Informed commentaries have stressed, somewhat justifiably, Iran’s benefits from the nuclear agreement with the P5+1 powers. Yet the agreement is, in many ways, formal confirmation of regional developments that have occurred since the US invasion of Iraq in 2003 and the Arab Spring. These changes have not only transformed Iran into a legitimate player in the regional system, but also into a potential partner in the international campaign against Islamic State (IS) and other jihadist Sunni organizations such as al-Qaida, Jabhat al-Nusra and others. Also, concerns over the emergence of a Shi’ite Crescent in the Middle East extending from Iran to Hezbollah in Lebanon, including the Shi’ites in Iraq and the Alawites in Syria, are not new: King Abdullah of Jordan voiced such concerns as early as 2004.The issue of Iranian influence involves two elements, one unknown and one hidden. The real extent of Iran’s influence on Baghdad, Damascus, Beirut and Sana’a is not known. We can only speculate that intelligence circles have much more credible information than do social networks or the media. What is important to remember is that many players on both sides of this field are invested in portraying an image of Iran’s role in the region that accords with their own interests. Israel and Saudi Arabia have strategic, geographic and ideological interests in magnifying the threat of a nuclear Iran, while the United States (undoubtedly joined in this by Russia and China, and possibly by the Gulf States bordering on Iran, such as Oman) has the opposite interest of downplaying this threat.History is familiar with the analogy of the 1938 Munich Agreement, in which Chamberlain and the West capitulated to Hitler but failed to prevent World War II. Yet history is also familiar with efforts to demonize the enemy that were subsequently understood to be exaggerated, if not outright baseless. For example, Israel and the West turned Egyptian president Gamal Abdel Nasser in the 1950s and 1960s into the Hitler of the Arab world, and according to Israeli intelligence and media sources of the period, the influence of Egypt and Nasser’s pan-Arabism pervaded the entire Arab world, including Iraq, Syria and distant Yemen. Subsequent historiography of the period shows that Nasser’s capabilities were much more limited than the grandiose powers ascribed to him. An assessment of Iran’s true power and regional influence must surely be sober rather than demagogic.The latent dimension of Iran’s regional influence involves the future of Syria. The keystone of Iran’s strategy in the Arab Middle East is its capacity to support Bashar Assad’s regime. The Iranian-Syrian alliance, which has been in place for over three decades (with a brief interruption during the Gulf War), has become a major axis of regional politics. This is not a “natural” alliance in the respect that it is based on Iran’s cooperation with an Alawite minority regime rather than a broad Shi’ite social foundation. Syria’s significance stems from its geo-strategic location in the heart of the regional system, rather than from any economic resources that it offers. “Whoever would lead the Middle East must control Syria,” wrote esteemed journalist and historian Patrick Seale in the 1960s.Indeed, harking back to 1950s when Syria became the focus of global and Arab Cold War struggles, at least five powers have competed for control over Syria since the outbreak of the civil war there in 2011: Iran and Russia (through the Alawite regime), the West (through the Free Syria Army), and two jihadi Sunni organizations – IS and Jabhat al-Nusra.In view of the highly unreliable information from the field, it is difficult to predict what will happen in Syria, or whether it will maintain its sovereignty and territorial integrity.Clearly, Iran’s success in preserving Syria’s Alawite government would be a significant accomplishment and reinforcement of the radical Shi’ite alliance in the region. Assad’s fall, on the other hand, would be a fatal blow to Iran’s regional influence by creating a vacuum in the Shi’ite Crescent, and would also weaken Hezbollah as well as Iran’s influence in Iraq. We can borrow from then-presidential candidate Bill Clinton’s famous 1992 phrase “It’s the economy, stupid,” and state with equal gusto that in post-nuclear-agreement Middle East, “It’s Syria, stupid!” Since the Western alternative in Syria now appears to be less probable, the West, including Israel, faces a dilemma regarding whether to support Syria – backed by the demonized Iran – or to bet on an alternative regime, with the risk of chaos, anarchy and even territorial changes. Turkey and Saudi Arabia would prefer to get rid of Assad at all costs, while Egypt has decided to prop up the Assad regime. Indeed, one may wonder whether the potential rise of IS or another radical Islamic entity in Syria might be an even more destructive scenario than the Iranian “threat.”The author is a professor in the Department of Islam and Middle Eastern Studies at the Hebrew University of Jerusalem, and a board member of Mitvim – The Israeli Institute for Regional Foreign Policies.