Tehran Prepares for a Post-Election Showdown as the Cost of Waiting Mounts at Home

No U.S. Decision to Attack, but the Discussion Has Already Shifted to the Day After the Elections

The most prominent security headline on October 28, 2026, is a report that Washington warned several Gulf states to prepare for the possibility of a “short but intense” U.S.-Israeli campaign against Iran after the November 3 midterm elections. The report is based on anonymous sources and includes no confirmation from the White House, presidential order, or operational date, so there is no basis for concluding that a decision to go to war has been made. The significance lies elsewhere: even if no order to attack has yet been issued, the regional discussion has already shifted from the general question of “whether the war will return” to the much more concrete question of what might happen after the elections and how the Gulf states should prepare.

Iran’s establishment media are trying to maintain two interpretations at the same time. On the one hand, they portray the American reports as psychological warfare, emphasizing the contradictions among the various reports and the fact that even U.S. sources do not claim that Trump has given final approval. On the other hand, they do not ignore the fact that the U.S. and Israeli militaries are preparing operational options that, according to those reports, include strikes on missile, drone, energy, and nuclear infrastructure. In other words, the message to the public is not that the threat is fabricated, but that the threat is real while also being used as a tool of pressure. For Tehran, this allows it to present itself as unafraid of the threats while still preparing for them.

Adding to this picture is an estimate that the war has already cost the United States more than $47 billion, including about $29 billion to replace munitions, roughly $12 billion in additional operational expenses, and $6.1 billion to replace lost equipment. The document on which the report is based has not been published in full, and it is also unclear whether it includes all the costs of repairing damaged bases, so the figure should not be regarded as a final accounting. But for the Iranian narrative, the number itself matters. Tehran wants to demonstrate that even if the United States is capable of continuing to fight, it does not do so for free, and every additional round will carry an accumulating financial and political cost.

The Government Is Already Admitting That the State of Waiting Hurts Ordinary Citizens First

The most important statement of the morning came not from the military or the Foreign Ministry, but from government spokeswoman Fatemeh Mohajerani. She said the government is seeking an “honorable peace” that protects national interests, adding that the main casualty of a prolonged state of “neither war nor peace” is the public. According to her, when the country does not know whether it is heading toward an agreement or another round of fighting, it becomes difficult for the economy to plan, difficult to attract investment, and more difficult to protect purchasing power.

This wording continues a line already expressed by Pezeshkian, but it is becoming more explicit. The interim situation is no longer being presented merely as a strategic problem that complicates the government’s work. It is being presented as a condition that directly harms ordinary citizens. This is an important distinction because for months the regime has also used uncertainty as leverage: as long as the adversary does not know whether Hormuz will reopen, whether talks will advance, or how Iran will respond, Tehran retains room to bargain. The government is now effectively acknowledging that the same bargaining space also carries a domestic cost.

In the same breath, Mohajerani did not abandon the language of deterrence. She made clear that any further strike on Iranian territory would be met with force. This preserves the government’s dual approach: preparing the public for the possibility of an agreement without creating the impression that the agreement is the product of weakness. From Tehran’s perspective, an “honorable peace” must be one that can be presented as the result of standing firm, rather than capitulating to pressure. The problem is that as time passes, it becomes increasingly difficult to separate the price that pressure exacts from the adversary from the price it exacts from the Iranian public.

A Regional Track Is Beginning to Take Shape, but Iran Still Does Not Trust the Mediators

Alongside the American threat, Tehran is trying to build a regional track that would reduce the need to reach an agreement solely through Washington. Mohajerani presented the meeting in Tehran involving Iran, Saudi Arabia, Turkey, and Pakistan as a model of “regional security from within”, meaning an attempt to build a mechanism in which the countries of the region themselves manage the risks without relying on outside powers. This proposal is joined by an idea put forward by Omani Foreign Minister Badr al-Busaidi for a non-aggression pact involving the six Gulf Cooperation Council states, Iran, and Iraq. If such an initiative moves forward, it could create a framework broader than direct negotiations between Iran and the United States and incorporate questions concerning military bases, shipping, and security relations between Tehran and its neighbors.

