The U.S. and Israel launched a wave of strikes on Iran early Saturday, just over a day after the latest round of U.S.-Iran nuclear negotiations in Geneva had ended without a breakthrough. Iran responded within hours by firing missiles at U.S. military bases around the region as well as at Israeli targets, while its allied militias in Iraq and Yemen moved to escalate attacks of their own, pushing the Middle East to the brink of a wider war.
Those militias’ rapid mobilizations on Iran’s behalf were decades in the making. The Islamic Republic has in part built its national defense around its constellation of such armed proxy groups stretching from Lebanon to Iraq to Yemen—groups that serve as both a deterrent and, when Iran needs, a weapon.
President Trump acknowledged their threat directly in a video posted to Truth Social on Saturday. “We are going to ensure that the region’s terrorist proxies can no longer destabilize the region or the world and attack our forces,” he said, describing the strikes as aimed at destroying Iran’s capacity to acquire a nuclear weapon and calling for regime change.
Those militias’ rapid mobilizations on Iran’s behalf were decades in the making. The Islamic Republic has in part built its national defense around its constellation of such armed proxy groups stretching from Lebanon to Iraq to Yemen—groups that serve as both a deterrent and, when Iran needs, a weapon.
President Trump acknowledged their threat directly in a video posted to Truth Social on Saturday. “We are going to ensure that the region’s terrorist proxies can no longer destabilize the region or the world and attack our forces,” he said, describing the strikes as aimed at destroying Iran’s capacity to acquire a nuclear weapon and calling for regime change.
Left: President Trump addresses combat operations in Iran, in a video posted to Truth Social. Right: Smoke rises after Iran carried out a retaliatory missile strike Saturday on the main headquarters of the U.S. Navy’s 5th Fleet in Manama, Bahrain. (Photo by Stringer/Anadolu via Getty Images)
The stakes had been visible for days. Last week, as the U.S. surged forces to the Middle East, the State Department ordered all non-emergency U.S. government personnel out of the embassy in Beirut and authorized the departure of personnel from Mission Israel.
U.S. and European security officials had been monitoring indicators suggesting that, if ordered by Tehran, proxy groups could launch retaliatory attacks against specific American targets in Europe and the Middle East, the New York Times reported.
Now, those concerns appear to be materializing. Kata'ib Hizballah, the most powerful Iran-allied militia in Iraq, announced Saturday that it would “soon begin attacking American bases” after strikes hit one of its strongholds. And the Houthis in Yemen announced they would resume missile and drone attacks on Western shipping and on Israel.
Iran’s most prominent proxy groups all have targeted U.S. interests before. Here’s how they operate—and what U.S. intelligence and Kharon research show about how their illicit funding flows.
U.S. and European security officials had been monitoring indicators suggesting that, if ordered by Tehran, proxy groups could launch retaliatory attacks against specific American targets in Europe and the Middle East, the New York Times reported.
Now, those concerns appear to be materializing. Kata'ib Hizballah, the most powerful Iran-allied militia in Iraq, announced Saturday that it would “soon begin attacking American bases” after strikes hit one of its strongholds. And the Houthis in Yemen announced they would resume missile and drone attacks on Western shipping and on Israel.
Iran’s most prominent proxy groups all have targeted U.S. interests before. Here’s how they operate—and what U.S. intelligence and Kharon research show about how their illicit funding flows.
Hizballah: ‘Degraded’ but Not Dormant
A crowd in Beirut watches a speech by Hizballah Secretary General Naim Qassem in January, at a solidarity event with Iran’s leader Ali Khamenei and the Iranian people. (Fadel Itani/NurPhoto via Getty Images)
Hizballah has been Iran’s most strategically valuable proxy for four decades.
Since 2024, Israel’s military campaign in southern Lebanon has dismantled Hizballah’s senior leadership, killed longtime chief Hassan Nasrallah and laid waste to its military infrastructure. Even so, the Office of the Director of National Intelligence’s (ODNI) Annual Threat Assessment for 2025 describes Hizballah as simply “degraded.”
“Although weakened, Hizballah maintains the capability to target U.S. persons and interests in the region, worldwide, and — to a lesser extent — in the United States,” the report said.
What they’ve said: Hizballah had underscored its solidarity with Iran before the U.S. strikes. The group’s new secretary general, Naim Qassem, said in a Jan. 26 speech that it was “religiously and ideologically duty-bound” not to remain neutral if the U.S. attacked Iran or its assets—vowing that Hizballah reserved “every right” to “take all necessary measures” and “do whatever we deem appropriate.” (Another Hizballah official appeared to walk back that hard line this week.)
The U.S. appears to have taken the group’s threat seriously. Last week, the State Department orderedthe departure of all non-emergency U.S. government personnel from the U.S. Embassy in Beirut, a longtime Hizballah target.
