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Iran Update Special Report, July 7, 2026

Iran is attempting to stop Western and Gulf efforts that could weaken its ability to use the Strait of Hormuz as a source of leverage in current and future disputes. Gulf states and the United States are attempting to undermine Iran's ability to use the strait as leverage by entering and exiting the strait along the Omani coast and by proposing alternative, non-Iranian-controlled transit mechanisms. Several Iranian media outlets reported on July 7 that the UAE proposed a plan to the International Maritime Organization (IMO) to manage the strait, which Iran rejected and eight other unspecified UAE “allies” supported.[1] Iran claimed that the Emirati proposal lacked “legal basis” and “exceeds the IMO Council's technical mandate and authority.”[2] Iran claimed that it is still providing services to vessels.[3] Iranian regime-affiliated outlets did not disclose any details about this plan, and no other regional or Western outlet has confirmed the existence of such a plan at the time of this writing. Iranian regime-affiliated outlets also published a statement from an “informed” source that all transit through the strait must be in accordance with Iranian arrangements after these outlets reported that Iran had rejected the supposed Emirati plan.[4] Iran recently objected to an Omani proposal under which shipping companies would voluntarily pay fees for using the strait.[5] Iranian Parliament's National Security and Foreign Policy Committee member Alaeddin Boroujerdi separately warned against any foreign action in the strait that is not in coordination with Iran and specifically noted French plans to remove naval mines in the strait as an example.[6]

Iran is also taking military steps to stop Western and Gulf efforts to weaken Iran's ability to control traffic in the strait. Iran launched two missile attacks on tankers in the strait on July 6 because both vessels failed to use Iranian-approved transit mechanisms. The first attack targeted a tanker carrying Qatari gas exports eight nautical miles off the coast of Limah, Oman, and the second attack targeted a Saudi-flagged oil tanker in the strait.[7] Iran launched another drone at an unspecified tanker on July 7 in the vicinity of the Strait of Hormuz.[8] These attacks are designed to deter vessels from transiting the strait using transit routes near the Omani coasts. Iran recognizes that if it fails to attack these vessels, it will lose the Strait of Hormuz as a tool of leverage. Iran will lose the strait as a tool of leverage if it cannot control the rate of traffic through the strait to secure concessions in negotiations.

Iran's military and diplomatic efforts come as North Atlantic Treaty Organization (NATO) member Foreign Ministers are set to discuss how to handle the strait issue with Bahraini, Kuwaiti, Qatari, and Emirati foreign ministers on the sidelines of the NATO summit in Ankara, Turkey, on July 7, according to diplomats speaking to Reuters.[9] Saudi Arabia, Kuwait, and the United Arab Emirates (UAE) are reportedly working on plans to extend the energy pipelines that will allow them to circumvent the strait and mitigate Iranian disruption to their economies, according to multiple sources speaking to Reuters on July 7.[10]

Hezbollah is preparing to use Iranian funds to resume financial payments to displaced Lebanese families in Hezbollah's political strongholds as part of an effort to rebuild support among the Lebanese public.[11] Unspecified Lebanese political and financial sources told Emirati media on June 29 that Hezbollah is preparing to disburse temporary housing assistance payments and reconstruction funding to displaced families in southern Lebanon, Beirut's southern suburbs, and the Bekaa Valley, where the population has traditionally supported Hezbollah.[12] The sources claimed that Hezbollah has received Iranian funding to support its reconstruction efforts through unspecified Iraqi financial channels.[13] Iran has historically used the Iraqi economy and Iranian-backed Iraqi militias to transfer funds, among other supplies, to other Axis of Resistance groups, including Hezbollah.[14] Four informed sources told Reuters on June 17 that Iran would use potential economic relief from the US-Iran memorandum of understanding (MoU) to fund and reconstitute Hezbollah, though it is not immediately clear what — if any — resources have reached Hezbollah as a result of the MoU.[15] Reconstruction payments have long been one of many tools Hezbollah uses to financially assist Lebanese people affected by conflicts with Israel.[16] Hezbollah's financial challenges as a result of its investment in the War in Syria, and a decrease in Iranian funding after the collapse of Assad, have been one of several reasons that some communities in Lebanon are increasingly disenchanted with the group.[17] Hezbollah's financial challenges following the October 7 War and during the current Israeli campaign in Lebanon have generated unprecedented discontent among its Shia support base in recent years, however.[18] Hezbollah's efforts to resume financial payments to its support base also challenge the Lebanese government's efforts to assert itself as the sole provider of social services for the Lebanese people.

