Analysis: Iran’s Response to Israel-UAE Pact: Tough Talk, But That’s All

DUBAI (Reuters) -
 Iranian President Hassan Rouhani speaks at a news conference. (REUTERS/Brendan Mcdermid/File Photo)

Iran’s clerical and military elite is turning up the volume of its rhetoric against a surprise agreement between the United Arab Emirates and Israel to normalize ties. But the bark appears to be worse than the bite.

Iranian authorities have harshly criticized last week’s U.S.- brokered deal, with some officials warning that the UAE and Israel cozying up to one another risks conflagration in the Middle East. Others made veiled threats against the Gulf state.

But so far, that is it. Tehran did not recall its charge d’affaires or cut ties with the UAE, as some other countries have done.

“We always act based on Iran’s national interests. Tehran will not take any aggressive measure as long as its interests are not endangered,” said a senior official who is close to Iran’s top decision-makers.

With business ties to Iran stretching back over a century, the emirate of Dubai, 100 miles across the Gulf, has long been one of Iran’s main links to the outside world.

Analysts said Tehran can ill afford to lose Dubai as a trade route, particularly since heavy U.S. sanctions have drastically reduced its oil exports and made doing international business increasingly complicated.

“Iran’s leaders will never cut the branch they are sitting on,” said Tehran-based analyst Saeed Leylaz.

Iran’s state news agency IRNA in June cited Iranian authorities as saying that the UAE, Iran’s second trade partner after China, would continue to process a huge part of Tehran’s imports and exports.

To avoid worsening Iran’s isolation, its clerical rulers decided to refrain from taking an aggressive approach to the region’s changing geopolitics, said another Iranian official.

“Tehran will not benefit from any hasty measure because other countries like Oman, Bahrain and Saudi Arabia might normalize ties with Israel as well,” said the official, who also asked not to be named because of the sensitivity of the matter.

“The potential of the Israeli flag flying in the UAE, which is a very, very important trading partner of Iran, is a major setback for Iranian leverage in the region,” said Meir Javedanefar, a lecturer at the Interdisciplinary Center (IDC) Herzliya in Israel.

Some Iranian insiders worry that exercising restraint over the UAE could make the Islamic Republic look weak among the political and paramilitary allies in the region who have expanded Iran’s reach in the past 20 years.

For this reason, the possibility that Iran’s proxies might signal displeasure with the Israel-UAE accord by staging low-level incidents cannot be ruled out, said a regional official.

“Don’t be surprised if you witness small-scale explosions, bomb, drone or missile attacks in the region in the coming weeks,” he said.

As frustration simmers, analysts say Iran is in the throes of popular unrest over the country’s economic grievances. Iran’s deteriorating economy has prompted widespread protests since late 2017.

“I don’t care about the Palestinian cause, I don’t care about regional politics. I care about my family,” said Masoumeh Saburi, 36, a single mother of two in Tehran whose husband is jobless. “I am struggling to provide food for my children.”