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Will the fragile ceasefire between Iran and Israel hold? One factor could be crucial

Published

7 months ago

June 25, 2025

Ahron Young

Will the fragile ceasefire between Iran and Israel hold? One factor could be crucial to it sticking

Ali Mamouri, Deakin University

After 12 days of war, US President Donald Trump announced a ceasefire between Israel and Iran that would bring to an end the most dramatic, direct conflict between the two nations in decades.

Israel and Iran both agreed to adhere to the ceasefire, though they said they would respond with force to any breach.

If the ceasefire holds – a big if – the key question will be whether this signals the start of lasting peace, or merely a brief pause before renewed conflict.

As contemporary war studies show, peace tends to endure under one of two conditions: either the total defeat of one side, or the establishment of mutual deterrence. This means both parties refrain from aggression because the expected costs of retaliation far outweigh any potential gains.

What did each side gain?

The war has marked a turning point for Israel in its decades-long confrontation with Iran. For the first time, Israel successfully brought a prolonged battle to Iranian soil, shifting the conflict from confrontations with Iranian-backed proxy militant groups to direct strikes on Iran itself.

This was made possible largely due to Israel’s success over the past two years in weakening Iran’s regional proxy network, particularly Hezbollah in Lebanon and Shiite militias in Syria.

Over the past two weeks, Israel has inflicted significant damage on Iran’s military and scientific elite, killing several high-ranking commanders and nuclear scientists. The civilian toll was also high.

Additionally, Israel achieved a major strategic objective by pulling the United States directly into the conflict. In coordination with Israel, the US launched strikes on three of Iran’s primary nuclear facilities: Fordow, Natanz and Isfahan.

Despite these gains, Israel has not accomplished all of its stated goals. Prime Minister Benjamin Netanyahu had voiced support for regime change, urging Iranians to rise up against Supreme Leader Ali Khamenei’s government, but the senior leadership in Iran remains intact.

Additionally, Israel has not fully eliminated Iran’s missile program. (Iran continued striking to the last minute before the ceasefire.) And Tehran did not acquiesce to Trump’s pre-war demand to end uranium enrichment.

Although Iran was caught off-guard by Israel’s attacks — particularly as it was engaged in nuclear negotiations with the US — it responded by launching hundreds of missiles towards Israel.

While many were intercepted, a significant number penetrated Israeli air defences, causing widespread destruction in major cities, dozens of fatalities and hundreds of injuries.

Iran has demonstrated its capacity to strike back, though Israel has succeeded in destroying many of its air defence systems, some ballistic missile assets (including missile launchers) and multiple energy facilities.

Since the beginning of the assault, Iranian officials have repeatedly called for a halt to resume negotiations. Under such intense pressure, Iran has realised it would not benefit from a prolonged war of attrition with Israel — especially as both nations face mounting costs and the risk of depleting their military stockpiles if the war continues.

As theories of victory suggest, success in war is defined not only by the damage inflicted, but by achieving core strategic goals and weakening the enemy’s will and capacity to resist.

While Israel claims to have achieved the bulk of its objectives, the extent of the damage to Iran’s nuclear program is not fully known, nor is its capacity to continue enriching uranium.

Both sides could remain locked in a volatile standoff over Iran’s nuclear program, with the conflict potentially reigniting whenever either side perceives a strategic opportunity.

Sticking point over Iran’s nuclear program

Iran faces even greater challenges when it emerges from the war. With a heavy toll on its leadership and nuclear infrastructure, Tehran will likely prioritise rebuilding its deterrence capability.

That includes acquiring new advanced air defence systems — potentially from China — and restoring key components of its missile and nuclear programs. (Some experts say Iran has not used some of its most powerful missiles to maintain this deterrence.)

Iranian officials have claimed they safeguarded more than 400 kilograms of 60% enriched uranium before the attacks. This stockpile could theoretically be converted into nine to ten nuclear warheads if further enriched to 90%.

Trump declared Iran’s nuclear capacity had been “totally obliterated”, whereas Rafael Grossi, the United Nations’ nuclear watchdog chief, said damage to Iran’s facilities was “very significant”.

However, analysts have argued Iran will still have a depth of technical knowledge accumulated over decades. Depending on the extent of the damage to its underground facilities, Iran could be capable of restoring and even accelerating its program in a relatively short time frame.