In March of last year, the Treasury Department sanctioned five individuals and three companies in a Lebanon-based sanctions-evasion network. The Hizballah finance team, Treasury said, manages commercial projects and oil-smuggling networks, “often in conjunction with Iran’s IRGC-Qods Force,” using front companies to generate millions in revenue.
From Kharon’s research: Hizballah’s military capabilities may be degraded, but its financial and social networks remain resilient.
One example is the Wa Tawanou Association, in Lebanon. According to an interview with its president on Hizbollah-affiliated Al Mayadeen TV, Wa Tawanou was founded in 2019 in response to a call by then-Hizballah leader Hassan Nasrallah for more charitable efforts to support the group’s field activities. While it claims to operate independently, Wa Tawanou has said in posts on X that it partnered through at least 2025 with Iran-based organizations to distribute aid in Lebanon; among them is the Iran Hamdel Association, whose director works for Iran’s office that glorifies the speeches and works of Iran Supreme Leader Ayatollah Ali Khamenei.
The charity also appears to have collaborated with Hizballah directly. It has promoted on its Facebook account two bank accounts under the name “Al-Qard, one in April 2023 and another this past October. That appears to be a reference to the Al-Qard Al-Hassan Association, a financial institution the Treasury Department sanctioned back in 2007, describing it as a cover that Hizballah uses “to manage its financial activity.”
Since 2024, Israel’s military campaign in southern Lebanon has dismantled Hizballah’s senior leadership, killed longtime chief Hassan Nasrallah and laid waste to its military infrastructure. Even so, the Office of the Director of National Intelligence’s (ODNI) Annual Threat Assessment for 2025 describes Hizballah as simply “degraded.”
“Although weakened, Hizballah maintains the capability to target U.S. persons and interests in the region, worldwide, and — to a lesser extent — in the United States,” the report said.
What they’ve said: Hizballah had underscored its solidarity with Iran before the U.S. strikes. The group’s new secretary general, Naim Qassem, said in a Jan. 26 speech that it was “religiously and ideologically duty-bound” not to remain neutral if the U.S. attacked Iran or its assets—vowing that Hizballah reserved “every right” to “take all necessary measures” and “do whatever we deem appropriate.” (Another Hizballah official appeared to walk back that hard line this week.)
The U.S. appears to have taken the group’s threat seriously. Last week, the State Department orderedthe departure of all non-emergency U.S. government personnel from the U.S. Embassy in Beirut, a longtime Hizballah target.
- The U.S. blames Hizballah for the infamous 1983 bombing of its embassy that killed 63 people, including 17 Americans, though an affiliate Shia militia group at the time claimed responsibility. Hizballah then bombed the annex of the embassy’s new Beirut location the following year.
In March of last year, the Treasury Department sanctioned five individuals and three companies in a Lebanon-based sanctions-evasion network. The Hizballah finance team, Treasury said, manages commercial projects and oil-smuggling networks, “often in conjunction with Iran’s IRGC-Qods Force,” using front companies to generate millions in revenue.
From Kharon’s research: Hizballah’s military capabilities may be degraded, but its financial and social networks remain resilient.
One example is the Wa Tawanou Association, in Lebanon. According to an interview with its president on Hizbollah-affiliated Al Mayadeen TV, Wa Tawanou was founded in 2019 in response to a call by then-Hizballah leader Hassan Nasrallah for more charitable efforts to support the group’s field activities. While it claims to operate independently, Wa Tawanou has said in posts on X that it partnered through at least 2025 with Iran-based organizations to distribute aid in Lebanon; among them is the Iran Hamdel Association, whose director works for Iran’s office that glorifies the speeches and works of Iran Supreme Leader Ayatollah Ali Khamenei.
The charity also appears to have collaborated with Hizballah directly. It has promoted on its Facebook account two bank accounts under the name “Al-Qard, one in April 2023 and another this past October. That appears to be a reference to the Al-Qard Al-Hassan Association, a financial institution the Treasury Department sanctioned back in 2007, describing it as a cover that Hizballah uses “to manage its financial activity.”
- More recently: The U.S. sanctioned senior members of Al-Qard just last July.
The Houthis: Ship strikes and oil money
A screengrab from a Houthi-provided video shows the targeting of the Magic Seas, a Liberian-flagged and Greek-operated commercial vessel, last July. (Handout photo by Houthi Media Center/Getty Images)
The Houthi insurgency controls Yemen’s coast along the Red Sea, a critical shipping lane for global commerce that connects the Indian Ocean and Middle East to Europe via the Suez Canal. Houthi missile strikes on hundreds of vessels since 2023 have turned it into a gauntlet, leading some major international shipping companies to reroute an extra 4,000 miles around Africa rather than risk it.
