The U.S. has repeatedly "defaulted," and hardliners in Iran have given up on their fantasies about the U.S., revealing that they are secretly expanding their military in preparation for a "new round of confrontation."

Author: Zhang Yaqi, Wall Street Journal

A series of default actions by the United States after the signing of the memorandum of understanding has completely destroyed the window for diplomatic easing with Iran, directly prompting hardliners in Iran to prioritize military preparedness over negotiations.

According to CCTV News, after U.S. President Trump threatened on the 14th that he would "soon declare the Strait of Hormuz as U.S. territory," Iran announced on the 15th that it had reached an agreement with Oman on the navigation of the Strait of Hormuz. However, regarding control of the strait, both the U.S. and Iran are still speaking past each other. On the same day, Iranian Foreign Ministry spokesman Ismail Baghaei publicly stated this week that "due to the U.S. violation of the memorandum of understanding, subsequent negotiations have never started, and the 60-day negotiation period set in the memorandum has completely lost its meaning."

According to a report by The Wall Street Journal on August 16, intercepted communications and other intelligence indicate that hardline leaders in Iran have completed a strategic shift—within two months after the signing of the memorandum on June 17, the Iranian Revolutionary Guard Corps quietly sent advisors to allied militias in Yemen, Iraq, and Lebanon, expanded missile and drone production, and extended the battlefield to the Red Sea, raising alarms among Gulf allies. Meanwhile, Supreme Leader Khamenei has recently conducted a large-scale personnel reshuffle in Iran's security and military institutions, placing hardline veterans in key positions.

This series of deployments has had substantial effects: the Houthis announced a blockade of shipping routes to Saudi Arabia in the Bab el-Mandeb Strait, Iranian missiles successfully breached U.S. defense systems to strike targets in Jordan and Kuwait, and Iran has hit six UAE vessels in the past two weeks, causing supply risks in the global energy market to continue rising. On the diplomatic front, Iran announced that it had reached an agreement with Oman on the navigation plan for the Strait of Hormuz, but the Iranian Foreign Minister clearly stated that this is separate from reopening the strait to international shipping.

The Memorandum of Understanding is Essentially Void, 60-Day Negotiation Window Missed

When Trump signed the U.S.-Iran memorandum of understanding at the Palace of Versailles in France on June 17, expectations were that the biggest obstacle would be how to persuade domestic critics in the U.S. to accept this relatively lenient agreement towards Iran. According to CCTV News, the memorandum promised to grant Iran sanctions exemptions, unfreeze billions of dollars in assets, and proposed the establishment of a $300 billion reconstruction fund; Iran's main obligation was to open the Strait of Hormuz and engage in negotiations over its nuclear program.

However, according to media reports citing informed Iranian and Arab officials, the hardline leadership in Iran holds a fundamentally skeptical attitude towards this agreement, believing it is merely a strategy for the U.S. and Israel to alleviate global economic pressure and buy time for a larger-scale strike in the next round. Just as U.S. diplomats were lobbying to promote the agreement, the son of Supreme Leader Khamenei, Mojtaba Khamenei, was already deploying security systems to prepare for a larger confrontation.

Three weeks later, in early July, Iran shot at vessels guided by the U.S. through the strait, catching Washington off guard. Brigadier General Hossein Mohebbi, a spokesman for the Revolutionary Guard, later publicly confirmed this dual-track strategy: "We fully utilized the opportunity during the ceasefire to enhance our capabilities, accelerate missile production, and improve missile accuracy."

Intelligence Reveals an Escalation Roadmap

According to media reports citing officials familiar with Arab intelligence analysis, intercepted communications between Iran and its allies in Yemen and Iraq show that the Revolutionary Guard is sending commanders to the Houthi-controlled areas, coordinating with Iranian-supported Iraqi militias to plan escalated actions against Saudi Arabia. Specific deployments include: transporting missiles, naval weapons, and drone launch systems to positions overlooking the Red Sea, and providing the Houthis with intelligence, target lists (including Saudi ports and energy facilities), and tactical advice to evade Saudi counterattacks.

At the same time, the Revolutionary Guard has also issued warnings to Gulf countries: if the U.S. strikes Iranian energy facilities, Iran will destroy similar targets of the adversary and has delivered detailed individual strike target lists to relevant Arab countries.

