F OR MORE than a year, fighting between Israel and Iran’s network of allied militias has brought the two countries dangerously close to direct war. Recent escalations make such a confrontation more likely. Last week Iran fired around 200 missiles at Israel. Israel is now preparing its response. What comes next could draw in Gulf states and America.

Israel has invaded southern Lebanon in a dramatic escalation of its conflict with Hezbollah. The Israeli ground operation began on 30 September, days after an air strike killed Hassan Nasrallah, the leader of the Iran-backed armed group.

What goes up...? Oil prices are down sharply Tuesday while traders await an Israeli strike on Iran, with benchmark U.S. crude momentarily falling at its steepest daily rate in a year. West Texas Intermediate futures tumbled by as much as 5%,