For the U.S., such strikes make the possible threat that the designated terrorist group poses a known quantity. But that doesn’t mean it’s an easily repelled one: Last March, the Trump administration conducted retaliatory strikes against the Houthis, reportedly with limited success.
Iran’s role: Supplying training, arms and oil.
“U.S. officials have described Iran’s efforts to supply the Houthis with weaponry, targeting information, and military advice,” the Congressional Research Service wrote in a report on the Houthis last week. In one representative case, the Treasury Department sanctioned five Iranian individuals “with links to Iran’s ballistic missile program” in 2018 for providing the Houthis with missiles and “related technical expertise.”
Then, in a designation last month, Treasury claimed that Tehran “both sells and provides a free monthly shipment of oil to the Houthis using Iranian-owned or affiliated companies based in Dubai.” That would probably make up a sizable chunk of the more than $2 billion in annual oil revenue, by U.S. estimates, that underpins the Houthis’ operations.
How the money flows: Through exchanges and front companies based both in Yemen and abroad. The Houthis pay for their Iranian oil, Treasury said, “by sending money to UAE-based exchanges … via exchange companies in Sana’a.” They then sell that oil to Yemenis at “exorbitant rates.”
The group pays for weapons, meanwhile, through Yemeni outfits, most prominently the Houthi-affiliated (and now U.S.-sanctioned) Al-Ridhwan Exchange and Transfer Company, in Sana’a. The U.S. said Houthi leaders have used Al-Ridhwan to facilitate “numerous payments to Houthi-owned accounts outside Yemen for missile components, advanced weapon systems, and other military-grade materials.”
From Kharon’s research: Digital platforms give these Houthi-affiliated exchanges—and, by extension, the Houthis’ funding efforts—international reach.
Coin Cash is a Yemen-based entity offering crypto-fiat and fiat-crypto conversion, as well as money transfer services to get funds into and out of Yemen. According to its website, its “most common” cryptocurrency “partners” are Binance, the world’s largest crypto exchange, and Dubai-based Bybit.
The Iran-aligned militias have attacked U.S. forces in Iraq and Syria dating to 2017, and Washington has responded periodically with airstrikes. The start of the Israel-Hamas conflict in 2023 accelerated that.
Since then, these groups—operating under the banner of the Islamic Resistance of Iraq—have conducted more than 150 attacks against U.S. forces in the region, according to ODNI. The U.S. has now designated six Iraqi militia groups as Foreign Terrorist Organizations, including four just last September.
“Iran continues to provide support that enables these militias to plan, facilitate, or directly carry out attacks across Iraq,” the State Department said then. “Iran-aligned militia groups have conducted attacks on the U.S. Embassy in Baghdad and bases hosting U.S. and Coalition forces, typically using front names or proxy groups to obfuscate their involvement.”
Below are three key players.
Kata’ib Hizballah (KH): Washington first designated this group, the one that had told the Times it would “soon begin attacking American bases,” as a terrorist organization in 2009. U.S. intelligence most recently estimated it at 7,000 to 10,000 fighters.
KH operates with direct IRGC Qods Force support, including personnel training, according to the Treasury Department; Treasury said in 2024 that the group in turn plays “a prominent role” in laundering money for the Iranian military unit. According to ODNI, Kata’ib Hizballah backed the closely Iran-allied Assad regime in Syria’s civil war, “closely collaborated with Lebanese Hizballah” and “has engaged with” the Houthis.
In January 2024, the group struck a U.S. airbase in western Iraq with rockets and ballistic missiles, leaving four American service members with traumatic brain injuries,officials said.
It is a leading member of the Islamic Resistance in Iraq (IRI), the umbrella front that coordinates Iran’s militia network in the country. Three weeks after the Oct. 7 attacks, a HAN front group claimed a drone attack on Bashur Airbase in Iraq targeting U.S. forces.
Harakat Ansar Allah al-Awfiya (HAAA): In January 2024, a drone struck Tower 22, a U.S. base in Jordan, killing three U.S. soldiers and injuring 47 others—the first time that American troops had been killed in the region since the Gaza war began.
HAAA was part of the IRI coalition that carried out that strike. According to the State Department, it has “since publicly threatened to continue attacking U.S. interests in the region.”
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For the U.S., such strikes make the possible threat that the designated terrorist group poses a known quantity. But that doesn’t mean it’s an easily repelled one: Last March, the Trump administration conducted retaliatory strikes against the Houthis, reportedly with limited success.
Iran’s role: Supplying training, arms and oil.
