As Israel announces a "new stage" in the Iran campaign, the conflict enters its most dangerous chapter—underground
Executive Summary
- On Day 7 of Operation Epic Fury, Israel declared Phase 2: a shift from the "surprise opening blow" to systematic destruction of Iran's underground military infrastructure, leadership bunkers, and remaining missile capability
- 50 Israeli jets dropped 100 bombs on Khamenei's underground leadership complex in central Tehran—the most intensive single strike on a capital city since the 2003 Baghdad "Shock and Awe"
- Iran's strike capability has degraded 90% (missiles) and 83% (drones), but the war is simultaneously widening: Beirut's southern suburbs are under mass evacuation, Azerbaijan has been hit, and Congress has failed twice to invoke war powers
- The Phase 2 transition marks a point of no return: the campaign's logic has shifted from degrading military capability to dismantling the regime's physical infrastructure of power
Chapter 1: The Phase Transition
On the evening of March 5, IDF Chief of Staff Lt. Gen. Eyal Zamir made an announcement that redefined the war. The "initial stage of surprise opening blow" was complete, he said. Israel was "now moving to the next phase of the campaign" with "additional surprising moves" he declined to reveal. Hours later, US Defense Secretary Pete Hegseth delivered the blunter version: "Firepower over Tehran is about to surge dramatically."
The numbers tell the story of Phase 1's scope. In six days, the US-Israeli coalition conducted 2,500 strikes using more than 6,000 weapons. Iran's air defenses have been largely neutralized. Its ballistic missile launches have dropped 90%, drone attacks 83%, according to US Central Command. The "opening blow" achieved what military planners call suppression of enemy air defenses (SEAD)—the prerequisite for everything that follows.
Phase 2 is qualitatively different. Where Phase 1 targeted surface-level military assets—radar installations, missile launchers, airfields, air defense batteries—Phase 2 goes underground. The targets are now hardened bunkers, subterranean missile storage facilities, command-and-control nodes, and the physical infrastructure of political power itself.
The distinction matters enormously. Surface targets can be rebuilt in months. Underground infrastructure represents decades of investment, billions of dollars, and irreplaceable engineering knowledge. Destroying it doesn't just degrade current capability—it eliminates the foundations on which future capability would be built.
Chapter 2: 100 Bombs Under Tehran
The signature strike of Phase 2 came early Friday morning, March 6. Approximately 50 Israeli Air Force fighter jets—likely a mix of F-35I Adirs and F-15I Ra'ams—dropped around 100 bombs on what the IDF described as Khamenei's underground bunker, located beneath the "leadership complex" in central Tehran.
The IDF statement described the target as spreading "across multiple streets" with "many entry points and rooms for gatherings of senior members of the Iranian terror regime." The bunker had been built as a "secure emergency asset for managing the war" by the supreme leader, who was "eliminated before he managed to use it." After Khamenei's assassination in the opening strikes, the compound continued to serve as a nerve center for senior officials.
The Technical Challenge
Destroying deeply buried targets is among the most demanding missions in modern warfare. Iran has spent decades—and an estimated $15-20 billion—building underground facilities specifically designed to survive aerial bombardment. The country's geography, with its mountain ranges and hard rock formations, provides natural protection.
The key weapons in this campaign are likely:
| Weapon | Penetration | Weight | Notes |
|---|---|---|---|
| GBU-28 (BLU-113) | ~6m reinforced concrete | 2,270 kg | Laser-guided, used by Israel since 2006 |
| GBU-57 MOP | ~60m earth / 8m concrete | 13,600 kg | US-only, B-2 delivery, designed for Iran |
| SPICE 2000 | ~3m concrete | 900 kg | Israeli precision glide bomb |
| MPR-500 | ~4m concrete (tandem) | 230 kg | Israeli multi-purpose rigid bomb |
The 100-bomb strike on a single complex suggests a "progressive collapse" strategy: multiple weapons hitting the same area sequentially to penetrate deeper layers. The first bombs crater the surface and remove overburden; subsequent weapons strike the exposed deeper layers. This technique, refined during the 2003 Iraq War and Afghanistan cave campaigns, requires precise sequencing and overwhelming mass.
The sheer number of aircraft—50 jets for one target—indicates either exceptional target hardening or the desire to achieve certainty of destruction in a single pass, avoiding the need to return against alerted defenses.
