The Middle East is undergoing its most dynamic transformation since World War I, when Sir Mark Sykes and Georges Picot first divided the region into colonized spheres of influence. Nearly 100 years later, with the overthrow of Hosni Mubarak in Egypt and Zine El-Abidine Ben Ali in Tunisia, and the ongoing struggle in Yemen, Syria, Libya and Bahrain, all states in the region – or involved in the region – have been forced to reassess their policies and alliances.

These developments have also permanently shattered the frames through which the Middle East was understood – or presented – by various governments. The defining struggle is not between “moderates” and “radicals” – at least not if the definition of “moderate” is an Arab state allied with the U.S. and at virtual peace with Israel. The deposed dictatorships in Cairo and Tunis both fit this false definition of “moderate.” Nor is the struggle between Islamic and secular forces. As R. K. Ramazani points out, the rallying call of protesters across the region has been democracy and dignity, not Islam and Sharia. And to the extent that protests in Bahrain have taken on a sectarian tone, it is arguably due to the efforts of the Al-Khalifa royal family and its Saudi Arabian protector – both considered “moderates” in the old frame.

These recent developments have shocked not only status quo political systems, but also an increasingly intense rivalry for regional influence between Israel, Saudi Arabia and the U.S. on one side, Iran on another, and Turkey as the third vertex in an emerging triangle of competition. Rather than end the rivalry, this shock has changed its context and created both challenges and opportunities for all sides. Regional unrest has demonstrated both the Arab street’s relevance, and its ability to play a decisive role in the region’s future. Thus, if the Arab democracy wave continues unabated, it will not only test status-quo powers investing in an order that suppresses the streets, but also emerging powers that claim to champion them.

This is likely the new fault line in the region – one that will intensify a growing rivalry between U.S.-Israel-Saudi Arabia, Iran and Turkey for dominance in the region, as each vertex in this triangle of competition increasingly positions itself to challenge the others attempt at filling the vacuum left by a declining U.S.-Israeli-Saudi status quo. This rivalry has played out in both hard and soft power arenas, with the latter – the battle for hearts and minds – becoming increasingly important.

The question facing Iran, and by extension its aforementioned rivals, reads: If Iran’s main instrument for achieving regional leadership has been its soft power among the region’s populations – which in turn has been rooted in an anti-American and anti-Israeli posture, and financial and political investment in various political factions across the region – will the recent regional shifts enable the Islamic Republic to exploit Arab street victories? Or will the emergence of a more empowered Arab street undermine the foundation of Iran’s soft power, thereby allowing its rivals to exert greater influence?

A crucial question is how Iran perceives the U.S.-Israeli-Saudi vertex as it struggles to adjust to a region in flux. Tehran has long viewed the Washington-Tel Aviv-Riyadh alliance as a declining power in the region. As such, Iranian government reluctance to negotiate with America has not necessarily been rooted in an ideological opposition to the idea of talking or improving relations with Washington. Instead, hard-liners in Tehran fear that any relationship with the U.S. would require Iranian acquiescence to status quo regional policies, thereby stripping Tehran of its independence and forcing it to follow America’s investment in Arab dictatorships rather than the Arab street. Since its inception, the Islamic Republic has calculated that the Arab street would ultimately overthrow pro-American dictatorships and the Israeli status quo in the region. Iran’s long-term regional security calculation has thus been predicated on championing the Arab street, and rejecting any engagement with Washington designed to rehabilitate Iran as a compliant U.S. ally.

Decision-makers in Tehran now perceive that governments in Israel and Saudi Arabia are faced with severe strategic challenges, and in turn limit American flexibility to address fluid regional upheaval. Over the past year, two of Israel’s foremost regional allies have seen their interests diverge – perhaps irreparably – from that of Tel Aviv. Turkish-Israeli ties have hit an all-time low, and in the view of many analysts, the long-standing alliance cannot be resurrected. Israel has also lost its most senior and strategically important Arab partner – the Mubarak government in Egypt – with no subsequent clarity on how the emerging government in Cairo will frame ties with Tel Aviv. U.S. diplomatic cables released by WikiLeaks revealed the extent of collaboration between Israel and Mubarak’s Egypt’s against Iran.

