conflicts in Syria, Iraq and Yemen – places where Iran is part of the problem and thus ought to be part of the solution.

IV. Sustaining and Improving the JCPOA

Like any negotiated outcome, the JCPOA is imperfect. Its implementation, too, has not been immaculate. Yet, the biggest threat to it is not procedural but political: the first major transfer of power in one of the countries that negotiated it has introduced a destabilising level of uncertainty. If the Trump administration decides to preserve the JCPOA while strictly enforcing and rigorously monitoring its implementation, it should do all that is necessary for its upkeep: from abiding by the letter and spirit of U.S. obligations – including ensuring that Iran is able to reap the economic dividends the deal entitles it to – to fencing it off, to the extent possible, from other disagreements with Tehran.[fn]Per JCPOA paragraph 26, the U.S. “will make best efforts in good faith to sustain this JCPOA and to prevent interference with the realisation of the full benefit by Iran of the sanctions lifting specified in Annex II”.Hide Footnote

Preserving the status quo does not exclude good-faith attempts to improve it. Renegotiating aspects, assuming the effort is consensual and mutually beneficial, might achieve a better and more stable outcome. A Republican president backed by a Republican-controlled Congress would have more credibility in offering incentives to Iran than Obama ever did. But if the U.S. seeks Iran’s capitulation through either economic pressure – which is unlikely to reach the intensity, scope and breadth of the sanctions that contributed to the existing outcome – or, even more dangerously, threat or use of military force, the result could be an explosive downward spiral.

Improving the JCPOA, even as implementation continues, would require a quiet Tehran-Washington dialogue in which both sides recognise one another’s security concerns and core interests, and communicate their red lines concerning both the nuclear and regional files. A possible outcome to such bilateral discussions could be an addendum to the JCPOA either strengthening some nuclear provisions (eg, longer timeframes for restrictions or more intrusive inspections) or adding non-nuclear ones (eg, curtailment of Iran’s ballistic missiles program or support for Levant militant groups) in return for rolling back the U.S. primary embargo.

If a better-for-better agreement is not attainable, the Trump administration could focus on non-Iran-specific arrangements, including creating a regional consortium for uranium enrichment or plutonium reprocessing or an international nuclear fuel bank that would remove need for a domestic enrichment program in Iran once the JCPOA sunsets. Alternatively, it could lead efforts to turn some JCPOA restrictions or transparency measures (eg, the ban on enrichment beyond 3.5 per cent and plutonium reprocessing, and continuous live-stream surveillance of key elements of the nuclear fuel chain) into common practice either at regional – as a first step toward a zone free of weapons of mass destruction in the Middle East – or global level.[fn]If the U.S. excludes Israel from such voluntary constraints, it would be a non-starter. Israel has reportedly relied on plutonium for its nuclear weapons capability but might also have a small uranium enrichment program. For more on such creative initiatives, see Alexander Glaser, Zia Mian, Hossein Mousavian, and Frank von Hippel, “Building on the Iran Deal: Steps Toward a Middle Eastern Nuclear-Weapon-Free Zone”, Arms Control Today, December 2015; Lord Hannay of Chiswick and Thomas Pickering, “Trumping Proliferation: From a one-off deal to a global standard”, European Leadership Network, 6 December 2016.Hide Footnote Curbing Iran’s missile program could also be achieved through international export control arrangements or requiring adherence of all states in the region to restrictions on range and payload.

On a more practical level, to avoid misunderstandings, the Trump administration should preserve the communication channels at the State Department, especially at the level of the office of lead coordinator for JCPOA implementation (currently Ambassador Stephen Mull), and also at the Energy Department, which have played an integral role in resolving technical issues in cooperation with the IAEA and the Atomic Energy Organisation of Iran. There is also need to create a new channel between OFAC and Iran’s Central Bank and Finance Ministry.[fn]OFAC has met several times with Iranian economic officials bilaterally and trilaterally (when a third country faced problems transferring Iranian unfrozen funds), but these meetings have been infrequent. There is also contact between the two sides through the Joint Commission, but at the diplomatic level, not that of experts who grapple daily with the technical and legal problems of normalising Iran’s banking relations.Hide Footnote While the Joint Commission’s 10 January meeting has clarified most JCPOA ambiguities that had been troubling implementation, especially in areas where the accord’s language lacks sufficient specificity, new technical hitches and interpretation differences will surely arise.[fn]Crisis Group email correspondence, European officials, 10 January 2017.Hide Footnote Resolving them will require effective communication and familiarity with the accord’s complex challenges. The IAEA is bound by its mandate from the Security Council and confidentiality agreements with its member states, but the Joint Commission should be more transparent, especially where its decisions have a significant impact on the accord’s implementation.

Iran should strictly adhere to its JCPOA commitments and move away from using brinksmanship as leverage.[fn]In addition to delaying the transfer of centrifuge infrastructure in Fordow to storage in the Natanz facility until shortly before the 16 January 2017 deadline, Iran kept its heavy-water stockpile close to the 130-ton threshold, and its low-enriched uranium stockpile just under the 300kg cap. Crisis Group interviews, U.S. and European officials, Brussels, London and Vienna, November 2016. Asked about the calculus behind this, an Iranian official retorted: “Because 299kg is under 300kg. We committed to remain under 300kg, not to keep a large distance from it”. Crisis Group interview, November 2016. Yet, as an EU official said, “implementing a long-duration agreement is difficult when you are always on the brink of surpassing the threshold, even if inadvertently”. Crisis Group interview, Brussels, 15 November 2016.Hide Footnote Exceeding the limits the accord sets, as an ex-U.S. nuclear negotiator put it, could be “technically insignificant in terms of advancing Iran’s nuclear capabilities, but … create a narrative that JCPOA opponents are all too eager to pounce upon”.[fn]Richard Nephew, “The Mirage of Renegotiating the Iran Deal”, Center for Global Energy Policy, Columbia University, 18 November 2016.Hide Footnote Tehran should also avoid deliberately provocative actions, eg, skirmishes with U.S. naval ships in the Gulf, and take other constructive steps, such as signing the Hague Code of Conduct against Ballistic Missile Proliferation (HCOC).[fn]By signing the HCOC, Iran would join the treaty’s 138 parties. HCOC provisions include commitments to provide pre-launch notifications for ballistic missiles and launch vehicles for satellites, as well as submission of an annual declaration of related policies.Hide Footnote It would be better served by focussing on structural and regulatory economic reforms needed for full realisation of sanction relief’s potential. These include continued progress on recapitalising and rendering its banking system more transparent and implementing the action plan to address its anti-money laundering and anti-terror financing deficiencies.

In return for meaningful advances on these issues, the U.S. Treasury should rescind Iran’s designation under the USA Patriot Act as a zone of primary money-laundering concern, continue a forward-leaning position to instil confidence in Iran’s market and issue licences for facilitating legitimate business. The administration should give OFAC more resources, as its staff has been stretched by a much increased workload.[fn]According to a report by the U.S. treasury department, the average time for processing licenses in 2015 increased from 71 to 88 business days, a statistic that significantly understates the problems, since half of the submissions remained unprocessed. See, “2nd, 3rd and 4th Quarter FY2015 Reports for Licensing Activities Undertaken Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000”, Treasury Department, 15 September 2016.Hide Footnote An OFAC commitment to monthly progress reports and a target for reduced processing times as staff grows could aid efficiency.

But the problem is also institutional inertia: traditionally a source of pressure on the private and public sectors to curb business with target countries, today OFAC is charged with opening the taps.[fn]A senior U.S. official said, “we definitely implemented the letter of the JCPOA, but OFAC is not in the spirit business”. Crisis Group interview, Washington, December 2016.Hide Footnote Creating a sub-division or separate entity to unwind sanctions might be more effective and signal other countries, such as North Korea with whom similar negotiations might soon be necessary, that the dividends of relief in return for policy shifts are real.

Ultimately, the nuclear agreement – even if ostensibly firewalled from surrounding conflicts – will be sustainable only if accompanied by détente in U.S.-Iran ties and progress on de-escalating and resolving the region’s conflicts. If either side opts for escalation in the region, the other inevitably would sooner or later do the same, eventually imperilling the JCPOA. By contrast, mutual efforts to ease regional tensions, such as helping to preserve the Syria ceasefire and using influence to help bring the Yemen war under control, would be a constructive approach that could help strengthen the nuclear deal.

Other P5+1 members should go beyond expressing strong support for the JCPOA and discourage Iran from overreacting to a possible change in U.S. tone and approach.[fn]See Crisis Group Statement, “President Trump and the Art of the Iran Deal”, 23 November 2016; “EU warns Trump not to destroy Iran nuclear deal”, Financial Times, 21 December 2016.Hide Footnote The EU could revive its “Blocking Statute” forbidding compliance with U.S. extraterritorial sanctions that lack Joint Commission consent.[fn]Such legislation would provide political reassurance to European companies interested in re-entering the Iranian market by extending non-recognition of U.S. judgments and administrative determinations that give effect to U.S. sanctions, and by establishing a “clawback” clause for recovery of damages incurred for alleged sanctions violations. Council Regulation (EC), no. 2271/96, “Protecting against the effects of the extra-territorial application of legislation adopted by a third country …”, 22 November 1996. The legislation was designed to resist U.S. extraterritorial sanctions against Iran and Cuba. It effectively deterred Washington from enforcing those sanctions for more than a decade.Hide Footnote Establishing this pre-emptive measure without prejudice to the Trump administration’s commitment to the JCPOA would send a strong signal that if Washington walks away from the deal, it will do so alone, while demonstrating to Iran that the 28 EU member states will defend the agreement. The EU also could do more to help reduce tensions in the region, serving as an interlocutor between the U.S. and Iran and sounding out ideas with all sides in the various regional conflicts in which Iran is involved.

China, France, Germany, Russia and the UK should formally announce that new unilateral U.S. sanctions deemed unjustified by the majority of the Joint Commission and that interfere with Iran’s full realisation of the benefits of sanctions relief under the JCPOA would be cause to initiate disputes against the U.S. at the World Trade Organisation (WTO) and other international courts and institutions.[fn]In the late 1990s, the EU successfully challenged U.S. sanctions with a similar approach. Quentin Genard, “European Union responses to extraterritorial claims by the United States”, EU Non-Proliferation Consortium, Non-proliferation Paper no. 36, January 2014.Hide Footnote Simultaneously, they should continue to support Iran’s WTO candidacy.

More countries could provide export credit lines to reassure companies interested in trade with Iran.[fn]“Italy extends $5bn credit line and export guarantees to Iran”, Financial Times, 12 April 2016; “Norway offers €1bn in credit to Iran”, Press TV, 17 August 2016.Hide Footnote Eventually, and if banking problems continue, there might be need for a public body to do due diligence, akin to the role of the European Bank for Reconstruction and Development (EBRD) in Eastern Europe after dissolution of the Soviet Union and elsewhere today. More nuclear cooperation is also necessary to strengthen the connective tissue between Iran’s nuclear program and those of other countries, providing an insurance policy that it will remain solely civilian.

V. Conclusion

A year in, the JCPOA is working but fragile, mostly because the political environment that created the nuclear standoff has not changed. Segregating nuclear negotiations from other regional disagreements was logical – as complex as the nuclear issue was, regional politics are even more so, and there are many more stakeholders than the P5+1 – given Iran’s imminent achievement of breakout capacity. Still, the accord’s fate depends on making progress on other fronts, which in itself is contingent on preventing the JCPOA’s demise under a new, highly sceptical U.S. administration.

The same calculus that brought Iran and the P5+1 to compromise after thirteen years of standoff and two years of negotiations still holds: the alternatives to this accord – a sanctions-vs.-centrifuges race that could culminate in Iran obtaining the bomb or being bombed – would be much worse. Its unravelling now would have unfathomable consequences for the region, non-proliferation and multilateral diplomacy. To imagine a stronger pact can be built on its ruins is a chimera, as destroying it – even if gradually – would also destroy the hint of trust that led the parties to compromise, but if preserved, it is possible to build on it.

Trump is the first U.S. president in more than two decades who does not need to worry, on his first day in office, about Iran crossing the nuclear threshold to weaponisation without detection. If he tries to adjust the JCPOA by coercive pressure, he could, deliberately or inadvertently, deeply erode it, which could reignite the nuclear crisis and compound regional instability. But if, drawing on his business acumen, he opts to offer Iran a better-for-better deal, he has a unique chance to strengthen the accord for all, while helping reduce U.S.-Iran tensions. The consequences of a wrong choice could come to dominate his presidency.

Washington/Brussels, 16 January 2017

Appendix A: Map of Iran

Map of Iran United Nations. Department of Peacekeeping Operations. Cartographic Section.
Women supporters of Hizbollah carry pictures of dead Hizbollah members as they march during a religious procession to mark the burning of the tents, part of the Ashura religious ceremony, in Nabatiyeh, South Lebanon, on 15 October 2016. REUTERS/Ali Hashisho

Hizbollah’s Syria Conundrum

Four years after plunging into Syria’s civil war, Hizbollah has achieved its core aim of preserving the Assad regime. Yet with no clear exit strategy, the Lebanese “Party of God” faces ever greater costs unless it can lower the sectarian flames, open dialogue with non-jihadist rebel groups and help pave the way for a negotiated settlement.

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Executive Summary

When Hizbollah – the Lebanese “Party of God” – threw its fighters into Syria in 2013, it sought primarily to save itself. Had the Assad regime collapsed or been defeated by U.S.-backed regional powers, it could have faced a hostile Sunni successor in Damascus and lost its essential arms channel from Iran. Today, its core objective of preserving the regime has been met, but there is no end in sight to the war. If Iran and Hizbollah continue to provide unconditional military support to the regime without a realistic exit strategy, they will be dragged deeper into what can only become a quagmire, even as their armed strength grows in the wider region. At the same time, they will have to contend with a potentially more hostile U.S. administration that has said it wants to push back Iranian influence even as it also pursues a more aggressive approach against the Islamic State (IS), an enemy it has in common with Hizbollah and Iran.

Avoiding being sucked into a quagmire requires negotiating a settlement that has buy-in from key countries that back the opposition, as well as (with Russia) imposing the requisite compromises on Damascus. This report proposes preliminary steps Iran and Hizbollah could take in that direction, including recognising non-jihadist rebels; initiating talks with them on whatever common ground they can find; lowering sectarian rhetoric; and refraining from new offensives against opposition-held areas so as to preserve a non-jihadist foe capable of enforcing a deal, if and when one is reached.

Hizbollah cannot change course in Syria without Iran’s agreement, yet pays high and mounting costs for its intervention. Once dependent on the late President Hafez Assad’s regime to protect its military status in Lebanon, it has become instrumental to the survival of his son’s rule in Syria. Yet, alliance with the Assads has become a liability, draining resources, empowering the jihadist groups it has tried to vanquish and provoking hostility from much of the Syrian population and regional players such as Qatar and Hamas with which it once enjoyed good ties.A more difficult to measure cost is the harm to its image and self-identity. From a “party of the oppressed” and a Lebanon-based and centred “resistance” movement standing up to Israel, it has projected itself across the border and morphed into a powerful regional force. Once acclaimed by Arabs for struggle against a common enemy, most recently in the 2006 Lebanon war, it is widely viewed as a sectarian Shiite militia and, in parts of Syria, a ruthless occupier.

