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New Squeeze on Iran

Prepared by: Lionel Beehner
Updated: January 29, 2007

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An apparent ratcheting up of U.S. pressure on Iran is underway on several fronts. To try to isolate Tehran, Washington has put pressure on foreign banks and financial institutions to sever their ties to Iranian banks, as outlined in this new Backgrounder. Kaveh L. Afrasiabi, an expert on Iranian foreign policy, says in this new CFR.org Podcast this kind of financial squeeze is effective but unlikely to move Iran to renounce its nuclear program. But the U.S. has set other pieces in motion.

U.S. forces recently raided an Iranian consulate in Iraqi Kurdistan and detained alleged members of the Revolutionary Guards accused (BaltSun) of abetting Islamic militants in Iraq. The Pentagon is expected to release a report soon detailing why the Iranian diplomats were detained. Following up on President Bush's January 10 speech on stabilizing Iraq, the White House has authorized U.S. forces to kill or capture Iranian operatives (WashPost) in the country. U.S. officials have reportedly contacted Iran's foreign ministry to try to resolve the dispute (AP).

The United States has also sent its second aircraft carrier strike group to the Persian Gulf, a symbolic gesture aimed at Tehran that enhances the U.S. military's capability to carry out potential air or naval-based strikes against Iranian targets. Bush's appointment of Admiral William Fallon to head Central Command may also signal Washington's greater willingness to wage air or naval-based strikes against Iranian nuclear targets, given the admiral's "vast experience in directing carrier-borne air strikes," writes Martin Sieff, a national security correspondent for UPI. One aim of these maneuvers is to show that the U.S. presence in the region remains strong, notwithstanding military setbacks in Iraq. There is no hope for direct dialogue with the Iranians, the thinking goes, so long as Washington appears to be negotiating from a position of weakness.

The bank squeezes, seizures in Iraq, and movement of carrier groups in the Gulf also appear to be an attempt by Washington to take advantage of perceived divisions within the Iranian regime. In particular, many experts say the Iranian elite may now be reconsidering its approach to retaining a civilian nuclear program. A few editorialists representing Iranian hard-line elites have voiced their displeasure with President Mahmoud Ahmadinejad's nuclear showmanship. The Supreme Leader, Ayatollah Ali Khamenei, and his chief arms negotiator Ali Larijani, who wield more influence over foreign policy than Ahmadinejad, have indicated they may soften Iran's nuclear stance.
Khameini and other elements within Iran's ruling class appear intent on reining in Ahmadinejad. His anti-Western rhetoric and nuclear posturing, domestic critics say, have only undermined Iran's position and damaged its economy.

The latest UN Security Council resolution, though weakly worded, hurts Iran's standing with the Chinese and Russians, Tehran's erstwhile champions at the United Nations. Meanwhile, a new poll indicates that most Iranians, while supportive of a nuclear program, are more committed to keeping their country in line with the Nuclear Nonproliferation Treaty.

Gary G. Sick of Columbia University, in a recent interview with CFR.org's Bernard Gwertzman, predicts Iran may still complete its stated goal of linking three thousand centrifuges by March, a small but important step in the nuclear fuel cycle. Such an achievement might allow Tehran space to reenter negotiations with the Europeans and make some concessions. On the other hand, it would throw off some of the more conservative timelines U.S. officials have given to Iran's nuclear program. Even if Iran halts its uranium-enrichment process, CFR Senior Fellow Charles D. Ferguson says the three thousand P1 centrifuges would be "a starter kit to get enough nuclear material to make a bomb within a year."

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