ANALYSIS: By Lim Tean

It is a peculiar kind of defeat — one dressed in the language of victory. Operation Epic Fury was sold to the world as a decisive strike to eliminate the Iranian nuclear threat once and for all.

Israeli Prime Minister Benjamin Netanyahu had lobbied Washington for precisely this moment. He got his war. What he didn’t get was the outcome he promised.

The US-Iran MOU is Israel’s strategic nightmare rendered in diplomatic text. And the consequences extend far beyond the terms of any single agreement.

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Left out of the room
Let us begin with the most humiliating fact. The MOU’s second paragraph mentions Lebanon three times and declares the immediate and permanent termination of military operations on all fronts — without once mentioning Israel.

A new deconfliction mechanism for Lebanon has been announced, including the United States, Iran, Pakistan, and Qatar. Israel is excluded from that too.

Think about what that means. The country that triggered this war, that flew alongside American aircraft, that provided the intelligence Netanyahu boasted had been decisive — was not in the room when peace was made.

Washington negotiated Israel’s strategic future without Israel.

Vice-President JD Vance’s message to Israeli critics of Trump and the MOU was blunt: they need to “wake up and smell the reality of the situation that country is in”. That is not the language of alliance. That is the language of managed irrelevance.

What Iran kept
The nuclear question — the ostensible casus belli for the entire war — remains unresolved.

The MOU suffices with rhetorical promises, deferring the actual mechanics of blocking Iran from acquiring nuclear weapons capacity, with no guarantee of agreement on that most critical issue.

Iran’s ballistic missile arsenal? Untouched. The MOU offers no treatment of Iran’s ballistic missile programme or its patronage of regional proxies — leaving Israel to contend with those threats as before.

Iran’s financial position? All US sanctions on Iran have been lifted, giving Tehran immediate and significant financial relief — resources that will flow into rebuilding military capabilities.

Tehran emerged from this war battered but unbowed, its theocratic system intact, its strategic leverage demonstrated to the entire world.

Foreign Policy and The Atlantic described the outcome as a defeat for the United States and Israel. The BBC’s international editor assessed that while US and Israeli air forces scored tactical victories, they were not enough to avoid strategic defeat.

The death of the Abraham Accords
Let me be categorical: the Abraham Accords are dead.

That architecture — the crown jewel of American-brokered Middle East diplomacy, the grand bargain that promised Arab “normalisation” with Israel in exchange for security guarantees and Palestinian deferral — has been buried by the post-war regional reality now taking shape.

The Saudi-Iran reconciliation summit now gathering momentum tells the whole story.

Riyadh is actively convening Gulf states and Tehran around a new regional order. And at the centre of that order sits the Palestinian question — not deferred, not managed, but central.

Saudi normalisation with Israel, once dangled as the great prize Netanyahu sought, is now explicitly conditional on Palestinian statehood in terms his government categorically rejects and always will.

The Abraham Accords were premised on one fundamental assumption: that Arab states could be peeled away from the Palestinian cause by American inducements and Israeli economic partnerships.

The Iran war has demolished that premise. Arab publics watching Gaza, Lebanon, and now Iran have made their governments’ calculations for them. No Arab leader can now normalise with Israel without paying a catastrophic domestic political price.

The Abraham Accords are not merely stalled. They are finished.

Some will argue that normalisation architecture, once built, has institutional momentum that survives political setbacks. This misreads what has changed. It was not merely the political temperature that shifted — it was the foundational premise of the entire enterprise.

The Abraham Accords assumed American power could permanently reshape Arab strategic calculations. The MOU has demonstrated that American power in the Middle East is now conditional, transactional, and self-limiting.

The architecture built on that power has no foundation left to stand on.

The dual hegemony: Iran and Turkey
Most analysts have framed Turkey’s rise as a consequence of Iran’s weakening — the great power stepping into the vacuum left by a damaged adversary. This framing is fundamentally wrong, and it misreads the emerging regional order.