Hizbollah long has given Iran strategic depth vis-à-vis Israel. Escalating involvement in Syria has elevated it to an indispensable partner in a high-stakes, increasingly sectarian-tinged regional confrontation, whose principal exponents are Iran and Saudi Arabia.

Hizbollah has benefitted from its intervention beyond regime survival. Its full-throated effort to keep the regime alive helped consolidate it as Iran’s most effective partner. The war has displayed and deepened mutual dependence. Hizbollah long has given Iran strategic depth vis-à-vis Israel. Escalating involvement in Syria has elevated it to an indispensable partner in a high-stakes, increasingly sectarian-tinged regional confrontation, whose principal exponents are Iran and Saudi Arabia. In turn, Iran gives arms and other support that allow Hizbollah to fight Israel and leverage military strength into political dominance in a country that always denied it to Shiites.

Hizbollah has also gained from its relationship with Russia, which arose from the latter’s 2015 intervention. It has been a vital partner on the ground, an elite fighting force without which Russian airstrikes would have been much less effective. It has been able to enhance its military and tactical expertise by a combat alliance, for the first time, with a global power. Yet, the relationship is fraught, as Moscow, a secular power wary of Islamist radicalism and favouring a strong Syrian state and army, has its own agenda in Syria, which is starting to diverge from Iran’s and Hizbollah’s, now that the regime’s immediate survival seems assured.

Hizbollah has its own agenda, so needs its own political strategy. Along with most other players, it continues to bank on hard power. This can only prolong the conflict and encourage radicalisation on all sides. Defeat of non-jihadist rebels would help swell jihadist ranks and remove a credible opponent that could negotiate a settlement and enforce a deal. Hizbollah may feel emboldened by Iranian and Russian support and their joint 2016 victory in Aleppo and favour efforts to gain more ground. Taking and holding territory in the face of a morphing insurgency and a hostile population will become increasingly costly in blood and treasure, however, and may prevent the party from extricating itself at all.

To loosen the trap and create the possibility of an eventual drawdown, Hizbollah, together with Iran, should urgently take steps to lower tensions. As part of the process Russia, Turkey and Iran launched in Astana in January 2017, they should help enforce the nationwide ceasefire. They should also open communication lines with non-jihadist foes in order to discuss mutually acceptable decentralisation to enable local governance in opposition-controlled areas without paving the way for Syria’s breakup; and to ease tit-for-tat restrictions on the besieged villages of Madaya, Zabadani, Fouaa and Kefraya. Likewise, they should press President Bashar Assad to negotiate a political settlement and should refrain from new offensives and collective punishment of civilians.

In return, a negotiated settlement must take into account the party’s vital interests, over which it shows neither willingness nor need to compromise given its fighting prowess. These include its arms channel, protecting Shiite shrines in Syria and preventing attacks against both the Shiite community and its fighters in Lebanon. Though the party’s arsenal has long posed serious concerns inside and outside Lebanon, its disarmament cannot be linked to a negotiated Syria settlement if a deal is to have a chance. At the same time, Hizbollah should work to dispel domestic rivals’ fears by agreeing to resume dialogue on a defensive strategy – stalled by its Syria intervention – that would regulate its arsenal’s use, including its stated commitment not to use it against domestic foes or provoke war with Israel.

None of this will be easy, but the alternative would be worse, for Hizbollah and much of the region: a prolonged, ever costlier engagement in an unwinnable war of attrition. Beyond the human costs, Hizbollah would have to permanently mobilise a Shiite community whose patience and support may have limits, and recruit youths who lack the commitment and discipline that have made Hizbollah a formidable fighting force. It cannot relish that prospect.

Beirut/Brussels, 14 March 2017

I. Introduction

Hizbollah, a product of Israel’s 1982 Lebanon invasion and occupation, owes its popularity and growth to its championing of Lebanese Shiites’ cause without presenting itself as a sectarian actor.[fn]Lebanon’s historically marginalised Shiites were mostly confined to the “belt of misery” before the civil war of 1975-1990: impoverished rural areas in the south and east traditionally neglected by the state, and Beirut’s southern suburb. “Hizbollah and the Shiite Community: From Political Confessionalization to Confessional Specialization”, Aspen Institute, November 2010.Hide Footnote Since the 1990 end of the civil war, it has played a dual role of political party within the Lebanese system and Islam-based armed resistance movement confronting Israel.[fn]Until the Syrian withdrawal in the wake of the 14 February 2005 assassination of former Prime Minister Rafic Hariri, Hizbollah was in the opposition, focused on its struggle against Israel and expanding its social-services network within the Shiite community. It began government participation that year and has since stepped up political involvement; in 2007-2008, it led an eighteen-month sit-in in Beirut to topple Prime Minister Fouad Siniora’s government; in May 2008, it clashed with Sunni and Druze militiamen in Beirut after the government decided to dismantle the independent communications network the party described as vital for its struggle against Israel; and it repeatedly sought to discredit the Special Tribunal for Lebanon investigating the Hariri assassination. In 2000, after Israel’s withdrawal from southern Lebanon, Hizbollah asserted the Shebaa Farms and Seven Villages areas, not vacated by Israel, were Lebanese and thus still occupied; it used this to justify its armed status in Lebanon. Israel and Hizbollah have since clashed on occasion, and in 2006 fought a 33-day war that destroyed much of southern Lebanon and Beirut’s southern suburbs (known as Dahiyeh). Crisis Group Middle East Report N°57, Israel/Palestine/Lebanon: Climbing Out of the Abyss, 25 July 2006.Hide Footnote However, the 2011 Syrian uprising and subsequent civil war there compelled it to shed its predominantly Lebanese profile for an unabashedly Shiite one by projecting its power across the border and thrusting itself into a sectarian-coloured regional power struggle.[fn]Crisis Group Middle East Report N°153, Lebanon’s Hizbollah Turns Eastward to Syria, 27 May 2014.Hide Footnote

Though Hizbollah had been active outside Lebanon previously, it appears to have extended its reach to include Syria, Iraq and Yemen, though the depth of its involvement in those countries remains a matter of speculation.[fn]Egypt said in 2009 it uncovered an Hizbollah cell and accused the party of plotting to smuggle weapons into Gaza and attack Israeli tourist sites in the Sinai Peninsula and ships in the Suez Canal. Hizbollah leader Hassan Nasrallah acknowledged the cell but said it was to assist Palestinians against Israel. “Egypt accuses Hezbollah of plotting attacks and arms smuggling to Gaza”, The New York Times, 13 April 2009. Nasrallah condemned Saudi Arabia’s April 2015 intervention in Yemen (see below). An ex-Yemeni security officer asserted the party has trained Huthis in Lebanon and highlighted the strong relationship between Hizbollah and the Huthi-led intelligence services in Sanaa. He also said two Hizbollah instructors resided in Saada in northern Yemen in 2012. Crisis Group interview, March 2017. A Huthi official said Hizbollah hosted a Huthi media station in Lebanon. Crisis Group interview, February 2016. Iranian officials confirmed the close Hizbollah-Huthi relationship. Crisis Group interviews, November 2016. A journalist with close Hizbollah ties said, “The party is Iran’s representative in Yemen”. Crisis Group interview, Beirut, June 2015. In Iraq, Hizbollah trained Shiite militants who fought U.S.-led coalition forces and later rebels in Syria. Mareike Transfeld, “Iran’s Small Hand in Yemen”, Carnegie Endowment for International Peace, 14 February 2017; “Lebanon’s Hizbollah and Yemen’s Houthis open up links”, The Financial Times, 8 March 2015; “Yemen government says Hezbollah fighting alongside Houthis”, Reuters, 24 February 2016; “Hezbollah Trains Iraqis in Iran, Officials Say”, The New York Times, 5 May 2008; “Hezbollah in Iraq: A Little Help Can Go a Long Way”, Washington Institute for Near East Policy, 25 June 2014.Hide Footnote As a Lebanese observer said, “it is the regional arena, countries like Syria and Yemen, that has really become important to many of my Hizbollah interlocutors. Lebanon seems to be secondary in their discussions”.[fn]Crisis Group interview, Washington, June 2016.Hide Footnote

Of paramount importance is Syria, where the party has crossed swords with an Arab foe for the first time. From the uprising’s early stages, it and its Iranian backer demonstrated that they would not accept a fundamental change in the regime, especially its security and intelligence apparatus. As Hizbollah’s military investment grew, so did its strategic interests, to the extent that today its fate and that of the Assad regime are intertwined: an important part of its weaponry transits through Syria from Iran, rendering it dependent on Damascus’s goodwill, while the military support this makes possible is in turn vital for Assad.

In the uprising’s early days, Hizbollah officials said they tried to convince the regime to avoid violence and address what they considered the demonstrators’ legitimate demands.[fn]Crisis Group interviews, senior Hizbollah and Hamas officials, Beirut, Damascus, June-December 2011.Hide Footnote Yet when its advice went unheeded, it supported the regime’s repressive tactics through logistical and military assistance.

Hizbollah’s fear of a sectarian war became a self-fulfilling prophecy, fomenting the very radicalisation it professed to be pre-empting.

By early 2012, the initially peaceful uprising had become – thanks in no small part to the regime’s brutal crackdown on protesters – an externally-supported violent revolt on its way to an all-out proxy war. Hizbollah and Iranian Revolutionary Guards Corps (IRGC) military advisers poured in, seeking to protect the regime from what they asserted was a growing Sunni jihadist threat. Hizbollah’s fear of a sectarian war became a self-fulfilling prophecy, fomenting the very radicalisation it professed to be pre-empting. Moreover, the party’s role became indispensable in sustaining a regime that increasingly faced manpower shortages. This set the stage for full-fledged military intervention in 2013, when it concluded that the regime’s grip on especially the parts of the country essential to survival was weakening and that defeat would threaten the party’s own survival.[fn]There are estimated to be some 8,000 Hizbollah fighters in Syria at any time, in addition to thousands more, sent on an irregular basis, who are not movement members. Crisis Group interview, Hizbollah fighter, Beirut, August 2016; “The Transformation of Hezbollah by its Involvement in Syria”, Washington Institute for Near East Policy, August 2016. A senior Hizbollah official said, “after the July 2012 bombing [that killed four top security officials in Damascus] and the subsequent assault on Damascus, the regime started to slide. There was a true danger it might lose the capital, which would have amounted to its collapse. At this stage the regime took the important step of creating popular defence forces, which grew to comprise up to 100,000 fighters. The regime received strong support in this effort from its [Hizbollah and Iranian] allies”. Crisis Group interview, Beirut, December 2013.Hide Footnote

Hizbollah leaders recognised that the intervention would be costly to the party’s image and credibility in Syria and the Arab region more broadly, as well as to its fighters.[fn]A senior Hizbollah officials said, “we know that our decision [to intervene] would turn some people against us. However, we don’t take decisions based on how popular they are, but on a clear vision and consistent principles. When we stood against the [U.S.] occupation in Iraq, Iraqi Shiites opposed us. Yes, popular support is important, but not at any cost”. Crisis Group interview, Beirut, June 2012.Hide Footnote Casualties began to climb; in May 2016, a member said Hizbollah had lost 1,700 to 1,800 fighters in Syria.[fn]Crisis Group interview, Beirut, May 2016.Hide Footnote It also began losing friends. It alienated significant segments of the population, which accused it of double standards for having supported popular uprisings elsewhere, notably in Tunisia, Egypt, Libya, Bahrain and Yemen, but treating the Syrian uprising as part of an external conspiracy.[fn]A Syrian activist said, “Nasrallah deeply shocked and disappointed the Syrian people. We used to venerate this man. It turned out he is a real hypocrite”. Crisis Group interview, Beirut, April 2012. “فيصل القاسم يسخر من حسن نصر الله”, YouTube, 23 November 2012, www.youtube.com/watch?v=Rn30Euch7ww; “Syria’s crackdown hits ally Hezbollah’s image”, Associated Press, 10 August 2011.Hide Footnote Hostility with the Syrian opposition became more explicit, the party leader accusing the protesters of serving Israeli, Western, Turkish and Gulf interests.[fn]In December 2011, the then-head of the opposition Syrian National Council, Burhan Ghalioun, a future Syrian government would cut ties with Iran and Hizbollah: “Our relationship with Lebanon will be … cooperation, and mutual recognition and exchange of interests and [we will be] seeking with the Lebanese to improve stability in the region. As our relations with Iran change, so too will our relationship with Hezbollah …. Lebanon should not be used as … in the Assad era as an arena to settle political scores”. “Syria opposition leader interview transcript”, The Wall Street Journal, 2 December 2011. Nasrallah used that interview to warn of a conspiracy against Hizbollah: “The past couple of days revealed that we were reading things in a very correct way. The real aim [of the uprising] is to attack the resistance movements. It is not reforms … being demanded of Syria …. [but] that it become a treasonous Arab regime …. With all due respect to those who demonstrate in Syria and those who fight with something else in mind, we tell them to be aware because they will be exploited …. It is a project that goes against their conviction, religion, culture, national belonging, nationalism, Syrian identity and true belonging”. Al-Manar, 6 December 2011.Hide Footnote The relationship with Syria’s Muslim Brotherhood suffered, not only because it was active in the opposition, but also because Hamas – the Brotherhood’s Palestinian branch headquartered in Damascus since its 1999 expulsion from Jordan – severed ties with the Iran-led “resistance axis”.[fn]“Hamas reduces presence in Damascus”, The National, 25 December 2011. Uncomfortable with the regime’s repressive response, Hizbollah’s and Iran’s support of Assad and the Muslim Brotherhood’s rise in the region, Hamas severed ties with the axis in 2012, moving closer to Qatar, Turkey and the Morsi government in Egypt. Crisis Group interviews, senior Hizbollah and Hamas officials, Beirut, May-October 2016. Iran-Hizbollah-Hamas relations have been partially restored, notably Iranian financial support for Hamas’s military wing, since 2015-2016.Hide Footnote

II. The Syria Gambit: A Double-edged Sword

Measured by military victories, Hizbollah’s intervention has been successful. With Iran and Russia, it has saved a crumbling regime and the axis it sustained. By securing most of Syria’s central and western regions, it has created in effect a buffer zone on both sides of the border, significantly reducing attacks in Lebanon from rebel-held areas in Syria.[fn]Between 2013-2014, dozens were killed when Hizbollah checkpoints and convoys and predominantly Shiite neighbourhoods in Beirut were attacked with rockets, car bombs and ambushes. On 19 November 2013, a double suicide bombing of Iran’s embassy killed 25, including a diplomat. In August 2014, the Lebanese Armed Forces (LAF) fought groups affiliated with the Islamic State (IS) and Jabhat al-Nusra in the border town of Arsal. Army deployment around Arsal and Hizbollah control over a swath of Syrian territory along the border have since helped reduce these attacks. “Rockets hit Beirut’s Dahiyeh”, Al Jazeera, 29 May 2013; “Dozens killed in the wake of the Dahiyeh explosion – Lebanese Red Cross”, Lebanese Broadcasting Company International, 15 August 2013; Crisis Group Middle East Briefing N°46, Arsal in the Crosshairs: The Predicament of a Small Lebanese Border Town, 23 February 2016.Hide Footnote It has also gained important operational expertise under Iranian and Russian military tutelage. It may yet parlay its vital military assistance into a political role in any future negotiations, either directly or through Iran. In blocking a regime change backed by the U.S., Turkey, Qatar and Saudi Arabia that would have shifted the regional power balance, it has cemented its own position and reinforced that of its patron, Iran, but it has also triggered daunting long-run challenges.