Iran’s response to Qatar, however, illustrates just how limited trust remains within this framework. The Foreign Ministry demanded that Doha “adhere to the rules of mediation” and refrain from allowing the attacking parties to use its territory and facilities against Iran. This message exposes the paradox in Iran’s policy toward the Gulf states: Tehran wants them to serve as mediators, but it is unwilling to regard them as neutral parties if they simultaneously host U.S. forces or permit activities that Iran views as hostile.

Building a regional framework, therefore, is not simply a matter of bringing everyone into the same room. It requires agreement on the very definition of neutrality. From Iran’s perspective, a country cannot relay proposals between Tehran and Washington while simultaneously allowing its territory to be used for operations against Iran. From the Gulf states’ perspective, the American presence itself is part of their security architecture. This gap does not prevent mediation, but it explains why a regional track that appears logical on paper is not necessarily easier than the direct track with the United States.

Hormuz Remains a Bargaining Chip Even Without a Complete Closure

The Iranian navy reported that a tanker described as being “in violation” had switched off its identification system, entered a restricted area east of the Strait of Hormuz, struck a mine, and caught fire. Iran, however, did not publish the vessel’s name, flag, ownership, cargo, or the condition of its crew, and according to the reports reviewed, international maritime safety mechanisms had not confirmed the incident either. There is therefore no basis for concluding that the tanker was in fact damaged as described.

But from a deterrence perspective, Iran does not necessarily need full verification of the incident to achieve part of the desired effect. The very claim that a tanker passing through without coordination struck a mine creates a question that every shipping company and insurer must factor into its calculations: what is the risk of continuing to transit the area without accepting the rules of the game Tehran is trying to impose? In this sense, uncertainty itself is a tool. Iran does not have to declare the strait completely closed. If enough captains, companies, and insurers believe that passage is dangerous, transportation costs rise and Iran retains its ability to exact a price.

This also explains why Hormuz remains so central to diplomatic contacts. Tehran does not possess only the ability to block a route. It also possesses the ability to offer certainty in return, and that certainty has itself become an asset that can be negotiated.

The Nuclear Issue Remains Shrouded in Uncertainty: No Signs of Reconstruction, but No Way to Know What Happened to the Material

The picture in the nuclear arena is also far from conclusive. Rafael Grossi told the Security Council that since June 2025, the International Atomic Energy Agency has not identified activity aimed at rebuilding the facilities that were damaged. At first glance, this could sound like evidence that the nuclear program remains paralyzed, but Grossi himself emphasized the limitations of the available information: the agency currently has no direct access to the sites and is relying largely on satellite imagery and remote monitoring.

The most serious problem is the stockpile of highly enriched uranium, approximately 440 kilograms previously reported by Iran. The agency is currently unable to verify where it is located, what condition it is in, whether it has been moved, or whether its composition has changed. Therefore, “no reconstruction activity has been detected” is not the same as “the program is inactive”. The precise meaning is much more limited: from the outside, there are no visible signs that the damaged facilities are being rebuilt, but there is also no monitoring that can resolve the questions surrounding material Iran already possessed.

For Tehran, this ambiguity could provide an advantage in negotiations. For the other side, it could also become a reason to demand more intrusive monitoring. As a result, the longer the IAEA remains without access, the more the lack of information itself becomes part of the crisis.

More Than One Million Have Dropped Off the Insurance Rolls, and That May Be the Most Serious Figure of the Morning

The most striking domestic figure comes from the labor market. Deputy Labor Minister Malek Hosseini reported that between March and the end of August, approximately 1.15 million people dropped off the payroll insurance rolls, while only about 300,000 of them were added to the unemployment benefit rolls. He also estimated that if the economy contracts by 7 to 8 percent this year, Iran could lose between 1.2 million and 1.4 million jobs by the end of the year.

