The US could unleash vastly superior firepower if it attacked Iran but Teheran could strike back against its forces in Iraq and threaten oil supplies crucial to the world economy.
Speculation is growing that US President George W. Bush could launch military action before he leaves office in January 2009 even though Washington says it is committed to resolving the crisis over Iran's disputed atomic ambitions diplomatically.
"It should be a walkover militarily," said London-based defense analyst Andrew Brookes about any US attempt to knock out the Islamic Republic's atomic installations.
"The hard bit is what comes afterwards and that is opening Pandora's box," said Brookes of the International Institute for Strategic Studies (IISS).
Western powers suspect Iran is seeking to build atom bombs. Iran says its nuclear program is aimed at generating electricity.
A former Iranian official with links to the country's highest authority, Supreme Leader Ayatollah Ali Khamenei, suggested Teheran would respond by using allies in the region to take the fight elsewhere in the Middle East.
"If they want to play games with us, I believe in a few ways we can turn Iraq into a fiery battlefield," he said.
Security experts voiced different opinions about the strength of Iran's armed forces in a showdown with the US. Iran's military, under an arms embargo imposed by Washington, still partly relies on fighter aircraft and hardware bought before the 1979 Islamic revolution that toppled the US-backed shah, topped up with domestically produced equipment as well as imports mainly from Russia.
A Western diplomat said Iranian leaders were confident US aerial bombardment would not threaten their hold on power.
"A bombing campaign has never removed a government and especially not in a country like this when there is no organized opposition," the Teheran-based diplomat said.
Iran's confidence has grown as it watched the US' failure to get a grip on Iraq despite its overwhelming military supremacy. Iran says it has missiles that could hit Israel and other state-of-the-art weaponry and that the West would regret any attack, warning of a "quagmire deeper than Iraq".
Some analysts say Iran could retaliate by, for example, using speed boats to launch guerrilla-style hit-and-run attacks on oil shipping, so-called 'asymmetric' warfare.
Iran, blamed for bomb attacks carried out by Shi'ite militants against US interests in Beirut in the 1980s, could also resort to its old tactics, some add. An Iranian commander last week said "martyrdom-seeking" militia would be able to disrupt Gulf transport routes.
"Iran cannot win a military campaign in a conventional sense but what it can do is cause considerable amount of grief afterwards," Brookes said.
This line of thinking was reflected in a commentary in Iranian daily Siyasat-e Ruz which said the elite Revolutionary Guards had held exercises in the "strategy of irregular combat".
"We are confident ... Iranians will do everything that they can do," said Iranian analyst Abbas Maleki.