The Lebanese government is also simultaneously providing financial compensation and reconstruction support to southern Lebanese citizens and municipalities in recent days.[19] The Lebanese Social Affairs Minister Hanin al Sayed announced on July 4 that the ministry plans to provide financial compensation payments to 130,000 displaced Lebanese families in the coming days.[20] The Lebanese Health Ministry issued a $250,000 US dollar grant for repairs to the Tebnine Government Hospital, in Bint Jbeil District, on June 30.[21] Lebanese Agriculture Minister Nizar Hani announced a five-million-dollar project to provide emergency relief payments and reconstruction support for Lebanese farmers in war-affected areas on July 7.[22] The Lebanese government is also reportedly reviewing plans to provide financial support to families to repair “light and moderate damage” to their homes, offer rental allowances for displaced families unable to return to their homes, and provide temporary housing to displaced families, according to Saudi media on July 4.[23]

Lebanese media characterized the June 26 Trilateral Framework Agreement's Military Coordination Group for Lebanon as the primary mechanism for implementing the ceasefire in Lebanon.[24] The framework agreement's security annex stipulates that the coordination group will deconflict between Israel Defense Forces (IDF) and Lebanese Armed Forces (LAF) units in southern Lebanon and verify that both militaries implement the framework agreement's terms.[25] The coordination group will monitor and coordinate LAF movements to backfill the IDF as it withdraws from positions and LAF efforts to disarm Hezbollah in mutually agreed “pilot zones,” for example.[26] Lebanese media claimed on July 6 that the MGC4L is the direct successor body to the now-defunct ceasefire monitoring mechanism established in Lebanon at the end of the previous Israel-Hezbollah conflict in November 2024.[27] Lebanese media further clarified that US Marine Lieutenant General Joseph Clearfield, who previously led the 2024 ceasefire monitoring mechanism, will lead the coordination group.[28] The Lebanese government has not directly confirmed that the coordination group will operate as an exclusive mechanism for implementing the ceasefire, however. Lebanese President Joseph Aoun told Lebanese media in an interview on July 6 that the Lebanese government is not opposed to appointing a representative to the Iran-Lebanon-United States “deconfliction cell” that the Qatari Foreign Ministry announced on June 21.[29] Unnamed Lebanese government sources told other Lebanese media on July 7 that the government will appoint a representative once the involved parties agree upon a date to convene, and that the government may appoint Lebanese negotiating delegation leader and former Lebanese Ambassador to the United States Simon Karam to the position.[30] Lebanese media previously reported on July 6 that the Lebanese government had largely ignored the deconfliction cell, which requires the Lebanese government to appoint representatives to the cell before it can commence operations, after signing the framework agreement on June 26.[31]

Iran will likely continue to assert that the deconfliction cell is the main legitimate mechanism for implementing the ceasefire in Lebanon, however. Iranian regime officials and media have claimed since June that the framework agreement is illegitimate and demanded that the United States and Lebanon abandon ceasefire efforts outside of negotiations pursuant to the Iran-United States Memorandum of Understanding (MoU).[32] Iran seeks to promote its involvement in the ceasefire in Lebanon to dictate ceasefire terms that are favorable to Iranian and Hezbollah interests, such as the IDF’s full withdrawal from southern Lebanon and cessation of IDF attacks on Hezbollah.[33] Iran will likely challenge any assertions that the coordination group is the legitimate ceasefire implementation mechanism because its mission is to oversee a process that will disarm Hezbollah, which threatens Iran's core interest in Lebanon.[34] The degree of Iranian opposition to the coordination group will almost certainly be dependent on the efficacy of LAF disarmament efforts, however.

