Iran Update Evening Special Report, July 5, 2026

The Institute for the Study of War (ISW) and The Critical Threats Project (CTP) at the American Enterprise Institute are publishing daily updates to provide analysis on the war with Iran. The updates cover events from the past 24-hour period.   

Key Takeaways:

• Iranian control of the Strait of Hormuz is detrimental to global commercial interests because it enables Iran to selectively determine which vessels may pass through the strait and at what cost. Iranian Ambassador to the People’s Republic of China (PRC) Abdolreza Rahmani Fazli stated on July 4 that Iran will give the PRC “special considerations” in determining the cost of “service” fees because the PRC is a “friendly country.”
• Israel Defense Forces (IDF) Chief of Staff Lieutenant General Eyal Zamir announced on July 5 that the IDF has established control over Hezbollah’s extensive underground tunnel networks in the vicinity of Beaufort Castle, Nabatieh District, in southern Lebanon. The IDF previously established control over above-ground terrain surrounding Beaufort Castle on May 31 and began to seize and dismantle underground Hezbollah infrastructure throughout June.

Toplines

Iranian control of the Strait of Hormuz is detrimental to global commercial interests because it enables Iran to selectively determine which vessels may pass through the strait and at what cost. Iranian Ambassador to the People’s Republic of China (PRC) Abdolreza Rahmani Fazli stated on July 4 that Iran will give the PRC “special considerations” in determining the cost of “service” fees because the PRC is a “friendly country.”[i] This comment suggests that Iran plans to discount the tolls that the PRC and other “friendly” countries must pay for their vessels to transit through the strait. Iranian Foreign Affairs Minister Abbas Araghchi previously identified the PRC, Russia, India, Iraq, and Pakistan as “friendly” states whose vessels can pass through the strait.[ii] Iran’s imposition of tolls on vessels belonging to countries that it deems “non-friendly” violates the principle of free navigation under the UN Convention on the Law of the Sea.[iii] Fazli’s statement is also consistent with CTP-ISW's ongoing assessment that Iran is prioritizing international recognition of its control of the strait over the collection of tolls.[iv]

US-Iran Negotiations

Nothing significant to report.

Maritime Activity in the Strait of Hormuz and Persian Gulf

See topline section.

US-Israeli Air Campaign

Nothing significant to report.

Iranian Domestic Affairs

Nothing significant to report.

Iran’s Axis of Resistance

Lebanese Hezbollah and the Israeli Campaign in Lebanon

Israel Defense Forces (IDF) Chief of Staff Lieutenant General Eyal Zamir announced on July 5 that the IDF has established control over Hezbollah’s extensive underground tunnel networks in the vicinity of Beaufort Castle, Nabatieh District, in southern Lebanon.[v] The IDF previously established control over above-ground terrain surrounding Beaufort Castle on May 31 and began to seize and dismantle underground Hezbollah infrastructure throughout June.[vi] Zamir, IDF Northern Command Commander Major General Rafi Milo, and other senior IDF field commanders visited Israeli forces and toured seized Hezbollah tunnels in the vicinity of Beaufort Castle on July 5.[vii] Zamir noted that Hezbollah, with Iranian assistance, had developed extensive tunnel networks underneath the ridge surrounding Beaufort Castle for command and control (C2) and targeting northern Israeli communities.[viii] Senior IDF officers have identified the Beaufort Castle ridge and terrain surrounding Ali al Taher, which is about three miles north of Beaufort Castle, as major Hezbollah operational areas.[ix] Zamir urged the Lebanese Armed Forces (LAF) to fulfill its commitment to disarming Hezbollah fighters and dismantling militant infrastructure per the terms of the June 26 Trilateral Framework Agreement.[x] Zamir also announced that the IDF will continue to attack Hezbollah in Lebanon and warned that the IDF is prepared to launch a “swift offensive” if Hezbollah violates the ceasefire.[xi] The IDF has continued to attack Hezbollah positions in southern Lebanon. The IDF has conducted four airstrikes across southern Lebanon since CTP-ISW's last data cut-off on July 4.[xii]

Other Axis of Resistance Activity

United Kingdom Maritime Trade Operations (UKMTO) reported that unspecified armed actors attacked a bulk carrier off the coast of the Houthi-controlled port of Hudaydah on July 5.[xiii] UKMTO said that the unspecified armed actors approached the bulk carrier in a skiff 30 nautical miles southwest of Hudaydah Port and opened fire.[xiv] No actor has claimed responsibility for the attack at the time of this writing.