Iran: Regional Perspectives and U.S. Policy

Congressional research reportJan 13, 2010

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CRS Report for Congress

Prepared for Members and Committees of Congress

Iran: Regional Perspectives and U.S. Policy

Summary

As the Administration and Congress move forward to pursue engagement, harsher sanctions, or

both, regional actors are evaluating their policies and priorities with respect to Iran. Iran’s

neighbors share many U.S. concerns, but often evaluate them differently than the United States

when calculating their own relationship with or policy toward Iran. Because Iran and other

regional concerns—the Arab-Israeli peace process, stability in Lebanon and Iraq, terrorism, and

the ongoing war in Afghanistan—have become increasingly intertwined, understanding the

policies and perspectives of Iran’s neighbors could be crucial during the consideration of options

to address overall U.S. policy toward Iran.

Iran’s neighbors seek to understand and influence changes in the following areas:

•

Iran’s regional influence,

•

Iran’s nuclear program,

•

Iran’s role as an energy producer, and

•

Iran’s support for terrorism and non-state actors.

Although the Obama Administration may share many goals of the previous administration on

Iran, it also sees the need for new strategies and approaches. The Obama Administration has

advocated a policy of engagement with Iran to determine the nature of its nuclear program and

address other subjects of international concern. While post-election turmoil in Iran delayed these

efforts temporarily, it appears that the Administration is committed to pursue engagement through

the P5+1 framework. At the same time, some Members of Congress have called for increased

sanctions on Iran.

The United States, Israel, and the EU proposed the end of 2009 as a deadline for Iran to

demonstrate its willingness to cooperate on the nuclear issue. That deadline has lapsed with no

visible progress toward a resolution and the Administration is now working with its P5+1 partners

to determine a course of action for 2010. Regardless of how they decide to proceed, any actions

on the part of the Obama Administration, Congress, or the international community, and any

developments in or provocations by Iran, will have implications for U.S. interests in the region as

Iran’s neighbors react and reevaluate their policies accordingly.

This report provides a description of Iran’s neighbors’ policies and interests, options for

Congressional consideration, and an analysis of potential regional implications. For more

information on Iran and regional perspectives, see CRS Report RL32048, Iran: U.S. Concerns

and Policy Responses, by (name redacted); CRS Report RL33476, Israel: Background and

Relations with the United States, by (name redacted); CRS Report RS20871, Iran Sanctions, by

(name redacted); CRS Report RL33533, Saudi Arabia: Background and U.S. Relations, by

(name redacted); CRS Report RS22323,

Iran's Activities and Influence in Iraq, by

(name redacted); and CRS Report R40653, Iran’s 2009 Presidential Elections, by (name red

acted).

Congressional Research Service

Iran: Regional Perspectives and U.S. Policy

Contents

Introduction: U.S. and Regional Interests ....................................................................................1

Iran’s Regional Influence ......................................................................................................1

Iran’s Nuclear Program .........................................................................................................2

Iran’s Role as an Energy Producer .........................................................................................2

Iran’s Support for Terrorism ..................................................................................................3

Iran: Regional Perspectives and Policies......................................................................................4

Saudi Arabia .........................................................................................................................4

Perspectives and Interests................................................................................................4

Policy Priorities ..............................................................................................................6

Economic and Security Concerns ....................................................................................6

Prospects ........................................................................................................................7

Qatar.....................................................................................................................................7

Perspectives and Interests................................................................................................7

Policy Priorities ..............................................................................................................8

Economic and Security Concerns ....................................................................................9

Prospects ........................................................................................................................9

Bahrain ............................................................................................................................... 10

Perspectives and Interests.............................................................................................. 10

Policy Priorities ............................................................................................................ 11

Economic and Security Concerns .................................................................................. 11

Prospects ...................................................................................................................... 12

The United Arab Emirates ................................................................................................... 12

Perspectives and Interests.............................................................................................. 12

Policy Priorities ............................................................................................................ 13

Economic and Security Concerns .................................................................................. 14

Prospects ...................................................................................................................... 14

Kuwait ................................................................................................................................ 15

Perspectives and Interests.............................................................................................. 15

Policy Priorities ............................................................................................................ 15

Economic and Security Concerns .................................................................................. 16

Prospects ...................................................................................................................... 16

Oman.................................................................................................................................. 16

Perspectives and Interests.............................................................................................. 16

Policy Priorities ............................................................................................................ 17

Economic and Security Concerns .................................................................................. 17

Prospects ...................................................................................................................... 17

Iraq..................................................................................................................................... 18

Perspectives and Interests.............................................................................................. 18

Policy Priorities ............................................................................................................ 18

Economic and Security Concerns .................................................................................. 19

Prospects ...................................................................................................................... 20

Turkey ................................................................................................................................ 21

Perspectives and Interests.............................................................................................. 21

Policy Priorities ............................................................................................................ 22

Economic and Security Concerns .................................................................................. 23

Prospects ...................................................................................................................... 24

Afghanistan ........................................................................................................................ 24

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Iran: Regional Perspectives and U.S. Policy

Perspectives and Interests.............................................................................................. 24

Policy Priorities ............................................................................................................ 25

Economic and Security Concerns .................................................................................. 25

Prospects ...................................................................................................................... 26

Egypt .................................................................................................................................. 27

Perspectives and Interests.............................................................................................. 27

Policy Priorities ............................................................................................................ 27

Economic and Security Concerns .................................................................................. 28

Prospects ...................................................................................................................... 29

Syria ................................................................................................................................... 30

Perspectives and Interests.............................................................................................. 30

Policy Priorities ............................................................................................................ 30

Economic and Security Concerns .................................................................................. 31

Prospects ...................................................................................................................... 31

Lebanon.............................................................................................................................. 33

Perspectives and Interests.............................................................................................. 33

Policy Priorities ............................................................................................................ 33

Economic and Security Concerns .................................................................................. 33

Prospects ...................................................................................................................... 34

Palestinians ......................................................................................................................... 35

Perspectives and Interests.............................................................................................. 35

Policy Priorities ............................................................................................................ 36

Economic and Security Concerns .................................................................................. 37

Prospects ...................................................................................................................... 38

Israel................................................................................................................................... 39

Perspectives and Interests.............................................................................................. 39

Policy Priorities ............................................................................................................ 40

Economic and Security Concerns .................................................................................. 41

Prospects ...................................................................................................................... 41

Caspian Neighbors .............................................................................................................. 43

Policy Priorities ............................................................................................................ 43

Economic and Security Concerns .................................................................................. 46

Prospects ...................................................................................................................... 47

Issues for Congressional Consideration ..................................................................................... 47

Possible Regional Implications............................................................................................ 48

Of Increased Sanctions.................................................................................................. 48

Of a Preemptive Strike .................................................................................................. 48

Of a Nuclear Iran .......................................................................................................... 49

Figures

Figure 1. Iran and its Neighbors ..................................................................................................4

Contacts

Author Contact Information ...................................................................................................... 50

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Iran: Regional Perspectives and U.S. Policy

Introduction: U.S. and Regional Interests1

As the Administration and Congress move forward to pursue engagement, harsher sanctions, or

both, regional actors are evaluating their policies and priorities with respect to Iran. Iran’s

neighbors share many U.S. concerns, but often evaluate them differently than the United States

when calculating their own relationship with or policy toward Iran. Because Iran and other

regional concerns—the Arab-Israeli peace process, stability in Lebanon and Iraq, terrorism, and

the ongoing war in Afghanistan—have become increasingly intertwined, understanding the

policies and perspectives of Iran’s neighbors could be crucial during the consideration of options

to address overall U.S. policy toward Iran.

