A possible US strike on Iran this weekend would be bad news for markets and for hopes of avoiding a wider Middle East war.

• The US ambassador to Turkey said a strike on Iran "absolutely" could happen this weekend, before quickly backpedaling on the diplomatic talking points.
• Trump claimed he "didn't know anything" about the ambassador's comments, which reads less like genuine surprise and more like keeping the element of surprise before a strike.
• Israel has publicly dropped the pretense of "defense," saying it is now pursuing "offense" and regime change in Iran, raising the odds of a drawn-out conflict rather than a quick resolution.
• Analysts argue the Iranian government has actually gotten stronger domestically since earlier strikes, as the population rallied around it, meaning regime change is unlikely even if an attack happens.
• Embassies in the Gulf region are reportedly already being evacuated in preparation for an attack, a signal that is being read as more serious than the political denials suggest.

Outlook: Watch for a strike before Israel's upcoming election or before the US midterms — any escalation would raise oil prices and rattle markets given the risk of a wider, prolonged war.