Each has its own powerful allies, and enemies, in the region. Here is where the key players stand:
The Sunni-dominated kingdom is home to the birthplace of Islam and contains the most important sites in the Islamic world. It is one of the world’s top oil exporters and among its wealthiest countries.
Saudi Arabia fears Iran wants to dominate the Middle East and is opposed to the Shia-led power’s growing involvement and influence in the region.
Its belligerence towards Iran appears to have been emboldened by US President Donald Trump’s equally tough position.
The young and increasingly powerful Crown Prince Mohammed bin Salman is waging a long war against Houthi rebels in neighbouring Yemen. The Saudis say the rebels are materially supported by Iran, a claim Tehran denies.
Saudi Arabia also backs rebels in Syria and wants to remove its president, Bashar al-Assad, who is a key ally of Iran.
Saudi Arabia has one of the best-equipped militaries in the region and is among the biggest arms importers in the world. It has an estimated 227,000 troops.
Iran became an Islamic republic in 1979, when the monarchy was overthrown and clerics assumed political control under supreme leader Ayatollah Khomeini.
The vast majority of Iran’s 80m-strong population are Shia Muslims, and the country is the leading Shia power in the region. Current leader Ali Khamenei has the final say on major foreign and domestic policy issues.
Iran’s influence has grown considerably in the past decade, especially after the overthrow of Saddam Hussein in Iraq.
Iran has supported Syrian President Bashar al-Assad in his fight against opposition groups and the so-called Islamic State (IS). Its elite Islamic Revolutionary Guards Corps (IRGC) has been instrumental in advances against Sunni jihadists in Syria as well as in Iraq.
Iran also believes Saudi Arabia is trying to destabilise Lebanon, where the Iran-backed Shia movement Hezbollah is part of the government.
Iran considers the US its main adversary.
Iran is reported to have some of the most advanced missile systems in the region.
It has over 534,000 personnel in active service, which includes the regular army and the IRGC.
US-Iran relations have been strained to say the least. Key events affecting them have included the CIA-orchestrated overthrow of Iran’s prime minister in 1953, the Islamic revolution in Iran, and the taking of hostages at the US embassy in Tehran in the 1980s.
Saudi Arabia, on the other hand, has always been a US ally, though relations were strained under Barack Obama’s administration, particularly given its engagement policy with Iran.
President Trump vowed to take a harder line on Iran – and he has, disavowing the landmark nuclear deal Iran signed under the Obama administration.
In contrast, the White House and Saudi royals have rolled out the red carpet for each other.
Neither Mr Trump nor his administration have criticised radical Islam in the Kingdom in the same way they link Iran to terrorism. Nor are Saudis on the list of foreign nationals on his controversial travel ban.
Donald Trump’s first trip abroad as president was to the Middle East, where he met Saudi and Israeli leaders, who have a common desire to stem Iran’s regional influence.
Saudi Arabia is the primary destination for US arms sales.
Russia is an ally of both Saudi Arabia and Iran, having close economic ties with each. It has also sold advanced weaponry to both countries.
Russia appears not to have taken a particular side in the crisis between Tehran and Riyadh, indicating instead that it is ready to act as a mediator.
Moscow’s involvement in the Middle East goes back to the Cold War times, when the Soviet Union provided arms and training for Syria’s military officers.
Its influence in Syria and in the region in general subsided after the fall of the Soviet Union but Moscow has striven to increase it of late.
Russia’s air offensive in the Syrian war helped turn the tide in Bashar al-Assad’s favour, and the Iran-backed fighters supporting him.
Turkey has trod a fine line between Iran and Saudi Arabia in the fast-moving military and political developments in the Middle East.
Ankara has become more involved in regional matters since the Islamist-rooted Justice and Development Party came to power in 2002.
Turkey, a Sunni power, has established strong ties with Saudi Arabia over their sectarian kinship and mutual opposition toward the Syrian government.