A. An Eroding Image and a Need to Rebrand

Since intervening in Syria, Hizbollah’s strategy and image have been profoundly altered. Fighting Israel and protecting the oppressed – the traditional pillars of its identity – have eroded, and it has redefined its primary purpose to fighting Sunni extremists.[fn]78.7 per cent of Lebanese Shiites supported Hizbollah’s Syria intervention, according to a 2015 survey held by Hayya Bina, an organisation led by a party critic. An-Nahar, 14 July 2015.Hide Footnote Formerly, it served as a cross-communal rallying force, within Lebanon and beyond, particularly when confronting Israel, but as regional polarisation increased, Hizbollah has come to rely more on its own Shiite constituency, operating within an increasingly sectarian regional order and contributing to it.

The merging of the two has proved awkward and forced the movement to juggle multiple contradictions. It stigmatises Sunnis, lumping all Syrian rebels together as takfiris and calling its Lebanese and Syrian political opponents Israeli or Western agents, while saying its fight is non-sectarian.[fn]Crisis Group Report, Lebanon’s Hizbollah, op. cit. A senior party official said, “our fight is not sectarian. We continue to support the Palestinian resistance. Are Palestinians Shiites?” Crisis Group interview, Beirut, October 2016.Hide Footnote It projects force while retaining its traditional rhetoric about resisting oppression;[fn]Nasrallah has repeatedly accused the Bahrain and Yemen governments of oppressing their people. In the October 2015 accident in Mecca that caused the deaths of hundreds of pilgrims, he described Saudi control of the sites and Hajj procedures an “historic oppression”. “Sayyed Nasrallah: Mina tragedy will have great impact on end of Saudi oppression”, Al-Manar, 14 October 2015. At the same time, Hizbollah members have begun to rationalise collective punishment, a practice used by Israel in Lebanon that has affected members’ families. One said, “Civilians killed in Syria are paying the price of their support for the takfiris”. Crisis Group interview, South Lebanon, August 2016.Hide Footnote denounces the Saudi-led and Western-backed coalition’s killing of civilians in Yemen, while ignoring its own and those of other regime allies in Syria;[fn]See Nasrallah’s speech during the annual Ashoura commemoration of Imam Hussein’s death, Al-Manar, 10 October 2016.Hide Footnote and engages in ruthless tactics such as sieges leading to starvation, while extolling its combatants’ morality.[fn]A senior Hizbollah official said, “recently some Syrian MPs visited us here from Aleppo. You should have seen the love and reverence they showed for Hizbollah. To them Hizbollah is holy because of its good behaviour and morality. Our morality in warfare is impeccable. We operate strictly according to what is halal and haram [religiously right and wrong]. No other resistance movement on earth can claim this the way we can. Indeed, in some [regime] areas of Syria, people only feel secure if Hizbollah is there”. Crisis Group interview, Beirut, October 2016. In contrast, an international relief organisation director said, “the besieged population of Madaya couldn’t care less about Hizbollah’s supposed morality. There, the group bears a huge responsibility for people’s suffering. Dozens have starved to death”. Crisis Group interview, Beirut, July 2016.Hide Footnote

The party has expanded across Syria, striking jihadist and non-jihadist groups alike […] in a bid to give its ally the upper hand in potential negotiations.

By presenting the fight as against takfiris, Hizbollah hopes to convince many initially sceptical supporters that its involvement is both appropriate and imperative.[fn]“The zeal of Hizbollah’s youth and their families is extremely high, and so is their morale. For the past three years, we’ve been recruiting young men, because everyone feels we are facing an existential threat. They see that Hizbollah’s intervention has made a difference: there are fewer suicide bombings in Lebanon, and no more rockets land on Beqaa villages”. Crisis Group interview, senior Hizbollah official, Beirut, April 2016.Hide Footnote It presents Assad as an indispensable partner in the war against Sunni jihadists and seeks to draw a broader international coalition into the fight, Russia in particular.[fn]From Hizbollah’s perspective, that coalition could indirectly also include its Western enemies. A party official said, “the U.S. and the West have understood that terrorists are the only alternative to Assad. Look how Western officials have stopped calling for Bashar’s downfall. They have now made the fight against Daesh [IS] and Jabhat al-Nusra their first priority”. Crisis Group interview, Beirut, May 2015.Hide Footnote However, in practice, its agenda has been much broader. The party has expanded across Syria, striking jihadist and non-jihadist groups alike (lumping them together as takfiris or part of a pro-Israeli West-backed axis) in a bid to give its ally the upper hand in potential negotiations.[fn]A Hizbollah official said, “basically, all armed Syrian groups share the same traits …. The differences between Jabhat al-Nusra [the Nusra Front previously tied to al-Qaeda, which renamed itself Jabhat Fatah al-Sham (Conquest of Syria Front) in 2016] and Ahrar al-Sham [a non-takfiri Salafi group] remain insignificant. They all are extremist, sectarian and anti-Shiite”. Crisis Group interview, Beirut, May 2016. Nasrallah described some armed opposition groups as “the Syrian Army of Lahad”, referring to the leader of the Israeli-controlled South Lebanon Army before Israel’s 2000 withdrawal. Nasrallah’s January 2015 speech, YouTube, 30 January 2015, www.youtube.com/watch?v=YjrQYt7bEYg. Prior to the rebels’ defeat in eastern Aleppo, UN envoy Staffan de Mistura publicly estimated Fatah al-Sham’s presence there at 900 of roughly 8,000 rebel fighters in the city. The Syrian opposition and Western diplomats said jihadist numbers were much lower (U.S. officials estimated around 200). Crisis Group interviews and communications, UN and U.S. officials, October 2016. Russia said the numbers were much higher. “Kerry plays down Syria deal hopes as Russia joins Geneva talks”, Reuters, 19 October 2016.Hide Footnote Though Hizbollah has repeatedly said it favours a political solution, its and its allies’ actions have helped the regime unabashedly pursue a maximalist military strategy, hoping that defeated rebels would be compelled to settle for a compromise on regime terms.[fn]See below. In December 2013, when the regime was on the defensive, a senior Hizbollah official said: “A resolution must be based on Bashar Assad staying in power, with some of his authorities removed. … I don’t think Assad will give up control of the military and security services. Maybe he would give the opposition cabinet positions on the economy, social and cultural affairs or media, in addition to allowing more freedom of expression”. Crisis Group interview, Beirut, December 2013.Hide Footnote

That is a risky bet, because if they do not, the remainder of the internationally-accepted opposition might join the jihadists. It also raises the question with whom the regime might compromise if potential partners are so thoroughly defeated they lose credibility and capacity to enforce a deal, while much of the population continues to reject the regime. How would it be able to govern?[fn]Hizbollah believes further regime victories will force the opposition to negotiate a settlement on its terms. A party official said, “clashes between al-Nusra and other opposition armed groups in Idlib [after their defeat in Aleppo] are significant …. If there is a complete break between them, the opposition will lose its military backbone [al-Nusra …. Then] speaking with [non-Nusra groups] will become possible even if Ahrar al-Sham took over everything, because then they will be sufficiently weakened militarily …. little more than an umbrella for foreign interference”. Yet, he acknowledged the regime and its allies could “benefit from giving the opposition just enough [in negotiations] to keep most opposition fighters on the side or agree to a deal, rather than joining al-Nusra in continuing the war”. Crisis Group interview, Beirut, January 2017.Hide Footnote

The bet is risky also because of possible consequences inside Hizbollah. The war has severely strained it. It is compensating for the regime’s manpower shortages and war-fighting incompetence by supplying thousands of fighters. Though party leaders downplay the significance of this, it has been one of Hizbollah’s main challenges, with an estimated 1,700 to 1,800 killed so far. By comparison, in its eighteen-year fight against Israeli occupation, it has lost around 1,200.[fn]A Hizbollah official said, “our combat casualties have been small and manageable, considering the size and importance of the war. They were high in Aleppo but have declined since. The party’s structure has not expanded significantly. Our strength in the war is qualitative more than quantitative”. Crisis Group interview, Beirut, January 2017. On casualty numbers, Crisis Group interview, Hizbollah official, Beirut, May 2016; and “Is Syria’s long war wearing down key Assad backer Hezbollah?”, The Christian Science Monitor, 4 October 2015.Hide Footnote

The leadership has argued that if the party does not fight Sunni extremism in Syria, it will have to do so at home.

The party has tried to overcome its manpower concerns by stepping up recruitment in Lebanon’s Shiite community, including with training and financial incentives. The leadership has argued that if the party does not fight Sunni extremism in Syria, it will have to do so at home.[fn]See text of Nasrallah’s speech, Al-Manar, 26 June 2013.Hide Footnote Before Hizbollah’s May 2013 military intervention, Lebanon was largely spared the type of violence that occurred across the border. However, the point of its leader, Hassan Nasrallah, was driven home shortly after, when, in apparent retaliation for Hizbollah’s intervention, suicide bombers from Syria attacked Shiites in Lebanon. Particularly notable were a July 2013 car bombing in Beirut’s predominantly Shiite Bir al-Abed neighbourhood that injured at least 53 and a suicide attack in Ruweis the next month that killed at least 25 and injured over 200.[fn]Also, separate suicide bombings struck the Iranian embassy and Iranian cultural centre in Beirut in, respectively, November 2013 and February 2014. “Rebel group claims Bir al-Abed attack”, and “Suicide bombers kill 25 near Iran embassy in Beirut”, The Daily Star, 11 July, 19 November 2013; “Deadly blast rocks a Hezbollah stronghold in Lebanon”, The New York Times, 15 August 2013; “Suicide bomber targets Iranian center in Lebanon”, Reuters, 19 February 2014.Hide Footnote

These events prompted Hizbollah to overhaul its profile. While at first it had not even publicly acknowledged its fighters were in Syria, using only the vague term “jihadist duty” as the circumstance of death when announcing casualties, it began to glorify its fighters’ role as popular support for its war effort increased, and it needed to foster yet greater backing to cope with its pressing manpower problem. It has gone outside its normal pool of party cadres to find recruits, employing them on a contract and submitting them to shorter training, a departure from long practice.[fn]See www.moqawama.org/essaydetails.php?eid=26124&cid=199. In Islam, jihad, literally “striving”, refers to the effort required to become a good Muslim and spread Islam. One component is military (holy war). Hizbollah calls its fighters mujahidin, those fighting a holy war. Funerals of fighters killed in Syria have become near-celebrations, with fireworks at the arrival of each new “martyr”. A resident of a southern village said, “we never used to hear fireworks when fighters were killed … against Israel”. Crisis Group interview, south Lebanon, August 2016. Recruits usually do three-months training before going to Syria and receive a salary for time at the front. Crisis Group interview, newly-recruited fighter, Beirut, July 2016.Hide Footnote This has allowed many young Shiite males to continue a seemingly normal life in Lebanon while fighting in Syria on a rotating basis.

They have multiple reasons for agreeing to fight. Some have a financial motive, but growing sectarianism and fear of Sunni extremism are the greatest draw. Moreover, in a country whose state has failed to provide basic needs, viable prospects or, more importantly, a sense of dignity, fighting jihadists in Syria gives many meaning and purpose. A fighter who joined the party’s ranks in 2013 said:

Before joining Hizbollah my life was meaningless. Since I became a party member, I have a cause to fight for, and I have gained respect and status in my community. And in addition to my social and military duties, I am also fulfilling the religious duty to serve my people.[fn]Crisis Group interview, Beirut, August 2016.Hide Footnote

Hizbollah has capitalised on this, giving new recruits a sense of belonging and a network and rewarding them monetarily, or their families if they die in battle. Under the party’s guidance, the Shiite community pays tribute to a martyr’s memory, envelops his family with emotional and material support and especially honours his mother (oum al-shahid) for her sacrifice. Such social and religious rituals tie fighters’ families more intimately into a cohesive, albeit increasingly sectarianised community and encourage others to show the same readiness to sacrifice children.[fn]Crisis Group interviews, Hizbollah officials and fighters, Beirut, May 2015-November 2016. A researcher who works on Hizbollah said, “women occupy an important place inside the party. Mothers, wives and daughters are religiously and psychologically prepared by their fellow party members to accept the idea of jihad and martyrdom. They are prepared for the possibility that their children, husbands or fathers become fighters and die in battle”. Crisis Group interview, Beirut, October 2016.Hide Footnote While the majority of Lebanon’s Shiites appear to remain solidly behind the party, at least for now, there are sceptical voices, fuelled by Syria’s escalating violence, which calls into question the party’s military prowess and the prospect of its fighters returning home victorious and soon. Dubious of Hizbollah’s triumphant narrative during May 2016 battles in the Qalamoun area, a university professor with party ties said, “in recent days, they have made so many strategic gains that one has to wonder how they lost these strategic places in the first place”.[fn]Hayya Bina July 2015 survey in An-Nahar, op. cit. Crisis Group interview, Beirut, May 2016.Hide Footnote

The effort to close ranks can barely disguise a certain malaise among supporters nostalgic for the contest with Israel, an abiding source of pride and consensus across the region. A fighter said, “of course, I wish we were fighting Israel and not in a conflict that is dividing the Arab world”. Military mobilisation also compels the party to accept relaxed social practices, triggering suspicions among some hard-core cadres. A former fighter against Israel said, “our generation used to pray the entire night before going to battle. Now, you see some of these guys spending their days in cafés, smoking the shisha [waterpipe], before they go off to Syria”.[fn]Crisis Group interviews, Beirut, May, September 2016. The behaviour of some young, fresh recruits without the rigorous religious discipline of Hizbollah cadres poses challenges for the party inside Lebanon. According to a Hizbollah local official, “some … have picked fights with other residents or acted arrogantly within the community. We had to call them to order”. Crisis Group interview, South Lebanon, August 2016.Hide Footnote

Arguably the greatest harm to Hizbollah’s reputation derives from having to play the sectarian card. This could ultimately jeopardise its and the wider Shiite community’s relationship with their environment. An Iraqi cleric with ties to Hizbollah said:

What would push young [Lebanese] Shiites to fight in Syria? Very few would go for Bashar’s sake, or even Iran’s. It’s a single stone of the [Shiite] Sayyida Zeinab shrine [in Damascus] that mobilises them. Yet, this could be very dangerous in the long run. One day, leaders may sit around the negotiating table, but it will be very difficult to heal broken spirits from this sectarian rift.[fn]Crisis Group interview, Beirut, May 2016.Hide Footnote

