'We have woken up to a new paradigm in the Middle East' following Iran-Israel escalation, analyst says

• Iran's weekend attack on Israeli marks a "new paradigm" in the Middle East conflict, which risks escalating into a wider regional war, Chatham House's Middle East director said Monday.
• Sanam Vakil said that it was a matter of when and not if Israel would respond after its war cabinet vowed on Sunday to "exact a price" against Tehran for its overnight drone attack.
• "I think a confrontation between Israel and Iran — which might be priced into the markets — is certainly coming, it's just a question of when," Vakil told CNBC's Squawk Box.

Iran's weekend attack on Israel marks a "new paradigm" in the Middle East conflict, which risks escalating into a wider regional war, Chatham House's Middle East director said Monday.

Sanam Vakil at the London-based thinktank said it was a matter of when and not if Israel would respond after its war cabinet vowed on Sunday to "exact a price" against Tehran for its overnight aerial assault on the Jewish state.

"The Israeli leadership will have a hard time not responding. They may not do it immediately, but I think a confrontation between Israel and Iran — which might be priced into the markets — is certainly coming, it's just a question of when," Vakil told CNBC's "Squawk Box Europe" Monday.

Iran launched more than 300 drones and missiles against military targets inside Israel on Saturday in response to a suspected Israeli strike that killed top Iranian officials in Syria.

The attack, though well telegraphed in advance, has presented some opportunity for Israel to rehabilitate its image following its months-long onslaught in Gaza, which many perceive as disproportionate to Hamas' Oct. 7 terror attacks.

However, an Israeli counteroffensive risks further escalating tensions between the