After the assassination of a Hamas leader in Iran, the Middle East is on the brink of conflict; Israel's adversaries threaten retaliation.

• Early Wednesday, a strike in Tehran resulted in the death of Hamas leader Ismail Haniyeh.
• Yesterday, Israeli forces announced that they had assassinated Hezbollah's second-in-command, Fuad Shukr, in a raid on Beirut, Lebanon.
• The response of Iran to the conflict could determine the escalation intensity.
• The killing of Haniyeh by Israel has severely damaged Hamas and effectively ended any hope of a ceasefire in the near future.

In Tehran, Iran, the Middle East is tense following the assassination of top Hamas leader Ismail Haniyeh in a dramatic escalation early Wednesday.

On Wednesday, an Israeli government spokesman declined to comment on the death of Haniyeh, which Iranian officials are accusing Israel of carrying out through an assassination.

"Charles Lister, a senior fellow at the Middle East Institute in Washington, wrote in a post on X following the news that Israel was very clear - Haniyeh was a dead man walking. Once out of Doha, it was game time. Coming hours after the killing of Fuad Shukr in Beirut, the Middle East is on an absolute knife-edge now."

Yesterday, Israeli forces announced that they had assassinated Hezbollah's second-in-command, Fuad Shukr, in a strike on a crowded area of Beirut. This was in response to a strike on the Israeli-occupied Golan Heights that killed several children a week ago. Israel accused Iranian-backed Lebanese militant group Hezbollah of the attack, a claim that Hezbollah has yet to confirm.

Haniyeh, the chief of Hamas' politburo, was a relatively moderate figure within the organization and led cease-fire negotiations with Israel, serving as the face of the group's regional diplomatic efforts.

The killing of Haniyeh by Israel has damaged Hamas and ended any hope of a ceasefire in the ongoing conflict in Gaza, which has been going on for ten months.

The Qatari Foreign Minister, Sheikh Mohammed bin Abdulrahman Al Thani, wrote on X: "The ongoing assassinations of civilians in Gaza and the targeting of negotiators while peace talks continue raises the question of how mediation can succeed. For peace to be achieved, we need serious partners and a global stance against the disregard for human life."

Qatar has been the host of Hamas' political leadership for a long time. In 2017, Haniyeh was appointed as the head of Hamas' political wing before moving to Qatar in exile in 2019. After leaving Gaza, he was succeeded by Yahya Sinwar, a more hardline Hamas devotee. Sinwar is believed to be the mastermind behind the Oct. 7 attack on Israel that resulted in the deaths of over 1,200 people and the kidnapping of 253 hostages, 116 of whom have since been freed.

Over 39,000 people in Gaza have been killed by Israel's military response to the attack, as per health authorities in the blockaded enclave, and more than half of its buildings have been destroyed, according to the U.N.

Despite ongoing ceasefire talks for months, Sinwar, Hamas' leader based in Gaza, frequently halts or ends negotiations.

Victor Tricaud, a senior analyst at consulting firm Control Risks, stated that Haniyeh played a crucial role in negotiations for a ceasefire in Gaza.

"The killing of Hamas leader Yahya Sinwar in Gaza will make it harder for the group to maintain a moderate position and may prolong the ceasefire negotiations for several months, according to Tricaud."

Antony Blinken, the U.S. Secretary of State, emphasized the need for a ceasefire agreement while addressing a forum in Singapore, and stated that the U.S. had no information about the reported Israeli attack on Haniyeh.

In 2018, the U.S. State Department labeled Haniyeh as a terrorist, stating that he supported armed struggle, including against civilians. Additionally, the department declared that Hamas operations were responsible for the deaths of 17 American lives in terrorist attacks.

Will Iran retaliate?

The vow of revenge by Iran, Hamas, and Hezbollah against Israel could result in a larger war or further escalation in the region.

On Wednesday, Israeli Defense Minister Yoav Gallant informed Israel Defense Forces troops that Israel is preparing for all possibilities, but does not desire a war. Meanwhile, Iran's leadership has stated that the alleged Israeli strike warrants "severe punishment" and that the country must pay a heavy price.

Not responding to Iran's aggression may not be an option for its leaders, who will feel pressured to demonstrate their military might. However, a full-scale war between Israel and Iran, including its proxies such as Hezbollah, would have disastrous consequences for all parties involved.

The death of Haniyeh in Tehran has put Iran's leadership under intense pressure from the Revolutionary Guards to retaliate after another attack on Iranian soil, according to Torbjorn Soltvedt, principal MENA analyst at Verisk Maplecroft, who spoke to CNBC.

"Another cycle of attacks between Israel and Iran is becoming more likely."

Despite the anticipation of many regional analysts, Iran is expected to remain cautious in its response to any potential conflict with Israel, as it has shown little inclination towards going to war to aid Hamas. The recent tit-for-tat exchanges of missile strikes between Iran and Israel in April were carefully calculated and communicated to minimize significant damage or casualties.

Tricaud at Control Risks anticipates any retaliation to be carefully calculated, possibly utilizing Iran-backed proxy groups. However, it is uncertain whether Tehran's goal of avoiding a full-blown regional conflict with Israel has shifted due to Haniyeh's assassination.

The strike against Iran constitutes a significant breach of its sovereignty, but Tehran has consistently demonstrated that it does not desire a direct conflict with Israel over the Gaza war.