The Broader Target Set
Reuters reported on March 5 that Phase 2 would include "bunkers storing ballistic missiles and equipment," with Israel aiming to "neutralise Iran's ability to launch aerial attacks at Israel by the end of the war." Earlier in the campaign, strikes had already destroyed the Supreme National Security Council headquarters and the Expediency Discernment Council building in Tehran, plus what Israeli officials called an underground nuclear weapons facility designated "Min Zadai."
This target list reveals the campaign's dual logic: military degradation (missile storage, launch capability) and political decapitation (leadership bunkers, regime institutions). The combination is historically rare. The closest parallel is the 2003 Baghdad campaign, but even that did not systematically target underground infrastructure at this scale.
Chapter 3: The Two-Front Escalation
Phase 2 is not confined to Iran. On the same day Israel announced its Tehran escalation, it issued mass evacuation orders for Beirut's southern suburbs—the Dahieh, Hezbollah's urban stronghold—covering neighborhoods home to more than 500,000 people. IDF ground troops crossed into southern Lebanon, with UN peacekeepers reporting ground combat.
This represents a deliberate reopening of the Lebanese front. The 2024 ceasefire between Israel and Hezbollah, which held for over a year, has now been shattered. Hezbollah's entry into the conflict—firing missiles at Israel in solidarity with Iran—gave Israel the legal and military pretext it needed.
The two-front strategy serves multiple purposes:
- Preventing Hezbollah from rebuilding while Israel is focused on Iran, eliminating the northern threat for years
- Demonstrating escalation dominance—the capacity to fight on multiple fronts simultaneously sends a signal of overwhelming force
- Fragmenting Iran's proxy network—with Hezbollah under assault and Iran's ability to resupply severed, the "Axis of Resistance" faces structural disintegration
The human cost is mounting rapidly. More than 1,200 people have been killed in Iran, over 120 in Lebanon, and dozens more across Gulf states. Six US soldiers have died. In Iran, 3,000 homes have been damaged, according to the Iranian Red Crescent Society.
Chapter 4: The Political Vacuum
As the military campaign intensifies, the political endgame grows murkier. Three developments on Day 7 illustrated the deepening uncertainty.
First, Trump told Axios he must be "involved in the appointment" of Iran's next supreme leader, explicitly rejecting Mojtaba Khamenei—the leading succession candidate—as "a lightweight." He cited the Venezuela model, where the US military captured Maduro and installed a more pliable successor. This is the clearest statement yet that the campaign's objective extends beyond military degradation to regime change.
Second, Iran's ambassador to Egypt categorically denied that Tehran has requested talks. "There will be no trust in Trump," Ambassador Ferdousi Pour said, noting that nuclear negotiations twice collapsed into war. President Pezeshkian called for mediation to be directed at "those who ignited this conflict." Iran remains institutionally defiant, even as its military capability erodes.
Third, Congress failed—for the second time in two days—to invoke war powers. The House defeated a resolution to halt the bombardment, following the Senate's similar vote. This makes it the eighth consecutive failure of the War Powers Resolution since its 1973 passage, cementing an effective congressional surrender of war authority to the executive branch.
The combination is toxic: an expanding military campaign with regime-change ambitions, no diplomatic off-ramp, and no domestic political constraint.
Chapter 5: Scenario Analysis
Scenario A: Rapid Capitulation (15%)
Premise: Iran's remaining leadership—the 3-person interim committee—agrees to negotiate under extreme military pressure, accepting terms similar to Japan's 1945 surrender: dismantling of nuclear and missile programs, restructuring of political institutions.
Why 15%: Iran's ambassador explicitly rejected talks. The IRGC, which controls the remaining military apparatus, has no incentive to negotiate its own dissolution. The regime's institutional DNA—forged in the 1979 revolution against American intervention—makes capitulation ideologically impossible. Japan had an emperor who could order surrender; Iran's fragmented post-Khamenei leadership has no equivalent authority figure.
Trigger: A catastrophic military strike (e.g., destruction of the IRGC's command structure) that decapitates remaining leadership capacity.
Scenario B: Attritional Degradation (50%)
Premise: The campaign continues for 2-4 weeks, systematically destroying underground infrastructure. Iran's conventional military capability is reduced to near-zero. The conflict settles into a low-intensity pattern: occasional Iranian asymmetric attacks (cyber, proxy, terror cells) against continued US-Israeli strikes. No formal settlement, but de facto military defeat.
