instead of capitulation warned of retaliation

[Maybo]

But this, too, didn’t happen. Gulf nations have showcased unexpected resilience, and instead of capitulation warned of retaliation as their air defenses shot down most Iranian drones and missiles, preventing catastrophic damage.


Source: U.S. and Iran Predicted a Very Different War Than the One Now Being Waged by Yaroslav Trofimov (WSJ)

I have difficulty understanding the underlined sentence structure. Was Gulf warned of retaliation?

 

[emsr2d2]

No. The Gulf nations were expected to capitulate but instead they warned that they would retaliate.