Iran’s neighbors seek to understand and influence changes in the following areas:

•

Iran’s regional influence,

•

Iran’s nuclear program,

•

Iran’s role as an energy producer, and

•

Iran’s support for terrorism and non-state actors.

Iran’s Regional Influence

The United States and Iran’s neighbors have expressed concerns about Iran’s regional ambitions,

its ability to influence the domestic political circumstances of its neighbors, and its ability to act

as a spoiler in the peace process. Many analysts have cast events in the region as a power struggle

between Sunni-ruled Arab states, led by Egypt and Saudi Arabia, and Iran and its allies and

proxies, namely Syria, Hamas, and Hezbollah.2 Others reject this paradigm as overly simplistic,

pointing to Iran’s physical and demographic attributes as an explanation for its regional role. Iran

is a country of considerable size and resources3 and, as a result, exerts a natural level of influence,

both in positive and negative ways, they argue. Some observers have argued that Iran’s soft power

has diminished since the June 2009 presidential election and ongoing unrest.

For some of Iran’s neighbors, Iran’s regional influence is a domestic political concern. For

example, Bahrain and Kuwait—Gulf states with signification Shiite populations—often express

concerns that Iran is fomenting unrest among Shiites, highlighting fears about their own internal

stability. In recent years, Morocco, Egypt, and Yemen have expressed similar concerns. Iran also

uses proxies that at times are a destabilizing force, as is the case with Hezbollah in Lebanon.

Others view Iran’s regional aspirations in a broader sense. Saudi Arabia, for example, criticizes

Iran’s interference in what it perceives as “Arab causes,” like the Israeli-Palestinian issue, and

reportedly confronts Iran’s proxies in Lebanese politics with material support of Sunni political

parties and candidates.

Prepared by Casey Addis, Analyst in Middle Eastern Affairs, January 2010.

Some analysts also include Qatar on the side of Iran.

According to the CIA World Factbook, Iran has a population of over 66 million, ranking it 20th in the world, and an

area of 1.6 billion square kilometers, ranking it 25th in land mass. Iran also ranks in the top five when it comes to

proven oil reserves and natural gas production.

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Iran’s Nuclear Program

The primary goal of U.S. and international engagement with Iran is to gain a clear understanding

of Iran’s nuclear activities through inspections and safeguards, and to limit Iran’s uranium

enrichment capacity to mitigate future concerns about the nature of its program and its possible

weaponization. Some argue that uncertainty over Iran’s nuclear program centers on the regime’s

political will to develop a nuclear weapon and are uncertain whether that will exists. Many

analysts, however, perceive the weaponization of Iran’s nuclear program as a certainty unless the

international community acts to stop it. The disclosure on September 21, 2009 of a second

uranium enrichment facility near Qom raised concerns on all sides (see “Caspian Neighbors”

below). Iran’s intentions are difficult to discern, but most analysts and observers agree that if Iran

was seeking enriched fuel for nuclear energy and other civilian purposes, then it would not need

to conceal an enrichment facility or restrict access of International Atomic Energy Agency

(IAEA) inspectors to existing sites.

Most of Iran’s neighbors share the concern of the United States and the international community

over the nature of Iran’s nuclear program, but some perceive it as a more imminent threat than

others. Others recognize the threat but have competing economic and political interests that may

prevent them from publicly expressing their concerns. Almost all of Iran’s neighbors share the

primary concern that uncertainty over Iran’s nuclear program could lead to a regional arms race

or war that could spill over into their territories, complicate their relationships with the United

States, and/or badly damage their economies.

Iran’s Role as an Energy Producer

Iran’s energy resources serve as both a source of funds for its nuclear program, support for

terrorism, and other activities, and as leverage over international players who might otherwise

condemn those activities. According to the Energy Information Administration (EIA), Iran holds

an estimated 10% of proven global oil reserves, the third largest proven reserves following Saudi

Arabia and Canada. It is the fourth largest exporter of crude oil by volume, behind Saudi Arabia,

Russia, and Norway. Perhaps just as valuable is Iran’s strategic location along the Strait of

Hormuz, a narrow chokepoint through which more than 40% of the world’s traded oil transits. In

addition to its oil reserves, Iran holds an estimated 15% of the world’s natural gas reserves, the

second largest globally. (Russia is first.)4 Iran’s vast energy resources, some argue, are

underexploited and with continued investment could become more vital as world demand also

grows.5 This fact is increasingly relevant to regional and U.S. approaches to Iran, as nations n

Asia develop stronger energy partnerships with Iran as a means of capitalizing on its potential.

For some of Iran’s neighbors, economic and security concerns are in conflict when it comes to

their relationships with Iran, and their policy priorities are shaped by whether they perceive

potential economic benefits to outweigh security concerns. While almost all of Iran’s neighbors

share the view that a nuclear Iran is not desirable, especially if its development leads to a regional

arms race or military conflict, some likely are unwilling to publicly challenge Iran on the issue

because of their economic dependence on or relationships with Iran.

Energy Information Administration (EIA), “Country Analysis Briefs: Iran,” 2007.

“Global Trends 2025: A Transformed World,” National Intelligence Council Report, November 2008.

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Iran’s Support for Terrorism

The United States and Iran’s neighbors are concerned about Iran’s support for terrorism in the

region. According to the U.S. State Department Country Reports on Terrorism, Iran supports an

array of U.S.-designated terrorist organizations and militant groups, including Lebanese

Hezbollah, Hamas, Palestinian terrorist groups, Iraqi militants, and Taliban fighters in

Afghanistan.6 This support has at times undermined the political stability of Iran’s neighbors, like

Iraq, and poses direct military threats to others, like Israel and Lebanon. It also directly challenges

U.S. efforts to advance the peace process, stabilize Iraq and Afghanistan, and promote regional

stability.

Terrorist groups supported by Iran have perpetrated attacks in the Middle East, Europe, and

Central Asia. While these attacks have targeted U.S. or Israeli interests, the presence of terrorist

groups often limits the options available to Iran’s neighbors to act together to address other

regional concerns. By creating internal divisions and exploiting existing political and sectarian

discord in places like the Palestinian territories and Lebanon, and by maintaining a proxy military

presence on Israel’s northern border (Hezbollah), Iran can perpetuate conflict without directly

involving its own troops while using continued Arab-Israeli strife to justify its own militant,

revolutionary rhetoric at home to shore up domestic support.

Secretary of Defense Robert Gates testified before the Senate Armed Services Committee on January 27, 2009 that

the Defense Department had seen a slight increase in Iranian shipments of arms into Afghanistan in recent months, but

also that the flow of Iranian weapons into Afghanistan remains at a small level. In attempting to explain the continuing

shipments, some experts believe that Iran’s policy might be shifting somewhat to gain leverage against the United

States in Afghanistan (and on other issues) by causing U.S. combat deaths, but not so extensive as to risk a Taliban

return to power. See Secretary Gates’ testimony at http://armedservices.senate.gov/Transcripts/2009/01%20January/A%20Full%20Committee/09-02%20-%201-27-09.pdf

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Iran: Regional Perspectives and U.S. Policy

Figure 1. Iran and its Neighbors

Source: Map Resources, Adapted by CRS (10/2009)

Iran: Regional Perspectives and Policies

Saudi Arabia7

Perspectives and Interests

As the two most politically and religiously influential states in the Gulf region, Saudi Arabia and

Iran have long maintained a binary balance of power, with each seeking to maximize its position

relative to the other and relative to important outside players. Knit together by a common Islamic

history but divided by sectarian, ethnic, and linguistic differences, the two Gulf energy giants

leverage their economic resources and political power competitively to shape policy outcomes

Prepared by Christopher Blanchard, Analyst in Middle Eastern Affairs, December 2009.

