The story: Supreme Leader Ayatollah Ali Khamenei has refrained from adopting an explicit position on whether, and how, Iran should respond to Israel’s Oct. 26 attack. Instead, he has seemingly delegated next steps to civilian and military leaders. Factional competition is thus now apparently heating up again, particularly against the backdrop of leadership succession.

One camp seems to see an opportunity to avert all-out war by engaging with the west to calm tensions. But another group appears intent on hitting Israel back hard, even as it may risk further escalation. Ultimately, the bigger...