And the chances of reviving negotiations on Iran’s nuclear program appear slimmer than ever.

What might future deterrence look like?

The war has fundamentally reshaped how both Iran and Israel perceive deterrence — and how they plan to secure it going forward.

For Iran, the conflict has reinforced the belief that its survival is at stake. With regime change openly discussed during the war, Iran’s leaders appear more convinced than ever that true deterrence requires two key pillars: nuclear weapons capability, and deeper strategic alignment with China and Russia.

As a result, Iran is expected to move rapidly to restore and advance its nuclear program, potentially moving towards actual weaponisation — a step it had long avoided, officially.

At the same time, Tehran is likely to accelerate military and economic cooperation with Beijing and Moscow to hedge against isolation. Iranian Foreign Minister Abbas Araghchi emphasised this close engagement with Russia during a visit to Moscow this week, particularly on nuclear matters.

Israel, meanwhile, sees deterrence as requiring constant vigilance and a credible threat of overwhelming retaliation. In the absence of diplomatic breakthroughs, Israel may adopt a policy of immediate preemptive strikes on Iranian facilities or leadership figures if it detects any new escalation — particularly related to Iran’s nuclear program.

In this context, the current ceasefire already appears fragile. Without comprehensive negotiations that address the core issues — namely, Iran’s nuclear capabilities — the pause in hostilities may prove temporary.

Mutual deterrence may prevent a more protracted war for now, but the balance remains precarious and could collapse with little warning.

Ali Mamouri, Research Fellow, Middle East Studies, Deakin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Ticker Views

Trump cuts India tariffs after Modi agrees to end Russian oil imports

Trump announces new trade deal with India, reducing tariffs to 18% in a major shift in U.S.-India relations.

Published

2 hours ago

February 3, 2026

Harvey Vargas

Trump announces new trade deal with India, reducing tariffs to 18% in a major shift in U.S.-India relations.

In a major geopolitical shift, U.S. President Donald Trump announced a new trade deal with India that slashes tariffs on Indian goods to 18%, reversing punitive levies previously as high as 50%.

The deal came following a phone call with Indian Prime Minister Narendra Modi and marks a significant pivot in U.S.–India economic relations after months of tension. Oz Sultan from Sultan Interactive Group joins us to break down what this means for exporters and global markets.

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Ticker Views

UK Prime Minister visits Beijing after eight years to boost trade and security

UK PM visits Beijing to strengthen trade and tackle security issues; insights from Professor Tim Harcourt on Brexit’s impact.

Published

1 day ago

February 2, 2026

Harvey Vargas

UK PM visits Beijing to strengthen trade and tackle security issues; insights from Professor Tim Harcourt on Brexit’s impact.

The British Prime Minister has made the first visit to Beijing in eight years, aiming to strengthen trade links and address growing security concerns with China.

Joining us to unpack the visit is Professor Tim Harcourt, Chief Economist at UTS, who discusses how Brexit has reshaped Britain’s approach and the delicate balance between economic opportunities and security commitments to the USA and NATO.

We also explore how China’s alliances with countries like Myanmar and Russia, along with Canada’s differing approach, influence trade relations, and what this visit means for Australia’s relationship with China.

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Ticker Views

3 things to know about Kevin Warsh, Trump’s nod for Fed chair

Published

3 days ago

January 31, 2026

The Conversation

3 things to know about Kevin Warsh, Trump’s nod for Fed chair

Kevin Warsh has been tapped by Donald Trump to lead the Federal Reserve.
AP Photo/Alastair Grant

D. Brian Blank, Mississippi State University and Brandy Hadley, Appalachian State University

After months of speculation, President Donald Trump nominated Kevin Warsh on Jan. 30, 2026, to be the next chair of the Federal Reserve.

If confirmed by Congress, Warsh will inherit leadership of the U.S. central bank at a delicate time. For months, current Fed Chair Jerome Powell has come under attack from the Trump administration for failing to heed the president’s call for lower interest rates. The fight has put into question the central bank’s independence and its role in stewarding the economy.

Powell’s term as chair will end in mid-May, leaving his successor to navigate an economy that has improved on some fronts but remains uneven and uncertain.

But what should America expect from the next Fed chair? Here are three things to note about Trump’s nominee.