Iraq and Syria are preparing to sign a US-sponsored strategic economic agreement in mid-July, according to three unspecified Syrian, Iraqi, and Western sources speaking to Saudi media on July 7.[35] An unspecified Syrian source said that Syrian Foreign Minister Assad al Shaibani will meet with Iraqi Prime Minister Ali al Zaydi or other Iraqi officials on the sidelines of Zaydi’s visit to Washington, DC, in July 2026. The primary purpose of the July 2026 visit is for Zaydi to meet with US President Donald Trump.[36] A political adviser in a previous Iraqi administration confirmed that Zaydi is preparing to sign a regional economic agreement that includes Syria.[37] An unspecified Western source added that US Special Envoy to Iraq and Syria Tom Barrack plans to create the “core of a new alliance of interests,” which will include efforts to reduce regional reliance on the Strait of Hormuz by linking Iraq, Syria, and other regional countries to a shorter route to the Mediterranean Sea.[38] The Saudi report comes amid recent US pressure on the Iraqi federal government to reduce Iranian influence in Iraq, including via the disarmament of Iranian-backed Iraqi militias and combatting militia financial networks.[39]

https://understandingwar.org/research/middle-east/iran-update-special-report-july-7-2026/

The coffin of Iran's former Supreme Leader Ayatollah Ali Khamenei arrived in Iraq's holy city of Najaf on Tuesday after funeral ceremonies in Iran, bringing a multi-day procession to one of Shi'ite Islam's most sacred sites following the leader's death in a February 28 US-Israeli strike. Iraqi Prime Minister Ali al-Zaidi and senior Iraqi officials received the coffin at Najaf International Airport ahead of funeral ceremonies and a mass public procession, state TV reported. Najaf holds special significance for Shi’ites worldwide as the burial place of Imam Ali, the cousin and son-in-law of the Prophet Mohammad.

Iranian President Masoud Pezeshkian also arrived in Najaf to participate in the ceremonies. The official reception at the airport was attended by Iraqi political leaders and Shi'ite religious figures, before the coffin is carried through the city in public mourning events expected to draw large crowds on Wednesday.

https://www.jpost.com/middle-east/iran-news/article-901813

Iraqi authorities declared Wednesday a public holiday, with ceremonies set to begin at 6:00 am (0300 GMT) in Najaf.

Huge crowds were expected in Najaf and Karbala, where banners welcoming Khamenei adorned the streets. Large portraits of the late leader hung beside Iranian flags and photos of other slain commanders from Iran's “axis of resistance”.

In Najaf, mourners will join a six-kilometre (four-mile) procession ending at the majestic shrine of Imam Ali, the Prophet Mohammed’s son-in-law and the first Shia Imam. Najaf is the main centre of Shia religious seminaries, and is also home to Grand Ayatollah Ali Sistani, Iraq's top Shia religious authority. Many senior Shia clerics have studied, taught or lived there, including Khamenei’s predecessor Ayatollah Ruhollah Khomeini.

After Najaf, Khamenei’s body will be flown to Karbala, about 60 kilometres north, for another procession that will culminate at the shrines of Imam Hussein and his brother Abbas.

Khamenei’s final burial will take place on Thursday in his hometown of Mashhad in northeast Iran.

https://www.iraqinews.com/iraq/iraqs-holy-cities-prepare-for-massive-crowds-as-khameneis-coffin-arrives/

Iran Update Special Report, July 8, 2026

Iran is willing to return to a large-scale conflict with the United States if necessary to secure its control over the Strait of Hormuz. Iran's behavior after the latest US strikes indicates that the Iranian regime values control over the strait more than avoiding renewed escalation with the United States. Iran has, in recent weeks, repeatedly attacked commercial shipping vessels that used alternative routes through the strait rather than the Iranian-designated traffic separation scheme.[2] It has conducted these attacks to maintain Iranian control over the Strait of Hormuz through Iranian-dictated traffic lanes. Iran also responded to US strikes against more than 80 targets on July 7 (more on the US strikes below) by attacking US military facilities in Bahrain and Kuwait.[3] The Iranian response caused no casualties.[4] US President Donald Trump has reportedly told his advisers that he will not “resume the war“ unless Iran kills US servicemembers.[5] Iran's willingness to flaunt the ceasefire by attacking shipping and risk US casualties by attacking US bases nonetheless demonstrates that Iran is willing to risk a resumption of large-scale operations.

