Tensions are escalating between Saudi Arabia and Iran following a missile attack on the Saudi capital Riyadh.

Saudi air defences intercepted the ballistic missile in the skies over the city in an incident that is jangling nerves across the region.

The attack comes the week after the Trump administration presented evidence it says shows Iran supplied another missile launched at Riyadh's international airport last month.

And it comes as a video has gone viral, apparently made in Saudi Arabia, which visualises open conflict between the two sides.

So what is going on?


Saudi Arabia and Iran back opposing sides in neighbouring Yemen's nasty civil war.

Image: Tensions have escalated after the missile

Saudi-led coalition air strikes aimed at shoring up the country's government have killed thousands of civilians and failed to dislodge a rebellion by Iranian-backed Houthis.

Houthis say they launched this missile in retaliation against that air campaign. They are thought to have a stockpile of older scud-style missiles.

But these two recent attacks have been surprisingly accurate and effective, reinforcing claims Iran is more directly involved.

Iran denies allegations it is supplying missiles to the Houthis. What is more likely is the involvement of Hezbollah.

The Shia militant organisation from southern Lebanon is a close ally of Iran and is reportedly sending advisers to assist the Houthis. Among them may be engineers and missile experts, drawing on Hezbollah's traditional field of expertise.

They could be supplying Houthis with missiles parts and more sophisticated guidance systems smuggled in from Iran.

Image: The missile flew through the skies above Riyadh before being shot down

Iran may be using its proxies to deter Saudi Arabia from deeper involvement in the Yemen civil war. Saudi Arabia has yet to show how it will respond to the Houthis' latest provocations.

There is though mounting concern about the escalating war of words between these two rival powers. Each side is talking tough and can ill-afford to show weakness.

Traditionally such tensions might have been eased by diplomatic efforts. Washington however has shown itself firmly on the side of the Saudis.

While there is no diplomatic process there is always a greater risk of escalation, misunderstanding and open conflict. Not a reassuring end to 2017.