G7 grapples with Israel-Iran conflict as strikes escalate regional rensions

On Sunday (15 June) Group of Seven (G7) leaders convened in the Canadian Rockies, with the escalating Israel-Iran conflict dominating their agenda. The summit, overshadowed by Iran’s retaliatory missile strikes on Tel Aviv and Haifa early Monday, follows Israel’s Operation Rising Lion, launched 13 June, targeting Iran’s nuclear and missile infrastructure.

The G7’s focus reflects global alarm over a potential regional war, with German Chancellor Friedrich Merz emphasising goals to prevent Iran’s nuclear weaponization, ensure Israel’s self-defence, and avert broader escalation. Yet, as Iranian missiles devastate Israeli cities and Israel vows to intensify its campaign, analysts warn that diplomatic prospects are dimming, with oil markets spiking and geopolitical risks mounting. The conflict’s trajectory, shaped by U.S. President Donald Trump’s mixed signals and Iran’s defiance, poses a critical test for global leadership.

Iran’s retaliatory strikes: devastation in Israel

Iran’s predawn missile barrage on 16 June struck Tel Aviv and Haifa, killing three and wounding dozens, per Israel’s emergency services. In Tel Aviv, residential buildings near Shuk HaCarmel market were obliterated, with explosions shattering windows near the U.S. Embassy.

In Haifa, 30 were wounded, and fires raged at a power plant, per local media. Guydo Tetelbaun, a 31-year-old Tel Aviv chef, described the terror: “The shelter door blew in… our apartment’s walls caved, no glass left.” Additional strikes hit Petach Tikva and a Bnei Brak school, signaling Iran’s intent to inflict maximum disruption.

Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed a “new method” overwhelmed Israel’s multilayered defences, causing systems to “target each other,” though the IDF offered no immediate comment. The attacks, part of a wave retaliating for Israel’s Friday strikes, killed at least 10 Israelis, including children, in earlier volleys. Iran reported 224 deaths, 90% civilians, from Israel’s campaign, highlighting the conflict’s human toll.

Before leaving for the summit on Sunday, Trump was asked what he was doing to de-escalate the situation. “I hope there’s going to be a deal. I think it’s time for a deal,” he told reporters. “Sometimes they have to fight it out.”

Iran has told mediators Qatar and Oman that it is not open to negotiating a ceasefire while it is under Israeli attack, an official briefed on the communications told Reuters on Sunday.

In Washington, two U.S. officials told Reuters that Trump had vetoed an Israeli plan in recent days to kill Iran’s Supreme Leader Ayatollah Ali Khamenei.

When asked about the Reuters report, Netanyahu told Fox News on Sunday: “There’s so many false reports of conversations that never happened, and I’m not going to get into that.”

“We do what we need to do,” he told Fox’s “Special Report With Bret Baier.”

EU at G7

Although the EU is not officially a G7 member, its representatives attend G7 summits. In Kananaskis, Alberta, on 15 June European Commission President Ursula von der Leyen emphasised the urgent need for global economic stability amid the Israel-Iran conflict and U.S. tariff threats.

Speaking at a joint press conference with European Council President António Costa, she urged U.S. President Donald Trump to halt protectionist measures, stating, “Let’s keep trade fair, predictable, and open. Protectionism hurts us all.” Von der Leyen stressed the G7’s role in sending a unified message to markets, advocating for diplomacy to de-escalate Middle East tensions and prevent oil price spikes.

António Costa, in his remarks, echoed von der Leyen’s call for a “frank discussion” among G7 partners to restore economic predictability. He highlighted the EU’s strategic priority to avoid a trade war with the U.S., noting, “Europe cannot bolster defense capabilities if forced to fight tariffs simultaneously.” Costa underscored the Israel-Iran conflict’s risk of regional escalation, urging G7 leaders to back diplomatic efforts to revive U.S.-Iran nuclear talks.

Israel’s pre-emptive offensive: aiming beyond containment

Israel’s Operation Rising Lion, initiated with a surprise assault on 13 June, decimated Iran’s military command, including IRGC chief Hossein Salami, and damaged nuclear sites like Natanz. Israeli Prime Minister Benjamin Netanyahu’s 14 June appeal to Iranians to overthrow their “oppressive” regime, coupled with strikes on oil and gas facilities like South Pars, suggests ambitions beyond nuclear delay – potentially regime change. Israeli intelligence, cited by The Times of Israel, claimed Iran was weeks from a nuclear breakout, justifying the pre-emptive label.

The IDF’s vow to escalate, with Ambassador Danny Danon pledging to “eliminate” Iran’s nuclear capabilities, signals a prolonged campaign. Yet, targeting civilian infrastructure risks rallying Iranian nationalism, potentially entrenching hardliners rather than sparking rebellion.

Geopolitical and economic risks

The conflict’s escalation threatens global stability. Brent crude rose 1% to $74.94 on 16 June, after a $4 spike, reflecting fears of Iran disrupting the Strait of Hormuz, through which 20% of global oil flows. A blockade could push prices to $120, per Rapidan Energy’s Bob McNally.

Analysts doubt regime change is achievable, given Iran’s IRGC resilience and nationalist backlash from civilian casualties. Richard Bronze of Energy Aspects predicts a “months-long” conflict, with Iran’s missile retaliation and Israel’s ongoing campaign ensuring tit-for-tat escalation absent a diplomatic breakthrough.

As G7 leaders meet, the Israel-Iran conflict tests their ability to forge a unified response. Israel’s pre-emptive strikes, aimed at thwarting Iran’s nuclear ambitions, have sparked a retaliatory cycle threatening regional stability and global markets. Merz’s call for diplomacy contrasts with Trump’s ambivalence, while Iran’s missile strikes and Israel’s escalation signal a conflict far from resolution. With oil prices rising and civilian lives at stake, the G7 must navigate a delicate balance to prevent a wider war, as the Middle East teeters on the brink.

Sources: Reuters, The Times of Israel, Politico, Atlantic Council, edited by g.g.

Caption: President of the European Commission Ursula von der Leyen (L) and President of the European Council António Costa (R) take part in a press conference during the G7 Leaders’ Summit in Kananaskis, Alberta, Canada, 15 June 2025. World leaders are expected to gather in Kananaskis, Alberta from June 15 to 17 for the G7 Summit. [EPA/SPENCER COLBY]