1. He is a familiar face …

Warsh brings deep experience with monetary policymaking to the role.

A graduate of Stanford University and Harvard Law School, he served as special assistant to the president for economic policy and executive secretary of the White House National Economic Council under President George W. Bush before becoming one of the youngest members of the Federal Reserve Board of Governors.

Warsh is no newcomer to discussions about Federal Reserve leadership. He was a finalist for the job in 2017, when Trump instead appointed Powell. Trump has since stated that he made a mistake by not selecting Warsh then – though clashes between Trump and Powell may have influenced that view.

Two men in suits walk outside. — Fed Chair Jerome Powell increasingly found himself out of step with Donald Trump’s wishes.
AP Photo/Pablo Martinez Monsivais

Warsh’s credentials are unquestionable. As a governor of the Federal Reserve Board from 2006 to 2011, he worked closely with other policymakers and with Wall Street during the global financial crisis of 2008. Since departing the Fed, he has returned to Stanford as a visiting fellow at the Hoover Institution and a lecturer at the Graduate School of Business, as well as a member of the Panel of Economic Advisers of the Congressional Budget Office.

He also has ties to the finance industry. He began his career in mergers and acquisitions at Morgan Stanley and, since leaving the Fed, has worked as a partner at Duquesne Family Office, an investment firm that manages the personal wealth of hedge fund manager Stanley Druckenmiller and other investors.

In 2016, Trump included Warsh in an economic advisory group assembled during his transition. Critics of Warsh’s nomination point toward his father-in-law, Ronald Lauder, a college friend and donor of the president, as evidence of politicization.

2. … with evolving monetary views

The big question people have is what a Warsh Fed would mean for monetary policy – that is, is it likely to play tight or loose with rates.

When the economy is growing quickly, like in 2021, the Federal Reserve tightens policy by raising interest rates to avoid the kind of economic growth that may not be sustainable long term and can lead to bubbles. However, during downturns, like in 2008 or 2020, the economic policy that can provide a backstop for the economy is looser. The Fed tends to lower rates in these situations, which supports growth.

Warsh’s views on monetary policy have long been considered hawkish, meaning he is inclined toward tighter policy and generally higher interest rates to keep inflation in check, even at the expense of slower economic growth. During his previous tenure at the Fed, he signaled concern about expansive monetary tools such as quantitative easing, in which the central bank buys Treasurys and other securities to stimulate the economy. This resulted in what Warsh called a “bloated” Fed balance sheet that held almost US$9 trillion of debt at its peak in 2022.

In recent public remarks leading up to his nomination, however, he has increasingly aligned in part with Trump’s push for lower interest rates and discussed establishing a new Treasury-Fed Accord, like in 1951, when Fed independence from fiscal authorities such as the Treasury Department was established.

3. His nod highlights fight over Fed independence

A central question surrounding this nomination is whether it promotes the politicization of the Federal Reserve.

The Fed’s independence from day-to-day political pressure has long been viewed as a cornerstone of U.S. economic policymaking. Decisions about interest rates, inflation control and financial stability are insulated from electoral politics for that reason. A truly independent Fed can resist making decisions that provide a short-term economic bump – something incumbent governments tend to like – but may lead to longer-term economic pain down the road.

The Fed tends to use its monetary policy tools carefully. Yet politicians tend to want looser monetary policy so the economy grows fast and they get credit for it.

And Warsh’s nomination can be seen in the context of a broader push from the executive branch to exert greater influence over monetary policy. Given Trump’s public criticism of Powell and vocal calls for his early departure, the president almost certainly intended to nominate someone who would lower interest rates according to preferences stated by the administration.

Critics of the nomination have argued that Warsh has a tendency to be more opportunistic with his policy views than Powell and other economists, who try to ignore political preferences.

As such, Warsh’s nomination encapsulates more than just a leadership transition. It highlights the ongoing tensions between political priorities and the traditional economic playbook, between short-term growth pressures and long-term stability, and between institutional independence and democratic accountability.

Time will tell whether he turns out to be hawkish or politically motivated as chair, if he is confirmed.

D. Brian Blank, Associate Professor of Finance, Mississippi State University and Brandy Hadley, Associate Professor of Finance and Distinguished Scholar of Applied Investments, Appalachian State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.