As Israeli troops move into Lebanon, the Iranian regime is yet to respond to the most significant setback to its regional prowess in decades.

The killing last week of Hezbollah leader Hassan Nasrallah is the latest in a series of humiliating losses suffered by the Islamic regime’s so-called Axis of Resistance. 

The Shia forces supporting Tehran across the Middle East have, in quick sucession, seen Israel kill Hezbollah commander Fuad Shukr and Hamas leader Ismail Haniyeh, maim thousands of militiamen by blowing up their pagers and walkie-talkies, and bomb rocket launchers across Lebanon.

Iran is now faced with the dilemma of how to restore deterrance against Israel without triggering further devestating blows.

If they fail to act, however, proxy militias may decide that their benefactor offers little in return for their support. 

Writing for the Royal United Services Institute, a defence and security think tank, senior research fellow Dr Burcu Ozcelik said Iran had no good options left.

"The death of Nasrallah, who personified Iran’s ‘resistance’ movement in the region, has altered the calculus for Iran. First, Iran’s extended deterrence through its so-called ‘axis of resistance’, which allowed it to externalise armed violence to Gaza, Lebanon and other theatres while claiming plausible deniability, is now under unprecedented pressure,” she wrote.

"This is a moment of reckoning, where Hezbollah and its supporters recognise that many may have overestimated Iran’s military capability and ideological resolve.”

Because missiles fired at Israel by Shia militias in Yemen and Lebanon have failed to compel the Jewish state to halt its war in Gaza, Iran’s belief in the ‘unity of arenas’ is under threat, she claimed.

The Islamic Republic now has three broad options.

Firstly, Dr Ozcelik wrote, militias in Iraq and Syria could attack British, American and Israeli targets, but this is not likely to have a meaningful effect. Alternatively it could have the Yemen-based Houthi movement strike sensitive targets within Israel, or Iran could directly attack Israel itself.

The last option is the least likely, in part because it may come away looking weaker than ever if its missiles are again intercepted midair.

"Since the 7 October attacks, Iran has shown that the axis of resistance was created to shield it from the direct line of fire and to avoid confrontation,” Dr Ozcelik added. 

"This fundamental ‘Iran-first’ perspective does not appear to have shifted, but if Iran cannot provide extended deterrence for its allies in the region, it may be seen to have little to offer at all.”

Writing for the Atlantic Council, Danny Citrinowicz, who previously served in Israel Defense Intelligence, said it was likely that Ayatollah Ali Khamenei had never faced such a difficult moment during his time as Iran’s supreme leader.

As Hezbollah was the main instrument deterring Israel from directly attacking Iran’s nuclear sites, the republic will now fear a direct attack.

"The implications of the dilemma for Iran and the Axis of Resistance are extremely significant,” he wrote.

"An Iranian reaction would endanger it in a war and create a very unwanted confrontation with the United States, but it would signal to the Axis the Iranian commitment to it, deter Israel from harming Iran, and be revenge for the assassination.”

Also writing for the Atlantic Council, analyst Masoud Mostajabi said the lack of a response from Tehran to Nasrallah’s killing revealed how shocking it was in the short-term.

"The assassination of Nasrallah, who transformed Hezbollah into a dominant political force and regional power while serving as a key pillar of Iran’s ‘forward defence’ strategy, delivers a critical and immediate blow to the Axis of Resistance,” he wrote.

But, he added, while Israel has won the battle, Iran remains committed to a long-term war of attrition. 

According to some experts, Israel can expect Iran to hold off on striking back for some time longer. 

Speaking to AP, Alex Vatanka, the director of the Iran Programme at the Washington-based Middle East Institute, said: “The Iranian leadership is prepared to accept a humiliating retreat in the face of Israeli strikes in the short term to safeguard the regime in the long run, and this explains Tehran’s lack of retaliation so far.”