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across the region and around the world. During the Cold War, the shared anti-Communist

positions of the late King Faisal bin Abdul Aziz Al Saud and the late Shah Mohammed Reza

Pahlavi made each a key regional ally of the United States under the so-called Twin Pillar policy,

in spite of their latent rivalry. Iran’s Islamic revolution accentuated core strategic tensions

between the two regional powers by bringing religious and ideological differences into sharp

contrast. In the 1980s, Iran’s revolutionary clerical regime produced anti-Al Saud propaganda that

questioned Saudi custodianship of the holy cities of Mecca and Medina, while official Saudi

clerics and Salafi activists amplified their anti-Shiite rhetoric. Sectarian clashes in Saudi Arabia’s

Eastern Province and the holy city of Mecca underscored Saudi fears of potential subversion from

Iran, and Saudi Arabia led other Gulf Arab states in supporting Iraq in its eight year war against

Iran.

In the 1990s, Saudi Arabia served as the key hub for the implementation of the U.S. “dual

containment” strategy, which was designed to maintain United Nations sanctions and no-fly

zones in Iraq and to deter potential Iranian or Iraqi aggression. During this period Saudi Arabia

viewed Iran in less hostile terms in light of Iraq’s invasion of neighboring Kuwait. The U.S.-led

invasion of Iraq in 2003 and the subsequent empowerment of Iraqi Shiites via the ballot box

upended the prevailing security balance in the Gulf: in Saudi Arabia’s view, Iran was the main

beneficiary of the removal of Saddam Hussein. The potential for insecurity and sectarian violence

in Iraq to draw Saudi Arabia and Iran into proxy warfare appears to have subsided at present.

However, the fundamental reorientation of Iraq’s political scene has created a new field of

competition that continues to shape the views of Iranian and Saudi leaders about regional

dynamics. The outcome of the pending national elections in Iraq will affect the relative interests

of Saudi Arabia and Iran and the prospects for future engagement or competition among them.

Elsewhere, Iran and Saudi Arabia remain engaged in a direct competition for influence, at times

pursuing diametrically opposed policies with regard to Lebanon and the Israeli-Palestinian peace

process. Whereas Saudi Arabia previously placed great emphasis on positioning itself as the

spiritual, if not political defender, of Sunni Islamic orthodoxy and a transnational Muslim

community, its leaders’ current focus appears to be on strengthening national and pan-Arab

solidarity in an attempt to undercut domestic extremist threats and contain Iran. While sectarian

rhetoric continues to enflame Saudi-Iranian relations, the dynamic between the two governments

has reverted to basic strategic competition, overlaid with official assurances of mutual respect and

periodic consultation. Saudi authorities have become less wary about asserting a leadership role

in the Arab world and have asked Iranian leaders not to unduly interfere in what the Saudi

Arabian government now considers to be strictly “Arab causes,” including Palestinian political

disputes. 8 Iran’s nuclear program is a source of concern for Saudi Arabia, as is the potential for

regional conflict resulting from the international community’s confrontation with Iran. More

recently, Saudi Arabia’s military campaign against the Shiite Al Houthi rebel group in northern

Yemen has brought fears of proxy conflict back into focus. Yemeni and Saudi sources have

alleged that Iran has provided material support to the Houthis, while Iranian figures have

condemned Saudi and Yemeni military operations as anti-Shiite.

Saudi Foreign Minister Prince Saud Al Faisal stated in March 2009 following a visit from Iranian Foreign Minister

Manouchehr Mottaki that, “although we [Saudi Arabia] appreciate the Iranian support for Arab causes, we believe that

this support should be channeled through the Arab legitimacy, be consistent with its goals and positions, express its

support for it and not be a replacement for it.”

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Policy Priorities

Iran may no longer be working overtly to destabilize or overturn neighboring governments, but

Iranian politicians nevertheless advocate for and support actors that have opposed Saudi policy

and disrupted regional security in recent years, such as Hamas and Hezbollah. Combined with the

perceived influence Iran has gained in Iraq and from its nuclear program, these trends have led

the Saudi government to adopt a cautious policy approach that seeks to avoid direct confrontation

while limiting the further spread of Iranian influence through coordination with other Arab

governments and, to a lesser extent, with the United States. In general, Saudi officials have

pursued limited engagement with their Iranian counterparts and have avoided exacerbating

sectarian tensions with official public statements. Saudi media outlets, including government

owned television channels and newspapers, have taken a more critical line toward Tehran, and

have capitalized on controversies such as the early 2009 flare-up over Bahrain (see below) and

the ongoing confrontation with the Al Houthi rebels in Yemen to fan popular opposition to

perceived Iranian interference in the region. On the nuclear issue, Saudi Foreign Minister Prince

Saud Al Faisal said in April 2009 that Saudi Arabia welcomed,

“the US Government’s positive approach of wishing to deal with the Iranian nuclear dossier

crisis diplomatically and through dialogue. We are very hopeful that the Iranian Government

will respond to these efforts for solving the crisis in a way that spares the Arab Gulf region

and the Middle East the dangers of the proliferation of nuclear weapons and ensures the right

of all the region’s countries to the peaceful use of nuclear energy in accordance with the

International Atomic Energy Agency’s standards.”9

At the United Nations General Assembly in September 2009, Prince Saud linked Israel’s nuclear

program to Iran’s in arguing that the international community’s response to Israel’s presumed

nuclear capabilities “has motivated some states to push ahead with the development of nuclear

capabilities, using the pretext of double standards to justify non-compliance with international

resolutions in this regard.”10

Economic and Security Concerns

The value of Saudi-Iranian trade remains relatively limited, estimated by the International

Monetary Fund at $1.42 billion in 2007 and $1.87 billion in 2008.11 The limits imposed on the

productivity of Iran’s oil sector by U.S. and international sanctions and the difficulties foreign

firms have found working in Iran benefit Saudi Arabia by helping to preserve its global market

share. As an oil producer with significant excess production capacity, Saudi Arabia is able to exert

some pressure on global oil prices and thereby has the power to affect the potential oil export

revenue available to its fellow OPEC member Iran.

Economic and security concerns are linked for both parties, as regional security disruptions have

the potential to threaten the viability of oil exports and necessary imports. Saudi Arabia’s military

forces possess more sophisticated modern equipment than those of Iran, in spite of the Iranian

military’s larger overall manpower. Saudi military spending also far outpaces that of Iran.

“Saudi Arabia’s Al Faysal, UK’s Miliband Comment on Mideast Peace Process, Issues,” OSC Report

GMP20090409825006, April 9, 2009.

Prince Saud al Faisal, Statement to the 64th Session of the U.N. General Assembly, September 26, 2009.

International Monetary Fund (IMF), Direction of Trade Statistics, Islamic Republic of Iran, September 2009.

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Iran: Regional Perspectives and U.S. Policy

However, Iran’s ballistic and cruise missile forces, the unconventional capabilities of Iranian

naval forces, and Iran’s relationships with non-state actors like Hezbollah are thought by many

experts to pose a credible and dangerous threat in the minds of Saudi security officials. Saudi

Arabia, as a longstanding military ally of the United States, is likely viewed by Iranian policy

makers as a potential staging ground or facilitator for attacks on Iran and a potential target for

retaliation against Iran’s enemies by virtue of the international community’s dependence on Saudi

oil exports. As such, Saudi officials reportedly fear that Iran could attack in the event Iran were to

face a military confrontation with the United States or Israel, even if Saudi Arabia had not been

involved in the planning or execution of a military operation.

