Iran Update Special Report, July 24, 2026

Key Points:

• Iran reportedly rejected a US ceasefire proposal on July 23, conveyed by Iraqi Prime Minister Ali al Zaydi, indicating Tehran’s belief in having the advantage in the current phase of the conflict; Iranian officials dismissed the offer as a temporary deal that does not address disputes over the Strait of Hormuz.
• Iran has been targeting US regional bases with drone and missile attacks, aiming to inflict steady casualties and pressure the US domestically to halt its airstrike campaign, including recent strikes on bases in Bahrain, Jordan, Qatar, and Kuwait.
• The Houthi movement is enforcing a blockade against Saudi Arabia but has not fully closed the Bab al Mandeb Strait, likely to avoid provoking a major US military response while seeking to extract concessions from Saudi Arabia amid heightened anti-Saudi rhetoric following the US-Iran MoU.
• Iranian officials have threatened that if the US expands airstrikes on Iran, they will ask the Houthis to close the Bab al Mandeb Strait entirely, though the Houthis have historically acted independently and have so far resisted full closure despite Iranian pressure.
• The strategic calculus surrounding the Bab al Mandeb Strait involves economic considerations, as disruptions have increased marine insurance costs and could cause oil price spikes, with Iran using the threat of broader maritime disruption as leverage against US military escalation.