After protesting U.S. support for revolts in Tunisia and Egypt – and fearing that American “betrayal” could inevitably reach Riyadh – Saudi Arabia drew a line in the sand as the winds of change swept through neighboring Bahrain. The overthrow of a Sunni monarchy on its border – or even the prospect of a power-sharing arrangement – that empowered Shiite communities hit too close to home for decision-makers in Riyadh, who flatly rejected American efforts to negotiate peaceful reform in Bahrain. Instead, Saudi Arabia ignored U.S. pleas and invaded its Sunni minority-led protectorate with the ruling family’s consent, using force to brutally crush the popular uprising there.

Further compounding these challenges facing the U.S.-Israeli-Saudi vertex is an unusual period of tensions between Washington and its allies Tel Aviv and Riyadh, caused by diverging interests. While America has recognized the regional status quo as untenable and struggles to balance its values (democratization) without damaging strategic interests (support for Israel, secure access to energy), Israel and Saudi Arabia view regional developments quite differently.

Martin Kramer of Israel’s conservative Shalem Center put his finger on the central point of contention during the February 2011 Herzliya Conference. Questioning America’s contention that the regional status quo is unsustainable, Kramer was unabashed: “In Israel, we are for the status quo. Not only do we believe the status quo is sustainable, we think it’s the job of the U.S. to sustain it.” Paranoia and defiance in Riyadh is no less palpable. The New York Times has reported that according to an Arab official who was briefed on talks between President Obama and King Abdullah bin Abdulaziz Al-Saud, the Saudi monarch was unwavering: “King Abdullah has been clear that Saudi Arabia will never allow Shia rule in Bahrain – never.”

At present, Iran’s perception of the U.S.-Israeli-Saudi vertex as a declining regional power – incapable of shifting its policies in accordance with a new power distribution – seems to have cemented. Although the proverbial political and economic screws have been tightened through sanctions to increase Iran’s international isolation, the Islamic Republic is paradoxically less isolated regionally. Iran’s measured confidence vis-à-vis the U.S.-Israeli-Saudi vertex is further reinforced by the fall of pro-American dictatorships in Egypt and Tunisia; volatility across the region that has destabilized countless others; empowered pro-Iranian political factions ruling Iraq and Lebanon; and Iran’s indispensible role in any long-term solution to stabilize American national security interests in non-proliferation, terrorism, energy security, Afghanistan, Iraq, and even the Israeli-Palestinian conflict.

From the outset of the Obama administration, decision-makers in Tehran have reiterated that tactical changes in America’s posture were insufficient to realign relations. For the Iranian government, only a strategic shift by Washington – no easy task, given concerted push-back by Israel, Congress and the Saudis – could unlock the U.S.-Iran stalemate. Thus, going forward, Iran will likely prefer to discard the notion of rapprochement with America that Iranian reformists entertained, and instead maintain the strategic objective of hastening Washington’s military exit from the region.

Iranian hardliners seem to seek a “codified rivalry” – one that will enable Iran to continue building soft power on the Arab street by maintaining its role as the region’s premier critic of America and Israel, while ensuring that the rivalry does not spill over into an open military confrontation. Within the context of a codified rivalry, Tehran’s interest in tactical collaboration with Washington may increase as its certainty in the decline of the U.S.-Israeli-Saudi vertex grows. By extension, Iran’s confidence in dealing with the U.S. in a manner that will not lead to Iranian subjugation and loss of independence may increase as well. Short of a strategic shift in U.S. policy, Iran will hedge against relinquishing its anti U.S.-Israeli-Saudi vertex posture, as the Islamic Republic perceives its soft power among the Arab street to require sustained vocal criticism of America and Israel.

