After the assassination of Iranian General Qassem Soleimani on January 3, many feared a major war would break out in the Middle East. Iran's retaliation came quickly but it did not provoke a conflict.

On January 8, two bases hosting US and coalition troops were hit by a barrage of missiles. Many perceived the attack as a sign of de-escalation as it did not result in human loss and the Iraqi authorities were warned about it in advance.

Since then, Tehran has been sending contradictory signals about the country's next move in this crisis. While Foreign Minister Mohammad Javad Zarif announced that the attacks "concluded proportionate measures in self-defence", Esmail Qaani, the new commander of the Quds Force of the Islamic Revolutionary Guard Corps (IRGC), declared that Iran will hit its "enemy in a manly fashion".

On January 17, Iranian Supreme Leader Ali Hosseini Khamenei outlined the way forward for Iran. In a rare speech during Friday prayers in Tehran, he called the Quds Force, "the fighters without border", declared that the European Union should not be trusted "because of their track record and their support for Saddam during the Iran-Iraq War", and called on Iranians to put their collective efforts into "strengthening themselves in every aspect".

Khamenei's speech signals that Iran will likely seek to avoid a full-scale war and adopt the following strategy: start advancing its nuclear capacity and seek to continue power projection abroad through the Quds Force and its regional allies.

In the aftermath of the assassination, Iran announced that it was abandoning nuclear deal limits. On January 15, European countries triggered a dispute mechanism that can lead to the return of the United Nations sanctions on Iran. The Iranian authorities could respond by quitting the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), which will pose a set of serious risks for the West and the Middle East.

Apart from that, Iran could seek to escalate tensions in the region through its political and military allies.

In its campaign to resist US presence in the region, Tehran has invested heavily in various armed groups. Over the past decade, under the leadership of Soleimani, the IRGC has mobilised and equipped tens of thousands of fighters in the region (mainly in Iraq and Syria).

Groups such as Kataib Hezbollah, Kataib Sayyid al-Shuhada, Asaib Ahl al-Haq, Badr, Harakat Hezbollah al-Nujaba, Kataib al-Imam Ali, Liwa Zeinabiyoun, Liwa Fatemiyoun, Quwat Imam al-Baqir, Liwa al-Sayyida Ruqayya, and Quwat al-Ridha have been receiving Iranian material support and strategic guidance.

This is in addition to a strong alliance with Hezbollah in Lebanon and strategic engagement with the Houthis in Yemen.

On January 7, the supreme leader ordered the allocation of an additional $220m budget for the Quds Force, part of which will probably be dedicated to strengthening these Iranian-backed armed groups.

In the aftermath of the assassination of Soleimani, the IRGC threatened to attack the city of Haifa in Israel and Dubai in the United Arab Emirates, in the event of an attack on Iranian soil.

The risk of retaliatory attacks by Iranian proxies across the region will remain high. Iranian-backed militias are determined to fight US forces. Hezbollah's leader Hassan Nasrallah warned that US "military bases, soldiers, officers, and warships" will be targeted.

Iran's desire for revenge will also affect the region politically.

In Syria, where Iran has had an uncomfortable partnership with Russia, the IRGC will likely seek to further entrench its presence. Russian attempts to curb Iranian military presence in response to US and Israeli calls may not be successful. In Yemen, Iran will also seek to secure its gains as an "indispensable diplomatic stakeholder".

In Iraq, Iran will continue to exert influence over internal political affairs, which will lead to further destabilisation as the country tries to cope with major political unrest.

Already suffering from major divisions, Iraq will likely see cleavages between supporters and opponents of Iran deepen. On January 5, the Iraqi parliament passed a resolution obliging the government "to work towards ending the presence of all foreign troops on Iraqi soil". The Kurdish and some of the Sunni members of the parliament did not attend the parliamentary session that approved this decision.

Many Shia political and religious leaders are in favour of the departure of foreign forces, but the US military presence is an integral element of the Kurdistan Regional Government's (KRG) security, especially in the aftermath of the 2017 independence referendum. Thus the push to expel US troops will become another point of contention between Baghdad and Erbil.

Soleimani's assassination also prompted calls for unity among Shia forces in Iraq which, until recently, were divided over the Iraqi protests. This means the demands by the protesters for political reform and desectarianisation of the political system are unlikely to be met. This will likely complicate the government formation efforts in coming months and could further exacerbate tensions between the various ethno-religious components of the country.

In Lebanon, the fallout of Soleimani's killing is also likely to be felt. Hezbollah is the most important strategic asset of the Islamic republic in the region and therefore, it is likely to continue its financial support of the group.

Like Iraq, Lebanon is experiencing social upheaval, with protesters demanding an overhaul of the political system. A stronger Hezbollah will likely be more assertive in its political negotiations with other forces within the country, especially as Saudi Arabia, the main backer of former Prime Minister Saad al-Hariri, has indicated it does not wish to escalate against Iran.

In the Gulf, the escalation in the US-Iran confrontation has caused much anxiety, especially as last year Saudi Arabia and the UAE witnessed Iran's military capabilities with the drone strikes on Aramco and the attacks on tankers near the Strait of Hormuz.

Fearing for their key oil sectors and economic stability, both Riyadh and Abu Dhabi have made it clear that they want to avoid any further escalation with Iran.

After the assassination of Soleimani, Prince Khalid bin Salman, Saudi Arabia's deputy defence minister, travelled to Washington and London to meet with political and defence officials to express the need for de-escalation.

Saudi Arabia has reduced its air raids in Yemen and emphasised that the Houthis can assume a role in the future Yemeni government. Before his resignation in November, Iraq's Prime Minister Adel Abdul-Mahdi had taken the role of a mediator between Riyadh and Tehran, actively facilitating negotiations for a de-escalation between the two. Although, this has not been confirmed by either Saudi Arabia or Iran, it seems to be the only expected approach for the Saudi leaders in the coming months.

The UAE also recently initiated negotiations with Tehran to re-establish diplomatic and possibly economic collaboration. The Emiratis have already started to scale back their military involvement in Yemen by pulling out their troops in the summer of 2019.

In October, reports surfaced that Emirati officials visited Tehran to spearhead talks for normalisation and de-escalation, and that Abu Dhabi had released $700m in Iranian funds previously frozen due to the US sanctions.

By contrast, Qatar has maintained good relations with Iran, which supported it during the blockade initiated by Saudi Arabia, the UAE and Bahrain. Doha has made long-standing efforts to act as a mediator and partner for its big neighbour. Just a day after Soleimani's assassination, Qatar's Foreign Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani travelled to Tehran to seek to de-escalate tensions. A week later, Qatari Emir Sheikh Tamim bin Hamad Al Thani also visited the Iranian capital and called for a dialogue.

Despite efforts to mediate by Qatar and others in the region, more instability and confrontation is on the horizon.

In his keynote speech at the last Doha Forum in December 2019, Iran's Zarif said the Middle East was afflicted by a "cognitive disorder" which has caused countries to perceive security as a zero-sum game - ensuring one's security by depriving one's neighbours of it - and to pursue ever-growing weapons deals.

The problem is that Iran's overall strategy in the region does not really differ from this "cognitive disorder". And the assassination of Soleimani has opened a new chapter in its confrontation with the West. A withdrawal from the nuclear deal will only deepen the crisis.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial stance.