To call the U.S. Embassy in Baghdad merely a diplomatic mission is to severely understate its scope and size. At 104 acres, the compound is nearly the size of Vatican City and comes complete with its own dormitories, dining halls, electrical plant, fire department and everything else needed to support the thousands of diplomats and contractors housed inside its thick walls. I have been there many times, and every time I felt like I was being magically whisked from the Middle East to small-town America.

So it was all the more shocking to read that hundreds of supporters of Kataib Hezbollah, an Iranian-backed militia, broke into the compound on Tuesday and ransacked the reception areas familiar to all visitors. To anyone of my generation (I was born in 1969), it instantly conjured up terrible memories of the Iranian hostage crisis of 1979 to 1981. The protesters even shouted the same slogan — “Death to America” — as the Iranian hostage-takers. Mercifully, Tuesday’s embassy invasion ended without any Americans being harmed after Iraqi security forces belatedly arrived to restore order, but the demonstrators remain just outside the embassy walls.

This is another reminder that in the long-running conflict between the United States of America and the Islamic Republic of Iran, we have repeatedly been humbled and hurt by a smaller but more determined and ruthless adversary. Indeed, for the past 41 years, Iran has put on a master class in irregular warfare, leaving the United States flummoxed about how to respond.

In the 1980s, Iranian-backed forces took dozens of Americans hostage in Lebanon and demolished both the U.S. Embassy and the U.S. Marine barracks in Beirut with truck bombs that killed hundreds. President Ronald Reagan was so desperate to free the hostages that he was willing to sell missiles to Iran — a backroom maneuver that blew up into the biggest scandal of the Reagan administration after the proceeds were secretly diverted to the Nicaraguan Contras.

In 1987, Reagan sent U.S. naval forces to prevent Iran from closing the Persian Gulf as part of its war against Iraq. One U.S. Navy frigate was nearly sunk by an Iraqi missile and another by an Iranian mine, but U.S. forces inflicted heavy damages on Iran’s Revolutionary Guard Navy and accidentally shot down an Iranian passenger airliner.

This was the first and last time that U.S. and Iranian forces engaged in direct battle. Iran prefers to do most of its damage via proxies. Following the U.S. invasion of Iraq in 2003, Iranian-sponsored Shiite militias killed hundreds of U.S. service members. President George W. Bush condemned Iran as part of the “Axis of Evil,” but wisely decided against escalating hostilities. The United States was mired in enough wars without starting another one against a nation of 81 million people.

The Iranians took advantage of Bush’s ill-advised decision to overthrow their nemesis Saddam Hussein to extend Iranian influence across Iraq under the very noses of American occupiers. Iran was already the dominant player in Lebanon. In the past two decades, it has become the dominant player in Iraq, Syria, and Yemen, too. The new Persian Empire stretches from Tehran to Beirut.

The only effective U.S. response to the Iranian threat since Reagan’s tanker war was President Barack Obama’s decision to conclude a deal with Iran in 2015 that would freeze its nuclear program. The deal did nothing to curb Iran’s regional power play and may have even fueled it by lifting economic sanctions — which is why I and others opposed it at the time. But it did at least stop Iran’s development of nuclear weapons. President Trump blundered by exiting the nuclear deal in 2018 and imposing economic sanctions on Iran in 2019, even though it was complying with the agreement.

Pushed into a corner, Iran and its proxies have lashed out by allegedly attacking oil tankers in the Persian Gulf, shooting down a U.S. drone, hitting a major Saudi oil facility with cruise missiles — and now rocketing a compound near Kirkuk, Iraq. The latter attack, which killed an American contractor and injured four U.S. troops on Friday, led Trump to retaliate with airstrikes across Iraq and Syria that killed 25 members of Kataib Hezbollah, the Iranian-backed militia blamed for the rocket attack, and sparked anti-American outrage. The embassy invasion on Tuesday was Iran’s riposte to make clear that it will not bow to American pressure. Your move, Mr. Trump.

The United States has only two ways out of this escalating crisis: fight or negotiate. A war with Iran, as I have previously argued, could be the mother of all quagmires; it could easily spin out of control with tit-for-tat responses of the kind we have seen in recent days. Better to negotiate. That would mean trying to rebuild a tougher nuclear deal in return for the lifting of U.S. sanctions.

But Trump shows little interest in either seriously negotiating or fighting. He has waged economic warfare on Iran while doing nothing to curb its regional aggression; indeed, by withdrawing U.S. troops from part of northern Syria, he has allowed an extension of Iranian influence. So we are left with the worst of all possible worlds: Iran is once again waging a low-intensity conflict, and America once again has no effective response.

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