Hizbollah’s starvation-inducing siege of two majority-Sunni villages in Syria (since 2015), Zabadani and Madaya, has followed the same sectarian logic of Sunni rebels who have blockaded two Shiite villages north of Idlib, Fouaa and Kefraya.[fn]Rebel groups took control of Idlib city in March 2015 and continued an offensive in the surrounding countryside, besieging the Shiite villages of Fouaa and Kefraya. In July, regime forces and Hizbollah besieged the Sunni villages of Madaya and Zabadani further south. A few weeks earlier, intense bombing of Zabadani pushed 20,000 fighters and civilians to seek refuge in Madaya. “Madaya: The two other Syrian villages where 20,000 people have been starving under rebel siege”, The Independent, 12 January 2016; “Syrian forces close in on rebel-held Zabadani”, BBC, 4 July 2015; “Anatomy of a Siege: the Story of Madaya”, Syria Deeply, 28 January 2016.Hide Footnote Both Hizbollah and rebels have subjected residents of these villages to constant rocket and sniper attacks to force concessions.[fn]Hizbollah reportedly took control of checkpoints surrounding Madaya and Zabadani, cracking down on corruption and smuggling that regime forces allowed. The humanitarian sit­uation deteriorated dramatically, as dozens died from starvation in Madaya in winter 2015-2016, despite aid deliveries. There are now some 40,000, mainly civilians, in Madaya and Zabadani and 21,000-22,000, mainly civilians, in Fouaa and Kefraya. “Sieges in Syria: Profiteering from Misery”, Middle East Institute, June 2016; “Five people starved to death in Madaya despite aid delivery, UN says”, The Independent, 18 January 2016; Crisis Group telephone interviews, Syrian fighter, activist, doctor, local official, Zabadani, Madaya, Fouaa, October 2016, February 2017. A Fouaa local official lamented: “We are witnessing a real catastrophe …. Yesterday, a young man was killed by a sniper; a women almost went crazy … because she has four children whom she hasn’t been able to feed for four days”. Crisis Group telephone interview, February 2017. An activist in Madaya said: “We are living in a prison. But prisoners receive food and medical treatment …. We are left here to die …. We feel as if we are … cave people, completely disconnected from the outside world”. Crisis Group telephone interview, February 2017.Hide Footnote In September 2015, Hizbollah and regime forces reached a deal with opponents, the “Four Towns Agreement”, that enabled aid delivery and evacuation of the wounded in all four villages, but both sides have repeatedly hampered implementation.[fn]“Siege Watch, Third Quarterly Report on Besieged Areas in Syria”, PAX and the Syria Institute, July 2016. Crisis Group telephone interviews, Syrian activist and doctor, Madaya, October 2016. The activist said, “if one person gets injured, it is impossible to get him or her evacuated unless someone in Fouaa or Kefraya has the same injury. If someone is hit there, Hizbollah will keep shooting at us until it gets the same injury and then impose a simultaneous evacuation”. A Fouaa local official said, “if one rocket is launched on Madaya, the terrorists respond by shelling us a whole day. They have destroyed everything …. Even the grass that we eat to survive is now frozen [because of the cold]. They did not allow aid in since November”. Crisis Group telephone interview, February 2017. Under the “Four Towns Agreement”, aid is intermittently allowed into the villages, but it is barely sufficient for basic needs.Hide Footnote

While accounts about conversion to Shiism promoted by Iran, Hizbollah and other Shiite militias abound in opposition milieus, it is difficult to verify its extent. There are reasons to be sceptical; Shiites are less than 1 per cent of the population in Syria, a slim basis to build on.[fn]Syrian Shiites live in small communities in Damascus, the coastal cities, Daraa, Homs, Idlib and Aleppo. Crisis Group telephone interviews, experts on Syria, February 2017. According to demographer Youssef Courbage, they were only 0.4 per cent of the population in 2012. “Ce que la démographie nous dit du conflit syrien”, Slate, 15 October 2012. In 1973, Lebanese Shiite cleric Mousa al-Sadr issued a fatwa (legal opinion by expert in Islamic law) recognising Alawites as part of the Shiite sect. However, Shiites and Alawites have distinct religious and social practices. “Iran-Syria Religious Ties”, United States Institute for Peace, 3 June 2013.Hide Footnote Yet, particularly Shiite religious practices, such as Ashoura celebrations, have become more visible, some accompanied with sectarian provocations.[fn]A Zabadani fighter lamented: “They raised Hizbollah’s flag on the most important mosque inside our town [in August 2015, with battles still raging]. It was such a provocation. I am not very religious, but it made me furious, so you can imagine what a devout person might think!” Crisis Group telephone interview, October 2016. “هلاك محمد طالب رافع راية حزب الله فوق مسجد بالزبداني (فيديو)”, YouTube, 23 August 2015, www.youtube.com/watch?v=PoaukKFgvLo. A Syrian relief worker in Damascus said, “with the increasing influence of Hizbollah and Iran, you see many provocative actions in Sunni areas, such as Kafar Suseh in Damascus. Shiite militiamen drive around shouting Shiite chants and poking their rifles out of the car window. They do the same in al-Midan, an area with a large Sunni concentration. This is very sensitive, very provocative”. Crisis Group telephone interview, November 2016.Hide Footnote A Syrian relief worker in Damascus explained:

It is difficult to give a definitive answer on the question of tashayu (Shiite conversion). It is certain that Shiites are being encouraged to display their religious identity more clearly. We never saw large commemorations of Shiite events like Ashoura in Syria before …. Also, if you go to Bab Touma [an old Christian neighbourhood of Damascus], you will see a lot of Shiite religious symbols. Even Christians are complaining about the heavy Shiite presence.[fn]Crisis Group telephone interview, November 2016. The presence of a Shiite shrine that attracts religious tourism and of a small Shiite community in a neighbourhood adjacent to Bab Touma might explain this sectarian display.Hide Footnote

Many regime opponents are convinced that Hizbollah’s long-term strategy is to empty the border region adjacent to Lebanon’s majority-Shiite Beqaa Valley of its Sunni population.[fn]Crisis Group telephone interviews, Syrian fighter, activist, doctor, Zabadani, Madaya, October 2016. A Syrian journalist predicted: “Hizbollah will never allow people to return to the area”. Crisis Group interview, Beirut, September 2016. While Hizbollah and its allies may not allow a complete refugee return to the border area, the party has reportedly been negotiating with rebel factions the return of up to 300,000 Syrian refugees, prioritising those displaced in the north-eastern Lebanese town of Arsal, a majority of whom hail from the Qalamoun region. Crisis Group interview, Western diplomat, March 2017. See “Hizbollah’s Diplomacy in Qalamoun”, The Atlantic Council, 1 March 2017; “Analysis: ‘Safe Zone’ on Lebanon Border Would Benefit Hezbollah, Iran”, Syria Deeply, 7 March 2017.Hide Footnote

For now, Hizbollah seems to have deferred thinking about how to limit or mend damage from its role in Syria. It is digging in psychologically for a long fight. A senior party official said, “we will keep fighting for as long as necessary; if that means ten years or twenty years, so be it. We are ready and our young men are motivated. Anyway, what alternative do we have?” Tellingly, Hizbollah chose “Patience and Victory” as its slogan for Ashoura in October 2016.[fn]Crisis Group interview, Beirut, April 2016; observation, Beirut, October 2016.Hide Footnote Nor has thinking begun about what it should do once the conflict ends. A senior official said its fighters would return to Lebanon, because the party assumes that a political settlement would keep the regime in power, thus securing Hizbollah’s and Iran’s, interests.[fn]Crisis Group interview, Beirut, October 2016. A few months later, a Hizbollah official said, “it is too early to say what the party’s future role in Syria will be. This will depend on what kind of solution is reached. Until now, the party is seeking to achieve its field-related objectives. We have not embarked on a political debate yet”. Crisis Group interview, Beirut, January 2017. In January 2017, following a Russia-Turkey-brokered ceasefire [with Ankara reportedly demanding withdrawal of all foreign fighters], the Iranian supreme leader’s senior adviser, Ali Akbar Velayati, asserted that the “claim that Hizbollah would leave Syria after the ceasefire is mere propaganda by the enemy”. Quoted in As-Sharq al-Awsat, 4 January 2017.Hide Footnote Yet, a settlement appears far off.

At a popular level inside Syria, Hizbollah seems to bet on those who despite their discontent continue to support the pro-regime axis for self-preservation.[fn]A Hizbollah official said, “the regime might not control all Syria, but more than 60 per cent of the population live in areas under its control. [There] people have a lot of respect and appreciation for [Hizbollah]”. Crisis Group interview, March 2016. Crisis Group research in Syria and Lebanon, however, reveals that many Syrians deeply resent the party.Hide Footnote In its relations with Syrian (mostly Sunni) refugees in Lebanon, Hizbollah has displayed restraint, welcoming them to areas under its influence (while watching them closely for political activities) and ensuring that its supporters do not clash with them.[fn]Crisis Group observations, Beirut, South Lebanon, Beqaa Valley, January 2013-October 2016. Nasrallah urged the government to adopt a humanitarian approach toward the refugees. In 2013, he rejected demands by his Christian ally, the Aoun-led Free Patriotic Movement, to seal the borders. He also urged supporters not to attack Syrian refugees. More recently, he encouraged the government to coordinate with Damascus to ensure refugee return to safe areas in Syria. Al-Akhbar, 3 January 2013; “Hezbollah against U.S. intervention in Syria: Nasrallah”, The Daily Star, 23 September 2014; Al-Manar, 13 February 2017.Hide Footnote Party officials working in local municipalities or with Hizbollah’s social organisations have provided services to Syrians in predominantly Shiite areas, fostering goodwill. The party believes it can, in future, build on their support. If and when the war ends, however, Hizbollah and its allies will still face the threat of Sunni jihadist violence in Syria and Lebanon, reflecting the region’s open sectarian wound and the ongoing rivalries between Saudi Arabia and Iran and between Turkey and Iran that prevent it from healing.[fn]A senior Hizbollah official predicted: “Even if an agreement is reached, Jabhat al-Nusra and Daesh will not commit to it. There will still be groups in rural areas carrying out terrorist attacks against the regime”. Crisis Group interview, Beirut, October 2016. A party member said, “the Syrians are not against us. Refugees can see how we are treating them in Dahiyeh, the south and the Beqaa”. Crisis Group interview, Beirut, May 2016. Crisis Group’s Lebanon research confirms that refugees have mostly enjoyed fair treatment and safety in areas under Hizbollah influence.Hide Footnote

B. Saudi Sanctions

The Syria intervention has also changed the way other regional actors see Hizbollah. Its relations with Riyadh in particular have taken a nosedive. From nuisance – a competitor with Saudi proxies in Lebanon such as Saad Hariri’s Future Current – it has grown into a significant regional player in its own right and ever-more potent leverage for Tehran. This evolution has galvanised its foes.

Between the end of the civil war and the assassination of ex-Prime Minister Rafic Hariri (Saad’s father), Lebanon was under Syria’s hegemony. Saudi Arabia, a main broker of the Taef agreement that ended the war, had major influence through Hariri and acquiesced to Hizbollah’s role as long as it was focused on confronting Israel. The assassination changed that, because Riyadh, Western states and others pointed at the Syrian regime as the culprit and at Hizbollah by association. Yet a relationship continued, even during the 2006 war, which Riyadh accused Hizbollah of triggering.[fn]Al Jazeera, 14 July 2006.Hide Footnote Between 2006 and 2008, the party avoided clashing with Saudi interests in Lebanon, conscious of the widely shared perception of Saudi leadership in the Sunni world.[fn]For background, see Crisis Group Middle East Report N°39, Syria After Lebanon, Lebanon After Syria, 12 April 2005. “Hezbollah escalates rhetoric against Riyadh”, Al-Monitor, 10 December 2013. In 2006-2008, Nasrallah did not publicly attack Saudi Arabia, focusing instead on its Lebanese ally, the Future Current. Crisis Group observations, Beirut, September 2006-May 2008.Hide Footnote

In May 2008 fighting in Beirut, Hizbollah dealt a humiliating defeat to the Future Current and other Sunni militias, compelling the Saudi ambassador and dozens of others to flee by boat.[fn]In May 2008, after the government decided to dismantle its independent communications network, Hizbollah and some allies mounted a large military operation. They quickly controlled predominantly Sunni West Beirut, besieged Prime Minister Saad Hariri (Rafic’s son) in his residence and overran the Hariri TV channel and newspaper and the Future Current headquarters. The party also clashed with Druze militia from Walid Jumblat’s Progressive Socialist Party in Mount Lebanon. Crisis Group Middle East Briefing N°23, Lebanon: Hizbollah’s Weapons Turn Inward, 15 May 2008; “200 people flee Lebanon for Cyprus”, Now, 12 May 2008.Hide Footnote Acknowledging the lopsided power balance on the ground, Saudi Arabia called for calm and urged Hariri to make concessions, the Doha Agreement.[fn]The Doha agreement gave rise to a national unity government in which the Hizbollah-led March 8 coalition enjoyed veto power. “Deal for Lebanese factions leaves Hezbollah stronger”, The New York Times, 22 May 2008.Hide Footnote

The Arab Spring and Syria war completed the transformation. Jumping to the defence of Shiites throughout the region, Hizbollah condemned the March 2011 Saudi military intervention in Bahrain and its treatment of its own Shiite population in the Eastern Province.[fn]At the beginning of the Arab Spring but before the Syria war, Nasrallah did not explicitly attack Saudi Arabia but criticised the repression of “peaceful Shiite protesters”, directing his ire at Bahrain’s ruling al-Khalifa family. See excerpts of his 19 March 2011 speech, YouTube, www.youtube.com/watch?v=A18uxsK4pkY. Referring to demonstrations in Saudi Arabia’s predominantly Shiite Eastern Province in 2011, he said Saudi authorities “call for moral conduct [in Syria]. In al-Qatif and al-Awamiya people are not even calling for the toppling of the regime; all they want are a few rights, a few reforms and a little development. They live in poverty in one of the wealthiest areas. How do they respond? By using bullets and tanks, calling for a military solution and … declaring [demonstrators] heretics and criminals”. See his 24 February 2012 speech, YouTube, www.youtube.com/watch?v=ZfuRjpl3zZc. In December 2013, it accused Riyadh of masterminding suicide attacks in predominantly Shiite areas in Lebanon, and in April 2015, it charged Saudi Arabia with “genocide and crimes” in Yemen. A month earlier, Nasrallah had directly insulted members of the Saudi royal family.[fn]“Nasrallah: Saudi behind Iran embassy bombing in Beirut”, Al-Alam, 4 December 2013. “Iran can’t be compared to ‘backward’ Saudi Arabia: Hezbollah”, The Daily Star, 15 April 2015. Hizbollah accords special importance to Yemen’s war. Leaders, officials and media have developed an anti-Saudi narrative focussed on human losses from airstrikes and the quagmire in which they say the Saudis have landed. “Nasrallah slams Saudi over Yemen op, says it did nothing for Arabs other than ‘sending Daesh’”, Naharnet, 27 March 2015.Hide Footnote For its part, Saudi Arabia condemned Hizbollah’s Syria intervention, which one official termed an “invasion”. In 2016, a Saudi military official accused Hizbollah of sending “mercenaries” to Yemen to support the Huthis. Most frequently, however, Saudi-backed Lebanese officials and media took the lead in criticising Hizbollah and defending the kingdom.[fn]“Saudi says ‘cannot be silent’ at Iran, Hezbollah role in Syria”, Reuters, 25 June 2013. Then-Foreign Minister Saud al-Faysal said, “the most dangerous development [in Syria] is the foreign participation, represented by Hizbollah and other militias supported by the forces of the Iranian Revolutionary Guard”. Al-Arabiya, 24 February 2016. “Hariri: Hezbollah’s accusations against Saudi Arabia are in line with Iranian and Syrian regimes’ behavior”, The National New Agency, 3 January 2016.Hide Footnote

Only in Lebanon was Saudi Arabia constrained – by Hizbollah’s dominance. It therefore set out to curtail the party’s influence politically and financially.

