From the minute Hezbollah fired their anti-tank missiles at Israel, the entire Middle East was glued to what might happen next. This is because what is happening in northern Israel pits Iran’s ally against Israel, a key ally of the US, and that has regional implications because Iran’s allies and proxies – from Syria to Iraq and Yemen – are all impacted by how Hezbollah performs and how Israel responds.For instance, in the last month, Iraqi Shi’ite paramilitaries linked to Iran have blamed Israel for a series of explosions at their munitions warehouses. In addition, the Houthi rebels in Yemen have been using Iranian technology to increase their drone and missile attacks on Saudi Arabia. They also say they have new air defense systems, and that they shot down a US drone recently. It would be the second US drone downed since June. In January, Israel’s former chief of staff said that it carried out more than 1,000 airstrikes against Iranian targets in Syria over the last years. That was a major declaration that built on two years during which Israeli officials had hinted at a widening campaign against Iran in Syria. Israel has only admitted several of these strikes directly as they happened, or after. In September, an airstrike in Latakia led Syrian air defense to shoot down a Russian plane by mistake, causing a crises and ending with Moscow sending the S-300 air defense to Syria’s regime.That means that Syria’s regime and other forces in Syria are watching closely. The August 24 airstrike that Israel carried out against an IRGC “killer drone” force in southern Syria killed two Hezbollah operatives. For the IRGC and other Iranian-backed groups in Syria, the escalation in Lebanon is important. They wonder if it could spill over to Syria.Iran’s bases in Syria were used to fly a drone into Israeli airspace in February 2018, and also to launch missiles at Israel in May 2018 and in January. Iran’s IRGC has entrenched in Syria, and Iran has benefited from the weakness of the Syrian regime to spread influence and move forces and munitions. This has included the deployment of Iraqi-based Shi’ite militias, such as Kata’ib Hezbollah. A Kata’ib Hezbollah base in Albukamal was mysteriously hit with an airstrike in June 2018. No one claimed responsibility for it, but Kata’ib Hezbollah has blamed both Israel and the US for attacks on it. It is led by Abu Mahdi al-Muhandis, who has worked with the IRGC since the 1980s.For Iraq, the simmering conflict in Israel’s north is also important because some Iraqi members of parliament have blamed Israel and the US for attacks in Iraq. They spread rumors and conspiracies. The Al-Etejah TV network even published a cartoon this weekend of the US’s “Uncle Sam” walking a baby Israel, indicating the usual Iranian-backed perception that the US and Israel are twin enemies, and that Iranian-backed forces – from Lebanese Hezbollah to the Houthis – are “resisting” them.The Houthis, for instance, call for the “death to America, death to Israel curse the Jews.” Both Hezbollah in Lebanon, Kata’ib Hezbollah in Iraq and the Houthis view themselves as involved in a regional war with Israel and the US. However, they believe the war is a long-term struggle, not always fought with kinetic attacks, but rather with influence and other operations. That is why they watch closely what happens in Hezbollah-Israel tensions. Shi’ite paramilitaries in Iraq, such as Qais Khazali, have indicated that if there is a conflict between Hezbollah and Israel, Iraqi paramilitaries could come to support Hezbollah. That would set off a larger conflict.Other countries, such as Saudi Arabia, are also watching. They have been fighting the Houthis for years since the kingdom intervened in Yemen in 2015. This has been difficult, and Riyadh has been accused of human rights violations. Members of the US Congress have objected to the Saudi campaign and called for an end of US support. Saudi Arabia has also been a traditional supporter of Lebanese Sunni Prime Minister Saad Hariri and the status quo in Lebanon. Saudi Arabia supported the Taif Agreement in 1989 that ended the Lebanese Civil War, but it is concerned about Hezbollah’s expansion in Lebanon.Meanwhile, in the Gulf, countries are also watching. They know the price that will be paid by a regional conflict. Iran was accused in May and June of sabotaging six ships, and Iran has also seized a British oil tanker in retaliation for the UK having helped seize an Iranian tanker in June. The UK, the US and others are seeking to secure shipping in the Gulf. Now the question is whether escalation could affect these countries.Other groups in the region are watching how Israel responds. This includes Hamas and Islamic Jihad in Gaza, as well as Turkey, the Kurdistan region in Iraq, Syrian rebels in northern Syria, and the kingdom of Jordan. This is because any kind of escalating conflict could affect the entire Middle East. In many ways, the simmering conflict between Iran, its proxies and allies and other countries has already affected the Middle East for years. But the firing of anti-tank rockets at Israel brings tensions to a new height.