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Understanding Iran's Use of Terrorist Groups as Proxies

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Throughout its tumultuous history, Iran has strategically employed terrorist groups as proxies in its foreign policy, using these groups to wield influence across the Middle East and beyond. From its longtime financial support of Hezbollah in Lebanon to its backing of militias in Iraq and Yemen, Iran's utilization of proxy groups has shaped regional dynamics, fueled conflicts, and presented a complex challenge for global security.

The current conflicts in the Middle East involving Hamas, Hezbollah, and the Houthis all demonstrate the control that Iran exerts over conflicts in the region—without ever becoming officially involved in the conflicts. With Iranian backing as a common denominator among these terrorist groups, we asked SIS and SPA professor Joe Young to help explain the history behind Iran’s status as a state sponsor of terrorism and its use of proxy groups in global conflicts.

Iran has been officially designated as a State Sponsor of Terrorism by the US since 1984. What does this designation mean, and how does it get applied?
Countries can be designated State Sponsors of Terrorism by the US State Department. Right now, there are only four countries on the list: Cuba, North Korea, Syria, and Iran. The list has been rightly criticized for being political, as countries like Cuba and North Korea are on the list yet are not really active supporters of terrorist groups. In Iran’s case, the label is more accurate. Iran supports Hamas, Hezbollah, and the Houthis in Yemen, among other terrorist organizations. Iran has also backed groups that bombed the US Embassy in Lebanon, attacked US soldiers in Iraq, and fought against US allies in Syria. The State Sponsor of Terrorism designation allows the US to sanction groups, states, and individuals from these countries as well as countries that trade with the sanctioned states.
Iran’s official religion is Shia Islam, but they support terrorist groups with opposing religious beliefs, such as Hamas, which is primarily a Sunni group. How do religion and religious factions factor into Iran’s relationships with proxy groups?
Iran has a couple of strategic interests that go beyond religion. First, Iran is in a long-term conflict with Saudi Arabia to be the leader of both the region and Islamic states more generally. The conflict rarely gets hot, but there are proxy conflicts and multiple ways the states challenge each other. Certainly, their brand of Islam is different than Saudi Arabia’s, but this competition is less about religious interpretation and more about power politics.
Second, Iran is in a long-term conflict with the US. Similar to the conflict with Saudi Arabia, it is mostly a cold conflict fought through proxy competition. Iran tends to back groups that run counter to US interests in other conflicts. Iran inserted itself into the Syrian civil war to counter US interests, as well as doing the same in Iraq. Religion is often one of the factors that connects Iran to these proxy groups, but in certain conflicts, as is the current case with Hamas, competition with the US trumps religious preferences.
Iran utilizes various terrorist organizations as proxy groups to combat Iran’s enemies. What makes a group a proxy, and why does Iran choose to use proxies as opposed to their own forces?
Proxy groups are groups that are connected to Iran but not directly controlled. This allows Iran to have plausible deniability when these groups use violence while maintaining the power to have them operate in Iran’s interests. The downside for Iran, however, is these groups often have their own interests that Iran does not control or direct. Ceding some of that control over a proxy group’s interests is a price that Iran is willing to pay to keep conflicts with the US and Saudi Arabia from escalating to full-scale war.