Not only Hizbollah but also Saudi Arabia changed its posture in the region. The latter responded to the 2011 uprisings with an assertive new foreign policy. Its intervention in Bahrain, military support of Syrian rebels, increased funding to oil-poor Jordan and Morocco, invitation to those two monarchies to join the Gulf Cooperation Council (GCC) to inoculate them against popular upheaval and March 2015 war in Yemen were all sharp departures. Only in Lebanon was Saudi Arabia constrained – by Hizbollah’s dominance. It therefore set out to curtail the party’s influence politically and financially.

In February 2016, it withdrew a $3 billion pledge of military aid to the Lebanese Armed Forces (LAF), along with another $1 billion in planned funding to the Internal Security Forces (ISF), reportedly in response to Lebanon’s failure to condemn the January attacks on Saudi diplomatic missions in Iran, or what official Saudi media described as “hostile Lebanese positions resulting from the stranglehold of Hizbollah on the State”.[fn]According to pledges announced in 2013, France would deliver $3 billion of weapons to the Lebanese army, paid for by Saudi Arabia. A first shipment was in April 2015. “Lebanon receives first shipment of French weapons”, The Daily Star, 20 April 2015. After the 2 January 2016 execution of prominent Shiite cleric Nimr al-Nimr in Saudi Arabia, protesters ransacked and torched the Saudi embassy in Tehran. “Iranian protesters ransack Saudi embassy after execution of Shiite cleric”, The New York Times, 2 January 2016. “Saudi issues fresh sanctions over Hizbollah ties”, The National, 27 February 2016.Hide Footnote The Saudi move deprived the military of equipment and weapons needed to face spillover threats from the Syrian war, for which many Lebanese blamed Hizbollah. However, it also reduced the kingdom’s already shrinking influence in Lebanon. A fierce Hizbollah opponent with close ties to the kingdom lamented: “This Saudi retreat will only empower Hizbollah and reinforce Iran’s stranglehold over Lebanon”.[fn]“Lebanese trade accusations over Saudi aid suspension”, Associated Press, 21 February 2016; Crisis Group interviews, businessman, residents, Beirut, April 2016. “Saudi Arabia punishes the Iranian project in Lebanon”, As-Sharq al-Awsat, 20 February 2016. Crisis Group interview, Beirut, April 2016. Lebanese President Michel Aoun chose Saudi Arabia for his first visit after his October 2016 election. According to some media reports, it helped improve relations. (Aoun’s son-in-law, Foreign Minister Gebran Bassil, had refused to sign the March 2016 Arab League statement condemning Iran and Hizbollah.) Hizbollah officials say the visit yielded no major results. “Saudi Minister meets Aoun, says new ambassador to Lebanon appointed”, Naharnet, 6 February 2017; Crisis Group interview, Beirut, January 2017.Hide Footnote

Antagonism toward Hizbollah reached fever pitch in March 2016, when the Gulf Cooperation Council labeled the party a terrorist group (a similar attempt in 2013 had dissolved in disunity). Shortly afterward, the Arab League and Organisation of Islamic Cooperation (OIC) followed suit. The decision had little direct impact on the party, which has few interests in the Gulf, except for the expulsion of a few Lebanese with alleged Hizbollah links.[fn]“Gulf Arab states label Hezbollah a terrorist organization”, Reuters, 2 March 2016. In 2013, attempts to condemn and cut ties with Hizbollah exposed GCC disunity; only Bahrain labelled it as terrorist, and Qatar partially restored relations shortly afterward, when Doha mediated the release of nine Lebanese Shiite pilgrims taken hostage by a Syrian armed group in Azaz in northern Syria. “Gulf states agree to blacklist Hezbollah as terrorist group”, Al-Arabiya, 17 July 2013; “GCC rules out possibility that Gulf will blacklist Hizballah as terrorist group”, Naharnet, 10 September 2013. “Saudi Arabia turns up the heat on Hezbollah”, Brookings Institution, 29 March 2016. “Lebanese expats fearful as Gulf expels dozens accused of Hezbollah links”, Reuters, 8 April 2016.Hide Footnote But it had great symbolic impact, as it revealed how the once historically acclaimed party of heroic resistance against Israel had become ostracised in an important part of the Arab world.

The Syria war has turned the Saudi-Iranian rivalry into a zero-sum proxy conflict, not just over their respective interests, which may be reconcilable, but over identity. This has sharpened sectarian rhetoric and heightened reciprocal Sunni-Shiite denigration. Hizbollah and Iranian officials have cited examples of bigotry against Shiites in Saudi political and religious discourse as a cause of the political impasse in Syria and elsewhere.[fn]An Iranian official said, “Saudi Arabia denies Iran the right to any role in the region. Shiites and Iran are [its] perfect enemy. Take Syria for instance. Why do they talk to the Russians but not to us about Syria? Enmity with Iran and the Shiites has become … the sole solution to all their problems”. Crisis Group interview, Tehran, May 2016. A Hizbollah official said: “We have an irrational leadership in Saudi Arabia that feeds on sectarian animosity … and fuels it. The U.S. should rein in the Saudis’ erratic behaviour”. Crisis Group interview, Beirut, May 2015.Hide Footnote Saudi Arabia went on the offensive against what it perceived as combined Iranian and Shiite expansionism, and Hizbollah and Iran now see it as the source of the region’s turmoil and one of the principal threats to survival of the “resistance axis”. A Hizbollah official said:

Just look at what the Saudis are doing in the region. They are inflaming every conflict, and it is they who created Daesh [IS]. This is Saudi warmongering. Even in Lebanon, the country whose stability and calm all regional and [wider] international players want to preserve, the Saudis went on the offensive [by cutting off aid and labelling Hizbollah terrorist], sending a message that even Beirut won’t be safe from their aggressive policy.[fn]Crisis Group interview, Beirut, April 2016.Hide Footnote

Saudi Arabia and its allies read the situation differently, interpreting Hizbollah’s actions as a drive for hegemony. A Lebanese official with close ties to the kingdom contended: “Saudi Arabia has tried dialogue and offering concessions to Iran and Hizbollah [following the 2008 Doha Agreement on Lebanon]. Where did this get us? Only to further hegemony and control by Tehran and its proxy. Compromise did not work; it will only allow Hizbollah’s hegemony to grow”.[fn]Crisis Group interview, Beirut, April 2016.Hide Footnote

The party has come under increasing international pressure following adoption in the U.S. in December 2015 of the “Hizballah International Financing Prevention Act” (HIFPA). It imposes, inter alia, sanctions on any non-U.S. financial institution that “knowingly facilitates a significant transaction or transactions for Hizballah … [and] of a person identified on the list of specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control of the Department of the Treasury”. Fearing retribution, Lebanese banks overreacted, not only closing hundreds of the party’s accounts, but also freezing those of party backers not expressly covered by the act.[fn]Public Law N°114-102, Hizballah International Financing Prevention Act of 2015, 18 December 2015, https://www.congress.gov/bill/114th-congress/house-bill/2297/text/pl. “How Lebanese banks are handling US sanctions on Hezbollah”, Al-Monitor, 12 January 2016. The U.S. also targets Hizbollah’s alleged activities in Africa and Latin America. “Treasury sanctions Hezbollah operatives in West Africa”, Treasury department, 6 November 2013; “U.S. intensifies bid to defund Hezbollah”, The Wall Street Journal, 16 December 2015. The European Union put Hizbollah on its terror list in 2013, due to its military role in Syria and alleged involvement in a 2012 bus bombing in Bulgaria that killed five Israeli tourists and their driver. “EU adds Hezbollah’s military wing to terrorism list”, Reuters, 22 July 2013.

This ignited a heated dispute between Hizbollah and Central Bank Governor Riad Salameh, who asserted that the U.S. law had to be applied to avoid the banking sector’s international isolation. The party verbally attacked the Central Bank, which convinced many politicians, analysts and citizens that it was the culprit in the June 2016 bombing of the headquarters of Blom Bank in central Beirut after the bank froze several Hizbollah-linked accounts.[fn]“Lebanon central bank says must comply with U.S. Hezbollah law”, Reuters, 17 May 2016. The Blom Bank attack caused damage but no fatalities. The Daily Star, 12 June 2016. “Economic Alternatives Could Help Split Shiites from Hezbollah”, Washington Institute for Near East Policy, 18 October 2016.Hide Footnote The banking sanctions touched a raw nerve: by putting in jeopardy Hizbollah’s social network, they threatened its position as a main service provider to the Shiite community and compounded the financial strain caused by its involvement in Syria.[fn]A journalist with close Hizbollah ties said, “Hizbollah had to cut between 15 and 20 per cent of the aid it provides its followers because it had to reallocate funds to its war effort”. Crisis Group interview, Beirut, September 2016. A party member acknowledged: “Compared to how the party used to support martyrs’ families, our assistance has shrunk …. The deaths of our fighters put an additional burden on our budget”. Crisis Group interview, Beirut, October 2016.Hide Footnote The new U.S. administration’s vow to take a more aggressive approach toward Iran and its regional influence may further increase pressure on the party.[fn]In February 2017, the Trump administration imposed new sanctions on Iran. Among those affected were individuals allegedly involved in laundering money for Hizbollah. “Trump sanctions Iran over missile test”, The Washington Post, 3 February 2017.Hide Footnote

C. All Quiet on the Southern Front?

While Hizbollah’s primary objective in Syria is preserving the regime, it has also cast its role there as a continuation of its 2006 war against Israel. According to this narrative, the U.S., Israel and Saudi Arabia, working in concert, are using the Syria crisis to finish off the “resistance axis” by severing the bond holding it together, the Assad regime. A senior Hizbollah official said:

Syria is the link between Iran and the Resistance [Hizbollah]. If that connection is lost, Lebanon will be stuck between a rock and a hard place, between Israel and an Israeli Syria. This is why we went into Syria and have been fighting there.[fn]Crisis Group interview, senior Hizbollah official, Beirut, May 2016. Hizbollah has repeatedly accused Syrian armed groups and political opposition of serving Israeli and Western interests.Hide Footnote

Ten years have passed since the 2006 war. The post-war equation – mutual deterrence based on each side’s fear that the next round could be broader and more devastating – has dissuaded both from escalating. Hassan Nasrallah declared in an interview shortly after the fighting ended: “You ask me, if I had known … there was 1 per cent chance that the kidnapping [of two Israeli soldiers by Hizbollah] would lead to such a war, would I have done it? I say ‘no, absolutely not’, for humanitarian, moral, social, security, military and political reasons”.[fn]An-Nahar, 27 August 2006.Hide Footnote

The Syria war may have introduced new and dangerous variables, but Hizbollah’s preoccupation with fighting Syrian insurgents has kept it from even attempting to confront Israel anew in southern Lebanon. In 2012, it said the Syrian conflict was not affecting its fighting capacity against Israel, but today the situation has changed, as it has had to dedicate the bulk of its financial, military and human resources to that war. Its involvement also has antagonised important segments of Lebanese and Syrian society, leaving it vulnerable on the Israeli front – a point not lost on Israeli strategists.[fn]“We have special forces dedicated to the fight against Israel; our forces in Syria are different”, a senior Hizbollah official said. Crisis Group interview, Beirut, June 2012. An Israeli defence official said, “Hizbollah has an interest in keeping things calm. They are still deterred. Nasrallah said that he wouldn’t have gone to the [2006] war had he known … the price …. They are stretched, and international sanctions are targeting their revenue”. Crisis Group interview, Tel Aviv, October 2016. Both parties realise the stakes have become much higher. Another Israeli defence official threatened: “What we will do to Lebanon has not been seen since World War II. We will crush it and grind it into the ground. They have upgraded their capacities as well – they have 100,000 missiles. Today there is mutual deterrence between us and no one wants war”. Crisis Group interview, Tel Aviv, October 2016. A newly retired Israeli National Security Council official said there are three reasons why Hizbollah cannot fight another war with Israel now: “the damage caused to them and the Lebanese state in 2006; the derivative deterrence caused by the fact that for many years there will be fears by non-Sunnis in Syria that Sunnis will rape six-year-old Shiite girls and dismember them; and Iran’s restraint until the right moment”. Crisis Group interview, October 2016.

It is difficult to predict how most Lebanese would respond to a new round of conflict; as in 2006, many might support Hizbollah.[fn]Druze leader Walid Jumblatt said, “many Syrians and Lebanese would rally behind the party …. Israel remains the number one enemy for many”. Crisis Group interview, Beirut, June 2014.Hide Footnote It would not be surprising, however, if many others, especially in the Lebanese Sunni community, would see it as an opportunity for revenge, as would anti-regime Syrians. A Lebanese analyst explained: “In 2006, many Lebanese blamed Hizbollah for the war. At the time, you could hear people wishing for Israel’s victory to get rid of the party. In many Sunni milieus, this sentiment has risen exponentially after Syria”.[fn]Crisis Group interview, Tripoli, September 2016.Hide Footnote Echoing this, a Syrian journalist said:

A war with Israel might be a rallying force behind the party for some, especially if we see the usual collective punishment by the Israeli army. But many Syrians [who massively welcomed displaced Lebanese Shiites in 2006] bear a deep hatred toward Hizbollah that now surpasses their hatred of Israel.[fn]Crisis Group interview, Beirut, October 2016.Hide Footnote

Israel has kept a close eye on the party as it became mired in Syria. While concerned about its acquisition of new weaponry and expertise from exposure to the Russian military, it has avoided intervening directly, for fear of redirecting the fight toward itself, preferring for the party to succumb in a war of attrition.[fn]“Hezbollah’s Russian Military Education in Syria”, Washington Institute for Near East Policy, 24 December 2015.Hide Footnote Yet, it has laid down strategic red lines: Iran’s transfer of sophisticated long-range, high-precision weaponry to Hizbollah; an attempt by Hizbollah fighters, supported by Iran, to gain a foothold on the Golan Heights and extend the party’s front line with Israel from Lebanon deep into Syria; and rocket attacks, intended or inadvertent, from Syrian territory into Israel, regardless of the perpetrator.[fn]Crisis Group interviews, Israeli officials, Jerusalem, Tel Aviv, 28-29 September 2016. An Israeli foreign ministry official said: “We retaliate in the Golan when fired at. All the attacks against us have been by local proxies, including Druze groups and Palestinian Islamic jihad”. Crisis Group interview, Jerusalem, October 2016. Speaking of Israel’s response, a Russian diplomat said, “All retaliatory attacks have been of government positions in the northern part of southern Syria”. Crisis Group interview, October 2016.Hide Footnote As a warning and deterrent, it has attacked alleged Iranian arms shipments to Hizbollah inside Syria on several occasions, and systematically responded to rocket fire from Syria by targeting regime positions.[fn]“Israeli strikes in Syria highlight fear over Hezbollah’s growing arsenal”, Al Jazeera, 27 April 2015. “Israel strikes Syria in response to rocket fire in the north”, Haaretz, 21 August 2015.Hide Footnote