Despite a deep mistrust of Iran, Turkey also recently forged an alliance with it against the growing Kurdish influence in the region, which both countries perceive as a threat.
The state of Israel was declared in 1948 with a majority Jewish population but, in the Arab world, only has diplomatic relations with Egypt and Jordan.
Iran and Israel are arch-foes. Iran rejects Israel’s right to exist and calls for it to be eradicated.
Israel’s Prime Minister Benjamin Netanyahu has strongly urged the international community to prevent Iran from obtaining nuclear weapons and has also called for the annulment of Iran’s landmark nuclear deal to curb what he calls its “aggressive” policy in the region.
He has said there is a level of co-operation with some Arab countries in the region to counter Iran’s growing influence. Saudi Arabia has denied reports in Israeli media that a high-level Saudi prince secretly visited Israel for talks in September.
Egypt has often played a central role in Middle East politics and has historically had better relations with Saudi Arabia than Iran, particularly after the Islamic revolution.
Saudi Arabia also supported the Egyptian army’s removal of Islamist President Mohammed Morsi in 2013.
However, there have been occasions of rapprochement between Egypt and Iran, such as when Iran sponsored an Egyptian-Iraqi oil deal after Saudi Aramco halted its oil exports to Egypt in October 2016.
Amid recent heightened tension between Saudi Arabia and Iran, Egyptian President Abdul Fattah al-Sisi called for “avoiding escalation of tension in the region, but not at the expense of the Gulf’s security and stability”.
The Syrian government of President Bashar al-Assad strongly sides with Iran in its standoff with Saudi Arabia.
Iran has traditionally backed the Syrian leadership and has been providing military and personnel support to the Syrian army in its fight against rebels and jihadist groups.
Iran sees Mr Assad, a member of the heterodox Shia Alawite sect, as its closest Arab ally. Syria is also the main transit point for Iranian weapons shipments to the Shia group Hezbollah in Lebanon.
Hezbollah has sent thousands of fighters to back the Syrian government. Correspondents say that due to its training and equipment, the group is now viewed as a fully-fledged army rather than a semi-amateur militia.
The Syrian government often accuses Saudi Arabia of adopting subversive policies in the Middle East.
Lebanon’s stance on the Saudi-Iran standoff is mixed.
Lebanese Prime Minister Saad Hariri, who announced his resignation from Saudi Arabia a few days ago, has very good relations with the Saudi government and sides with it against Iran.
On the other hand, Lebanese Hezbollah is an ally of Iran, which provides it with considerable support. Its leader Hassan Nasrallah has often attacked the Saudi government.
The Gulf States of Qatar, Bahrain and Kuwait have had friendlier ties with Saudi Arabia than Iran in the past.
But Qatari-Saudi ties have suffered since Qatar defied a demand from Saudi Arabia for it to curb ties with Iran earlier this year.
After Saudi Arabia, the UAE, Egypt and Bahrain imposed a blockade on Qatar in July, Iran sent five planeloads of food to Qatar to help it over food shortages.
In August, Qatar and Iran restored full diplomatic relations which had previously been dropped over attacks on two Saudi diplomatic facilities in Iran.
Bahrain and Kuwait lean toward Saudi Arabia though.
Bahrain’s Sunni king and his family hold the main political and military posts there but about 70% of the country is Shia.
Bahrain has accused Iran of training “terrorist cells” to operate inside the country to overthrow its government. It also accuses the Shia opposition of maintaining links with Iran.
The government said in October that “it is one of the countries most affected by the expansionist policy of the Iranian Revolutionary Guards”.
Although Kuwait is not imposing a blockade on Qatar, its government has shifted from an earlier stance of siding with Iran, to siding with Saudi Arabia.
In February, it called for improving Arab-Iranian relations and Iranian President Hassan Rouhani visited for the first time since he was elected in 2013 to discuss Iran-GCC tensions.
Following the Saudi-Qatar crisis, however, Kuwait expelled 15 Iranian diplomats and shut down related military, cultural and trade missions in the country.