Prospects

The rivalry inherent to the Iranian-Saudi relationship appears natural given that the two states are

emerging powers seeking to maximize their interests in a volatile, economically important region

and on the world stage. The vulnerability of both countries’ energy assets and the unique

constraints imposed by religious factors may help mitigate the likelihood of direct conflict, in

spite of economic competition and apparent sectarian tensions between the two. Saudi-Iranian

political tensions have flared in the past to the point of sparking limited military engagements, but

over time Saudi and Iranian leaders consistently have found means of defusing their

disagreements before these crises have escalated into broader conflict. To the extent that political

developments in Iran empower figures intent on asserting Iranian influence in Iraq, the Gulf, and

the Levant without regard for the views or interests of Arab states, Saudi Arabia can be expected

to use its considerable economic and political influence to resist Iranian encroachment. To the

extent that more accommodating, pragmatic figures prevail, Saudi leaders can be expected to

continue limited engagement with Iran, in light of persistent concerns about Iran’s regional

ambitions. Developments in Iraq will shape Saudi and Iranian leaders’ decision making about

their own bilateral relationship.

Saudi Arabia’s prospective response to the acquisition of a nuclear weapon by Iran has long been

a matter of intense debate and conjecture among observers and policy makers. Speculative

predictions aside, history and recent policy statements suggest that if Saudi leaders decide that a

Iranian nuclear weapon would have a significant deterrent effect on the United States or

otherwise intolerably alter the balance of power in the Gulf, then Saudi Arabia would take

decisive action to secure its national interests as it has in the past, whether unilaterally or in

cooperation with other governments. Most Gulf experts expect that Saudi Arabia’s response

would be a critical factor in other regional actors’ decisions about a possible Iranian nuclear

weapon’s capability.

Qatar12

Perspectives and Interests

Since the Iranian revolution, Iran and Qatar have maintained positive relations, in spite of periods

when Iran’s relationships with the Arab Gulf states otherwise foundered, such as during the IranIraq war and tanker war of the 1980s. Qatari officials have met frequently with members of Iran’s

Prepared by Christopher Blanchard, Analyst in Middle Eastern Affairs, December 2009.

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government in Iran and in Qatar in recent years, and the Qatari government regularly advocates

for increased dialogue between the GCC states, other Arab states, and Iran. Iranian President

Mahmoud Ahmedinejad attended the December 2007 GCC summit in Doha at the invitation of

Qatari Emir Hamad bin Khalifa Al Thani. He also attended a January 2009 summit on Gaza

sponsored by the emir. The emir in turn visited Iran in November 2009 for consultations on

bilateral and regional issues. In a March 2009 interview with a German newspaper, the emir

explained Qatar’s current perspective on the region and on Iran by saying,

“We are a small country and we can live with anything around us. We will not be an enemy

to anybody, but of course we will not allow anybody to use us against others. We will not,

for example, stand with America against Iran. For sure. Iran never bothered us, it never

created a problem for us... It will be hard for the Gulf countries to be with Iran against the

United States. And I believe Iran knows this.”13

These remarks, coupled with Qatari decisions to host Iranian leaders and to encourage Arab

solidarity with Hamas during the January 2009 Gaza war have led some observers to argue that

Qatar is working in opposition to the efforts of Saudi Arabia and Egypt and in favor of Iran.

Qatari officials largely reject analyses that divide the region into opposing camps and argue that

engagement, dialogue, and collective approaches to regional security problems between Arab

states and Iran may offer opportunities to avert further tension and conflict. These arguments and

positions are consistent with the Qatar’ government’s reputation for favoring independent policies

and attempting to assert a leadership role consistent with its growing economic clout, in spite of

its small population and very limited military capabilities.

Policy Priorities

Qatar’s foreign policy priorities reflect its leaders’ desire to maintain their country’s

independence, security, and freedom of action among more powerful competing regional and

international actors, including the United States. Like other Arab Gulf states, Qatar’s economic

growth and diversification is in many ways dependent on the maintenance of stability in the Gulf

region. Thus it views potential conflict, whether initiated by Iran or by others, as undesirable.

Statements from Qatari leaders suggest that Doha views Iran as an ascendant regional power that

cannot be ignored or fully contained by non-military means, and thus Qatar prioritizes

engagement with Iran and its potential adversaries. Qatar’s recent diplomatic activities, including

its mediation of Lebanon’s political deadlock in early 2008 and its advocacy on behalf of Hamas

in January 2009, have been viewed by many regional observers as consistent with Iran’s

priorities, although Qatari leaders have described their regional diplomacy as driven by traditional

Arab nationalist concerns. In July 2006, Qatar was the sole member of the United Nations

Security Council to oppose Security Council Resolution 1696, which called on Iran to "suspend

all enrichment-related and reprocessing activities, including research and development, to be

verified by the IAEA," and proposed potential sanctions should Iran refuse.

“Qatari Emir Views Foreign Investments, Change in Economic Powers, Mideast Peace,” OSC Report

EUP20090329499001, March 29, 2009.

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Economic and Security Concerns

According to the IMF, the value of Iranian-Qatari trade was estimated at $57 million in 2007 and

$75 million in 2008.14 Iran and Qatar share the large North Field/South Pars natural gas deposit

off the Qatari coast. Most of the gas in the field lies in Qatar’s territorial waters (approximately

900 trillion cubic feet), with Iran’s waters possessing the remainder (approximately 280 trillion

cubic feet). Qatar’s share of the field is the basis for the country’s status as holding the third

largest natural gas reserves in the world. Qatari liquefied natural gas exports brought an estimated

$35.6 billion in export revenue to the country in 2008.15

With small and lightly equipped armed forces, Qatar effectively relies upon the U.S. armed forces

stationed in the country for its defense. However, the presence of U.S. forces also creates a

potential flashpoint vis-à-vis Iran; in the event of U.S.-Iranian hostilities, U.S. military facilities

in Qatar would be critical for U.S. command and control purposes and thus could be likely targets

of Iranian attack. The Chief of Staff of the Qatari Armed Forces Major General Hamad bin Ali al

Attiyah travelled to Iran in July 2009 and held security talks with Iranian defense officials,

including the commander of the Iranian Revolutionary Guard Corps.

Prospects

Unlike the other GCC states, Qatar has an enduring economic and security linkage to Iran, by

virtue of the shared energy resources in the countries’ contiguous waters. Without access to the

shared gas deposit or under conditions where gas production facilities created with massive state

investments were threatened with attack, Qatar’s economy and fiscal position could suffer greatly.

Qatar has maintained a policy of engagement with Iran and has strengthened bilateral ties as

Iran’s influence relative to other regional actors has grown in recent years. Absent a change in the

nature and senior clerical leadership of the Iranian government, political changes among Iran’s

elected leadership are unlikely to jeopardize or significantly alter Iranian-Qatari relations. In late

June 2009, Qatari Prime Minister and Foreign Minister Sheikh Hamad bin Jassem bin Jabr Al

Thani characterized Iran’s post-election disputes as “an internal matter because we must respect

the right of each state to solve its own problems. The Iranians will decide how to resolve their

problems among themselves, and I am certain that they will bypass this crisis.”16 A more

moderate government in Tehran could empower Qatari efforts to promote GCC engagement with

as a means of preventing conflict.

Qatari officials have simultaneously pursued a policy of rapprochement with Saudi Arabia,

bringing an end to a series of long running political and boundary disputes, and with other Gulf

states, building transportation and energy linkages to Bahrain, the United Arab Emirates, and

Oman. Qatar’s policy of attempting to “not be an enemy to anybody” appears sustainable unless

drastic changes in security conditions compel Qatari leaders to choose among friends.

