At the turn of the new year, United States President Donald Trump seemed to be setting the stage for phase 2 of attacks on Iran. When hosting Israeli Prime Minister Benjamin Netanyahu in December 2025, President Trump confirmed that Iran’s missile program is a threat to US interests and Israeli security. He threatened to strike Iran if the missile program was not rolled back. He also warned Iranian authorities against killing protestors who took to the streets in response to the rapidly deteriorating economic crisis. In his familiar bravado style, President Trump said the US was ‘locked and loaded’ to respond to Iranian authorities.
Renewed public unrest in Iran could serve the resumption of the Israel/US– Iran conflict as the stated objective of the 12-day War in June 2025 remains unresolved. The Israel/US attack on Iran was justified in terms of Iran’s pursuit of a nuclear program, deemed by both Israel and the US to be aimed at weaponisation. Iran has denied the claim to weaponisation but vowed to rebuild its facilities. The war also revealed Iran’s capacity to target Israeli territory with its drones and missiles. For Washington and Tel Aviv, the mission is not complete. Defending Iranian citizens against tyranny may just be the right cover for a second attempt.
Economic unrest in Iran leads former Islamic Republic allies to take to the streets
Iran started the new year with a wave of unrest across major cities following the devaluation of the national currency and runaway inflation. The Iranian currency was exchanging at a whopping 1.34 million Iranian rials to 1 US dollar. The currency crash froze much of everyday trade, forcing merchants and traders from the Bazaar into the streets in protest, soon joined by university students.
Merchants in the Grand Bazaar are not ideologically opposed to the Islamic Republic of Iran. If fact, they played a key role during the 1979 revolution, shuttering down their shops in response to Ayatollah Khomeini’s call for a national strike against the Shah. So it is hard for the Iranian government and the conservative parliament to dismiss them as ‘counter-revolutionaries.’ But past experiences of economic unrest in Iran have demonstrated that there is a thin line between calls for economic accountability and political change. That is because the leadership in Islamic Republic of Iran has woven every aspect of life into a narrative of ideological contest with the United States. Chants targeting bad management, corruption and incompetence, soon morphed into something much more far reaching: an end to Iran’s interventionist regional policy that made it a pariah state.
Rallying against regional ambition, calling for economic and welfare reform
The chants cried by protestors revealed the depth of the regime’s crisis of legitimacy. In a direct affront to Iran’s commitment to bolster a network of proxies to challenge the United States and Israel, the protestors chanted: “No Gaza, No Lebanon, my life for Iran.” Protestors clearly see the regional ambitions of the regime to be detrimental to Iran’s national interests. They represent an alternative vision, one that does not prioritise anti-US commitments but Iran’s economy and welfare. This contrasting vision is not new and has surfaced repeatedly in times of economic crisis, only to be suppressed by brute force. It is hard to see how the current surge could be different.
The government of President Masoud Pezeshkian who represents the reformist camp in the Iranian political landscape, tried to pacify protestors and acknowledge economic grievances as legitimate. Clearly, his administration appears to have learned from past experiences. A security crack down is likely to aggravate tensions. But the protestors were not swayed. The reformist camp appears to have lost credibility and is blamed equally for pushing Iran into isolation and to the brink of collapse. They chanted “Reformer, Hardliner, the game is over”.
The loss of confidence in the reformist camp is significant because it had served as a safety valve for pent-up discontent with the regime, by instilling hope for change from within. President Hassan Rouhani, the architect of the reformist government (2013-2021), even called his administration the Government of Hope. But it is hard to be hopeful under the rule of the Islamic regime in 2026.
The geopolitical landscape of the region has changed significantly since October 2023, as Iran-affiliated regional actors came under sustained military pressure. Hamas has been depleted, Hezbollah is undermined, and Bashar al-Assad’s regime has fallen. Israel and the US attacked Iranian facilities in June 2025. The United Nations reinstated international sanctions on Iran in September 2025 in response to what the Europeans call Iran’s non-compliance with its obligations under the 2015 nuclear deal. The sanctions have made life unbearable, while the threat of another Israeli and US attack on Iran looms large.
US’ misleading ‘regime-change’ rhetoric continues to fuel the crisis in Iran
In the midst of widespread protests in Iran, President Trump’s response has aggravated the situation. His message of support for the Iranian public has given hope to protestors and the Iranian diaspora that the US would act on its promise. After the US abduction of the Venezuelan president, many hope the US would bring about ‘regime change’ in Iran. This has encouraged some protestors. But Washington’s commitment to regime change in Iran is misleading. While President Trump and many around him have repeatedly hinted that they would favour it, a concerted effort at regime change – à la deposing Saddam Hussein in Iraq – would be too costly. It would entail US troops on the ground and President Trump has made it clear he is not interested in such operations. His favourite kind of military engagement is surgical, such as targeting three nuclear facilities in June 2025 and then declaring the end of the war.
The US rhetoric has added fuel to the crisis in Iran. Iranian authorities routinely reject protestors as misguided youth, deceived by foreign propaganda. In the wake of Trump’s declaration of support, the stakes have been raised. The head of Iranian judiciary labelled protestors as agents of foreign interference, promising ‘appropriate response’ by the authorities. But Trump is unlikely to follow his rhetoric. Having encouraged protests and clearly identified the US as a defender of Iranian citizens, fanning the flames, the US response is unlikely to go beyond selected targeting of infrastructure and the leadership, if at all. That is far short of regime change. Instead, it would be a dangerously escalatory move.
Israeli-US strikes or interventions in Iran could throw the region into crisis
President Trump has been erratic and holds a deep disdain for international law. Targeting the Iranian Supreme Leader Ali Khamenei and the top leadership in a drone strike is no longer beyond the scope of possible scenarios. But the ruling regime is well-entrenched, with loyal cadres with vested interest in its survival. Most importantly, the Islamic Revolutionary Guards Corps (IRGC) has the means as well as the ideological and economic interests to defend the regime from falling. In the absence of US troops on the ground, after the initial shock, the IRGC will move to assert its authority and fill the vacuum left by US assassination of the top leadership. This would likely entail brute force against dissidents, and further hostility towards the United States.
The possible repeat US and Israeli attack on Iran is watched with concern in the region. It would threaten to throw the whole region into a deeper crisis, as the IRGC could follow through with the threat of targeting US assets in the Persian Gulf and beyond. While Iran’s proxy network is seriously depleted, it can still pose a threat to US troops in Iraq and Kuwait, as well as the US 5th Fleet Command in Bahrain and US CENTCOM in Qatar. The narrow Strait of Hormuz, a chokepoint for 20 percent of global oil shipment, would be at risk. Iran has repeatedly threatened to close the Strait, as a last resort. The decapitation of the Islamic regime could make that response inevitable in the minds of IRGC, to hit the United States where it hurts: extending the regional crisis into a global economic crisis. This is a daunting prospect.
Meanwhile, Tehran shows no interest in giving up its nuclear and missile programs, insisting they are essential for its security. International pressure continues to mount on Iran and life for ordinary Iranian citizens is becoming increasingly challenging. The government has no economic leverage to address the crisis but has the force to suppress protestors, labelled as foreign agents.
Prof Shahram Akbarzadeh is the Director, Middle East Studies Forum, Deakin University in Melbourne, Australia and a Non-Resident Senior Fellow, Middle East Council on Global Affairs in Doha.