My thesis is this: what this war has produced is not a Turkish replacement of Iranian power, but the consolidation of a dual hegemony over the Middle East — Iran and Turkey together, each dominant in its own sphere, each with its own tools of regional influence, and collectively forming the twin poles around which the new Middle East will organise itself.

Iran has survived this war with something more valuable than military capability — it has demonstrated to every state in the region that it possesses a weapon of genuine mass economic destruction in the Strait of Hormuz, with strategic leverage over both the Gulf region and the world economy that no military strike can eliminate.

Iran will rebuild. Its reconstruction will be funded by sanctions relief. And it will re-emerge as the dominant power of the Persian Gulf and the Shia arc from Baghdad to Beirut.

Battered, yes. Eliminated as a regional hegemon? Absolutely not.

Turkey simultaneously consolidates its own distinct hegemony — Sunni, NATO-anchored, commercially formidable, and diplomatically agile in ways Iran can never be.

Turkey maintains a permanent military base in Qatar. Saudi Arabia and the UAE are among its largest defence clients, with Riyadh reportedly in final-stage discussions to join Turkey’s KAAN fifth-generation stealth fighter programme — which would make it the first Gulf state with a stake in an advanced combat aircraft project outside direct American control.

Turkish Foreign Minister Hakan Fidan has already called for the formation of a Middle East security pact to build trust and stability across the region after the war.

Crucially, these two hegemonies are not necessarily in fatal conflict with each other. The restraint that Turkey and Iran have historically shown towards one another, particularly at moments of regional and global crisis, constitutes a managed rivalry — one that involves compartmentalisation, coexistence of competing strategic depths, and mutual calculation that outright confrontation serves neither.

They will compete, yes — in Syria, Iraq, and across the Levant. But they will also tacitly coordinate where their interests converge, above all in containing Israeli power and ensuring that neither Washington nor Tel Aviv can dictate the regional order.

For Israel, this dual hegemony is a strategic nightmare of the first order. It faced Iran as a declared enemy — isolated, sanctioned, and manageable within a US-led containment architecture. It now faces two hegemonic powers operating across every theatre in which Israeli interests are engaged, one of them a NATO member with a domestically built defence industry and deepening Gulf partnerships that Israeli power cannot easily reach.

Israel traded a weakened, contained adversary for two formidable and rising ones.

Netanyahu’s shattered grand design
History will not be kind to Benjamin Netanyahu’s strategic vision. Behind the stated objectives of eliminating Iran’s nuclear programme lay a grander ambition — the consolidation of Israeli regional dominance, the permanent suppression of Palestinian statehood, and the realisation of a Greater Israel stretching from the Jordan River to the sea, secured by Arab normalisation and American military backing.

That project is now in ruins.

Reports cited Israeli intelligence provided by Netanyahu as a decisive factor in Trump’s authorisation of Operation Epic Fury. He designed this war. He lobbied for it. He provided the intelligence that launched it. And the outcome — Iran surviving with its strategic leverage intact, Turkey ascending, a dual hegemony replacing the old order, the Abraham Accords collapsing, and Palestinian statehood returning irresistibly to the regional agenda — is the precise opposite of everything his grand design required.

The Greater Israel project required three things simultaneously: permanent American backing, Arab acquiescence, and the suppression of Palestinian nationhood. All three pillars have collapsed in the same season.

A recent poll shows that 92.1 percent of Israelis, including Jews and Arabs, believe Iran gained the most from the MOU, and 86 percent hold a negative view of the agreement.

Netanyahu faces elections in September or October. He went to war promising existential resolution. He faces the ballot box having delivered existential ruin.

The greatest blow: The loss of the American shield
But the deepest and most consequential damage inflicted by this war on Israel is not the MOU’s terms, not the dual hegemony, not the death of the Abraham Accords. It is something more fundamental.

Israel can no longer be assured of American support in future conflicts.

This is a tectonic shift in the foundations of Israeli security doctrine. Since 1973, Israel has operated on one unshakeable assumption: that the United States would underwrite its military adventurism, absorb its diplomatic costs, and stand between Israel and strategic consequences. That assumption is now shattered.

