Dina Esfandiary. Ariane Tabatabai. Sana’a: Iran’s Fourth Arab Capital? Lawfare. 10 Jan 2016.

Editor's Note: The Saudi-Iranian rivalry has long been a driver of instability and extremism in the Middle East, and this tension grew even worse when the Saudis executed Nimr al-Nimr, a Shiite cleric and outspoken critic of the ruling family, on January 2nd. The rivalry has played out across the Middle East, with Yemen being one key -- and often neglected -- arena. Ariane Tabatabai of Georgetown and Dina Esfandiari of King's College London argue that the two regional powers have different priorities and that Yemen could be used as a way to bring the two countries back to the negotiating table.

The tensions between Saudi Arabia and Iran escalated to new levels in first week of 2016 following the execution of top Shia cleric in Saudi, Sheikh Nimr al-Nimr. Relations between the two regional rivals had already worsened throughout 2015, particularly as a result of the nuclear agreement with Iran. But within 48 hours of al-Nimr’s execution, Iranian protesters attacked the Saudi embassy in Tehran, the Kingdom announced it was cutting diplomatic and trade ties with Iran, and several Gulf Arab states, including Bahrain and Sudan, followed in Saudi Arabia’s footsteps. The latest episode in the Saudi-Iranian saga couldn’t come at a worse time for the region.

Saudi Arabia and Iran’s conflict takes place outside the two countries’ respective borders, namely in Syria, Iraq, and Yemen. Indeed, statements from Iranian hardliners, Arab hardliners, and Western pundits often describe Baghdad, Beirut, Damascus, and now Sana’a, as the four Arab capitals under Iranian control. But there are key differences in how the two regional powerhouses see and treat each of these conflicts. Though al-Nimr’s execution will make de-escalation difficult, understanding the differences in the way Riyadh and Tehran view these conflicts, especially Yemen, highlights an opportunity, even if a small one, for stabilization between the two powers.

Saudi Arabia and Iran have national security concerns and interests in each of the aforementioned countries, but their priorities vary. Iran considers Iraq as its backyard. Tehran views its security as tied to the stability and security of Iraq. After all, the two countries share a long history, economic ties, a long and porous border, overlapping ethnic populations, and a common dominant religion: Shia Islam. For Saudi Arabia, Iraq sits lower on its list of priorities. Since Saddam Hussein’s collapse, Iraq hasn’t represented a real threat to Saudi interests in the region, and Riyadh’s main focus in Iraq is containing the Islamic State. To this end, Saudi Arabia formed a coalition of over thirty Muslim nations to combat terrorist groups in the region, including the Islamic State. This announcement came after the Kingdom was criticized for enabling, rather than combating, the Islamic State.

Saudi Arabia’s top priority is Iran’s lowest one: Yemen. Given its proximity to the Kingdom and the 1700 km of porous border, Yemen is vital to Saudi national security and interests. Instability in Yemen is a first order concern for Riyadh, which believes it must be the dominant power in its neighboring country. But for Iran, its involvement in Yemen is expendable and more hands-off. The Houthis do not respond to Iran like its other proxies, sometimes dismissing Tehran’s suggestions, as was the case with their takeover of Sana’a, which Iran advised against. Many Houthi grievances are legitimate and local.

Syria is the more challenging of the three. It holds a similar position for both Iran and Saudi Arabia. It doesn’t neighbor either state, but both have a vested interest in the country. Iran aims to maintain the Assad regime, while Saudi Arabia wants the regime to fall. Both, however, want to roll back the Islamic State. Syria is the battleground for power projection, more than a key national security challenge as Yemen and Iraq are for Riyadh and Tehran, respectively.

For these reasons, while Iran is heavily invested in Iraq and Syria, with Revolutionary Guards and advisors on the ground providing training, equipment, and intelligence, its presence in Yemen is relatively minimal. Iran knows it can’t have the same level of influence in Yemen as it does in Iraq and Syria. This is especially the case today, given reports of heavy Iranian casualties in Syria and onerous offensives in Iraq designed to retake Islamic State territory. As a result, Iran is happily putting minimal effort into Yemen to project power and poke Saudi Arabia at a minimal cost. Tehran helped build Houthi administrative, political, and economic capacity. More recently, Tehran likely provided the Houthis with training, and some form of material and weapons support. Some of these efforts are led indirectly through Tehran’s proxy group, Hezbollah. In fact, while Iran’s presence in Iraq and Syria has become increasingly visible – often staged carefully for PR purposes, such as Revolutionary Guards’ elite Quds Force commander Qassem Soleimani’s appearances on battlefields in Iraq and Syria – the Iranian security establishment has been careful not to showcase its presence in Yemen too much. If the cost of this policy exceeds its benefits, Iran would likely pull out of Yemen.

Yemen’s less significant position in Iranian regional security calculations and its vital position in Saudi’s mind makes it a good starting point for better Iranian-Saudi relations. Iranian officials have indicated a willingness to discuss their presence in Yemen, perhaps agreeing to withdraw (keeping in mind that Tehran doesn’t control all Houthi actions). In exchange, both parties could agree that neither side can win in Syria, and Riyadh could forgo its precondition of Assad stepping down for dialogue to occur.

The window of optimism opened after the July 2015 Iran nuclear deal seems to be closing rapidly. Saudi Arabia never hid its disdain for Iranian regional policies. But tensions had not reached such levels in the past few years. But despite the recent escalation, the Rouhani government’s statements and actions indicate that de-escalation and engagement of their Gulf Arab neighbors is still a priority for the administration. Rouhani’s team, particularly Foreign Minister Javad Zarif, has shown a willingness to risk a domestic battle with hardliners in order to engage Riyadh. For the first time since the end of the nuclear talks, the Rouhani administration’s stance on a foreign and security policy matter seems to be shared by influential individuals across the board within the political and security establishments: from the hardline leader of Tehran’s Friday prayer, Ahmad Khatami, to Brig. Gen. Mohsen Kazemeini of the Revolutionary Guards’ Tehran units, many denounced the storming of the Saudi embassy after al-Nimr’s execution. This means that Iran has room to de-escalate the situation, although it highlights that the government does not control all political factions and groups.

For Saudi Arabia, however, matters are more complex. Riyadh escalated the situation quickly and involved other Arab states in the process. As a result, it’s hard to see how Riyadh can de-escalate while saving face.

The new developments aren’t promising. But if any progress can be made toward stabilizing the region, Yemen is the key. Yemen’s relative unimportance to Iran and Tehran’s willingness to use its presence there as a bargaining chip, coupled with its essential position in Saudi security calculations and the shared concern of Al-Qaeda in the Arabian Peninsula and the growing Islamic State presence in Yemen (despite potential cooperation between the Saudis and some jihadist elements), make dialogue between the two powers on a resolution of the conflict a possibility. For this to happen, though, the United States and its European partners have to use their influence to push Riyadh to the negotiating table.