The Revolutionary Guard has also developed new plans for further escalation. According to Iranian officials and public statements, options include: sabotaging undersea internet cables in the Persian Gulf, creating political turmoil in Shiite-majority countries like Kuwait and Bahrain, and even not ruling out ground operations against Kuwait. Kuwait has viewed these threats as real risks—early in May, the country announced that its security forces intercepted six members of the Revolutionary Guard, who had landed on a Kuwaiti island facing Iran across a narrow strip of Iraqi territory.

Personnel Restructuring Led by Hardliners

According to CCTV News last week, Supreme Leader Mojtaba Khamenei has made several new personnel appointments in Iran's armed forces. The overall direction points towards a more reinforced command chain and a more aggressive strategic orientation.

Among the most notable appointments, Mohsen Rezaei, who led the Revolutionary Guard during the Iran-Iraq War in the 1980s, has been appointed as the secretary of the Supreme National Security Council, the highest decision-making body in Iran, serving as Khamenei's representative. It was this council that halted the gradual opening of negotiations for the Strait of Hormuz in the past week.

Khamenei has also recalled his confidant Hossein Taeb, who previously led the crackdown on protests in 2009, to take charge of the Basij militia organization and tasked him with transforming this volunteer force into a "civilian intelligence network"—the backdrop being the serious issue of large-scale infiltration of Iranian intelligence by Israel exposed in the two wars.

In terms of unified military command, Khamenei appointed Brigadier General Ali Abdollahi, a senior commander of the Revolutionary Guard, to oversee both the Revolutionary Guard and the regular military systems. He has long advocated for strikes against Arab countries with U.S. military bases around the Persian Gulf. The appointment of the new commander of the Revolutionary Guard, Ahmad Vahidi, explicitly requires him to carry out "strong offensive actions against the enemy," and his advisor Mohammad Reza Naghdi stated the next day that the Revolutionary Guard must be prepared to advance actions into enemy territory.

Saeid Golkar, an expert on Iranian security affairs at the University of Tennessee at Chattanooga, commented: "Vahidi's promotion aligns perfectly with a leadership that is preparing for a sustained confrontation rather than a return to normal political conditions."

Structural Dilemma at the Negotiation Table

Diplomatic efforts have not stopped, but obstacles remain. According to mediators involved in the negotiations, Iranian diplomats earlier this month reached an agreement with Oman to establish and supervise a navigation route in the Strait of Hormuz and gradually promote the reopening of the strait, but the Revolutionary Guard immediately halted the related arrangements and resumed attacks on vessels.

In the latest diplomatic developments, according to the Global Times, Iranian Foreign Ministry spokesman Baghaei announced on August 15 that Iran and Oman have reached an agreement on the navigation plan for the Strait of Hormuz, emphasizing that the U.S. has been obstructing the negotiations. However, he also drew a clear line: this move is separate from the full reopening of the strait, and whether it reopens depends on whether the U.S. can fulfill the relevant conditions. Just the day before, Trump had threatened to "soon declare the Strait of Hormuz as U.S. territory," to which Iran immediately rebutted that such remarks "stem from his personal delusions."

Faced with the deadlock in negotiations, Trump has chosen to step back and observe, hoping that sanctions pressure and naval blockades can soften Iran's stance. However, the Iranian leadership is accelerating its shift to a "survival economy" model, focusing on long-term attrition.

Iran's chief negotiator Mohammad Bagher Ghalibaf's strategic advisor Mehdi Mohammadi described the current deadlock this week as "the calm before the storm," stating that one of the driving factors of the ongoing conflict is a "cross-generational revenge project" regarding the killing of Supreme Leader Ali Khamenei in the first round of strikes. "There are still many unfinished matters between the Iranian nation and Trump," Mohammadi said, "Iran is prepared for a major showdown."

Mohammad Hassan Sangtarash, a researcher at Peking University's School of International Relations and an observer of Tehran issues, pointed out:

"There is a widespread perception within Iran that the main war has not truly begun. Everything that has happened so far is increasingly interpreted as a 'boiling frog' tactic—limited, gradual escalation aimed at exhausting the opponent's capabilities and paving the way for larger-scale confrontation."

Former senior U.S. diplomat and Iranian nuclear negotiation representative Alan Eyre succinctly and straightforwardly assessed this judgment: "For this regime, war is the baseline state. Iran will maintain a wartime posture in preparation for the next round of strikes."