Trump refused to share a preliminary text of the MOU with Netanyahu, whose judgment he questioned using multiple expletives, while simultaneously describing Iranian interlocutors as “very rational people who were nice to deal with.” Washington did not merely negotiate over Israel’s head — it negotiated against Israel’s preferences, excluded it from the peace architecture, and then told it to accept the outcome.

The lesson every future Israeli government must now absorb is devastating in its simplicity: America will pursue its own interests. When those interests align with Israeli military action, Washington will partner.

When they diverge — as they did the moment the Strait of Hormuz closure threatened the global economy — Washington will deal. And Israel will not be in the room.

This is not a temporary rupture that a change of American administration will repair. It is a structural shift. The United States has demonstrated, in front of the entire world, that Israeli military adventurism carries costs that Washington will not indefinitely absorb. Every future Israeli prime minister will govern in the shadow of that demonstration.

A bleak horizon
Israel enters this new era already deeply wounded from within.

More than 150,000 people have left Israel in the past two years, and more than 200,000 since the current government took office in December 2022. This is not the normal ebb and flow of migration. A Knesset report described it as a “tsunami” — and those departing are disproportionately the young, educated, tax-paying professionals who constitute the backbone of Israel’s high-tech economy.

For the second consecutive year, more people left Israel than arrived — a negative net migration balance unprecedented in the country’s modern history. Population growth slowed in 2025 for the first time in decades, driven primarily by emigration alongside declining fertility rates and war-related mortality.

More than 25 percent of Israelis are now considering leaving. The number of official requests to terminate residency in 2024 was more than double the total requests made between 2015 and 2021.

For a state that defines itself as the ultimate sanctuary for world Jewry, this exodus carries a verdict more damning than any diplomatic agreement. Jews are leaving Israel because of Israel’s wars. The state founded to make Jews safe has become, in the eyes of growing numbers of its own citizens, a state that makes them perpetually and inescapably unsafe.

The economy mirrors the demography. The departure of high-tech workers — the engineers, physicians, and entrepreneurs who drove Israel’s “Start-Up Nation” identity — carries compounding consequences. Capital, talent, and tax revenue leave together. The sectors that remain are progressively more dependent on state subsidies and less capable of generating the growth that underwrites military spending.

A state in permanent war cannot indefinitely sustain a first-world economy, and the numbers are beginning to reflect that truth.

The only path forward: A Palestinian state
There is only one exit from this strategic catastrophe, and it requires Israel to face a truth it has spent 70 years refusing to acknowledge.

Israel’s long-term survival as a viable state — economically, demographically, diplomatically — now depends on a single political act: the acceptance of a Palestinian state with East Jerusalem as its capital.

This is no longer a moral argument, though the moral case is overwhelming. It is a cold strategic calculation. The post-war regional order being assembled — the dual hegemony of Iran and Turkey, the Saudi-led Gulf reconciliation, the death of the Abraham Accords — has Palestinian statehood as its non-negotiable foundation.

Every regional power that matters has made this clear. The price of Israel’s reintegration into a workable Middle Eastern order, and by extension the restoration of something resembling normal economic and diplomatic life, is Palestinian statehood.

Without it, Israel faces permanent regional hostility, no prospect of Arab normalisation, a continuing haemorrhage of its most productive citizens, an economy under sustained pressure, and an American patron whose support is now conditional and transactional rather than unconditional and structural.

The Zionist founders understood something Netanyahu’s generation has forgotten: that Israel’s survival ultimately depends not merely on military power but on legitimacy — the legitimacy that comes from being a state that other states and peoples can live alongside.

That legitimacy has been catastrophically squandered. It can only begin to be rebuilt through justice for the Palestinian people.

The reckoning has arrived. And the path forward, however painful, is clear.

Accept Palestinian statehood — with East Jerusalem as its capital — or face a future of accelerating isolation, demographic decline, and strategic irrelevance in a Middle East that has irrevocably moved on.

Lim Tean is a Singaporean lawyer, politician and commentator on geopolitical affairs. He is the founder of the political party People’s Voice and a co-founder of the political alliance People’s Alliance for Reform.