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Last week, Iraq hosted a regional summit intended to encourage archrivals Saudi Arabia and Iran to resolve their differences and ease tensions in several countries in the Middle East that have become their proxy battlegrounds. Reconciliation between the two could pave the path for peace in Yemen, save Lebanon from a total collapse, and aid Iraqs, and maybe in time even Syrias, economic recovery.

Although Iraq was applauded for opening its doors to discuss a possible end to the cold war that has been fought between Riyadh and Tehran for hegemony of the Muslim world, no breakthrough was achieved. Saudi and Iranian foreign ministers merely agreed to continue the conversation that started in April just days after the Biden administration began an indirect dialogue with Iran to revive the Iranian nuclear deal, also known as the Joint Comprehensive Plan of Action [JCPOA].

The Iranian-Saudi talks have stalled, however, because of Irans insistence on consolidating its gains made by using its armed militias; uncertainty over the fate of the JCPOA; and the absence of security guarantees from the United States, upon whom Saudi Arabia is dependent.

Last week, Iraq hosted a regional summit intended to encourage archrivals Saudi Arabia and Iran to resolve their differences and ease tensions in several countries in the Middle East that have become their proxy battlegrounds. Reconciliation between the two could pave the path for peace in Yemen, save Lebanon from a total collapse, and aid Iraqs, and maybe in time even Syrias, economic recovery.

Although Iraq was applauded for opening its doors to discuss a possible end to the cold war that has been fought between Riyadh and Tehran for hegemony of the Muslim world, no breakthrough was achieved. Saudi and Iranian foreign ministers merely agreed to continue the conversation that started in April just days after the Biden administration began an indirect dialogue with Iran to revive the Iranian nuclear deal, also known as the Joint Comprehensive Plan of Action [JCPOA].

The Iranian-Saudi talks have stalled, however, because of Irans insistence on consolidating its gains made by using its armed militias; uncertainty over the fate of the JCPOA; and the absence of security guarantees from the United States, upon whom Saudi Arabia is dependent.

Irans government is keen for the resumption of diplomatic ties with the Saudis, which would help it entrench its currently contested international legitimacy and possibly lay the groundwork for greater regional engagement, economic and social, that would also bolster the government domestically. Iran wants to show its people that it is not completely isolated, and that the economic straits in which it is suffering are largely a result of American hostilitynot the regimes costly interventions in the Middle East, which have become targets of angry protest.

The government of Irans new president, Ebrahim Raisi, can count on some domestic support for this narrative, especially after Raisis decisive election victory; and of course he has the full backing of Supreme Leader Ayatollah Ali Khamenei and hardline factions such as those that dominate the Revolutionary Guard. But that is unlikely to quell protests in Iran that have complained that the policy of supporting militias from Lebanon to Yemen is too costly when money is short at homeand only attracts further sanctions.

The complication in this scenario is that Raisi intends neither to rein in those militias nor to agree to changes in the nuclear deal. Irans development of long-range ballistic missiles, which the United States would like to include in further talks, raises a particular threat to Saudi Arabia. As long as Iran is not ready to concede on these key fronts, the Saudis simply do not see the prospect of a deal.

Seyed Hossein Mousavian, an Iranian policymaker who served on Irans nuclear diplomacy team in negotiations with the European Union in 2015, summarized Iranian presidents thinking: As I understand, President Raisis approach will be for the P5+1 and Iran to be committed to JCPOA as is and full compliance vs. full compliance,' Mousavian said. That means the broader issues the United States and its allies such as Saudi Arabia (let alone Israel) see as important next steps are not currently on the table.

Simon Henderson, Baker Fellow and director of the Bernstein Program on Gulf and Energy Policy at the Washington Institute, said that he thought Iran would continue to support militias across the so-called Shia crescent. Any adjustment will be for tactical rather than strategic reasons, Henderson said.

Raisis presidential inauguration teemed with a horde of leaders of non-state militias it backs, many of whom have spent years or decades carving away Saudi influence in the region in favor of Irans presence. Their presence and prominence at the event certainly did not boost Saudi confidence in the talks.

Joost Hiltermann, director of the Middle East and North Africa program at the International Crisis Group, said Iran sees these armed partners as critical to its posture in the surrounding region. However, these militias also pursue a domestic agenda that does not always perfectly coincide with Irans regional design, Hiltermann added.

It could get more interesting if these groups over-reach in their domestic environments, he said. This could happen especially in Iraq, where the Iran-backed militias, as well as many of the others, could run afoul of popular sentiment when they become predatory and act as especially violent auxiliaries of the state without accountability, or are seen to be fighting on behalf of Iran instead of Iraqi national interest.

In Lebanon, too, criticism of Hezbollah has increased. Although the group still has broad support in its strongholds, it is losing ground in the rest of the country. Most people in Lebanon blame the political elite for rampant corruption and ruining the countrys economy. But many also see Hezbollah as the reason behind the United States and Saudi Arabias reluctance to extract the country from its financial crisis.

These flickerings of regional opposition to the Iranian project, together with the possibility of a breakdown of the JCPOA talks, seem to have given the Saudis the sense their leverage over Iran may grow. They may even hope that Irans intransigence will cause the collapse of the Vienna talks, leaving Iran under sanctions and less able to support its broader regional objectives. Rather than make any concessions to help Iran, Saudi Arabia would prefer to keep it on its trajectory of deepening isolation.

Ali Vaez, Iran project director at the International Crisis Group, said that if the United States-Iran nuclear deal is not restored, Tehran and Washington will remain at daggers drawn, and under those circumstances, Iran-Saudi de-escalation is unlikely, if not impossible.

He added that any resolution between the regional foes would depend on the division of areas of influence. Ultimately, both countries would have to agree on a set of rules and to potentially determine zones of influence in the region, Vaez said.

Analysts suggest that, as far as mutual concessions go, Syria is low-hanging fruit for Saudis and Yemen is the same for Iranians. Saudi Arabia could join the United Arab Emirates in pushing for diplomatic recognition of the Assad regime, while Iran could push its local allies the Houthis into a deal with the Saudi-backed government of Yemen. Compromises could be found for both Iraq and Lebanon.

But Iran sees such an idea as an unnecessary volte-face: Irans local allies, including the Syrian army and Hezbollah, have with Russian backing already routed Sunni-led opposition groups from regime-held territory in Syria; and the Houthis are currently winning the war in Yemen. And Iran has already succeeded in planting proxies inside the governments of both Iraq and Lebanon.

Iran has expanded its influence in the Middle East, and in that sense it has won the unconventional war it has been fighting. But many of the regions countries, including Iran itself, are economically miserable. They are either mired in active conflicts, brought low by the effects of wars and sanctions, or like Lebanon are suffering self-imposed financial crises.The Saudis for now have little to gain from acknowledging Irans victories and cementing them in place. Until that changes, Iranians, as well as the citizens of other nations stuck in the middle of the Saudi Arabia-Iran rivalry, will continue to lose out.

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Saudi-Iranian Rapprochement Is Heading Nowhere - Foreign Policy