Iran Update, October 20, 2026

 OCTOBER 20, 2026

The Institute for the Study of War (ISW) and The Critical Threats Project (CTP) at the American Enterprise Institute are publishing updates Monday through Friday to provide analysis on the war with Iran and the broader Middle East. Weekday updates cover events from the past 24-hour period, whereas weekend updates are abbreviated and cover the Houthi-Saudi conflict and major breaking developments related to the war with Iran.

Data Cutoff: 2:00 PM ET

Researchers

• William Doran: Middle East Researcher

• Parker Hempel: Middle East Researcher

• Katherine Wells: CTP Iran Analyst

• Bailey Pasternak: Middle East Researcher

• Benjamin Schmida: Middle East Researcher

• Brian Carter: CTP Research Manager

Key Takeaways

1. Yemen - Houthi and Yemeni government-aligned forces are likely continuing to contest control over Jabal Han, which overlooks western Taiz City.

2. Yemen - The Houthis likely fired several ballistic missiles targeting Marib City on October 19 as part of a campaign to render Yemeni government-aligned forces unwilling or unable to sustain its counteroffensives in Marib Governorate.

Toplines

Houthi and Yemeni Forces in Taiz

Houthi and Yemeni government-aligned forces are likely continuing to contest control over Jabal Han, which overlooks western Taiz City.[1] The Houthis claimed that Houthi forces controlled all of the Jabal Han area on October 20, but an independent Yemeni journalist reported that both Houthi and Yemeni government-aligned forces occupy positions on the mountain.[2] Neither Houthi nor Yemeni government-aligned forces control Jabal Han's summit as of October 20, according to the journalist.[3]

The Houthis posted footage on October 20, showing Houthi fighters at several geolocated positions on Jabal Han, which is a mountain on the edge of western Taiz City; the date of the footage is unclear.[4] The Houthis have recently posted old footage while claiming control over heavily contested combat areas, such as Dhubab Airport on the Red Sea coastal plain.[5] Yemeni government-aligned forces also claimed on October 20 that they repelled a Houthi ground assault on Jabal Han.[6]

Jabal Han is of considerable military value to the Houthis in their campaign to capture Taiz City because it allows observation of most of the city.[7] The Houthis could position fighters on Jabal Han to observe Yemeni government-aligned forces' movements and positions in combat areas, along key roadways, and within urban neighborhoods in the vicinity. Houthi fighters on Jabal Han could also provide spotting for short-range mortars and even target government positions and convoys with direct-fire weapons, such as anti-tank guided missiles. This would require the Houthis to capture and hold all of Jabal Han, however, which the group has repeatedly failed to accomplish despite numerous ground assaults and military deception in recent weeks.[8] The city's dense urban environment will also make observation of government fighting positions considerably harder, assuming accurate fires against military forces are a priority.

Yemeni government-aligned forces also continued to engage Houthi fighters south of Taiz City on October 19 and 20, likely in an effort to break the Houthis' encirclement of government-aligned forces in central Taiz Governorate.[9] Yemeni government media and a Yemeni journalist reported on October 20 that government-aligned forces have engaged Houthi fighters in al Misrakh and Sabr al Madawim districts, near the Taiz-Aden ground line of communication (GLOC).[10] Successful Yemeni government efforts to recapture and hold territory in central Taiz Governorate could relieve some pressure on government-aligned forces in Taiz City and the vicinity, which are currently facing materiel shortages and intense combat.[11] Any Yemeni government breach of the Houthis' encirclement in central Taiz Governorate will not meaningfully improve government-aligned forces' operational environment unless these forces recapture, hold, and secure significant segments of the Taiz-Aden GLOC, however.[12]

Houthi Strikes in Marib

The Houthis likely fired several ballistic missiles targeting Marib City on October 19 as part of a campaign to render Yemeni government-aligned forces unwilling or unable to sustain their counteroffensives in Marib Governorate.[13] Yemeni government media reported on October 19 that the Houthis fired a barrage of ballistic missiles that struck unspecified targets in Marib City.[14] The Houthis seek to defeat the Yemeni government's counteroffensives in northwestern and southern Marib Governorate, which have proven marginally more successful than other counteroffensive efforts in Taiz Governorate and on the coastal plain.[15]

