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They keep proxy organizations in every failed or quasi state in the region such as Palestine, Lebanon, Iraq, Syria and Yemen.

As these are non-state actors using civilian infrastructure, the international legal order cannot handle these, as they are not party to any law. Therefore when a western aligned country needs to fight these they are in an extreme disadvantage. Any real attack will kill the civilians whose infrastructure said organizations are providing and misusing, eventually pressured to stop retaliating. This was used by Iran in Saudis/UAE vs Houthis, Israel vs Lebanon/Hamas or US vs Iraq.

The approach of having a full fledged state yet declaring it is not a state gave them invisibility, allowing these organizations to grow in strength. Due to their extreme ideology and brinkmanship, ironically this still means someone will need to fight these eventually (see Hamas, Hezbollah, Houthis), but in a much greater civilian loss than when was possible previously.

Later on, Iran improved this strategy by creating an alliance of these organizations. They train each other and have planned to fight together in the case of war (partially successful in the last conflict). Currently, they are on the verge of losing two such proxies (Hamas, PIJ) and are in the risk of another one (Hezbollah), and that's why Iran is trying to exert pressure on western countries through attacking civilian shipping.