International Monetary Fund (IMF), Direction of Trade Statistics, Islamic Republic of Iran, September 2009.

Vernon Silver and Henry Meyer, “Sheikh Who Backed Barclays Gets Another Shot With Qatar’s Money,”

Bloomberg, May 12, 2009.

BBC Monitoring Middle East, “Shaykh Hamad Bin-Jasim Bin Jabr Al Thani, Premier discusses Qatari mediation,

Al-Jazeera, ties with Egypt, Israel, Saudi” June 26, 2009.

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Bahrain17

Perspectives and Interests

As the rulers of a small state among larger regional and international powers, Bahrain’s Sunni

Arab monarchy historically has depended on good relations with external actors as the ultimate

guarantee of its stability and security. Bahrain’s current foreign relations reflect dynamics

common to the country’s history: the government of Bahrain seeks to maintain the country’s

security and independence through alliances with fellow Arab states, through a policy of

engagement and non-antagonism toward Iran, and through the support of a powerful extraregional actor, the United States. As an international hub for business and banking, Bahrain’s

economic success depends upon its image as a secure environment for investment and commerce.

The potential for disruptive regional developments or conflict and the island’s perennially

disgruntled Shiite majority are the two principal concerns of Bahrain’s ruling elite.

Bahrain’s ruling family, the Al Khalifa, first established control over Bahrain and its

predominantly Shiite population in the 1780s, after overcoming and expelling Persian outposts on

the island. The Al Khalifa family subsequently sought alliances to secure itself from the

predations of several regional powers, including Persia, until ultimately agreeing to make Bahrain

a British protectorate in 1861.18 Persian officials contested Bahrain’s sovereignty repeatedly

during the 19th and 20th centuries, most notably in the early 1930s, when Reza Shah contested the

right of Bahraini officials to grant oil concessions to U.S. and British interests, and in 1957, when

a bill was submitted to the Iranian Majlis (legislature) to make Bahrain a province of Iran. Prior to

Bahrain’s independence from Britain in 1971, Iran reasserted its claim to Bahrain, and the United

Nations Secretary General dispatched a representative to determine the views of Bahrainis, who

found that the island’s residents overwhelmingly favored independence from all outside powers,

including Iran. The findings were endorsed by the United Nations Security Council in Resolution

278 and Iran’s legislature ratified the resolution, in effect relinquishing all claims to Bahrain. 19

While these issues were formally settled nearly forty years ago, concerns that the claims will be

revived have arisen from time to time based on comments by officials and clerics associated with

the Islamic Republic of Iran. The most recent example occurred in February and March 2009,

when media reports that a former speaker of the Iranian parliament and then-aide to Iran’s

Supreme Leader had referred to Bahrain as Iran’s 14th province sparked a regional controversy. In

response, the Iranian Foreign Ministry repeatedly reasserted Iran’s respect for Bahrain’s

sovereignty and independence alongside Bahraini officials, amid condemnations from a number

of other Arab states. In spite of Iranian government assurances, the remarks were seized upon by

Arab governments and observers who are convinced that Iran harbors hostile intentions toward its

neighbors and have been concerned about perceived Iranian interference in Arab affairs in recent

Prepared by Christopher Blanchard, Analyst in Middle Eastern Affairs, December 2009.

Majid Khadduri, “Iran's Claim to the Sovereignty of Bahrayn,” American Journal of International Law, Vol. 45, No.

4 (Oct., 1951), pp. 631-647.; and, J. B. Kelly, “The Persian Claim to Bahrain,” International Affairs, Vol. 33, No. 1

(Jan., 1957), pp. 51-70.

For more information on this process, see Husain Al Baharna, “The Fact-Finding Mission of the United Nations

Secretary-General and the Settlement of the Bahrain-Iran Dispute, May 1970,” International and Comparative Law

Quarterly, Vol. 22, No. 3 (Jul., 1973), pp. 541-552; Edward Gordon, "Resolution of the Bahrain Dispute," American

Journal of International Law, Vol. 65, No. 3 (Jul., 1971), pp. 560-568; and, United Nations Security Council, Notes by

the Secretary General, S/9726 and S/9772.

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years. Bahrain’s leaders, like those of other Arab Gulf states, have responded cautiously to Iran’s

nuclear program and the sectarian tension that has accompanied conflict in Iraq and rise of the

Shiite Arab political parties since the fall of Saddam.

Policy Priorities

Bahrain’s limited resources and large Shiite population, some of whom are of Persian ethnicity,

create unique challenges for the country’s leaders as they view their relationship with Iran and

events in the region. In the past, Bahrain’s rulers have accused Iran of supporting pro-Iranian

proxy groups against the Bahrain government, and Bahraini concerns about the potential for

Iranian-supported unrest have been amplified in recent years amid sectarian violence in Iraq and

resurgent protests by Shiite groups in Bahrain. Riots in 2009 mirrored similar events in the mid1990s that produced accusations of Iranian interference, although reporting suggests the political

disputes driving the more recent unrest are based on long-standing unresolved domestic

grievances and government reactions rather than widespread pro-Iranian sentiment.

Bahrain’s leading Shiite opposition party, Al Wefaq, remains engaged in the political process and

expressed concern about Iranian comments concerning Bahrain’s sovereignty in early 2009. The

party also played a mediating role following the December 2008 arrests of Shiite activists accused

of plotting bombing attacks on Bahrain’s national day, helping to secure the release of rival Shiite

leader Hassan Mushaima. In November 2009, Sunni politicians criticized Al Wefaq after the

Shiite party’s members in the lower house of parliament refused to support a resolution endorsing

Saudi Arabia’s military campaign against the Al Houthi fighters accused of infiltrating the

kingdom from northern Yemen. 20 The controversy reignited concerns about sectarian divisions

among Bahrainis, although both the royal court and Al Wefaq have issued statements

underscoring the linkage between Saudi and Bahraini security. Al Wefaq and Mushaima’s hardline Al Haq movement will compete for influence among Bahrain’s Shiite majority in the run-up

to parliamentary elections scheduled for 2010, although it remains unclear whether Al Haq will

formally participate or seek to put pressure on Al Wefaq to reinstate its boycott in light of

continuing disillusionment among Shiites. Al Wefaq has delayed confirming that it will

participate in the election, citing concerns about the overall effectiveness of the parliamentary

system and continued allegations of sectarian discrimination. Bahrain’s monarchy and Sunni

community are likely to continue to closely monitor developments among leading Shiites for

signs of Iranian influence or agitation.

Economic and Security Concerns

Iranian-Bahraini trade is limited; the IMF estimated its 2007 value at $166 million and $177

million in 2008.21 Negotiations for a potential natural gas agreement for Bahrain to import Iranian

gas to meet growing domestic energy demand was temporarily placed on hold following the

sovereignty controversy in early 2009. Under the terms of the agreement, Bahrain and Iran would

build a pipeline to enable Bahrain to import 28 million cubic meters per day of gas over 25

years.22

Habib Toumi, “Al Wefaq blasted for stand on Al Houthi issue,” Gulf News (Dubai), November 15, 2009.

International Monetary Fund (IMF), Direction of Trade Statistics, Islamic Republic of Iran, September 2009.

Geoff King, “Iran says not officially told Bahrain has suspended gas talks,” Platts Commodity News, February 22,

2009.

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As stated above, Bahrain’s primary security concerns are domestic and relate to Iran only to the

extent that Iranian leaders may seek to exacerbate existing tensions between Bahrain’s Sunni

monarchy and its majority Shiite population. Bahrain relies on its relations with the United States

and Saudi Arabia for its external security. Like Qatar, Bahrain hosts major U.S. military facilities,

specifically the forward headquarters for the U.S. Navy component of U.S. Central Command,

and may fear a potential retaliatory attack in the case of hostilities involving the United States or

Israel and Iran.