Israeli officials seem particularly concerned that Hizbollah might try, with Iranian help, to exploit a vacuum in southern Syria to establish an underground military network around Quneitra, near the Israeli border, and mass forces there.[fn]Crisis Group interviews, Israeli officials, Tel Aviv and Jerusalem, September-October 2016.Hide Footnote In January 2015, an Israeli helicopter attack killed six, including a Hizbollah commander, an IRGC officer and Jihad Mughniyeh, the son of Hizbollah’s late military chief, Imad Mughniyeh. An Israeli newspaper quoted Western intelligence sources as claiming that a unit headed by Jihad Mughniyeh had been plotting “to attack Israel with rockets, anti-tank missiles and bombs, and planned to send terror operatives into Israeli territory”.[fn]“Israeli strike in Syria kills late Hezbollah leader’s son, sources say”, Haaretz, 18 January 2015.Hide Footnote Several sources assert that Hizbollah has been training Syrian government forces in the area.[fn]Ibid; and Crisis Group interviews and telephone interviews, pro-regime and anti-regime Syrian journalists and activists, Beirut, April 2015-May 2016.Hide Footnote

In the Golan, it is hardly plausible that Hizbollah would pursue its military activities without Iran’s support and supervision. The deaths of Mughniyeh and an Iranian officer suggest these efforts are closely coordinated. In a commemoration speech for the “Quneitra martyrs” following the attack, Nasrallah declared:

We in the Islamic resistance in Lebanon no longer recognise the [old] rules of engagement [that kept the Lebanese front separate from Israel’s Syria relationship] …. There are no rules of engagement when one confronts aggression and assassinations. We no longer accept the separation of the battlefronts.[fn]Al-Manar, 30 January 2015.Hide Footnote

Almost a year later, an Israeli airstrike on the outskirts of Damascus killed Samir Kantar, allegedly the head of the Syrian Resistance for the Liberation of the Golan, a little-known regime-backed group advised and equipped by the IRGC and Hizbollah.[fn]“Hizbollah prisoner swap under way”, Al Jazeera, 16 July 2008; “Slain Hezbollah operative’s role shrouded in mystery”, Al Jazeera, 22 December 2015. Kantar was released in 2008 after 30 years in an Israeli prison in return for the remains of the two Israeli soldiers Hizbollah captured in 2006, and joined the party soon after. The group Kantar headed reportedly aimed at an armed movement on the border. A Lebanese analyst close to Hizbollah said, “it was not a coincidence that the party chose Kantar, a Druze, to conduct these operations. His sectarian origins have likely helped in recruiting Syrians from the Golan, who are mostly Druze”. Crisis Group interview, Beirut, February 2017.Hide Footnote In apparent response, a Hizbollah unit named after Kantar detonated an explosive device targeting an Israeli army patrol in the disputed Shebaa Farms area in southern Lebanon two weeks later. In turn, Israel shelled areas in southern Lebanon.[fn]Al-Akhbar, 4 and 6 January 2016.Hide Footnote No casualties were reported in either attack, and both sides appeared to abide by the rules tacitly agreed after the 2006 war: Hizbollah confined its response to the Shebaa Farms area it claims is still occupied by Israel, and Israel avoided a disproportionate response.

Overall, the fear of unpredictable and unmanageable consequences has prompted the two players to exercise restraint. Yet, both say they are preparing for another war, one that would presumably be fought in both Lebanon and Syria. A Hizbollah official said, “sooner or later, a conflict between us and Israel is going to happen, and we are getting ready for that day”. An Israeli official noted that Hizbollah currently has “100,000 rockets aimed at us” in southern Lebanon. As Crisis Group wrote about Lebanon in 2010, “the world should cross its fingers that fear of a catastrophic conflict will continue to be reason enough for the parties not to provoke one”.[fn]Crisis Group interviews, Beirut, April 2016, Tel Aviv, 29 September 2016. Crisis Group Middle East Report N°97, Drums of War: Israel and the “Axis of Resistance”, 2 August 2010.Hide Footnote

III. Hizbollah and Its Allies

A. Iran: A Tightening Bond

Since its creation in the cauldron of the 1982 Israeli invasion, Hizbollah has steadily developed its ties with Iran, its ideological mentor and military patron, but according to Iranian and Hizbollah officials, the party has remained autonomous in Lebanese politics.[fn]Iran says it does not interfere with Hizbollah’s political role in Lebanon. An Iranian official said, “on Lebanese domestic issues, it is 100 per cent Hizbollah’s agenda”. Another official asked, “how could we dictate to Hizbollah what to do in Lebanon? The party understands the domestic affairs far better than we do. Quite the contrary, we often benefit from Hizbollah’s knowledge in gaining a better understanding of Lebanon and the region”. Crisis Group interviews, Tehran, May 2016. Hizbollah officials also highlighted the party’s autonomy inside Lebanon. Crisis Group interviews, Beirut, June 2012-October 2013.Hide Footnote Militarily, however, it has become an instrument of Tehran’s foreign policy, especially its need for a “forward operating base” or “strategic depth” in Lebanon to deter an Israeli attack on Iran itself. As early as 1982, the IRGC sent hundreds of commanders to Lebanon to advise and train fighters of the fledgling “Party of God”, then little more than an amalgam of armed Shiite groups, as it confronted the Israeli onslaught.[fn]Crisis Group interviews, senior Iranian diplomat, Istanbul, March 2016; IRGC strategist, Tehran, May 2016. According to Nizar Hamzeh, Iran sent 1,500 IRGC advisers to the then Syrian-controlled Beqaa Valley to train Shiite militants fighting Israel. “Lebanon’s Hizbullah: From Islamic revolution to political accommodation”, Third World Quarterly, vol. 14, no. 2, 1993. An amalgam of local Shiite groups took the name “Hizbollah” in 1984, also calling itself the Islamic Resistance in Lebanon, according to its 1985 founding document: “Open Letter to the Oppressed”. Haytham Mouzahem, “Hizbollah, from birth to the July war (1982-2006)”, undated, www.forum.qawem.org/showthread.php?t=76826.Hide Footnote This was when Iran’s three-year old Islamic Revolution was keen to precipitate similar political change throughout the Muslim world.[fn]The Office of Islamic Liberation Movements, established shortly after the revolution, was overseen by Ayatollah Hossein Ali Montazeri (a close confidant of Ayatollah Ruhollah Khomeini) and tasked with exporting the revolution throughout the Muslim world. It was incorporated into the foreign affairs ministry and sidelined in 1987.Hide Footnote

By adopting Ayatollah Khomeini’s wilayat al-faqih (guardianship of the Islamic jurist) doctrine, Hizbollah introduced an ideology that previously had enjoyed little traction in Lebanon’s Shiite community, setting the path for a new set of religious, cultural and social beliefs and practices.[fn]Wilayat al-faqih, a concept specific to Shiite Islam, holds that, in the absence of Imam al-Mahdi, the twelfth imam who Shiites believe has gone into occultation and will reappear, the Islamic nation should be under the guardianship of a supreme leader (faqih). Article 5 of Iran’s constitution stipulates: “During the occultation of the Wali al-Asr (may God hasten his reappearance), the wilayah [guardianship] and leadership of the umma [nation] devolve upon the just and pious faqih, who is fully aware of the circumstances of his age, courageous, judicious and capable”. Similarly, in the 1980s, Salafism enjoyed only a very marginal presence among Lebanese Sunni Muslims.Hide Footnote Many Hizbollah critics cite this doctrine as evidence of the party’s subordination to Iran, but the reality is more complex. Over the years, the patron-client relationship has evolved into one of mutual, albeit lopsided dependence. Several factors have helped in recalibrating it: Hizbollah’s resistance against the Israeli occupation of parts of Lebanon, which eventually persuaded Israel to withdraw; the party’s growing influence among Lebanese Shiites; and its widespread legitimacy and popular support in the Arab world.

A major shift in the relationship occurred in 2006, when the party demonstrated that Iran’s long military and financial investment had borne fruit. Hizbollah stood its ground against Israel, foiling its war objectives: the two captured soldiers’ release and destruction of the party’s military wing.[fn]In its aftermath, an Israeli government inquire concluded the war had been “a big and serious failure”. The Washington Post, 31 January 2008. It is now viewed by Israel’s defence establishment as having successfully established deterrence, which has lasted more than a decade. Crisis Group interview, Israeli defence official, Tel Aviv, January 2017.Hide Footnote Despite more than 1,000 civilian deaths and widespread destruction in Lebanon, Hizbollah celebrated a “divine victory”.[fn]Hassan Nasrallah’s 22 September 2006 speech, www.youtube.com/watch?v=KurXHcmjsOc.Hide Footnote Survival against the Middle East’s most powerful army turned it into an indispensable component of the emerging axis of which Syria and Gaza-based Hamas also were a part and a powerful force in Lebanon with regional standing.[fn]Al-Arabiya, 10 August 2007. Including the two who were captured, 119 Israeli soldiers died in the 34-day war; 628 were wounded. 44 Israeli civilians died and some 1,000 were wounded due to the roughly 4,000 rockets Hizbollah fired. “Israel-Hizbullah conflict: Victims of rocket attacks and IDF casualties”, Foreign ministry, July-August 2006, https://tinyurl.com/jdvazdf. An Hizbollah official said, “2006 was a turning point in the party’s trajectory …. It increased the trust of [allies] and the fear of [foes] toward us”. Crisis Group interview, Beirut, May 2009.Hide Footnote The second watershed was the war in Syria. While the conflict deepened Hizbollah’s reliance on Iran, it also established the party as the axis’s most effective military partner, instrumental in saving the regime.

Iran has been the party’s unwavering supporter, main weapons supplier and provider of all other aspects of its warfighting capability, especially logistics and training. Hizbollah fighters have gained their skills primarily from Iranian advisers (themselves hardened in the 1980-1988 war with Iraq) in training camps in Lebanon, Syria and Iran. No reliable information exists about the extent of Iran’s financial support for Hizbollah’s political and social service activities; estimates vary from $100 million to $400 million a year. Following the 2006 war, it reportedly provided up to $1.2 billion for reconstruction and compensation of war victims (especially Hizbollah supporters).[fn]On military aid, Crisis Group interviews, Hizbollah officials and members, Beirut, southern Lebanon, Beqaa, 2010-2016. “Hezbollah’s Iran money trail: It’s complicated”, Al-Akhbar, 31 July 2012. A Lebanese analyst with ties to the party said these estimates might be misleading, as “Iranian support for Hezbollah is essentially non-governmental and, as a consequence, does not appear in any official fiscal budget” in Lebanon. Cited in ibid.Hide Footnote

Nor is there hard data on Iranian expenditures for Hizbollah’s Syrian war effort, but it is reasonable to assume Tehran has largely covered its financial and military needs. Reacting to U.S. sanctions in June 2016, Nasrallah declared: “Hizbollah’s budget, its income, its expenses, everything it eats and drinks, its weapons and rockets, come from the Islamic Republic of Iran …. As long as Iran has money, we have money”. This shows the party’s enduring dependence on Iran and its unlikely ability to pursue, even if it wished, a Syria strategy autonomous from that of its backer.[fn]A February 2017 article described an uneasy relationship, quoting party fighters’ and commanders’ complaints about the IRGC-Quds Forces’ chief “micromanaging their military operations [in Syria] to an unprecedented degree” and Tehran financial pressure to enforce obedience to Iran on Hizbollah combatants. “Hezbollah Losing its Luster Under Soleimani”, Washington Institute for Near East Policy, 22 February 2017. A retired Lebanese army general with close ties to Hizbollah said, “these tensions are normal; they could occur even within the ranks of an army. They may derive from the fact that Iran has advisers and senior commanders in Syria, while Hizbollah has mostly sent fighters. There are no signs of deeper rifts, however. Hizbollah’s and Iran’s strategy and goals in Syria are fully aligned. Yet, the party has been under financial strain, and has had to delay salary payments in its various institutions. This is not the result of Iranian political pressure but of the economic situation”. Crisis Group interview, Beirut, March 2017.Hide Footnote However, it also reveals Hizbollah’s critical role in preserving an axis that is of paramount importance to Tehran.

Domestically, Hizbollah’s enemies accuse it of sacrificing Lebanon’s interest for Iran’s by entering the Syria war.

Iranian officials have stressed the relationship’s reciprocal nature. One said, “cooperation and coordination between us have become much stronger. Because of this conflict, we now share a common path and destiny”. Another compared losing Hizbollah to an amputation: “Our enemies are seeking to weaken us by striking at our right arm, represented by Hizbollah”.[fn]Al-Arabiya, 25 June 2016. Crisis Group interviews, Tehran, May 2016. Another official said, “Iran’s decision to intervene in Syria aimed to preserve the very resistance that Hizbollah represents. It is Hizbollah that conveyed fears and concerns to the Iranian leadership”. Crisis Group interview, Tehran, May 2016.Hide Footnote Domestically, Hizbollah’s enemies accuse it of sacrificing Lebanon’s interest for Iran’s by entering the Syria war. A Future Current official relayed a conviction shared by many of its foes: “By intervening in Syria, Hizbollah is jeopardising Lebanon’s security and economy to serve its Iranian patron’s agenda”.[fn]Crisis Group interview, Tripoli, June 2015.Hide Footnote Yet, this elides a complex reality. Its presence in Syria is equally motivated by self-preservation.