The Houthis could have attacked either military or civilian areas in Marib City in an attempt to render the government's counteroffensives unsustainable; the exact target remains unclear. The Houthis may have struck military targets as part of a strike campaign to disrupt military staging areas and reinforcements necessary to support counteroffensives in Marib. The attacks in Marib come after recent attacks on training camps and assembly areas in Shabwa and Lahij governorates.[16]

The Houthis alternatively may have fired on civilian areas in an attempt to weaken local civilian and tribal support for the Yemeni government's counteroffensives in Marib Governorate. Marib Governor and military commander Sultan al Aradah depends on a coalition of local tribal forces for military operations in Marib Governorate, and, by maximizing casualties, the Houthis may seek to weaken these tribes' resolve to support military action.[17]

Other Regional Updates

• US and Partner Military Operations: Nothing significant to report.

• Iranian Strike Campaign: (Assessed Iranian War Aims: Secure international recognition of Iranian control over the Strait of Hormuz; Degrade the US ability and willingness to continue the war; Restore deterrence vis-à-vis the United States and its regional partners; Divide the United States and Israel from the Arab states) — Nothing significant to report.

• US-Iran Negotiations: Nothing significant to report.

• Iranian Domestic Affairs: Nothing significant to report.

• Lebanon: Nothing significant to report.

• Iraq: Nothing significant to report.

Arabian Peninsula

The UK Defense Ministry announced on October 20 that it would intercept Houthi projectiles over Saudi Arabia.[18] This could allow Saudi Arabia to remove aircraft from defensive sorties and task them for offensive operations. The UK Defense Ministry stated on October 20 that it would also provide a transport aircraft to move materiel around Saudi Arabia and deploy additional military advisors to support Saudi air defense missions.[19] The UK also announced that it would continue to provide air-to-air refueling support to Saudi aircraft, which the UK authorized on September 22.[20] The number of UK fighter aircraft that will be deployed remains unclear.[21] Saudi aircraft are reportedly conducting dozens to potentially hundreds of strike missions on Houthi targets in Yemen per day.[22] Other Saudi aircraft are presumably conducting combat air patrol over Saudi Arabia to support ground-based air defenses amid Houthi drone fire.

The deployment of UK aircraft to Saudi Arabia could also help Saudi Arabia expand its air defense coverage across Saudi territory. The Houthis are reportedly targeting locations in Saudi Arabia without air defense coverage to maximize drone and missile impacts on Saudi territory.[23] An unspecified senior US official told the Wall Street Journal that Saudi forces have intercepted approximately 90 percent of Houthi attacks in the current conflict but noted that over half of the Houthi attacks have targeted undefended locations.[24]

The UK announcement comes amid continued Houthi attacks on Saudi Arabia since ISW-CTP's last data cutoff on October 19. The Saudi Joint Forces Command reported on October 20 that Saudi air defenses intercepted a Houthi ballistic missile and a drone that targeted Riyadh.[25] The Houthis have conducted near-daily attacks targeting sites in and around Riyadh since October 1, including King Khalid International Airport.[26]

Saudi coalition aircraft later destroyed the Houthi missile launch platform that was used in the intercepted Riyadh missile attack on October 20, according to Saudi Joint Forces Command.[27] Saudi Arabia has attempted to degrade the Houthis' ability to launch missiles at Saudi Arabia by targeting Houthi missile launch sites and missile depots in recent weeks.[28]

Saving for the Machines: How AI and Automation Will Reshape Capital, Growth, and Wealth

 As artificial intelligence and advanced automation rapidly evolve, a defining economic question of our era is taking shape: Who will save for the machines?

