"Behind the Curtain" is a new column by Axios CEO Jim VandeHei and co-founder Mike Allen, based on regular conversations with White House and congressional leaders, CEOs and top technologists.

Top U.S. officials tell us the threats of a war widening from the Gaza Strip are real and rising, forcing the Pentagon to rush additional weapons systems to the region and put more U.S. forces on higher alert for quick deployment.

• This comes three short days after "Behind the Curtain" outlined five simultaneous global threats unnerving top U.S. officials: Israeli-Hamas, the Russia-China axis, North Korea, Iran's saber-rattling and weaponized fake videos hitting every battlefield.

Why it matters: Red-hot rhetoric by Israel and Iran — including publicly threatening to widen the war — has U.S. officials on edge.

• "It's quite a dangerous situation," a senior administration official told us. "It could all veer off the rails really quickly. The whole region could be in conflict."

What we're hearing: This is a big reason President Biden and his war cabinet are using an elaborate carrot-and-stick strategy to slow Israel's invasion of Gaza. Bluntly, they need time to prepare for an Iranian escalation elsewhere, including getting more air defense systems to the region fast, sources tell Axios' Barak Ravid.

• In an ominous appearance on ABC's "This Week," Defense Secretary Lloyd Austin warned of the "prospect of a significant escalation of attacks on our troops and our people throughout the region."

What's happening: The central concern is Iran and Iran-funded terrorist groups. But, capturing the complexity of this moment, officials are keeping close tabs on China to see if Beijing exploits the chaos.

• Iran's foreign minister warned Israel that if Gaza strikes continue, "the region will go out of control."
• Iranian-backed Hezbollah militants in Lebanon stepped up cross-border attacks on Israel's north, per the Israel Defense Forces.
• Israel ramped up bombing on three fronts — in Gaza, in southern Lebanon and a rare airstrike in the West Bank.
• Israel's economy minister, Nir Barkat, told London's Mail on Sunday that if Hezbollah joins the war, "we will not just retaliate to those fronts, but we will go to the head of the snake, which is Iran."

Between the lines: U.S. Cabinet officials are making it clear they fear escalation — and that the U.S. is ready to respond mightily to attacks on American troops.

• Secretary of State Tony Blinken said on NBC's "Meet the Press": "We expect that there's a likelihood of escalation ... by Iranian proxies directed against our forces."

What to watch: The No. 1 indicator is how Hezbollah in Lebanon, on Israel's northern border, responds to Israel's expected offensive in Gaza in the south. "If Hezbollah decides to light up northern Israel ... it would be a serious adversary that would require serious resources from Israel to deal with," the senior official told Axios.

• Second, the U.S. is urging Israel to "go in smartly. The biggest way to see this escalate, see other groups come in, is to go in in a reckless fashion," the official said. "It's impossible to say what they're going to do. The country is absolutely traumatized, as you would expect."
• The administration's three-part plan is sending a deterrence message to Hezbollah and other actors in the region, trying to get more aid to Palestinians faster, and emphasizing that the war is not with the Palestinian people but with Hamas, which governs the Gaza Strip.

Behind the scenes: The U.S. is advising Israel to delay a ground offensive in Gaza in part to allow more hostage releases. Ten Americans are unaccounted for, and the U.S. believes a significant number are hostages.

• The U.S. believes Israel "would struggle in a two-front war and that such a conflict could draw in both the United States and Iran, [Hezbollah's] main supporter," the N.Y. Times reports.
• Barak is told another huge issue is getting Palestinian Americans out of Gaza (there are around 500) before a ground operation starts. Blinken confirmed on CBS' "Face the Nation" that Hamas has blocked Americans from leaving Gaza.

The big question: While the world is focused on the Middle East, does China get more aggressive in the South China Sea and eventually — the big one — Taiwan?

• Six Chinese warships last week operated in Middle Eastern waters for what Beijing's state media called a "goodwill visit."
• Yesterday, a Chinese coast guard ship rammed two Philippine military vessels during a mission to resupply the contested Second Thomas Shoal in the South China Sea, heightening fears of an armed conflict. The State Department says China "violated international law."