As for the Iranian vertex, regional unrest (save Syria) has strengthened it in the short run, but Iran’s ability to profit from the fall of pro-American dictatorships over the long run is uncertain. The decline of the U.S.-Israeli-Saudi vertex – ongoing since the invasion of Iraq, and increasingly evident through region-wide protests – has created a power and leadership vacuum that begs to be filled. Although Iran has long cherished this moment, it is not the only contender, and both its makeup and its example could prove to be insurmountable obstacles. As the only majority Shiite, Persian state in a region dominated by Sunnis and/or Arabs, Iran has historically suffered from an acute sense of strategic loneliness – it has no obvious regional allies, and its experience with extra-regional superpowers has left Iranian decision-makers convinced that they can only rely on self-sufficiency for security. The notion that Iran is destined to be first among equals – primus inter pares – in regional decision-making is deeply ingrained in its identity, regardless of its politicians or system of governance. Paradoxically, Iran is the odd man out in a region that it nevertheless seeks to lead.

Modern history has taught Iran that hard power alone will not facilitate regional leadership. Even though Tehran’s Arab neighbors recognized Iranian military superiority in the 1970s, the late Shah understood that he could neither obtain nor maintain a position of preeminence in the Persian Gulf through arms and oil alone; Iran needed to be seen as a legitimate power in the eyes of the Arab street as well. The Shah also realized that Iran could not forever treat the Arabs as enemies and balance them through Iranian military preponderance. Not only was a more conciliatory policy necessary to gain legitimacy for Iran’s domination; befriending the Arabs most efficiently guaranteed Iran’s long-term security as well. By the mid-1970s, Iran was at its peak. It had befriended Egypt, neutralized Iraq, quadrupled its oil income and established its regional preeminence. Yet, the Shah never managed to bridge the Sunni-Shiite and the Persian-Arab divide. To achieve that, soft power was needed, of which the Shah’s Iran was in short supply.

The Iranian revolutionaries who took power in 1979 recognized this and sought to bridge the divide with Arabs through the ideology of political Islam. Though this strategy has been abysmally unsuccessful with ruling Arab elites – they feared the ideological force of the clerics more than the military force of the Shah – Iran’s brand of political Islam and anti-imperialist posture has won it coveted soft power on the Arab street.As such, Iran’s claim for regional leadership is not based on military superiority, but rather its political and financial investment in various regional movements and its ability to exploit the frustration of the Arab street over perceived injustices in the region – both regional political issues such as the Israeli-Palestinian conflict, and domestic political issues.

If the notion of soft power is of central importance to Iran, then arguably the greatest challenge it will face going forward is the emergence of a new foreign policy orientation in the region by states that traditionally have followed America’s lead. The rise of an increasingly robust Turkish vertex has been predicated on this principle, and its impact is evident – Prime Minister Recep Tayyip Erdogan is one of only two world leaders to poll higher than Iranian President Mahmoud Ahmadinejad on the Arab street. Despite growing economic and political cooperation, competition over regional clout may test Turkish-Iranian ties, as both sides seek to fill the vacuum left by a perceived regional decline of the U.S.-Israeli-Saudi vertex. Thus, as unrest on the Arab street remains fluid, the balance of competition and collaboration between Turkey and Iran may tilt towards the former.

Both Ankara and Tehran seek the reputation of preeminent regional arbiter, but stylistic differences in soft power are clear. In contrast to Iran’s approach of exploiting Arab frustration over perceived regional injustices and utilizing political proxies from Beirut to Baghdad, the Turkish approach employs trade, investment, and a consistent emphasis on diplomacy and international integration. Ankara’s more appealing soft power strategy vis-à-vis the Arab street therefore serves Turkish national interest by securing new markets for the country’s growing economy without compromising the Islamic sentiment of the ruling Justice and Development Party’s political base. It also provides Turkish decision-makers with greater flexibility to use both backroom diplomacy and megaphone diplomacy – depending on the circumstance – in support of the Arab street push for peaceful democratic transitions.