The upcoming wave of economic transformation—fueled by software, massive data centers, power plants, and specialized robotics—requires unprecedented levels of capital investment. According to recent projections, AI campuses alone are expected to absorb a staggering 3.6% of GDP per year between 2025 and 2032. Because much of this capital depreciates rapidly (with high-end GPUs lasting only three to six years), funding this technological revolution demands a massive mobilization of savings.

In a comprehensive research paper titled Saving for the Machines, Jesús Fernández-Villaverde (University of Pennsylvania, CEPR, NBER) explores the macroeconomic mechanics of this transition. Utilizing a neoclassical growth model integrated with the task framework of Acemoglu and Restrepo, the paper investigates what happens as the economy races toward full and partial automation by 2045.

1. The Dual Engine: Task Structure and Capital Supply

To understand how the economy adapts to automation, Fernández-Villaverde highlights two critical margins:

1. Task Structure: Determines which tasks machines can execute, how efficiently they perform them, and how easily labor and machines can substitute for one another. This dictates the return on accumulating machines.

2. Capital Supply: Captures how households adjust their savings in response to changing economic conditions.

The paper contrasts optimal household saving (where capital supply is perfectly elastic in the long run) against a fixed saving-rate benchmark (such as keeping the savings rate locked at the historical U.S. average of 23%).

2. Key Findings: The Great Growth Boom and the Capital Share

The quantitative calibration (anchored to U.S. data for 2025 with a transition window to 2045) reveals dramatic shifts in economic trajectories depending on the elasticity of substitution ($\sigma$) between tasks:

• The Power of Optimal Saving: With an elasticity of substitution of $\sigma = 0.2$ (signifying strong complementarity between tasks), long-run growth reaches 11.7% under optimal saving, compared to a mere 2.2% if the saving rate remains locked at 23%. When $\sigma = 1$, growth skyrockets to 21.9%.

• A Capital-Share Driven Surge: Rather than households becoming drastically "thrifter," the dramatic rise in savings—surging from 23% to over 54%–57% of output—is driven by a massive expansion in the capital share. As automation takes over, the capital share of income climbs from roughly one-third toward one. Because capital captures a much larger slice of a vastly expanded economic pie, investment naturally explodes.

• The Danger of Bottlenecks: Strong complementarity ($\sigma = 0.2$) paired with a rigid, fixed saving rate can choke off the growth boom, causing the economy to drift back toward baseline productivity growth. The binding constraint is often not technology, but the supply of capital.

3. Wages, Inequality, and "Ricardo’s Rent"

The transition to an automated economy carries profound distributional consequences:

• The Initial Wage Dip and Recovery: Under full automation, wages initially face downward pressure as machines absorb human tasks. However, the long-run outcome depends heavily on task elasticity. With low substitutability ($\sigma = 0.2$), tasks that only labor can perform act like scarce fixed factors, generating large "Ricardian rents". Consequently, wages eventually recover and can rise well above historical trends.

• The Hand-to-Mouth Divide: While capital owners reap extraordinary rewards (with certainty equivalent welfare gains often exceeding 100% to 200%), hand-to-mouth households who rely entirely on labor income face severe vulnerability. Simulations incorporating hand-to-mouth consumers indicate they can lose 40% to 65% of their consumption relative to trend during the transition.

• Targeted Compensation: Model simulations show that keeping labor income strictly on trend via policy interventions requires temporary transfers that peak at around 4% of GDP ($\sigma = 1$) to 20% ($\sigma = 0.2$) around the year 2040, after which economic growth outpaces wage declines and the need for compensation fades.

4. Financial Markets and Asset Prices

The macroeconomic shock of automation also fundamentally alters financial markets:

• Exploding Long-Term Yields: Because markets anticipate an aggressive growth boom, the 10-year yield jumps sharply from around 5% to between 9% and 14% (and even higher for longer maturities).

• Human Wealth vs. Equity: Human wealth drops precipitously by roughly two-thirds as labor's share of income shifts. Conversely, the stock market experiences a massive quantity boom driven by intense capital accumulation, with equity shares of wealth surging past 95% by 2045.