By contrast, Hizbollah’s involvement elsewhere in the region, in Yemen in particular, has no direct connection with its interests or positions in Lebanon or Syria; nor has it affected its conflict with Israel. By providing training and logistical support to Huthi rebels and taking the rhetorical lead within the axis against the Saudi role in Yemen, Hizbollah may be signalling to the kingdom the cost of supporting Syrian rebels. In doing so, it directly represents Iran’s interests– having no direct geostrategic stakes of its own at the southern tip of the Arabian Peninsula – and stands accused by its opponents of undermining Lebanon’s relations with Riyadh.[fn]“How does assaulting Saudi Arabia serve Lebanon’s high interests? What harm did Saudi Arabia do to Lebanon?”, asked the Lebanese Forces leader Samir Geagea, who described Nasrallah’s statement as detrimental to the country. Al-Hayat, 19 April 2015.Hide Footnote

B. Syria: Assad or Nothing

Hizbollah’s relationship with the regime has evolved from tenuous during the first years of its existence, to client-patron after the 1990 end of the Lebanese civil war, to strategic and friendly since Bashar Assad’s 2000 rise to power.[fn]Syria watched Hizbollah’s emergence warily and fought it through its Lebanese Shiite proxy, the Amal movement, during the civil war. Later it came to see the party as an important asset for leverage against Israel. Due to Damascus’s tolerance, Hizbollah was the only Lebanese militia to escape disarmament under the 1989 Taef Accords, based on its “resistance” credentials. Yet, occasional tensions continued. In 1993, the Lebanese army, then under Syrian influence, fired on Hizbollah demonstrators in Dahiyeh protesting the first Israel-PLO Oslo Accord, killing nine and injuring dozens. Hizbollah organised the rally despite warnings from the Lebanese government and Syrian authorities that they would enforce a ban on demonstrations. Olfa Lamloum, “La Syrie et le Hizbollah: Partenaires sous contrainte?”, in Sabrina Mervin (ed.), Le Hezbollah: état des lieux (Paris, 2008). The alliance deepened after 2005, when Hizbollah supported Assad after Saudi Arabia, France, the U.S. and others accused him of having killed Rafic Hariri; Damascus returned the favour in the 2006 Lebanon war.[fn]Following mass anti-Syria protests of the Hariri assassination, Hizbollah organised a huge Beirut rally supporting Syria’s role in Lebanon. The slogan of the demonstration, which gave its name to the pro-Hezbollah 8 March coalition, was “Thank you, Syria”. Nasrallah’s 8 March 2005 speech, YouTube, www.youtube.com/watch?v=YMf-bvXZQzY. Yielding to domestic and international pressure, Damascus withdrew its troops from Lebanon in April 2005. As a farewell gift, Nasrallah offered Rustom Ghazaleh, then-head of Syrian military intelligence in Lebanon, a rifle Hizbollah had captured from Israel. As-Safir, 29 April 2005. Hizbollah also acknowledged Syria’s aid in the 2006 war. Nasrallah declared: “Syria was not only a passageway for the resistance, but also a real military supporter …. The most important missiles that were falling on Haifa and central Israel were Syrian missiles … provided to the resistance”. “Nasrallah hails slain Syrian officials as ‘Martyrs’, says relation with Aoun strategic”, Naharnet, 18 July 2012. As important was Syria’s strategic and political support. Assad referred to Arab leaders who accused Hizbollah of provoking the war as “half-men”. Al Jazeera, 20 August 2006. Once dependent on Hafez Assad’s dominance in Lebanon to preserve its military status, Hizbollah has become instrumental in preserving his son’s rule in Syria. Today, the alliance is organic: the prospect of the regime’s demise, especially if replaced by a hostile Sunni one, poses an existential threat to the party. Hizbollah believes that it would be next on the list.[fn]Crisis Group interviews, Hizbollah officials and supporters, Beirut, May 2012-Arpril 2016.

In Syria, Hizbollah has pursued a dual agenda, sparing no advisory, logistical or military efforts in support of its ally. In line with the Iranian strategy, it has fought to save the regime: helping it to quell the armed opposition, preserve its hold on Damascus and retake key territory essential to survival. From the beginning, however, it has also sought to safeguard its own direct interests: fighting in the Qusayr and Qalamoun areas along the border to create a buffer zone against attacks by Syrian jihadists inside Lebanon, preserving its vital Iranian supply line and protecting two Shiite shrines in Syria.[fn]Syria has only a small Shiite population (less than 1 per cent) but has two important Shiite shrines erected over the graves of Zeinab, the Prophet Muhammad’s grand-daughter through his son the Imam Ali, and Rukaya, daughter of the Imam Hussein, Ali’s son. Pilgrimage to shrines in Syria, Iraq, Iran and elsewhere is a common practice in the Shiite world. A Lebanese cleric explained: “Our young men are deeply affected when they hear that the takfiris might destroy the graves of Sayyida Zeinab and Sayyida Rukaya …. They were ready for anything to protect these shrines”. Crisis Group interview, South Lebanon, May 2016. Nasrallah said, “the destruction of the Sayyida Zeinab shrine could have led to a sectarian war …. We sent 40 to 50 fighters [to protect it]”. Now, 3 December 2013. The shrines are unharmed, but sectarian war is now a reality and Hizbollah has deployed thousands of its fighters.Hide Footnote

In doing so, Hizbollah has rarely distanced itself from the regime, often acting in unison with its political and military objectives. Though Hizbollah may not share Assad’s goal to regain control over all Syria, party officials have seen a partition, including via autonomy arrangements or other forms of decentralisation, as a threat.[fn]Crisis Group interview, Senior Hizbollah official, Beirut, October 2016.Hide Footnote However, in the wake of the January 2017 Russia-Turkey-brokered Astana peace talks, Hizbollah distinguished between temporary arrangements allowing local governance and ones that would pave the way for federalism:

The opposition wants [any ceasefire or extended agreement] to allow them local self-governance. The Russians may be open to this and have suggested that areas under regime and opposition control should be open to trade and movement between them. … The regime … rejects these ideas, but perhaps it will not always do so. Perhaps such an arrangement – local administration – could be acceptable on a temporary basis, as long as it doesn’t ultimately end up with federalism.[fn]Crisis Group interview, Beirut, January 2017.Hide Footnote

For now, Iran, Hizbollah and the regime continue to believe that local governance could form the basis for enemy safe havens and set off an uncontrollable domino effect throughout the region that would give birth to new enemies of the “resistance axis”.[fn]A Hizbollah official explained: “Based on what I have heard from Iranians, they are against any federalism because it is a dynamic that if it begins in Syria could end in Iran. Indeed, federalism is in some ways worse than full partition, because it introduces an ambiguous situation and relationship [between regional and central government], as we have seen in Iraq”. Crisis Group interview, Beirut, January 2017. A senior Hizbollah official described local self-governance as “partition, which the resistance axis opposes. Syria must remain united, but with better administration. There can be no temporary partition, because inevitably it will become permanent. Over time, those controlling their areas will build their own institutions and insist that these remain in their hands”. Crisis Group interview, Beirut, October 2016.Hide Footnote The party has thus participated in the regime’s battles throughout much of the country.[fn]A senior Hizbollah official said, “in some areas, we have a leading role, and the regime has become dependent upon us. But in others, such as Daraa, we play a supporting role”. Crisis Group interview, Beirut, October 2016.Hide Footnote More importantly, despite repeatedly claiming that it favours a political solution, party officials have never gone beyond offering options that are strictly on Assad’s terms: the security apparatus is untouchable, with only minor concessions on non-security matters, such as ministerial posts;[fn]In 2013, a Senior Hizbollah official said: “Assad will not give up control of the military and security services. Maybe he would give certain cabinet positions to the opposition, such as … economy, social affairs, culture or information”. Crisis Group interview, Beirut, December 2013.Hide Footnote and Assad must remain president as guarantor of the unity of both regime and its armed forces. A senior Hizbollah official said:

The other side [the opposition and its backers] believe that without Bashar the regime will split into competing factions and they could take politically what they could not achieve militarily [shifting Syria into a rival regional camp]. This is why they are so insistent on Assad going. It is what they believe but not what we think. If we, the Iranians and Russia coordinated our support [in the event of Assad’s departure], the regime would remain cohesive.[fn]The official did not deny there was a Plan B for Assad’s death or departure but asserted: “Of course we are not going to announce any alternative plan, or our foes would immediately jump on the alternative”. Replacing Assad “was out of question”. Crisis Group interview, Beirut, April 2016. Subsequently, another Hizbollah official went further: “For Iran, preserving Syria’s geopolitical position [as part of the ‘resistance axis’] … is the bottom line. This boils down to one goal: We cannot allow Bashar Assad to be overthrown militarily. Iran does not have an alternative to Assad but is open on other matters … it wouldn’t have a problem with Sunnis constituting the majority in parliament. Of the conflict’s external parties, [Hizbollah] is probably the only one that cannot live without Assad at this stage. For us, this is existential. But the opposition participating in government … is not a problem”. Crisis Group interview, Beirut, January 2017.Hide Footnote

Hizbollah appears to subscribe to the notion that Assad’s presence has kept the Syrian army and associated security forces and militias united behind the regime, preventing its collapse.[fn]A senior Hizbollah official said, “you cannot separate the military institution and the president. Without Assad, the regime would become as fragmented as the opposition. He is the guardian of regime consensus”. Crisis Group interview, Beirut, April 2016.Hide Footnote Yet, it recognises that as Syria has changed irreversibly since 2011, so has Assad.[fn]Crisis Group interviews, Hizbollah officials, senior official, Beirut, May 2015-Ocotber 2016.Hide Footnote A party official explained: “The Assad we used to know has gone and won’t come back. There is now a new Assad, a guarantor of minorities, representative of some segments of the population, and protector of [Iran’s] regional interests”.[fn]Crisis Group interview, Beirut, April 2016.Hide Footnote This “new” Assad remains a linchpin for Hizbollah’s fortunes.

Finally, Hizbollah believes it can achieve its objectives by military means, obviating need for painful negotiated compromises. A senior official said, “there is no morality in politics; it is about influence and power. Over … five years, and particularly in the two stages that followed first Iran’s and Hizbollah’s and later Russia’s intervention, the regime has regained key territory”. A few months later, he went further: “The opposition is losing; it should expect very little [from negotiations]”. The fall of rebel-held eastern Aleppo in November 2016 will only have strengthened Hizbollah in this belief.[fn]Crisis Group interviews, Beirut, April, October 2016. Another Hizbollah official said, “Assad was right [to seek a military solution in Aleppo]. The loss of [the eastern part of] the city forced the opposition to accept negotiations …. A settlement must take into account the power balance on the ground. You cannot tell Assad [after his victory] that he needs to leave. The regime has the right to demand guarantees that protect it and, for the most part at least, the way in which it governs”. Crisis Group interview, Beirut, January 2017.Hide Footnote

Hizbollah has played various battlefield roles: it has trained and organised army troops, (paramilitary) National Defence Forces fighters and non-Syrian militias; led major battles, especially in areas directly related to its own security and supply lines; helped recapture and hold territory; and mediated between Syrian troops and Iranian fighters and advisers. In exchange, the army has given the party light-infantry support and reconnaissance data.[fn]Crisis Group interviews and telephone interviews, Hizbollah officials, Hizbollah fighter, Lebanese journalists and analysts with ties to the party, Syrian analysts, journalists and activists, Madaya, Istanbul, Gaziantep, Beirut, September 2013-October 2016. “Hizbollah in Syria”, Institute for the Study of War, Middle East Report no. 19, April 2014.Hide Footnote A fighter explained: “Whether Hezbollah leads operations depends on the nature of the battle and the terrain. In a recent battle in a Damascus suburb we fought alongside the [Iraqi] Abu-Fadel Abbas brigade and took the lead. In other operations, we handle the entire process from reconnaissance to clean-up”.[fn]Quoted, “Another border war?”, Now, 22 October 2013. Hizbollah joins in direct support, eg, sniper and counter-sniper operations, facility and route protection, joint clearing and direct engagement with opposition forces, often in coordination with the army and pro-regime militias. Crisis Group interviews, Hizbollah fighter and official, journalists with close ties to the party, Syrian analyst, Beirut and South Lebanon, January 2014-October 2016.Hide Footnote

Hizbollah and regime fighters have occasionally experienced tensions, perhaps resulting from cultural differences between the army’s secularism (and secular lifestyles predominant among many Alawites) on one side and Iran’s and Hizbollah’s strong religious inclination on the other. A journalist with ties to the party said, “there are indeed cultural differences. Some party fighters are not familiar with their allies’ habits, such as alcohol consumption or cursing religious symbols, while regime forces are frustrated with Hizbollah’s rigorous religious practices”.[fn]Crisis Group interview, Beirut, May 2016. An Iranian analyst said, “the Syrian regime is not on the same wavelength as Iran and Hizbollah. It doesn’t have the same resistance narrative. The army is secular. This regime might ally itself with the devil to save itself. Iran and the party find this exhausting”. Crisis Group interview, Tehran, May 2016. Hizbollah, however, considers the regime morally and politically tied to the resistance axis.Hide Footnote Accounts of army corruption and incompetence also may have triggered dissension, while some army officers have voiced frustration over Hizbollah’s leading battlefield role. Local tensions notwithstanding, Hizbollah and the regime are solidly united in what both perceive as an existential fight. A Syrian analyst in Beirut said, “at the political level, we can hardly see any sign of divergence, let alone tensions. For now, the three allies [regime, Iran, Hizbollah] remain closely bound together”.[fn]Crisis Group interviews, Syrian journalists, analysts and soldier, Beirut, Damascus, May-October 2016; Syrian analyst, Beirut, August 2016.Hide Footnote

C. Russia to the Rescue?

Russia’s September 2015 military intervention was as crucial in preventing the regime’s collapse as was Iran’s and Hizbollah’s in 2013.[fn]An Israeli official who was in Russia in June 2015 reported that Russian counterparts acutely sensed the regime was on last legs when the decision to intervene was made. Crisis Group interview, ex-National Security Council official, Tel Aviv, 30 September 2016. A Russian diplomat stated: “In summer 2015, we were extremely concerned about the rapid advance of radical Islamist forces toward Damascus and the threat to the government’s stability and the fate of millions of Syrians. Among the radical fighters were some 3,000 Russian citizens …. The government stood to lose its military arsenals, which would have meant new weapons in the hands of the jihadists. It was a very genuine concern”. Crisis Group interview, Tel Aviv, September 2016.Hide Footnote Since then, the four have become linked in a strategic partnership – agreed on the need to preserve the regime, but possibly diverging, even widely, on what should come after. Russian airstrikes, often focused primarily on non-jihadist rebels, paved the way for major regime advances. Moscow thus reclaimed a prominent international role, one of its primary objectives, in addition to preventing Western-backed regime change in Damascus.[fn]See Crisis Group Middle East Briefing N°47, Russia’s Choice in Syria, 29 March 2016.Hide Footnote

Militarily, Russia has proved a powerful complement to Iran’s and Hizbollah’s contributions. Where Shiite militiamen compensate for the regime’s manpower shortages by providing fighters for ground battles, Russia has carried out air bombardments and surveillance in support of ground forces, avoiding so far getting sucked into an Afghanistan-like quagmire. Its involvement started a relationship with Hizbollah whose dimensions and inner dynamics remain unclear. It is certain that it has helped the party improve its fighting capabilities.[fn]“Hezbollah’s Russian Military Education”, op. cit.; “Hezbollah is learning Russian”, Carnegie Middle East Center, 26 February 2016. Crisis Group interview, journalist with close party ties, Beirut, July 2016.Hide Footnote Several reports refer to joint operations rooms in Latakia and Damascus. In addition, six Hizbollah fighters reportedly participated in the rescue of one of two Russian pilots whose jet was downed by Turkey in November 2015.[fn]“Hezbollah’s Russian Military Education”, op. cit.; “Russia special forces aiding Hezbollah in Latakia: report”, Now, 27 January 2016; Al-Akhbar, 17 June 2016. Russia Today in Arabic, 25 November 2016.Hide Footnote

Iran and Hizbollah have been grateful for the lifeline Russia has thrown the regime but do not trust its motives and cannot control its actions. Twice, in February and September 2016, Moscow compelled the regime to abide, if briefly, by a U.S.-Russian-brokered cessation of hostilities that suspended Russian airstrikes against rebels in Aleppo. Hizbollah and Iran were not included in the talks that produced the first lull and reportedly were not even informed in advance.[fn]“Why Iran still doesn’t trust Russia on Syria”, Al-Monitor, 10 June 2016. A senior Hizbollah official said: “We did not agree with the ceasefire. We think it was a wrong decision by the Russians”. Another official said, “the Russians wanted to pursue the cessation of hostilities, which Iran and the regime were against. But in the end the Russians failed …, and we paid the price [via rebel gains south of Aleppo]”. Crisis Group interviews, Beirut, October 2016, January 2017.Hide Footnote Moscow’s March 2016 announced partial air force withdrawal further fuelled Iran’s and Hizbollah’s suspicions, which were then exacerbated by belated support of the regime’s Aleppo offensive when fighting resumed a month later.[fn]Crisis Group interview, Hizbollah official, Beirut, May 2016.Hide Footnote

Russia’s long ties with the regime also concern Assad’s other backers. They see its secularism, past support and deep knowledge of the Syrian army as a potential threat. Russia’s secular worldview makes it more attractive to the Alawite community – and certainly to Syria’s Sunnis and to non-Shiite minorities – than Iran’s wilayat al-faqih ideology. Its strong support of the army and state institutions clashes with Iran’s and Hizbollah’s preference for militias to protect the regime.