The Iranian regime's media apparatus has repeatedly emphasized the strategic importance of the strait, and that military action may be necessary to ensure Iran maintains control over the strait. Islamic Revolutionary Guards Corps (IRGC)-affiliated Fars News Agency argued on July 8 that Iran should respond to US actions by disrupting Gulf oil exports, damaging regional energy infrastructure, asserting control over Bab al Mandab, and conducting asymmetric attacks on US forces.[6] Iranian regime's English-language media outlet, Press TV, separately argued on July 8 that Iran would strike “enemy” targets at a minimum two-to-one ratio and close the Strait of Hormuz following any future strike on Iranian territory or interests.[7] Regime-aligned outlets’ rhetoric intends to normalize a broader coercive campaign in the strait and signals that any US effort to challenge Iranian control over the strait can trigger costs against US forces, Gulf states, energy infrastructure, and other regional chokepoints.

The present pattern of US strikes does not appear to be changing Iran's calculus on controlling the Strait of Hormuz. US Central Command (CENTCOM) reported on July 7 that it struck over 80 targets in Iran in response to repeated Iranian attacks on commercial vessels in the strait.[8] CENTCOM stated that it struck coastal radar sites, anti-ship missile capabilities, drone launch sites, command-and-control networks, and more than 60 IRGC fast attack crafts (FAC) near and in the Strait of Hormuz.[9] These strikes aimed to degrade Iran's capability to threaten shipping, lay naval mines, and coordinate maritime operations in the strait, according to CENTCOM. Strikes similar to those conducted by CENTCOM on July 7 have had no visible effect on Iran's ability to threaten shipping, however, and it is unclear when these strikes would have such an effect on Iran's ability to threaten shipping. Iran's strategy relies on its ability to fire small numbers of projectiles into the Strait of Hormuz to hit individual ships. Iran has continued to fire small numbers of projectiles into the Strait of Hormuz, seemingly as it pleases. There is presumably a point at which Iran would be unable to fire small numbers of projectiles into the Strait of Hormuz, but it is impossible to determine when Iran would be unable to fire projectiles without a complete understanding of the number of Iranian systems and launchers available to regime forces. There is similarly a point at which launch crews would be unwilling to fire their systems. It is unlikely, however, that these crews will lose cohesion and refuse to fight now–under relatively insignificant pressure–after having weathered the large-scale strike campaign in March and April. These strikes are certainly not changing Iran's willingness to control the strait, as evidenced by the ongoing Iranian strikes and regime media comments described above.

The Trump administration also revoked Iran's oil waiver in response to Iran's attacks on commercial vessels, which deprives Iran of one of the main economic benefits for the regime under the US-Iran memorandum of understanding (MoU).[10] The effects of the revocation on Iranian strategic calculus remain unclear.

Iran is also almost certainly observing leaks and public comments about the Trump administration's reticence to resume large-scale operations, which will affect the regime's willingness to use force to attempt to secure the strait.

Iran is attempting to coerce Gulf states and others to acquiesce to Iranian control over the Strait of Hormuz after Iran failed to secure recognition of its control over the strait through diplomacy. The recent attacks—including one on a Saudi-flagged tanker and another on a tanker carrying Qatari natural liquid gas (LNG)—support this effort.[12] This effort is designed to alter the meaning of Clause 5 of the MoU. Clause 5 of the US-Iran MoU requires Iran to arrange safe, fee-free commercial passage through the Strait of Hormuz for 60 days and to restore traffic within 30 days after removing technical and military obstacles, including mines.[13] It also requires Iran to discuss the future administration and maritime services of the strait with Oman and other Persian Gulf littoral states under applicable international law.[14] Iranian officials attempted briefly to use diplomacy to secure diplomatic recognition of their control of the strait, including recognition of Iranian-led fee mechanisms. This ultimately failed when the Gulf Cooperation Council (GCC) and United States released a joint statement refusing Iran's demands to control the strait.[15] Iran is now attempting to use force to coerce the Gulf states into recognizing Iranian control.
Iran is attempting to unilaterally impose a vision for the strait's ”arrangements,” which are supposed to be created in dialogue with the Gulf states, not through coercing the Gulf states. Iranian coercion of the Gulf states is an effort to circumvent the intent of Clause 5, which administration officials noted was designed so that Gulf states would moderate Iranian positions about controlling the strait. Parliamentary National Security and Foreign Policy Commission member Alaeddin Boroujerdi stated on July 8 that commercial vessel traffic through the strait must occur under Iranian oversight and management, specifically through the IRGC Navy.[16] Iranian Foreign Affairs Ministry Spokesperson Esmail Baghaei similarly argued that Clause 5 confirmed Iran's responsibility to determine arrangements for safe passage of vessels and that US challenges to those arrangements violated the MoU.[17]