Conclusion

Jesús Fernández-Villaverde’s Saving for the Machines offers a rigorous quantitative roadmap for an AI-driven future. It demonstrates that funding the infrastructure of tomorrow—from power-hungry data centers to advanced robotics—depends entirely on how households and financial systems mobilize savings. While the technological potential for unprecedented economic expansion is immense, managing the distributional divides and capital supply bottlenecks during the transition will define the ultimate success of the machine age.

Beyond the Blade: Exploring The Sword and the Screen in Japanese Period Cinema (1915–1960)

 When people think of Japanese cinema, images of stoic samurai, flashing katanas, and dramatic cinematic showdowns usually take center stage. Masterpieces like Akira Kurosawa’s Rashomon (1950) and Seven Samurai (1954) didn't just win international acclaim—they permanently altered global pop culture, casting a long shadow over everything from Hollywood Westerns and Star Wars to modern anime.

However, as highlighted in the landmark film retrospective and commentary collection, The Sword and the Screen: The Japanese Period Film 1915–1960 (organized by Yale University and the National Film Center, Tokyo), the Japanese period film (jidaigeki) is far more expansive, subversive, and malleable than just a handful of classic samurai sword fights.

Let’s take a deep dive into the fascinating history of the jidaigeki, exploring how a genre ostensibly dedicated to Japan's pre-1868 past became one of the most modern, experimental, and politically charged canvases in cinematic history.

1. From Stage to Screen: The Silent Era and the Power of the Benshi (1915–1920s)

By definition, a jidaigeki is any film with a narrative set prior to the Meiji Restoration of 1868 (spanning the Edo period and earlier feudal eras). Its cultural roots trace back to traditional kabuki theater and traveling performance troupes (koshibai) of the Meiji and Taishō periods.

The early days of Japanese filmmaking had a unique production geography:

• The Studio Split: Modern stories (gendaigeki) were typically produced in studios around Tokyo, while historical jidaigeki found their permanent home in Kyoto. Kyoto offered ancient temples, shrines, and generations of traditional craft artisans skilled in historical costumes and props.

• The Reign of the Benshi: Before the 1923 Great Kantō Earthquake, Japanese silent film screenings relied heavily on live benshi (narrators) standing at the edge of the screen to voice characters while traditional kabuki musicians (geza-ongaku) played shamisens and taikos. Because the benshi drove the narrative rhythm, early films avoided close-ups, cutbacks, and intertitles, relying instead on long, carefully composed theatrical takes.

The Shift Toward Cinematic Modernity

At the end of the 1910s, progressive intellectuals and filmmakers pushed to modernize Japanese cinema by adopting Western styles, wresting narrative control back from the benshi.

This ushered in a golden age of silent film in the late 1920s, heavily influenced by Hollywood’s transparent narrative editing and the rapid, sensory-stimulating montages (furasshu) of the French Impressionist movement. Directors like Itō Daisuke—revered as the "father of jidaigeki"—expertly fused fast-paced action with calligraphic camera movements, portraying brooding, nihilistic drifters in politically conscious films like An Unforgettable Grudge (1926) and A Diary of Chūji's Travels (1927).

2. The Golden Age of Variety: Comedy, Musicals, and Rebellion (1930s)

As sound arrived in the 1930s, the jidaigeki bloomed into an astonishing variety of tones and styles, proving that period films could be playful, satirical, and deeply progressive.

• "Nonsense Jidaigeki" & Satire: Directors like Itami Mansaku revolutionized the genre with satirical, anti-authoritarian comedies. His masterpiece The Peerless Patriot (1932) parodied rigid samurai conventions by following a country bumpkin forced to impersonate a local ruler.

• Commoner Realism: Yamanaka Sadao brought lyrical realism to the struggles of commoners and marginalized people living in the shadows of Edo. His brilliant film Kōchiyama Sōshun (1936) collaborated with the leftist Zenshinza theater troupe to deliver grounded, naturalistic performances (and featured a young Setsuko Hara, later famous for Ozu’s masterpieces).