Prospects

Suspicions of Iran among Bahrain’s leaders appear deeply ingrained, and are amplified in

instances where Bahrain’s leaders perceive Iran to be pursuing hegemonic or sectarian policies.

Political changes in Iran as a result of the disputed 2009 election could mitigate some, but not all

of Bahrain’s concerns. Acquisition of a nuclear weapon by Iran would likely deepen Bahrain’s

reliance on the United States, although trends and reactions among the Gulf Cooperation Council

states would also exert significant influence on Bahrain’s response. Iran appears poised to

continue its efforts “to consolidate and deepen relations with all nations in the Persian Gulf,

especially Bahrain,”23 as a means of minimizing the prospects for collective GCC action that

could harm its interests.

The United Arab Emirates24

Perspectives and Interests

Like the other Gulf states, the individual emirates of the United Arab Emirates (UAE) have had

complex relationships with Iran historically, marked by changing alliances and, in some cases,

contested sovereignty. On a national basis, the UAE government has viewed Iran simultaneously

both as a potentially hostile neighbor and as an important commercial partner since the formation

of the UAE in 1971. The seven constituent emirates’ relations with Iran have proven complex,

with some, such as Ras Al Khaymah and Abu Dhabi, having long held more negative views of

Iran and its intentions, and others, such as Dubai and Sharjah, taking more accommodating

positions based on shared commercial and demographic ties.

Persian and Iranian interaction with the Arab Trucial States, as the emirates were collectively

known prior to the formation of the UAE in 1971, was critical in their early economic and

political development and shaped interactions and rivalries between the emirates as the new state

emerged. In 1971, Iran, then ruled by U.S.-backed Shah Mohammed Reza Pahlavi, seized two

islands, Greater and Lesser Tunb, from the emirate of Ras Al Khaymah, and established a military

outpost on the largely uninhabited island of Abu Musa under a bilateral agreement with the

emirate of Sharjah. In April 1992, Iran exerted control of the remainder of Abu Musa. The dispute

over the sovereignty of the islands has persisted over the last nearly 40 years, and frequently has

enflamed tensions between the UAE, Arab states, and Iran. In October 2008, the UAE and Iran

signed an agreement to establish a joint commission to resolve the islands dispute; that agreement

Iranian Foreign Minister Manuchehr Mottaki quoted in Al Arabiya “Bahrain and Iran declare ‘good’ ties after crisis,”

February 26, 2009.

Prepared by Christopher Blanchard, Analyst in Middle Eastern Affairs, December 2009.

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came two months after the UAE protested Iran’s opening in August 2008 of administrative and

maritime security offices on Abu Musa. The United States is concerned about Iran’s control over

the islands, but takes no position on the sovereignty of the islands.

In a March 2009 interview, UAE President Sheikh Khalifa bin Zayed Al Nahyan explained the

UAE government’s views on the islands dispute and the Iranian nuclear program:

“As a matter of principle, we do not condone the use of force in solving international

disputes no matter how far away the location of this dispute may be. How much more so,

when it is next door! We always stress the need to listen to the sense of reason in resolving

the differences on Iran’s nuclear program, which should be by peaceful means. We still hope

these efforts will succeed. We also hope that all parties will exercise self-restraint and meet

the demands of the international community on this issue...

We hope that our brothers and neighbors [sic] Iranians will respond to our demands by

handing over the Islands to the UAE. Our request is not an impossible one (to accept), since

we are only asking that our legitimate rights to the three islands of Abu Musa, Greater Tunb

Greater and Tunb Lesser be restored. We are looking forward to retrieving our sovereignty

over the Islands through peaceful approach and dialogue. We have said repeatedly that the

UAE will accept any ruling by the International Court of Justice, whether in our favor or

not.”25

In December 2009, the leaders of the GCC states reiterated their support for UAE sovereignty

over the islands and called for Iran to accept mediation or ICJ adjudication of the islands dispute.

Iran’s Foreign Ministry responded by asserting Iran’s ownership of the islands “forever.”26 On

December 23, UAE Foreign Minister Sheikh Abdullah bin Zayed al Nahyan stated that “They

[Iran] call the [islands] issue a misunderstanding and we call it occupation. However, we should

not view Iran's continuous occupation of the UAE islands as a barrier for developing economic

ties between the two countries. We even hope that such ties will reach a level through which we

can resolve the dispute, not the other way around.”27

Policy Priorities

Like Saudi Arabia, the UAE’s policy priorities wih regard to Iran are multifaceted. In general,

Emirati officials stress that they are seeking to avoid circumstances that would lead to regional

conflict in which Iran could attack UAE territory. Specifically, they are seeking to engage with

Iran on key disputes and cooperate with international partners to stem the advance of Iranian

regional influence. The UAE’s economic potential and planned growth depends on security and

regional stability, and UAE leaders accordingly promote peaceful resolutions to regional disputes,

even as they prepare to minimize the threat that regional security disruptions and military threats

could post to the UAE. Tangible expressions of these priorities are visible in UAE support for the

Obama Administration’s outreach to Iran and calls for a mediated resolution to the islands

dispute. These initiatives are paired with UAE political and financial support for the Palestinian

Emirates News Agency (WAM), “UAE President: Doha Summit an Opportunity to Mend Arab Fences,” March 25,

2009.

Emirates News Agency (WAM), “GCC summit issues final communiqué” December 16, 2009; and, Islamic Republic

News Agency, “Iran reiterates ownership of Persian Gulf islands,” December 16, 2009.

SABA Online (Yemen News Agency), “They Call It Misunderstanding... We Call It Occupation, Says Sheikh

Abdullah,” December 23, 2009.

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Authority, endorsement of the Arab League peace proposal to Israel, and the UAE’s diplomatic

engagement and debt forgiveness toward Iraq, all of which attempt to balance countervailing

Iranian efforts.

Economic and Security Concerns

Iran-UAE economic relations are well developed. The IMF estimates the value of bilateral trade

at $5.9 billion in 2007 and $7.74 billion in 2008.28 Dubai has long served as a particularly

important commercial center for Iranian traders and businessmen, and Iranian merchants make

significant profits bringing goods back and forth across the Gulf to Emirati ports. A number of

Iranian banks operate branches in Abu Dhabi and Dubai, which U.S. officials suspect have

become increasingly important nodes for the Iranian banking system as it seeks to maintain

access to international financial markets amid tightening multilateral banking sanctions. It

remains unclear what impact, if any, Dubai’s debt challenges and subsequent financial bailouts by

Abu Dhabi will have on political relations within the federation or what effect any changes could

have on the UAE’s relations with Iran.

The UAE, under the auspices of the Abu Dhabi Executive Authority, also has begun to move

forward with plans to build nuclear power stations, and has sought to position its program as a

counterexample to Iran’s by agreeing to forego the development of indigenous uranium

enrichment and fuel reprocessing capabilities. Ironically, the willingness of international partners

to support the UAE nuclear program has been undermined by instances in which Iran and other

nuclear proliferation customers and suppliers have used the UAE as a transit, shipping, and

financial hub.

The UAE, particularly Abu Dhabi, has long feared that the large Iranian-origin community in

Dubai emirate (est. 400,000 persons) could pose a “fifth column” threat to UAE stability. Military

cooperation and arms sales form a key pillar of U.S.-UAE relations. The UAE hosts frequent port

calls and shore visits for U.S. naval vessels and allows the U.S. military to use Al Dhafra air base

in support of a variety of missions in the U.S. Central Command (CENTCOM) area of operations.