Unsurprisingly, Iranian decision-makers have been somewhat irritated by Ankara’s ability to “hijack” the anti-status quo mantle from Tehran. In addition to Turkey’s more balanced soft power projection, Prime Minister Erdogan’s public criticisms of Tel Aviv – as well as concrete Turkish efforts to put Israel on the defensive – have won the Turks strong admiration on the Arab street. One observer in Tehran quipped that Iran had done all the groundwork “in the resistance against Israel,” and at the last minute, the Turks stole the show. Turkey’s comprehensive soft power in the region – including cultural affinity, economic ties, and a balanced approach towards Israel – may present Iran with a major challenge in any future competition for leadership in the region. If Turkey’s new assertive foreign policy continues to challenge the U.S.-Israeli-Saudi vertex, then the uniqueness of Iran’s regional position – and its source of soft power – may be at risk.

Although Turkey’s brand of Islamic democracy and its “zero problems” regional policies provide an appealing model for the Arab street, it remains to be seen whether Ankara’s soft power strategy is transferrable beyond the status quo. As regional unrest has demonstrated, Turkey prefers solutions that play to its strengths (diplomacy, business) rather than the strengths of the U.S.-Israeli-Saudi vertex (military superiority, maintaining status quo) or Iranian vertex (political proxies, championing disenfranchised). Turkey was one of the first country’s to call for Hosni Mubarak’s resignation, but it urged dialogue and restraint in dealing with a recalcitrant Muammar Gadhafi. While understandable from a geopolitical perspective, this does open Ankara to criticisms of hypocrisy, and it remains unclear how perceived Turkish double standards will play on the Arab street. Going forward, the Turkish vertex will face an increasingly difficult challenge of balancing its interests with its values.

While Iran has longed for the post-American era in the Middle East, this may paradoxically present a more arduous challenge than Tehran originally anticipated. Despite showing significant ideological flexibility in the past, Iran’s ability to adjust to new realities over the long term seems limited. In the short to medium term, however, regional unrest puts Iran’s adversaries – from the U.S. to Israel to Saudi Arabia – on the defensive, and plays to one of Iran’s demonstrated strengths: the ability to exploit instability and divisions. After revolution, isolation and eight years of war, the Iranian government has an inclination for disorder, and will seek to leverage new working relationships with the Arab street that capitalize on the declining U.S.-Israeli-Saudi status quo.

The triangle of competition for regional influence between the U.S., Israel and Saudi Arabia, Iran, and Turkey represents three distinct vertices, each with its own vision for the region’s future. Winning the Arab street – and by extension, regional dominance – will require soft power projection that advances aspirations for political, economic and social freedoms. The U.S.-Israeli-Saudi vertex has so far lacked the ability to adapt to fast-paced changes, but still maintains enough military and economic clout to decelerate changes that many nevertheless consider inevitable. The Turkish vertex provides a compelling political and economic model for the Arab street, but Ankara’s emerging power status will increasingly force it to balance – and in more complex scenarios, choose between – interests and values. Success for the Iranian vertex does not require the same level of certitude or stability as its rivals, and it therefore stands to benefit most from a measurable degree of continued unrest on the Arab street for the foreseeable future – arguably the most likely scenario in the offing.

The Iran In-Depth Series is supported by the Rockefeller Brothers Fund, the Ploughshares Fund and the Norwegian Foreign Ministry. This article first appeared in the Cairo Review of Global Affairs.

Trita Parsi is president of the National Iranian American Council. Reza Marashi is director of research at the National Iranian American Council and a former Iran desk officer at the U.S. Department of State. This article is partly based on a presentation given by Parsi at the University of Virginia on April 1, 2011.