Iran and Hizbollah are also at a disadvantage in that Russia represents the pro-regime camp internationally, including as a permanent member of the UN Security Council with veto power. They see this as deeply problematic, as Russia’s agenda diverges from the regime’s and theirs in fundamental respects, beyond the need to secure its survival. Unlike its allies, Russia has backed the YPG, the PKK’s affiliate in northern Syria, and appears to accept the idea of a federal Syria, an arrangement that would benefit the Kurds.[fn]A Hizbollah official said, “Russia has no problem with federalism, which would give autonomy to the Kurds. But for us, federalism means partition, and this we cannot accept”. Crisis Group interview, Beirut, April 2016. After a Moscow visit, a UN official said, “Russian officials don’t fundamentally oppose an autonomous Kurdish region in Syria”. Crisis Group interview, Beirut, April 2016. The YPG (People’s Protection Units) is the PKK’s Syrian Kurdish armed affiliate, established in 2012. It is the dominant armed Kurdish force in Syria. The PKK (Kurdistan Workers’ Party) is the main armed Kurdish group in Turkey, cofounded in 1978 by Abdullah Öcalan; it started an armed insurgency in 1984. It is considered a terrorist organisation by Turkey, the EU, the U.S. and a number of other states. See Crisis Group Middle East Report N°151, Flight of Icarus? The PYD’s Precarious Rise in Syria, 8 May 2014.Hide Footnote Moreover, it is widely rumoured that President Vladimir Putin does not care personally for Assad, sees him ultimately as a liability and might be prepared to consider removing him if this would serve Russia’s interests better.[fn]Crisis Group interviews, 3-6 March 2016. A Hizbollah official commented: “The Russians say Assad’s fate must be left outside any settlement. In theory, if it were up to them alone, it is possible they would make a deal [including Assad’s departure]. But in reality, they cannot and will not impose it”. Crisis Group interview, Beirut, January 2017.Hide Footnote An Iranian analyst said in response:

Russia has the upper hand in negotiations; it has leverage over the U.S., veto power at the UN and more international and regional negotiation channels. But they shouldn’t think they can impose their decisions against our interests. Russia may have influence over the Syrian bureaucracy and elites, but with Hizbollah we hold the ground.[fn]Crisis Group interview, Iranian analyst close to decision-making circles, Tehran, May 2016.Hide Footnote

Hizbollah’s relationship with Russia has other limits, given Moscow’s ties with Israel, which Putin has been careful to nurture.[fn]See, “Vladimir Putin is the closest thing to a friend Israel has ever had in Moscow”, Reuters, 14 January 2016; “Putin reaffirms Israel-Russia ties”, Jerusalem Post, 11 June 2016.Hide Footnote Since its Syria intervention, Moscow has engaged in a delicate balancing act between itself, Israel and the regime and its backers. “We are conducting dialogue with organisations in Syria, but we will not allow the transfer of weapons to an organisation that brings about destruction and death”, said the Russian Federation Council’s chairperson during a visit to Israel – in a statement that did not explicitly name Hizbollah but was pregnant with irony given the nature of the Syrian war and Russia’s military role.[fn]“Russian Federation Council Chairperson Matvienko Visits Israel”, Israeli foreign ministry, 4 February 2016. When two Hizbollah commanders said Russia gave the party advanced weapons, Israeli opinion was reportedly divided. Some were sceptical; others were suspicious of Russia’s intentions. “Russia is arming Hezbollah, say two of the group’s field commanders”, The Daily Beast, 11 January 2016; “Is Russia supporting Hezbollah?”, Intersection, 8 February 2016, www.inss.org.il/uploadImages/systemFiles/Is%20Russia%20supporting%20Hezbollah%20-%20Citing%20Yiftah%20Shapir%20in%20Intersection%20site.pdf. Israeli defence and foreign ministry officials said Moscow prevented a number of Israeli airstrikes on weapons convoys and gave Hizbollah missiles. Crisis Group interviews, respectively Tel Aviv, September 2016, Jerusalem, November 2016.Hide Footnote Furthermore, while Moscow views the Golan Heights as Israeli-occupied under international law, it favours a negotiated solution. Hizbollah and Iran see armed struggle as the means to liberate occupied territory and have attempted to establish a military foothold around Quneitra to operate against Israel and thus increase the cost of its occupation.[fn]Crisis Group interview, Russian diplomat, September 2016. During the 2014 Israel-Gaza war, Putin told a rabbis’ delegation: “I support the struggle of Israel as it attempts to protect its citizens. I also heard about the shocking murder of the three youths. It is an act that cannot be allowed, and I ask you to transmit my condolences to the families” (referring to the kidnapping and murder of yeshiva students, for which Israel held Hamas responsible). Israel National News, 10 July 2014.Hide Footnote

In sum, Russia and Iran/Hizbollah are uneasy but necessary allies in Syria.[fn]In August 2016, Tehran allowed Russia to use its Hamedan airbase for long-range TU-22M3 bombers to strike in Syria. It had not allowed a foreign force to use its airspace since the 1979 revolution. It withdrew permission within a week due to domestic Iranian outrage after the Russians revealed the permission. “Iran revokes Russia’s use of air base, saying Moscow ‘betrayed trust’”, The New York Times, 22 August 2016.Hide Footnote A Hizbollah official said, “we have what you could call a partnership with Russia, one that leaves room for differences in which each side respects the other’s interests because we need each other”.[fn]Crisis Group interview, Beirut, May 2016.Hide Footnote

IV. A Way out of the Conundrum?

The regime’s victory in eastern Aleppo notwithstanding, the war is far from over. While Nasrallah endorsed the Astana peace talks, the party has yet to match his words with action.[fn]Al-Manar, 12 February 2017. Nasrallah’s Astana position contrasted with his statement after the second cessation of hostilities collapsed in 2016: “There is no prospect for political solutions [in Syria] …. The final word is for the battlefield”. Al-Akhbar, 27 September 2016. After the ceasefire was announced and the Astana talks were ongoing, the party supported the regime in its Wadi Barada offensive on Damascus’s outskirts. A Hizbollah official explained that offensive during the ceasefire “was an exception, because of [the area’s strategic] water supply. Hizbollah was heavily involved … because of its already significant presence …. The Russians supported … because of the water crisis [in Damascus]”. Crisis Group interview, Beirut, January 2017.Hide Footnote Even defeat of the armed non-jihadist opposition would likely not end violence but only fuel more hatred of the regime and support for jihadist groups, such as IS and Jabhat Fatah al-Sham, especially among a generation of Sunni youth.[fn]For a comparison with Iraq, see Crisis Group Middle East Report N°169, Fight or Flight: The Desperate Plight of Iraq’s “Generation 2000”, 8 August 2016.Hide Footnote

The election of Donald Trump in the U.S. potentially opens a new chapter of the war, one laden with uncertainty. Regime supporters have welcomed the development, believing it augurs a further U.S. withdrawal from the conflict politically and militarily and thus a Moscow-imposed favourable settlement. Their perception appeared plausible. Washington’s participation during the Astana peace talks was limited to a single observer.[fn]“One more Middle East conflict: What to make of Donald Trump”, The New York Times, 10 November 2016. Crisis Group Commentary, “What’s at Stake in the Syrian Peace Talks in Astana?”, 24 January 2017.Hide Footnote Assad declared that if Trump “is going to fight the terrorists, of course we are going to be [an] ally, [a] natural ally in that regard with the Russians, with the Iranians, with many other countries”.[fn]“Syria conflict: Assad hopes for ‘anti-terror ally’ in Trump”, BBC, 15 November 2016. Assad reiterated his position that the U.S. and Syria could cooperate “against terrorists, and against terrorism. That’s self-evident … the priority is to have cooperation in fighting terrorism between the different nations, including Russia, Iran and Syria, of course”. “President al-Assad: The US’s only way to defeat terrorism in Syria is through cooperation with Syrian government –Video”, Yahoo News, 10 February 2017. The interview transcript is at: http://sana.sy/en /?p=99897. Nasrallah indicated he did not fully agree, as Trump “just revealed the real face of the racist, oppressive and ugly U.S. administration”, but added “a foolish president in the White House is good news to the vulnerable people across the world”. Al-Manar, 13 February 2017.Hide Footnote For now, though, the Trump administration appears to support an offensive led by the U.S.-backed Syrian Democratic Forces against IS’s Raqqa stronghold in northern Syria.

Trump is yet to develop a more comprehensive Syria policy, however. He has expressed approval of Russia’s role, which he said was aimed at defeating IS, and criticism of the Obama administration’s support of non-jihadist rebels, whose political affiliations he questioned. However, he has equally voiced opposition to Iran and determination to counter its influence in the region. Though it remains unclear what Washington intends to do in Syria, the pro-regime camp faces a U.S. administration more hostile than its predecessor. It should be equally concerned about jihadist groups’ welcoming of Trump’s anti-Muslim rhetoric and the intended U.S. ban on immigrants from some Muslim countries, which feed their narrative.[fn]CBS Morning News Trump interview, YouTube, 18 February 2016, www.youtube.com/watch?v=nlJ-H5yZe90&feature=youtu.be. Abu Omar Khorasani, a top IS leader in Afghanistan said, “this guy is a complete maniac. His utter hate towards Muslims will make our job much easier because we can recruit thousands”. “Jihadists say Trump victory a rallying call for new recruits”, Reuters, 14 November 2016.Hide Footnote

The longer Syria remains wracked by violence, the longer Hizbollah will need to compensate for the regime’s depleting manpower. Yet, it is unlikely the party will change course. It has invested so deeply in the war that it would find it nearly impossible to extricate itself. As a senior official of the Lebanese 14 March bloc put it, “Hizbollah has taken a one-way ticket to Syria, win or lose”.[fn]Crisis Group interview, anti-Hizbollah party leader, Lebanon, April 2016.Hide Footnote Even if it wanted to, Hizbollah can no longer disentangle its interests from Iran’s in Syria.

Hizbollah and Iran, which time and again have favoured pragmatism over ideology, should follow suit and refrain from referring to armed movements indiscriminately as extremists or takfiri – Muslims who accuse other Muslims of apostasy.

The peace talks kicked off by Russia, Turkey and Iran in Astana offer a slim opportunity for de-escalation in Syria. Fighting jihadists – IS and Fatah al-Sham (now reconstituted as Hay’at Tahrir al-Sham) – provides only a narrow ground for consensus between the regime’s backers and Turkey. To keep Ankara and the groups it supports on board, Assad’s allies need to refrain from new offensives against non-jihadists and terror tactics against the civilian population. Russia and Turkey have drawn a clear line between jihadist and non-jihadist groups. Hizbollah and Iran, which time and again have favoured pragmatism over ideology, should follow suit and refrain from referring to armed movements indiscriminately as extremists or takfiri – Muslims who accuse other Muslims of apostasy.[fn]Nasrallah went as far as to state, “there is no such thing as a moderate armed Syrian opposition. [They are] either with Nusra or with Daesh [IS]”. Al-Akhbar, 27 September 2016. Jabhat al-Nusra was the name of Jabhat Fatah al-Sham until 2016.Hide Footnote

More generally, Hizbollah should reconsider its use of sectarian rhetoric that mobilises Sunni communities no less efficiently than the Shiite constituencies at which it is aimed. While the party will never win a popularity contest in Syria, a public shift toward an explicit non-sectarian stance might help it win back some of the high ground it once enjoyed. Iran and Hizbollah should also initiate talks with non-jihadist rebels on issues on which agreement might be possible, including local governance in rebel-controlled areas and a mutual easing of sieges on Madaya, Zabadani, Fouaa and Kefraya.

In turn, the U.S. should maintain its support to Syrian insurgents while raising its profile in negotiations aimed at ending the conflict. The Trump administration’s future Syria strategy will also need, however, to address a number of inconsistencies: teaming up with Russia while confronting Moscow’s Iranian ally in Syria, and fighting IS while freezing aid to U.S.-backed groups that combat it.[fn]“Exclusive: CIA-backed aid for Syrian rebels frozen after Islamist attack – sources”, Reuters, 21 February 2017.Hide Footnote

V. Conclusion

Hizbollah’s intervention in Syria has had a contradictory effect on the party. While it has helped increase its fighting capacity, allowed it to consolidate ties with allies and raised its regional profile as a military force, it has also drained its resources, exposed it to new enemies, left it more thinly spread on its front with Israel and transformed it in ways that may yet come back to haunt it.

Its leaders appear to believe they have no option but to pursue a decisive military victory. To celebrate its annual “Martyrs’ Day” in November 2016, Hizbollah staged a military parade in Qusayr, the town that marked its May 2013 full-fledged entry into the war and first victory.[fn]An-Nahar, 14 November 2016.Hide Footnote By showcasing its heavy weapons, including tanks, anti-aircraft missiles and armoured vehicles, it sent an unambiguous reminder to its enemies of its military strength. A Lebanese newspaper quoted Nasrallah’s deputy as saying, “we now have a trained army”.[fn]As-Safir, 16 November 2016. The party promptly issued a correction, stating that the official, Naim Qassem, had said: “We have become more than a guerrilla movement but less than an army”. “Lebanon's Hezbollah denies claiming it is now ‘an army’”, Al-Monitor, 16 November 2016.Hide Footnote

Hizbollah’s leaders need a reality check. More than five years of war have shown that military power does not automatically translate into military victory, and demonstrations of strength, instead of impressing enemies, may merely harden their resolve. For all its prowess, Hizbollah remains an external actor in Syria – in a region where history has shown that those seen as liberators and protectors one day can quickly be perceived as invaders and occupiers the next. In addition, Iran now faces an unpredictable U.S. administration determined to curtail its role in the region. Rather than feeding extremism, Hizbollah and Iran would be better served by lowering the sectarian flames, opening dialogue with non-jihadist rebel groups and paving the way for a negotiated settlement that would guarantee their vital interests and encourage Hizbollah, at last, to return to Lebanon.

Beirut/Brussels, 14 March 2017

Appendix A: Map of Lebanon-Syria Border Areas

Map of Lebanon-Syria Border Areas © Mike Shand/International Crisis Group, 2017.