In 2007 and 2008, the Bush Administration notified Congress of over $19.4 billion in potential

arms sales to the UAE, including what would be the first overseas sale of the Terminal High

Altitude Air Defense system, an anti-missile system well suited for responding to potential

Iranian threats.29

Prospects

UAE-Iranian relations are shaped by tensions inherent to interactions between a small,

heterogeneous federation and a more powerful, ambitious, ideologically motivated neighbor.

Each side views the bilateral relationship through the lenses of their economic interdependence,

their open territorial disputes, their ethnic differences, and sectarian divisions. Emirati authorities

allowed public protests at the Iranian consulate in Dubai in relation to post-election disputes in

Iran, and subsequent political changes in Iran as a result of the election dispute have the ability to

amplify or reduce the extent to which the UAE views Iran as a threat. The UAE strongly opposes

International Monetary Fund (IMF), Direction of Trade Statistics, Islamic Republic of Iran, September 2009.

Information about notifications of proposed U.S. arms sales is available from the U.S. Defense Cooperation Agency

at: http://www.dsca.mil/PressReleases/36-b/36b_index.htm.

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the militarization of Iran’s nuclear program and would likely seek greater security coordination

with the Gulf Cooperation Council or a clear commitment of protection from the United States.

The prospect remains that the UAE could alter its decision to forego domestic uranium

enrichment or plutonium reprocessing technology at some time in the future, which could signal

pursuit of a more independent option, although doing so would risk harming UAE-U.S. relations.

Refined petroleum product sanctions legislation pending in the U.S. Congress (see H.R. 2194, S.

908, and S. 2799) could affect firms operating in the UAE, as well as proposed U.S.-UAE nuclear

cooperation.

Kuwait30

Perspectives and Interests

Kuwait’s relationship with and perceptions of Iran have generally been a function of Kuwait’s

core concerns about Iraq, Kuwait’s larger neighbor which invaded and occupied it from August

1990 until February 1991. During the rule of Saddam Hussein in Iraq, Kuwait considered Iran a

counterweight to Iraqi power in the Gulf region, and most strategists in Kuwait did not view

Tehran as the potential regional hegemon that some of its Gulf allies have. Some of its Gulf

neighbors criticized Kuwait for attempting to use Iran and Iranian-supported movements to

weaken Saddam Hussein. During the 1990s, Kuwait often hosted pro-Iranian Iraqi Shiite

oppositionists against Saddam, including those of the Supreme Council for the Islamic

Revolution in Iraq (SCIRI), which is now a major Shiite party in Iraqi politics and has changed its

name to the Islamic Supreme Council of Iraq (ISCI).

Policy Priorities

In keeping with Kuwait’s overall perceptions and strategy, Iran-Kuwait relations are relatively

normal. High level visits are routine, including parliamentary exchanges. In early 2008, the two

formed an Iran-Kuwait Higher Committee to continue building relations. Kuwaiti refineries

supply gasoline to Iran, which must import about 30% of its gasoline needs. The two are

attempting to resolve their common maritime border, a pre-requisite for the proposed joint

development of the disputed Durra offshore oil field, which also straddles the Saudi maritime

border.

Kuwait has also taken a moderate approach to Iran’s nuclear program. While the Kuwaiti

government has stated that it is committed to complying with all U.N. Security Council

Resolutions, including resolution 1801 which includes sanctions on Iran31, it has also cautioned

against an escalation to conflict. Speaker of the Kuwaiti National Assembly Jassem al Kharafi

stated that “there are provocative Western statements, and Iran responds in the same way...I

believe that a matter this sensitive needs dialogue not escalation.”32

Prepared by (name redacted), Specialist in Middle Eastern Affairs, December 2009.

U.S. Open Source Center (OSC) Document GMP20081002966020, “Kuwait in Compliance with UNSC Iran

Sanctions Resolution Interior,” KUNA, October 2, 2008.

“Kuwaiti Parliament Speaker Says the West is ‘Provoking’ Iran On Nuclear Issue,” Associated Press, July 14, 2008.

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Economic and Security Concerns

So acute were Kuwait’s fears of Saddam Hussein that it curried favor with pro-Iranian Iraqi Shiite

parties even though these same Shiite groups had conducted attacks in Kuwait in the 1980s. The

December 1983 bombings of the U.S. and French embassies in Kuwait and an attempted

assassination of the Amir in May 1985 were attributed to the Iraqi Da’wa (Islamic Call) Party, the

Shiite party of Iraqi Prime Minister Nuri al-Maliki. Seventeen Da’wa activists were arrested for

these attacks. Da’wa activists also hijacked a Kuwait Airlines plane in 1987. These acts in the

1980s were perceived by many as an effort by Tehran – using these Iraqi allies – to pressure

Kuwait into ending its support of Iraq during the Iran-Iraq war. At that time, Iran was viewed by

Kuwait and the other Gulf states as the larger threat in the Gulf. During 1987-88, the United

States protected Kuwaiti oil tankers against Iranian attack. Kuwait’s perception changed when

Saddam turned against the Gulf states by invading Kuwait in August 1990. In May 2001, Kuwait

publicly apologized for supporting Iraq during the Iran-Iraq war.

Iran and Kuwait also have limited trade, approximately $43 million in 2008.33

Prospects

Some Kuwaiti strategists, such as former Ambassador to the United States Shaykh Saud al Nasser

Al Sabah, have questioned Kuwait’s stance as naive and potentially dangerous. 34 These observers

question Iran’s motives and believe that Kuwaiti leaders mistakenly do not perceive that Iran is

slowly seeking to establish hegemony in the Gulf. Kuwait has not publicly accused Iran of

attempting to support Kuwaiti Shiites (who are about 30% of Kuwait’s population) as a potential

internal opposition in Kuwait, but some believe Iran is looking for opportunities to strengthen

Shiites in Kuwait to ensure that Kuwait maintains a relatively friendly posture towards Iran.

Others say that Iran has no opportunity to support Shiites in Kuwait as an opposition movement

because Kuwaiti Shiites are relatively well integrated into Kuwait’s society and economy, and

have fewer grievances than do Shiites in other states of the Gulf. On July 18, 2008, Kuwait

named its first ambassador to Iraq since the 1990 Iraqi invasion—Ali al Momen, a retired general.

Momen is a Shiite Muslim, and his appointment signaled Kuwait’s acceptance that Iraq is now

dominated politically by Shiites.

Oman35

Perspectives and Interests

Of the Gulf states, Oman is perceived as politically closest to and the least critical of Iran. Its

leader, Sultan Qaboos bin Said Al Said, has often pursued foreign policies outside an Arab or

Gulf consensus, and Qaboos sees no inconsistency between Oman’s alliance with the United

States and its friendship with Iran. This relationship has proved useful to the United States in the

past; Oman was an intermediary through which the United States returned Iranian prisoners

captured during U.S.-Iran skirmishes in the Persian Gulf in 1987-88. Oman’s attempts to steer a

International Monetary Fund (IMF), Direction of Trade Statistics, Islamic Republic of Iran, September 2009.

CRS conversations with Shaykh Saud al Nasser Al Sabah. 1997 – 2006.

Prepared by (name redacted), Specialist in Middle Eastern Affairs, December 2009.

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middle ground caused problems for Oman in April 1980 when, within days of signing an

agreement allowing the United States military to use several Omani air bases, the United States

used these facilities—reportedly without prior notification to Oman—to launch the abortive

mission to rescue the U.S. Embassy hostages seized by Iran in November 1979.36

Policy Priorities

The question many observers ask is why is Oman not as wary of Iran as are the other GCC states.

