We ask if Tehran's missile tests and threats to close a vital oil route mark a new chapter in the Iran-US standoff.
It was a show of might that could serve to test the West's patience. Iran said it has successfully test-fired two long-range missiles during military exercises in the Gulf.
"The beneficiary of any direct military campaign against Iran will be Israel. Iran might pose a threat technically and theoretically to Israel, but this is a very distant scenario. I don't see a war taking place against the 'west' but I see it [tensions] escalating."
- Mohammad Marandi, professor of American Studies, Tehran University
Just a day earlier, Barack Obama, the US president, signed a law imposing tougher financial sanctions to penalise Iran for its nuclear research programme.
Iran responded by threatening to halt oil shipments through the Strait of Hormuz – a narrow shipping passage through which one-sixth of the world's oil supply passes – a move the US has made clear it will "not tolerate".
So, is this more sabre rattling? And what chance has diplomacy in diffusing the tension?
Inside Story, with presenter Hazem Sika, discusses with guests: Mohammad Marandi, a professor of American Studies at Tehran University and a Visiting Fellow at the American University of Beirut; Hussein Shobokshi, a columnist with the Saudi-owned Asharq Al-Awsat newspaper; and David Roberts, the deputy director of the Royal United Services Institute.