Apple Intelligence requires at least 4GB of storage and, as its capabilities increase in updates, you should aim to allow for 8GB, plus a little more for the data that it will create and download when in use.
iOS provides good tools to help you discover what’s taking up storage on your iPhone, and to decide how best to reduce that to free up space. Open Settings, tap General, then iPhone Storage. The bar chart there breaks down current use by type, and below it are suggestions for changes that should help. One of the most useful is Offload Unused Apps, which you can either Enable, or perform manually for each app included in the list below. Offloading the apps that you no longer use any more can save a whole lot of storage space.
Large attachments in old messages are another good prospect, accessed through the Messages item in the list of apps lower down. A little time reviewing them and removing ones you don’t need any more can also recover several GB of storage.