Israel and Iran have shown a reluctance to escalate their conflict, providing a rare moment of calm in the Middle East. The possibility of a direct confrontation between the two powerful nations had loomed large earlier this month when Israel attacked Iran's consulate in Syria, resulting in the deaths of seven senior officers from the Islamic Revolutionary Guard Corps. Iran retaliated on April 13th with a massive attack on Israel, launching over 300 missiles and drones, most of which were successfully intercepted by air defenses from the United States, Israel, Britain, France, and Jordan.

Although Israel felt the need to respond to the attack, the situation was deescalated with a small drone strike by Israel on an air base in the Isfahan district of Iran. Israel did not officially acknowledge the strike, and Iran, instead of accusing Israel, blamed "infiltrators" from within its own borders. This incident, combined with the lack of further retaliatory actions, has relieved concerns about a chain of revenge-driven escalations.

President Biden, urging Israeli Prime Minister Benjamin Netanyahu to avoid retaliation, warned of a potential massive counterstrike from Tehran even in response to a small Israeli attack. Israel's measured response and Iran's denial of the attack helped restore a semblance of equilibrium between the two countries for the time being.

Despite the relative calm, disagreements persist over the ongoing conflict in Gaza. Israeli officials, including Netanyahu, advocate for a major offensive against Hamas militants in the town of Rafah. However, President Biden and his aides insist that any such operation should be carried out with a plan to avoid civilian casualties, which the Israelis have not yet presented. Unresolved discussions about a potential ceasefire and the release of Israeli hostages held by Hamas in exchange for Palestinian prisoners have added to the complexity of the situation.

In a related development, the idea of a grand bargain involving the United States, Saudi Arabia, Israel, and the establishment of a demilitarized Palestinian state, has been revived. Saudi Arabia has relaxed its conditions to a verbal commitment from Israel to restart negotiations for a two-state solution. However, Netanyahu remains hesitant, as even expressing support for the idea could fracture his conservative coalition and potentially result in new elections.

While there is a widespread desire for a comprehensive deal, including a ceasefire, hostage exchange, and talks towards a Palestinian state, progress is slow due to the resistance from Israel and Hamas. International pressure, particularly from the United States on Israel and Qatar on Hamas, may play a crucial role in pushing for a resolution.

The current lull in tensions between Israel and Iran, coupled with renewed discussions about the potential grand bargain involving Saudi Arabia, provides an opportunity for diplomats to work towards a peaceful resolution. However, the ultimate outcome remains uncertain, as the question of whether these developments will have a significant impact continues to loom.