By waging a proxy war, Iran has insulated itself from direct military reprisal. However, it is not guaranteed to escape unscathed. Iran's areas of vulnerability in this conflict include the following:
1. Hezbollah may be destroyed
The Israeli strategy is to destroy Hezbollah as a military presence in Lebanon. The Hezbollah presence in southern Lebanon amounts to only about 5,000 (very well-armed) soldiers, working with up to a thousand Iranian soldiers. It is going to be difficult to find them because they are shielding themselves in the civilian population, but they are still beatable. Israel might succeed on its own or a western-led peace process might finally put some teeth in the resolution to demilitarize southern Lebanon. If Hezbollah is beaten, Iran loses a fighting force it has put a great deal of energy into arming and supporting, and the possibility of Middle East peace is greatly increased.
2. World opinion may be starting to understand the Israeli dilemma
When Israel withdrew from southern Lebanon in 2000 Hezbollah was supposed to withdraw as well, but instead it continued to move missiles into the region - all aimed at Israel. So while some commentators are trying to paint Israel's bombardment of Lebanon as a land grab or a hate-filled killing spree, most analysts and governments see that Israel has its back against the wall and needs to solve the problem of tens of thousands of missiles pointed into its territory from just across its border.
3. Syrian influence in Lebanon could be diminished
If Israel can rout Hezbollah from southern Lebanon, it might weaken the strangle-hold on the Lebanese government that is enjoyed by Hezbollah and Syria. The effect of this conflict on long-term power structures in the region is largely going to be determined by how the peace is brokered. With most western and many Arab countries seeing that this was Iranian-Syrian aggression, the eventual cease-fire, with possible deployment of UN peacekeeping forces and new UN resolutions, may address the issue of Syrian influence in the democratic country of Lebanon.
4. The Iran-Syria alliance could be weakened
Politically, Iran seems invulnerable, but it relies a great deal on Syria, and Syria is very vulnerable. Iran is the dominant power, but Syria has the important ties with Arab militias. The military wing of Hamas is headquartered in Damascus. As Daniel Byman wrote in 2003 in the journal Foreign Affairs, "Although Syrian leaders do not have Tehran's close ideological and personal ties to Hezbollah, Damascus' leverage is actually much greater. Syria serves as a conduit for Iranian military supplies and often determines the timing, location, and scope of Hezbollah attacks. Moreover, Syrian intelligence on Lebanon is superb; unlike the United States and Israel, Damascus knows the identity and location of Hezbollah's core leadership. Syria also... has demonstrated its skill and ruthlessness by disarming every militia there except Hezbollah. Damascus essentially exercises a veto over Hezbollah's operations, as it has demonstrated by shutting down strikes against Israel when it has suited the regime's purposes."
As the New York Times reported today, "The United States and its Arab allies might persuade Syria to end its decades of supporting terror and reconsider its close ties with Iran."
5. Iran's true goals are being exposed
In the last couple of weeks, many media articles have reported on the Iranian troops that are currently fighting with Hezbollah in southern Lebanon, the enormous amounts of money the Iranians are pouring into Hezbollah, the Iranian-made rockets being shot into Israel, and Iran's motivation in destabilizing the region. Daniel Schorr wrote in the Christian Science Monitor this week that Iran is using this war to divert attention from its nuclear program. (One piece of evidence for this is that Hezbollah invaded Israel on the first day of talks in Paris about the Iranian nuclear program.) Finally it may become common knowledge that what's going on is not about Israeli-Palestinian land negotiations (although those are extremely important); it's about who will control the Arab world.