Why 50%: This aligns with the stated military objectives—eliminating aerial attack capability—and the demonstrated trajectory. The 90% reduction in Iranian missile launches suggests the endpoint is approaching. Historical precedent: NATO's 78-day Kosovo campaign followed a similar pattern of escalating strikes leading to de facto capitulation without formal surrender.
Trigger: Depletion of Iran's remaining missile inventory (estimated at 200-400 surviving weapons).
Timeline: 2-4 weeks of Phase 2 operations.
Scenario C: Wider Regional War (35%)
Premise: Iran activates remaining asymmetric capabilities—Hezbollah ground operations, Iraqi militia attacks on US bases, Houthi intensification, sleeper cells in Gulf states, catastrophic Hormuz mine-laying—triggering a multi-front conflagration that overwhelms coalition capacity.
Why 35%: The 90% degradation figure applies to ballistic missiles and drones, not to all capabilities. Iran's asymmetric toolkit—perfected over decades—includes naval mines (estimated 5,000+), anti-ship missiles, cyber weapons, and proxy networks across multiple countries. The IRGC's Quds Force operates semi-independently from conventional military command. Azerbaijan has already been struck. The Katyusha attack on Bahrain, the THAAD radar targeting, and the Austin domestic attack suggest the asymmetric escalation ladder is being climbed.
Trigger: A major Iranian asymmetric success—a ship sunk in Hormuz, a mass-casualty attack on a Gulf state, or a coordinated terror campaign in Western cities.
Chapter 6: Investment Implications
Energy
The IEA's Fatih Birol attempted to calm markets: "There is plenty of oil, we have no oil shortage. There is a huge surplus in the market." He characterized the disruption as "temporary" and "logistical." Oil prices are on track for their biggest weekly gain in four years. The IEA's framing is technically correct—global spare capacity exceeds Hormuz disruptions—but ignores the insurance and logistics paralysis that creates effective supply shortages regardless of physical availability.
Positioning: Long crude volatility. The gap between IEA's "surplus" narrative and market reality (insurance cancellation, shipping paralysis) creates a potential snap-higher scenario if Hormuz mine-laying occurs.
Defense
Phase 2's bunker-busting focus validates precision munitions and deep-penetration weapons as priority procurement categories. Raytheon (GBU-28 production), Northrop Grumman (B-2 platform), and Lockheed Martin (JASSM-ER) are direct beneficiaries. The THAAD radar targeting by Iran highlights air defense vulnerability, supporting Patriot/THAAD expansion.
Safe Havens
Gold has pulled back 5% on margin-call liquidation—a buying opportunity if the war extends. The dollar's paradoxical strength (safe haven + petrodollar demand) could reverse if the conflict undermines the financial architecture the dollar depends on.
Regional Risk
Gulf sovereign wealth funds face a credibility crisis. The "safe haven" premium built into Dubai, Abu Dhabi, and Qatar—worth trillions in real estate and financial services valuations—is being repriced in real time. KOSPI's 19% crash demonstrated how quickly correlated Asian energy-dependent markets can unwind.
Conclusion
Phase 2 of Operation Epic Fury represents a crossing of the Rubicon. The shift from degrading Iran's military capability to systematically destroying its underground infrastructure—the physical foundations of both its military and political power—forecloses most paths to a negotiated resolution. Underground facilities, once destroyed, cannot be rebuilt in years. Leadership bunkers, once penetrated, cannot provide the psychological security that enables defiant governance.
The IDF chief's promise of "additional surprising moves" and Hegseth's warning of a "dramatic surge" suggest the campaign's most intensive period lies ahead. Iran's 90% missile degradation creates a dangerous window: the regime's conventional deterrent is nearly exhausted, but its asymmetric capabilities and the desperation of cornered leadership make the coming days the conflict's most volatile.
The historian Barbara Tuchman observed that the "power of the dead" shapes wars as much as the living. Khamenei's underground bunker—built to ensure regime survival, destroyed after the man it protected was already dead—is Phase 2's perfect symbol. The infrastructure of the old Iran is being dismantled. What replaces it remains the war's unanswered question.
Sources: AP News, CNN, The Guardian, Reuters, Sky News, IDF statements, CENTCOM briefings
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