US President Donald Trump’s policy of “maximum pressure” on Iran has generated Tehran’s policy of “tit for tat,” and the results worry the world. Drones downed. Tankers seized. Insults exchanged. Both countries say – and act like – they don’t want a shooting war. Iran’s Supreme Leader Ayatollah Khamenei said in May, “We don’t seek a war, and they don’t either.” Trump ordered an aerial attack on Iran and called it off. Yet both sides have mobilized their intelligence alliances to harass and demonize the enemy. Fears of miscalculation and “false flags” are mounting. The United States and Iran are not at war, but their intelligence services are.

Behind the Iran headlines are multiple secret agencies, acting individually and collectively. The US Central Intelligence Agency, it is reliably reported, works with Israel’s Mossad, on dirty tricks from assassination to the Stuxnet virus. Mossad chief Yossi Cohen is an unofficial emissary of Prime Minister Bibi Netanyahu to the Gulf monarchies that fear Tehran. The Saudis use Israeli spyware to surveil and harass critics of Crown Prince Mohammad bin Salman (MBS).

In Washington, the CIA’s finding last November that MBS ordered the killing of US-based journalist Jamal Khashoggi has been ignored in service of facilitating the anti-Iran campaign. Now the agency’s Iran Mission Center is headed by Michael D’Andrea, a career undercover officer and convert to Islam, known for his involvement in torture, drone wars and hostility to Iran. There’s no reason to think Director Gina Haspel isn’t doing the maximum for Trump’s maximum-pressure policy.

At the same time, Iranian intelligence is emboldened. Iran has benefited from the overthrow of Saddam Hussein in Iraq. Since 2014, the Islamic Revolutionary Guard Corps (IRGC), Iran’s foreign-intelligence and special-operations service, has cultivated allies in Baghdad by helping drive ISIS out of the country. Inside Iran, the Ministry of Intelligence and Security actively suppresses Iranian civil society while regularly boasting of breaking up CIA spy rings. (On at least one occasion, CIA sources admit the Iranians succeeded.) All the while, the IRGC claims its drones are shadowing American ships.

Are the tit-for-tat exchanges a prelude to a shooting war? Or are they a substitute for full-blown war? While the possibility of miscalculation is real, it is also possible that the unstable status quo will not give way to war. The Iranians, as the weaker party, have every reason to prefer “asymmetric warfare” to open combat. The United States, weary of its two failed crusades in the Middle East since the terror attacks of September 11, 2001, has plenty of incentive to avoid a shooting war, even as Trump seeks to punish Iran with sanctions.

Covert action entices policymakers because it promises a path of action that is more aggressive than diplomacy without the costs of war

Covert action entices policymakers because it promises a path of action that is more aggressive than diplomacy without the costs of war. While Washington pundits fear “another Iraq,” the conflict between Washington and Iran might also devolve into the sort of hybrid war seen in Ukraine in 2013, in which paramilitary clashes and propaganda campaigns proliferated but never culminated in full-blown armed conflict.

Relying on intelligence services, not military action, preserves flexibility for both sides. The Iranians can play for time by attacking US allies, not the United States. After Iran seized a British tanker, Britain’s foreign minister responded that it was not contemplating military action and expressed hope that the United States would return to the nuclear deal. Trump can reap the benefits of talking tough with Iran without the political costs of being a wartime president.

Just as Trump pivoted from “fire and fury” about North Korea’s nuclear arsenal to embracing a dovish negotiating track with Kim Jong Un, so he might pivot from “maximum pressure” to reopening negotiations with Iran. As his ideological ally Tucker Carlson warned, if Trump breaks his promise to stay out of “dumb” Middle East wars, he will likely harm his 2020 re-election prospects.

This conflict is not new. The struggle between the CIA and Iranian intelligence goes back to 1953 when the CIA and Britain’s MI6 mounted Operation Ajax to overthrow Iran’s democratically elected government. The country was ruled by the pro-American Shah for the next 25 years. When the Shah was deposed in 1979, the Iranians extracted their revenge, launching a war, via proxy forces, to drive the CIA out of the Middle East. In 1983 Iranian-backed forces bombed the US Embassy in Beirut, killing a number of CIA employees. The following year, Iranian-backed forces kidnapped the Beirut station chief and later tortured him to death.

Yet both sides have managed to contain the conflict. Since 1996, the Iranians have not been credibly linked to any terrorist attacks on US targets, according to a 2017 Congressional Research Service study. (In 2011 two Iranians were charged with plotting the assassination of the Saudi ambassador in Washington, and one was convicted. The Iranian government denied involvement.)

In Iraq, the United States and Iran implicitly cooperated. When ISIS overran western Iraq in 2014, Shiite militia groups mobilized to fight the jihadist forces with the open support of Iran. “Islamic Revolutionary Guard Corps advisers were often on the front lines with the militia groups they supported, and Qassem Soleimani, the commander of the IRGC’s elite Quds Force, was occasionally photographed on the battlefield,” intelligence reporter Mike Giglio noted in The Atlantic. Yet Iran’s allies pursued the same goals as the 5,000 American troops in Iraq: defeating ISIS.

Now that ISIS has been driven out of the region’s biggest cities and Washington is openly hostile to Iran, the IRGC can use its Iraqi allies to rally local opinion against the United States or even to attack US troops.

What’s new on the American side is the collaboration of Saudi Arabia and Israeli intelligence. Until MBS took power in 2015, the Saudis rarely tried to project power outside of the kingdom. Now the Saudis stand accused of deploying senior intelligence officers to kidnap and kill Khashoggi.

The Saudis once positioned themselves as guardians of Palestinian national aspirations, and if they had contact with Israelis, they kept it very quiet. Now the Saudis are supporting Jared Kushner’s Middle East Development Project to buy peace by investing up to US$50 billion in the West Bank, a plan that has attracted virtually no Palestinian support.

Mossad has the same agenda, Yossi Cohen said at a conference in Israel this month. “The Mossad has identified at this time a rare opportunity – perhaps the first in the history of the Middle East – to reach a regional understanding that would lead to an inclusive regional peace agreement.”

According to The Times of Israel, the Mossad chief said, “the opportunity comes from a shared interest with countries throughout the region in fighting Iran and Islamic terror groups, like the Islamic State, and from the close relations with the White House and the Kremlin.” In other words, Kushner’s “peace plan” and Mossad’s anti-Iran agenda seem to be two sides of the same coin.

Given the belligerent incoherence of Trump’s statements and the angry militance of Iran’s response, a full-blown war is a real possibility. But so is a limited hybrid war waged by rival intelligence services that know each other too well.

This article was produced by the Deep State, a project of the Independent Media Institute, which provided it to Asia Times.