My thinking on the military actions that should be taken is to limit the campaign to stopping the current invasion and retaliate by takeing no more than 4-5 of thier cities. This will 1) not put order in jepardy from discontent citezens, 2) Show these actions will not be tolerated and well meet swift reply, and 3) allow us to keep our eye on the prize, so to speak, and allow us to build improvement needed for victory instead of military units.
As far as battle plans, getting rid of that stack near Memphis should be farily easy. If we bring up our 18 Artillery guns to Memphis, we should be able to weaken the western stack enough to use Infantry from the rear to eliminate most of them. The remaining that retreat will be too weak to be a threat for the time being. To wipe out the eastern stack, we could bring up our tanks, they should be more than enough to eliminate them. We also need to bring up the remaining Infantry from the rear to defend Abydos and CSIM, which are in range of Cavalry assults.
The next turn we can move our guns to the spot where the eastern stack was and shell Hieraconpolis to be followed by tank attack that should take it. There should be some tanks left over that were need for the assault on Hieraconpolis, these could be brought around to attack St. Regis. With these two cities, we have two fronts to sandwich them in, and take some cities quickly. No matter what, I do not believe we should commit all of our tanks to the attack, we must keep some in reserve just incase of an emergency. If these plans aren't clear enough, or you'd just want a visual plan, let me know and I'll post a map with the plan on it.
This is just what I would do if I were in Falcon's shoes, hope it helps. One thing you must keep in mind, it appears the Iro's have no Rubber, so thier best defensive unit is the Rifleman. With our Tanks, Infantry, Artillery, and our soon-to-have Bombers, we can end this war VERY quickly.
One more thing, we can also bring our destroyer near Shanghi to destroy the roads on the souce of saltpeter near Tonawanda. With that destroyed and Hieroconpolis taken, they'll have no saltpeter to build more cavalry with.