It is very important not to turn the figure of 1.15 million into a count of layoffs. People can leave the insurance rolls for other reasons as well, including retirement, a move into self-employment or informal work, the expiration of a contract, or a situation in which an employee continues working but the employer stops paying insurance contributions. Even with that qualification, however, the figure is severe. It points to a significant contraction in the formal labor market and to a large number of workers losing one of the most important protections provided by formal employment.

This is precisely where “neither war nor peace” shifts from a diplomatic term to a social condition. A factory that does not know whether there will be new sanctions, another attack, power outages, or disruptions to imports is reluctant to hire new workers. A business does not invest if it does not know what the exchange rate will be a month from now. A worker who moves into informal employment may still bring money home, but does so without the same level of insurance, pension coverage, and protection against unemployment. The longer the temporary situation continues, the more temporariness itself becomes a structural feature of the labor market.

Bread Is Becoming More Expensive, and Homeownership Is Receding to 82 Years of Wages

The same pressure is evident in the most basic of products. According to industry representatives, the price of wheat used for industrial bread has risen from 23,860 to 60,000 tomans per kilogram, while the price of flour has increased from approximately 30,200 to 78,700 tomans. As a result, the price of a large baguette has risen from 60,000 to 90,000 tomans. The change does not apply in the same way to traditional subsidized bread, so it should not be inferred that the price of all bread in Iran has risen by the same proportion. But the increase affects industrial bakeries, restaurants, and food products that use this flour, meaning its effects can spread far beyond the baguette itself.

Housing tells the same story over a longer horizon. A market expert estimated that an ordinary salaried worker would need to save 82 years’ worth of wages to purchase an 80-square-meter apartment. This is not an official government statistic but an expert estimate, yet it vividly illustrates the depth of the gap between wages and property prices. Workers are not merely confronting the question of whether they will be able to buy a home this year. For a large part of the public, the very idea of purchasing a home is becoming an increasingly difficult scenario to imagine.

Here too, the interim situation causes harm from both directions. Fear of war delays transactions and investment, but does not necessarily produce a corresponding decline in land, construction, and rental costs. The market can therefore freeze without becoming more affordable. This may be one of the harshest forms of uncertainty: the family does not buy because the future is too risky, but waiting does not bring it any closer to owning a home.

Desk Assessment: Iran Is Building Three Layers of Defense, but Time Is Working Against It

The picture on October 28 is not one of Iran passively waiting to see what happens after the midterm elections. Tehran is trying to operate on three levels simultaneously. The first is military and maritime deterrence, with Hormuz remaining a lever capable of raising the cost of escalation even without a complete blockade. The second is the construction of a regional framework in which Saudi Arabia, Turkey, Pakistan, Oman, and the Gulf states would form part of a mechanism designed to prevent another war. The third is an attempt to demonstrate to both the public and the adversary that the war has already cost the United States tens of billions of dollars, and that Washington therefore also has an interest in avoiding another round.

But the domestic clock is moving at a different pace. More than one million people are dropping out of the payroll insurance system, flour and bread prices are rising, the prospect of purchasing a home is moving further out of reach, and the government itself is already acknowledging that the public is paying the price of indecision. Deterrence can create bargaining power, but it cannot replace investment. Hormuz can raise the global cost of war, but it cannot by itself create new jobs in Iran. And the threat of a forceful response can deter an attack, but it cannot reduce the number of years a family needs to save in order to buy a home.

The important signal on the morning of October 28 therefore, is not whether the United States has already decided to attack. There is no evidence that it has.

The more important signal is that all sides are already preparing for the possibility that the question will return after November 3, while inside Iran, the waiting itself is becoming increasingly costly.

Tehran wants to reach the day after the elections with as many cards in its hand as possible. The problem is that every additional day it holds on to those cards costs more for the public it is asking to keep holding on.