Iran is using the ceasefire to reconstitute its military capabilities, as ISW-CTP has previously assessed.[18] A US official told the Wall Street Journal on July 7 that Iran has restored some military capabilities around the Strait of Hormuz since the April 7 ceasefire, including by moving small, portable radars to replace fixed radar sites destroyed during the war.[19] The official also said Iran has dug out or repaired hundreds of missiles and launchers damaged or buried in US strikes and now has access to more than half of its pre-war missile and launcher stockpile.[20] Iran's reconstitution during the ceasefire likely makes the regime more willing to sustain risk around the strait because Tehran is rebuilding the capabilities it would need if the conflict resumes. The ceasefire gives Iranian forces time to repair launchers, recover missiles, restore command networks, and rebuild the strike capacity that underpins its strategy of attacking shipping in the Strait of Hormuz. Iran's escalation around the strait preserves leverage over shipping and Gulf energy flows while strengthening its position for a potential future conflict.

The Lebanese government announced on July 8 that it will participate in negotiations with the US and Israel in Rome, Italy, on July 15 and 16. The Lebanese government earlier claimed that its participation in negotiations would be contingent on an Israeli withdrawal from “pilot zones” in southern Lebanon.[21] An unspecified diplomatic source told French media on July 8 that Lebanon would only attend the Rome talks if Israeli forces withdrew from the two pilot zones established by the June 26 Trilateral Agreement Framework.[22] The June 26 framework stipulates that Israeli forces will eventually withdraw from their positions in Zawtar el Gharbiyeh and territory surrounding Ghandouriyeh and Froun, Nabtatieh Governorate, after which the Lebanese Armed Forces (LAF) would secure the areas and disarm and dismantle local armed groups.[23] ISW-CTP has not observed any Israel Defense Forces (IDF) withdrawals or Lebanese Armed Forces (LAF) deployments to the pilot zones, which makes it unclear whether Beirut conceded on its reported condition for Lebanese participation in the Rome talks. Lebanese and Israeli officials have previously expressed different opinions over the implementation of the framework. Unspecified sources told Lebanese media on July 6 that the LAF refused to deploy to the pilot zones and disarm Hezbollah in those areas north of the Litani River until Israeli forces withdraw from southern Lebanon, while Israeli officials stated in recent days that the IDF would remain in southern Lebanon until Hezbollah is disarmed.[24]

Iraq Islamic Revolutionary Guards Corps (IRGC) Quds Force Commander Brigadier General Esmail Ghaani will likely meet with Shia Framework leaders and Iranian-backed Iraqi militia leaders during his July 8 visit to attend former Iranian Supreme Leader Ayatollah Ali Khamenei’s funeral in Najaf, Iraq.[25] Ghaani typically meets with Framework and militia leaders when he travels to Iraq. Iraqi media reported that Ghaani met Framework and militia leaders in Iraq in May 2026 to discuss US pressure to disarm the militias.[26]

Some Shia Coordination Framework members may be attempting to limit the scope of Iraqi Prime Minister Ali al Zaydi’s recently launched anti-corruption campaign. Several sources told Saudi media on July 7 that the framework intends to “engineer the prosecution procedures” and make “settlements” with individuals accused of corruption.[27] An informed source also told Iraqi media on July 7 that some unspecified framework members discussed adopting a new process to apprehend individuals accused of corruption that does not involve Iraqi security forces, which is likely a reference to recent Iraqi Counter Terrorism Service (CTS) operations to apprehend corrupt militia leaders.[28] This report comes after unspecified framework leaders refused Zaydi’s request to arrest senior Iranian-backed Iraqi militia leaders involved in corruption, according to Qatari media on July 1.[29] Iraqi authorities, including the CTS, which reports directly to the prime minister, have arrested about 50 people across Iraq since June 28 as part of Zaydi’s anti-corruption campaign.[30] This campaign follows US pressure on Baghdad to dismantle Iranian-backed Iraqi militia-linked financial networks and combat corruption.[31]

https://understandingwar.org/research/middle-east/iran-update-special-report-july-8-2026/