The bottom line: The world is at massive risk of armed contagion in the Middle East — and will be for a while.

• Go deeper: The N.Y. Times' "The Daily" podcast talks to a Florida teacher trapped in Gaza.

Share this column ... Read Friday's column, "Rattled U.S. government fears wars could spread."

House Republicans will hear today from nine lawmakers vying to be the next speaker of the House, with a candidate forum that ushers in a grueling day of voting tomorrow, Axios' Juliegrace Brufke reports.

• Why it matters: Candidates will be given just minutes to pitch themselves as the best option to unify the fractured House GOP — which is going on three weeks without a speaker.

Keep reading.

Owning your own home is a critical step in building wealth in the U.S. But younger Americans increasingly can't swing it, and instead are stuck renting — at steep rates, Axios' Sami Sparber and Emily Peck report.

• Older Americans on fixed incomes are especially burdened by high housing costs, contributing to rising homelessness among Baby Boomers, The Wall Street Journal reports (paywall).

Get Axios Markets.

The sun rises over a sprawling temporary lake in salt flats of the newly reopened Death Valley National Park in California.

• The lake was formed by flooding in August from Tropical Storm Hilary, which dropped a year's worth of rain in a single day.

Anthropic, the Amazon-backed startup behind the Claude generative AI chatbot, is promoting a new form of responsible AI: a constitution for its large language models based on public input, Axios' Ryan Heath reports.

• Why it matters: If users are consulted on the design of tech products, it's usually around product updates and convenience questions — not in the product's foundational values.

Anthropic commissioned polling of 1,000 Americans, asking what values and guardrails they want AI models to reflect.

• The public wants a greater focus on impartiality through "objective information that reflects all sides of a situation" — and making AI responses easy to understand.

Share this story.

Goldman Sachs is embarking on a new advocacy campaign on behalf of small businesses, asking federal regulators to abandon a push for new banking rules that opponents argue will heap new pressures on Main Street, Axios managing editor Javier E. David writes.

• Why it matters: The small business sector and interest-rate-sensitive parts of the economy are crying uncle as rates hit their highest levels in at least a decade. That has chilled housing activity and crimped lending.

The Wall Street giant is throwing its weight behind a pressure campaign against Basel III Endgame (B3E), new capital rules for large and regional banks. The rules could affect lending decisions in ways opposed by a growing number of banks.

• Goldman's 10,000 Small Business Voices is launching digital ads that demand the Fed "stop the squeeze" on small biz.

Ernst & Young says the proposal, scheduled to take effect in 2025, "represents a sea change for the U.S. banking industry, significantly altering the regulatory capital regime for U.S. banks."

• Keep reading.

Three former members of the Congressional Hispanic Caucus — including New Mexico Gov. Michelle Lujan Grisham (D) — today are creating a new super PAC to get more Hispanic Democrats elected to Congress, Axios' Hans Nichols reports.

• Why it matters: The battle for Congress in 2024 runs partly through districts with significant Hispanic populations.

The new group, BOLD America, is being launched by Lujan Grisham, as well as former Reps. Lucille Roybal-Allard (D-Calif.) and Filemon Vela (D-Texas).

• Keep reading.

The "Saturday Night Live" cold open featured Rep. Jim Jordan (R-Ohio), played by Mikey Day, brooding in his office after losing three votes for House speaker. SNL's Donald Trump, James Austin Johnson, drops by.

• "Yoo-hoo! Is this the Loser's Office?" "Trump" says. "I don't like you at all. Part of it's the jacket — it's the lack of the jacket. You don't look good!"
• "I'm Coke, you're Shasta!"

"People are saying that I'd make a great speaker," the Trump character says. "But sadly, I'll be too busy campaigning, traveling from city to city, visiting their beautiful courtrooms. ... But I'm doing great things for the courts!"

• Watch on YouTube.