Key Takeaways:
Israel could be at war with Iran as early as tomorrow, Defense Minister Israel Katz told military journalists in a closed briefing, revealing the Israel Defense Forces have selected specific targets inside Iran and are prepared to conduct independent military action without US support.
"The IDF has identified its targets and is ready to strike. If Iran launches missiles at Israel, our response inside Iran will be devastating," Katz said, according to participants in the briefing. He added that Israel is closely monitoring the interaction between the Trump administration and Tehran, and while it will not disrupt the US diplomatic track, it retains full operational autonomy.
The warning comes as the US and Iran agreed to halt attacks against one another as recently as June 29, according to reports, following days of escalating strikes that threatened the fragile truce brokered earlier this month. That deal, which paused direct hostilities between Washington and Tehran, did not address Iran's network of proxy forces across the Middle East — a point US Secretary of State Marco Rubio acknowledged during his brief Middle East visit, noting Gulf states shared "very concrete concerns" about continued Iranian power projection.
Katz's remarks represent the most explicit Israeli threat of unilateral action since the conflict with Iran began in January. He outlined a multi-front strategy encompassing Lebanon, Iran and Gaza, reiterating that Israeli forces will maintain a long-term military presence in southern Lebanon. The defense minister's language signals that Israel views the window for diplomatic resolution as narrow and is preparing for a scenario in which it acts alone.
Iran's Proxy Network Faces Uncertain Future
The threat of an independent Israeli strike lands at a moment of flux for Iran's network of allied militias across the region. Hezbollah in Lebanon, despite suffering severe losses in prolonged clashes with Israel in 2024 and 2025, remains the cornerstone of Tehran's proxy strategy. "The Iranians see this as a temporary bad phase and believe Hezbollah will regenerate," said Hanin Ghaddar, senior fellow at the Washington Institute for Near East Policy. "It is absolutely vital for the Revolutionary Guards to rebuild their proxies around the region."
The Houthis in Yemen, which maintain closer ties to Tehran but operate with significant autonomy, demonstrated their ability to target Israel and threaten Red Sea shipping during the recent conflict. In Iraq, Shia militia groups backed by Iran for more than two decades flexed their capabilities but stopped short of deploying their full arsenals, with many factions wary of escalation with the US. "They are more risk-averse than perhaps the Iranians would like," said Michael Knights, an expert on Iraqi militias at Horizon Engage.
Market Implications and Historical Precedent
The prospect of direct Israeli-Iranian hostilities carries significant implications for global energy markets. The Strait of Hormuz handles about 21% of global oil consumption, and any disruption to tanker traffic through the chokepoint could send crude prices sharply higher. Brent crude has already priced in a geopolitical risk premium since the January conflict began, and a direct Israel-Iran war would likely push oil toward levels not seen since the 2022 Russia-Ukraine supply shock.
Gold and the US dollar typically benefit from flight-to-safety flows during Middle East escalations. The last time Israel conducted a direct strike on Iranian territory — the April 2024 attack on the Isfahan nuclear facility — Brent crude spiked more than 4% in a single session, gold rose 1.8% and the VIX jumped above 20. A full-scale conflict would likely trigger a more severe and sustained repricing across commodities, currencies and equity markets.
Katz's warning also revives questions about the US-Israeli contingency plan involving Kurdish forces in northern Iraq — a strategy that called for thousands of lightly armed Kurdish fighters to cross into northwestern Iran with US special forces support. That plan, described by former officials as having been "on the shelf" for more than 20 years, was never activated during the January conflict due to insufficient preparation time, Turkish opposition and Kurdish leaders' reluctance after what they viewed as a US "betrayal" in Syria.
This article is for informational purposes only and does not constitute investment advice.