• Genre-Bending Musicals: Defying the stereotype of grim masculinity, films like Makino Masahiro’s Singing Lovebirds (1939) merged romantic comedy, operetta, and swordplay, while comedian Enoken starred in the high-energy chase musical Enoken's Kinta the Pickpocket (1938).

• Female-Centric Perspectives: Ishida Tamizō’s Flowers Have Fallen (1938) told a gripping historical drama set during the turbulent 1860s entirely from inside a Kyoto geisha house—featuring an all-female cast where male voices and clashing armies could only be heard off-screen.

With the outbreak of war in China in 1937, the genre pivoted temporarily toward sober, state-aligned historical films (rekishi eiga), epitomized by Kenji Mizoguchi’s monumental The Loyal 47 Ronin (1941–1942).

3. Postwar Revival and Global Domination (1950s–1960s)

Following the restrictions of World War II and the Allied Occupation, the jidaigeki roared back to life, spearheading the international "Golden Age" of Japanese cinema and introducing the world to festival-winning masterworks:

• The Global Breakthrough: Akira Kurosawa’s Rashomon won the Golden Lion at the Venice Film Festival in 1951, proving to the West that Japanese cinema was a global powerhouse.

• The Second Golden Age: Studios like Daiei and Toei churned out legendary epics. Directors like Kenji Mizoguchi (Ugetsu, 1953), Teinosuke Kinugasa (Gate of Hell, 1953), and Hiroshi Inagaki (Samurai, 1954) combined breathtaking visual styling with profound psychological depth.

Did You Know? The explosion of chanbara (sword-fighting) movies in the 1950s and 60s created a dizzying loop of global cinematic influence, deeply shaping Hollywood action films and Hong Kong cinema.

4. Uncovering Forgotten Masters and Subversive Gems

While Western canons often restrict jidaigeki to a handful of films by Kurosawa or Mizoguchi, the genre's vast reservoir holds incredible hidden gems that challenge traditional definitions:

• Misora Hibari’s Musical Swordplay: The tragic enka pop singer Misora Hibari starred in delightful, gender-bending period musicals and sword films (such as Benten Kozō and First Love of Okon) where she routinely played male outlaws and swaggering heroes, turning conventional chanbara tropes upside down.

• Kawashima Yūzō’s Political Satire: Sun in the Last Days of the Shogunate (1957) blended the lighthearted banter of traditional rakugo storytelling with a piercing, anti-samurai political allegory about social unrest on the eve of the Meiji Restoration.

• Uchida Tomu’s Epic Masterpieces: After returning from post-war repatriation, Uchida became one of the most graceful directors of the era, helming complex psychological period dramas like The Kuroda Affair (1956) and the definitive five-part adaptation of Miyamoto Musashi (1961–1965).

• Mori Kazuo’s Character Studies: A prolific studio craftsman for Daiei, Mori directed The Blind Menace (1960), casting Shintarō Katsu as a deeply villainous, lecherous blind masseur—years before Katsu found global fame playing the kinder, iconic blind swordsman Zatoichi.

Conclusion: The Enduring Legacy in the Age of "Cool Japan"

As television took over the jidaigeki market in the 1970s, and video games and internet culture surged in the decades following, traditional period film production slowed down. Yet, the spirit of the jidaigeki never truly died.

Today, its DNA lives vibrantly across modern media:

• It thrives in contemporary anime and manga.

• It inspires modern cinematic revivals by directors like Yōji Yamada (The Twilight Samurai) and Takashi Miike (13 Assassins).

• It has sparked a cultural phenomenon among young female fans known as "history girls" (rekijo), who nurture an otaku-like passion for Japan's feudal warriors.

From the shadow plays of silent Kyoto to global cinematic screens, the Japanese period film remains a breathtaking, shape-shifting bridge between past and present—proving that stories told centuries ago can still capture the beating heart of the modern human experience.