Iran and the United States are now at a "de facto state of war" after missiles rained down on American military bases in Iraq, says an international relations expert.
The unambiguous strike by Tehran today, in response to the assassination of general Qassam Soleimani in a targeted US drone strike, may now lead to a "bloody" regional conflict, Alexander Gillespie told the Herald.
The international law professor at the University of Waikato said: "Iran is calling President [Donald] Trump's bluff."
Gillespie said the strikes were also a "really difficult issue" for the New Zealand Government.
There are 45 Defence Force (NZDF) personnel stationed at Camp Taji in Iraq, where they have trained Iraqi soldiers to fight Islamic State since 2015.
Five more NZDF personnel are based in Baghdad.
Gillespie said if the Kiwi Government withdraws from Taji then "it's not going to look good for our relationship with America".
"In an ideal world you don't cut and run because you've got the integrity of your country, you've made a deal with a Iraq and America.
"The risk is that if this war goes sideways very quickly, and that's quite possible in the next 24 hours, that our troops are underneath an arm of a country which is involved in a war which we did not sign up for."
Gillespie said New Zealand "could be pulled directly into that conflict".
But security analyst Paul Buchanan said it appeared the US-Coalition was already beginning to fray at the edges after Germany's partial withdrawal from Iraq.
He said the risks of New Zealand pulling out were low.
"It's not as if [New Zealand is] cutting and running. A bigger country, a middle power has already said 'this is not worth it'," Buchanan said.
"If they've suspended the training what's the point of being there? ... Quite frankly, I don't think it's going to impact our relationship with the United States one iota whether they stay or pull out. They just become targets."
The next 24 hours, and how the US reacted, would determine New Zealand's response, Buchanan said.
Camp Taji, an American base, would also become a target for militias if the situation continued to escalate, he added.
There were earlier unconfirmed reports that Iran's ballistic missiles had targeted the camp today.
Iranian state TV described the attacks on US-occupied bases at the Assad Air Base and a camp at Erbik as a revenge operation for the killing of Soleimani, the leader of Iran's Revolutionary Guard.
Gillespie said: "Trump has obviously misread the situation."
"He assumes that he could do an outrageous provocation on Iran and they would not strike back ... He's obviously wrong about that.
"The response by Iran is interesting because most people expected that they were going to use indirect proxies or surrogates to cause trouble in the region.
"There's no ambiguity, this is Iran now calling Trump's bluff, 'if you want a war, we'll give you a war'."
Iran was "trying to keep the war at this stage contained", Gillespie said, but the question now is how will Trump respond.
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There was speculation that Trump would make a speech about the strikes.
But after a meeting at the White House, likely including US Secretary of State Mike Pompeo, Defense Secretary Mark Esper, and Vice President Mike Pence, he turned to Twitter.
"All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning," Trump's tweet read.
Gillespie said Trump has three options.
"Trump does nothing ... I think that's unlikely, there's probably American blood on the ground now and he's backed himself into a corner ... and if he doesn't do something he's going to look weak."
He could "strike back in a proportionate manner" with a missile attack at two Iranian military bases, which Gillespie called the "best-case scenario".
But the US president might not do that and target the "menu of 52 sites" he has talked about previously.
Trump has earlier signalled his administration had already targeted 52 sites to hit if Iran retaliated, "some at a very high level & important to Iran & the Iranian culture."
"If he goes beyond the proportionate response then the war starts. I don't think he's going to turn the other cheek," Gillespie said.
Iran's use of missiles rather than a rocket attack or through a proxy was designed to show they ability to accurately hit strategic targets.
"They're trying to show that we are not a weak third-world country."
Other potential targets for Iranian strikes, Gillespie said, were US troops concentrated in Qatar and Kuwait.
Tehran has also earlier issued a counter threat to target America itself.
"The chances of a peaceful exit are looking more remote by the hour," Gillespie said.
"It is a de facto state of war ... There's been no shortage of triggers. But this is the most unambiguous act so far, this is the military striking the military."
Buchanan thought Iran was "trying to sucker the Americans into a quagmire".
"Into a protracted conflict they will not win. There will be no decisive victory, but there will be a lot of blood-letting.
"If the US response is calibrated and if it doesn't escalate things dramatically, it stays proportional then we may be able to get some sort of stand-off and major conflict will be averted. But if the Americans respond out of proportion, then we have the makings of a major conflict.
Buchanan said the US had nothing to gain with the initial strike.
"This was Trump. Trump wanted to bully the Iranians," he said.
"Let's hope that calm heads prevail … but if they decide they have to be the guy with the biggest balls on the block ... then we have the makings of a serious escalation."
Gillespie said people also needed to keep today's events in context.
"This is not the third world war," he said. "Russia and China will not come in on the part of Iran. They will happily sell them weapons until the cows come home but they're not going to get involved.
"This could be a regional conflict, it could be quite bloody, but it's not going to be a cataclysmic global event."