On October 12, the Kuwaiti newspaper al-Qabas reported that Iran had informed Hezbollah that it would cut funding to the Shia militia by forty percent. The source cited the cutback as a result of growing economic sanctions and a diversion of resources to help Bashar Assad in his crackdown on the pro-reform movement. This action, along with several other events suggests that Iran's regional standing may be eroding rapidly.

When the Arab Spring first erupted, it seemed apparent that Iran would gain an advantage over the West, with the first revolutions taking aim against unpopular, western-backed dictatorships. Tunisia's Ben Ali, Yemen's Saleh, Bahrain's Khalifa, and Egypt's Mubarak were all known as western allies and “moderate” leaders, and the popular uprisings against them proved to be an embarrassment to US foreign policy.

Until March, it seemed quite clear that Iranian-backed nations such as Syria and Lebanon would emerge unscathed, allowing Iran to secretly continue its nuclear program as the West focused its efforts on damage control in North Africa.

Initially, the world doubted the success of the Syrian uprising, assuming that the rurally-led reform movement would be suppressed much like the Shia-led uprising in Bahrain. To the world's surprise and much to Iran's ire, the protest movement in recent months has succeeded in forming a somewhat united front while continuing to apply international pressure on the Assad regime, to the point where even Russia has called for Bashar to either reform or relinquish power.

As the Syrian conflict intensified, it became clear to the Arab world that the Iranians were actively supporting an Allawite regime in oppressing their Sunni brethren in Syria, effectively stripping the Iranians of their image as leaders in the struggle against Western imperialism. The Syrian opposition's continuous denouncement of the Ayatollah's as well as their henchmen Hezbollah, paved the way for Sunni powers such as Saudi Arabia and Turkey to regain popularity by taking a firm stance against Syria and their Iranian backers.

The Arab Spring Has Tied Iran's Hands

Iran likely realizes that it will not be able to utilize the Arab Spring as was initially hoped. Iran has failed to find an ally in which to spread its influence in both Tunisia and Egypt while Bahrain was able to crush the Shia uprising with the help of the Saudis and the apathy of the West. In North Africa, conservative Sunni Muslim groups like the Muslim Brotherhood are vehemently opposed to Iran due to the Sunni-Shia divide, while their followers strongly identify with the plight of suffering Syrians.

The Syrian conflict had only served to solidify the anti-Iranian alliance, as Turkey has become one of Assad's most outspoken critics, enforcing an arms embargo and even threatening military action. Threats made by Iranian officials have until now been unsuccessful in deterring Turkey from its anti-Assad stance, to the point where it has gone ahead with a high profile decision to install a strategic early warning radar system on Iran's northeastern doorstep. To make matters worse, the Azerbaijanis are widely believed to be allowing Israeli and Western intelligence to operate listening stations from its territory into Iran.

Despite their involvement in the Libyan conflict, the United States and Europe have succeeded in applying additional sanctions on Iran which have been effective in crippling the Iranian economy to the point where it has been forced to cut back on its funding to both Hezbollah and Hamas. While these budget cuts may not affect these groups' military capability in the short run, their popularity will eventually be weakened at home due to a failure to fund charity and social programs.

In addition to its efforts to bolster allies in the region, Iran is plagued by several ongoing internal conflicts. For the past several months, Kurdish separatists have increased their activity in Turkey as well as northeastern Iran, setting their sights on the latter's crucial pipeline infrastructure. Despite the military's ongoing efforts to crush these groups, they have succeeded in disrupting energy flows time after time, posing a serious threat to Iran's primary economic staple. In addition, Iranian state-media is reluctant to report on continuing attacks by Sunni extremist groups in the country's south and east, many of which have been successful in assassinating prominent officials in addition to hampering energy production.

Saudi Assassination Plot a Window of Opportunity

The high profile arrests of Iranian-linked agents in the Saudi assassination plot in the US have come at a truly favorable time for Iran's enemies across the Gulf and in the West. Such a plot to attack Saudi diplomats on the soil of the world's only superpower solidifies Iran's image as a reckless and dangerous rogue state with no respect for international law.

The Americans and Saudis must be careful not to push Iran into a corner, as an overly zealous reaction will not only provoke the Iranians to make desperate decisions, but risk swinging public opinion against them for becoming the aggressor. It has already been suggested that Iran may be using the Kurdish separatist group, the PKK to destabilize Turkey in response to Erdogan's policies vis-a-vis Syria.

Iran's currently weakened state has not been brought about by the unilateral use of hard power, but rather a persistent and coordinated campaign of isolation by nations in the region which see the Islamic Republic as a common enemy.

The assassination plot allows the West to highlight the urgency of preventing Iran from acquiring a nuclear weapon, paving the way for harsher sanctions. With a weakened economy, Iran will be unable to support its proxies around the region, as it understands that the continuation of government-sponsored social programs at home are all that stands in the way of another popular uprising.

Iran's strategy for expanding its influence over the entire region has backfired. Its foothold is months away from being replaced by a possibly hostile Sunni leadership, while its militias along the eastern Mediterranean coast may soon be rendered ineffective due to budget cuts. NATO surrounds Iran from practically all sides, eliminating its ballistic missile deterrence while consolidating the region's will to respond with force to any aggression. The West will continue to dismember the Iranian economy over its nuclear program, the continuation of which has ironically has become the last nail in its own coffin.

Daniel Nisman works for Max Security Solutions, a risk consulting firm based in Tel Aviv. He is also co-founder of www.Israelicentrism.com and the www.friendasoldier.com dialogue project.