“U.S. officials have described Iran’s efforts to supply the Houthis with weaponry, targeting information, and military advice,” the Congressional Research Service wrote in a report on the Houthis last week. In one representative case, the Treasury Department sanctioned five Iranian individuals “with links to Iran’s ballistic missile program” in 2018 for providing the Houthis with missiles and “related technical expertise.”
Then, in a designation last month, Treasury claimed that Tehran “both sells and provides a free monthly shipment of oil to the Houthis using Iranian-owned or affiliated companies based in Dubai.” That would probably make up a sizable chunk of the more than $2 billion in annual oil revenue, by U.S. estimates, that underpins the Houthis’ operations.
How the money flows: Through exchanges and front companies based both in Yemen and abroad. The Houthis pay for their Iranian oil, Treasury said, “by sending money to UAE-based exchanges … via exchange companies in Sana’a.” They then sell that oil to Yemenis at “exorbitant rates.”
The group pays for weapons, meanwhile, through Yemeni outfits, most prominently the Houthi-affiliated (and now U.S.-sanctioned) Al-Ridhwan Exchange and Transfer Company, in Sana’a. The U.S. said Houthi leaders have used Al-Ridhwan to facilitate “numerous payments to Houthi-owned accounts outside Yemen for missile components, advanced weapon systems, and other military-grade materials.”
From Kharon’s research: Digital platforms give these Houthi-affiliated exchanges—and, by extension, the Houthis’ funding efforts—international reach.
Coin Cash is a Yemen-based entity offering crypto-fiat and fiat-crypto conversion, as well as money transfer services to get funds into and out of Yemen. According to its website, its “most common” cryptocurrency “partners” are Binance, the world’s largest crypto exchange, and Dubai-based Bybit.
- An archived 2023 version of its website reviewed by Kharon had listed another notable partner: the Sana’a-based Al Hazmi Exchange Company, which the U.S. sanctioned in December 2024 for facilitating money laundering on the Houthis’ behalf.
Iraqi Militias: Mounting attacks since Oct. 7
Tehran spent years cultivating Shia militant groups in Iraq that gained their combat credentials fighting the Islamic State. They’ve since parlayed that battlefield experience into something more durable: seats in Iraq’s parliament, command of tens of thousands of fighters and direct lines to the IRGC Qods Force.The Iran-aligned militias have attacked U.S. forces in Iraq and Syria dating to 2017, and Washington has responded periodically with airstrikes. The start of the Israel-Hamas conflict in 2023 accelerated that.
Since then, these groups—operating under the banner of the Islamic Resistance of Iraq—have conducted more than 150 attacks against U.S. forces in the region, according to ODNI. The U.S. has now designated six Iraqi militia groups as Foreign Terrorist Organizations, including four just last September.
“Iran continues to provide support that enables these militias to plan, facilitate, or directly carry out attacks across Iraq,” the State Department said then. “Iran-aligned militia groups have conducted attacks on the U.S. Embassy in Baghdad and bases hosting U.S. and Coalition forces, typically using front names or proxy groups to obfuscate their involvement.”
Below are three key players.
Kata’ib Hizballah (KH): Washington first designated this group, the one that had told the Times it would “soon begin attacking American bases,” as a terrorist organization in 2009. U.S. intelligence most recently estimated it at 7,000 to 10,000 fighters.
KH operates with direct IRGC Qods Force support, including personnel training, according to the Treasury Department; Treasury said in 2024 that the group in turn plays “a prominent role” in laundering money for the Iranian military unit. According to ODNI, Kata’ib Hizballah backed the closely Iran-allied Assad regime in Syria’s civil war, “closely collaborated with Lebanese Hizballah” and “has engaged with” the Houthis.
In January 2024, the group struck a U.S. airbase in western Iraq with rockets and ballistic missiles, leaving four American service members with traumatic brain injuries,officials said.
- From Kharon’s research: Like other Iranian proxies, KH celebrated Hamas’s Oct. 7, 2023, attacks on Israel and solicited funds thereafter, purportedly for humanitarian purposes. The week after the war began, the militia’s Iraq-based media channel, Kaf Media, shared a campaign collecting donations via Mastercard and a Jordanian money service provider.
It is a leading member of the Islamic Resistance in Iraq (IRI), the umbrella front that coordinates Iran’s militia network in the country. Three weeks after the Oct. 7 attacks, a HAN front group claimed a drone attack on Bashur Airbase in Iraq targeting U.S. forces.
Harakat Ansar Allah al-Awfiya (HAAA): In January 2024, a drone struck Tower 22, a U.S. base in Jordan, killing three U.S. soldiers and injuring 47 others—the first time that American troops had been killed in the region since the Gaza war began.
HAAA was part of the IRI coalition that carried out that strike. According to the State Department, it has “since publicly threatened to continue attacking U.S. interests in the region.”
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