Oman has no sizable Shiite community with which Iran could meddle in Oman, so the fear of

Iranian interference is less pronounced. There are also residual positive sentiments pre-dating

Iran’s Islamic revolution. Oman still appreciates the military help the Shah of Iran provided in

helping end a leftist revolt in Oman’s Dhofar Province during 1964-1975. Others attribute

Oman’s position on Iran to its larger concerns that Saudi Arabia has sought to spread its Wahhabi

form of Islam into Oman, and Oman sees Iran as a rival to and potential counterweight to Saudi

Arabia.

Economic and Security Concerns

Oman reportedly is discussing a security pact with Iran, although the scope is as yet undefined.37

In addition, Oman’s government is said to turn a blind eye to the smuggling of a wide variety of

goods to Iran from Oman’s Musandam Peninsula territory. The trade is illegal in Iran because the

smugglers avoid paying taxes in Iran, but Oman’s local government collects taxes on the goods

shipped. 38 Bilateral trade between Oman and Iran was approximately $1.45 billion in 2008, and

consists mostly of natural gas exports from Iran to Oman.39

Oman’s position on Iran’s nuclear program is consistent with the general trend of Oman-Iran

relations. On October 1, 2009, Omani Foreign Minister Yusuf bin Allawi bin Abdallah stated that

“the Arabs and any Arab have no interest in being hostile to Iran,” adding that “the entire world

calls for a peaceful solution” to the international dispute over the nature of Iran’s nuclear

program. 40

Prospects

Some accounts say that Oman is in the process of drawing closer to Iran than it has previously.

Oman, as do the other GCC states, publicly opposes any U.S. attack on Iran’s nuclear facilities,

and has rebuffed efforts by the other Gulf states to persuade Oman to distance itself from Iran

politically.

CRS conversations with U.S. Embassy officials in Oman. 1995-2003.

Slackman, Michael. “Oman Navigates Risky Strait Between Iran and Arab Nations.” New York Times, May 16,

2009.

Ibid.

International Monetary Fund (IMF), Direction of Trade Statistics, Islamic Republic of Iran, September 2009.

U.S. Open Source Center (OSC) Document GMP20091001825001, “Omani Foreign Minister on Relations with Iran,

Israel, Hamas, GCC,” Al-Hayah Online (London), October 1, 2009.

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Iraq41

Perspectives and Interests

Since the fall of Saddam Hussein, Iran has sought to shape and influence the post-Saddam

political structure to Iran’s advantage. Iran succeeded in that strategy during 2004-2007, when

Iraq was highly unstable and when it appeared, at times, that the U.S. effort to secure and

democratize Iraq were failing. As Iraq stabilized during 2008, Iraqi nationalism strengthened and

Iran came to be seen by many Iraqis, both Sunni and Shiite, as contributing to sectarian conflict.

Iraqi leaders continue to take Iran’s interests into account, but they no longer reflexively support

Iranian positions.

Policy Priorities

Several of Iran’s interests have been served by post-Saddam Iraqi leaders. This continuing

Iranian influence might be reflected in Iraq’s announcement in December 2009 that it would

relocate the 3,000 Iranian oppositionists who live at “Camp Ashraf,” near the Iran border, to a

detention center in southern Iraq. These oppositionists had been invited to set up camp in Iraq in

1986, from where they could launch incursions into Iran, but the current, relatively pro-Iranian

central government does not want to host this group any longer.

Iran attempted, but failed, to derail a U.S.-Iraq Status of Forces Agreement (SOFA) that

authorizes the U.S. military presence beyond December 31, 2008. Senior Iranian leaders publicly

opposed the pact as an infringement of Iraq’s sovereignty—criticism that masked Iran’s fears the

pact is a U.S. attempt to consolidate its “hold” over Iraq and encircle Iran militarily. This

criticism did not derail the accord, but might have contributed to insistence by Iraqi leaders on

substantial U.S. concessions to a final draft agreement. In the end, Iran’s concerns were

attenuated by a provision in the final agreement (passed by Iraq’s parliament on November 27,

2008 and now in force as of January 1, 2009) that U.S. forces could not use Iraqi territory as a

base for attacks on any other nation. This provision is perceived by some as a statement that Iraq

does not support military action against Iran’s nuclear program. 42

During exchanges of high-level visits in July 2005, Iraqi officials took responsibility for starting

the 1980-1988 Iran-Iraq war, indirectly blamed Saddam Hussein for using chemical weapons

against Iranian forces during the war, signed agreements on military cooperation, and agreed to

open Iranian consulates in Basra, Karbala, Irbil, and Sulaymaniyah. In response to U.S.

complaints, Iraqi officials subsequently said that any Iran-Iraq military cooperation would not

include Iranian training of Iraqi forces. On May 20, 2006, Iraq’s Foreign Minister, Hoshyar

Zebari, supported Iran’s right to pursue “peaceful” nuclear technology.43

On the other hand, Iran has not returned the 153 Iraqi military and civilian aircraft flown to Iran

at the start of the 1991 Gulf War, and Iraqi leaders demand their return. Iraqi officials also have

Prepared by (name redacted), Specialist in Middle Eastern Affairs, December 2009.

For example, see “Joint Statement by Gulf States, Egypt, Jordan, Iraq, and U.S.: Ministers Reaffirm Commitment to

Promote Regional Peace, Security,” U.S. Department of State, available online at http://www.america.gov/st/texttransenglish/2008/September/20080925155930eaifas0.7949945.html.

“Clarification Statement” issued by Iraqi Foreign Minister Hoshyar Zebari. May 29, 2006.

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refused to expel the Party for a Free Life in Kurdistan (PJAK), an Iranian Kurdish separatist

group, which Iran says is staging incursions into Iran from Iraqi territory. On February 5, 2009,

that group was named by the U.S. Treasury Department as a terrorism supporting entity under

Executive Order 13224.

Most territorial issues that have contributed to past disputes were resolved as a result of an

October 2000 rededication to recognize the thalweg, or median line of the Shatt al Arab waterway

as the water border (a provision of the 1975 Algiers Accords between the Shah of Iran and the

Baathist government of Iraq, abrogated by Iraq prior to its September 1980 invasion of Iran.) The

water border is subject to interpretation, but the two sides agreed to renovate water and land

border posts during the March 2008 Ahmadinejad visit to Baghdad. In February 2009, Foreign

Minister Zebari urged Iran to move forward with these demarcations, suggesting Iranian footdragging to resolve an issue whose ambiguity now favors Iran.

Economic and Security Concerns

The key concern of the central government is Iran’s separate relationship with Shiite factions and

militias. These factions are political opponents of the government of Prime Minister Nuri alMaliki and their serve militias serve as a limitation on full government security control,

particularly in the south. The most prominent such faction is that of Moqtada Al Sadr. His

political ties to Iran were initially limited because his family remained in Iraq during Saddam’s

rule. Still, the Sadr clan has ideological ties to Iran; Moqtada’s cousin, Mohammad Baqr Al Sadr,

founded the Da’wa Party and was a political ally of Ayatollah Khomeini when Khomeini was in

exile in Najaf (1964-1978). Iran came to see political value and potential leverage in Sadr’s

faction—which has 30 total seats in parliament, a large and dedicated following among lowerclass Iraqi Shiites, and which built a 60,000 person “Mahdi Army” (Jaysh al-Mahdi, or JAM)

militia after Saddam’s fall.

Perceiving the JAM as useful against the United States in the event of a U.S.-Iran confrontation,

in 2005, Iran began arming it through the Revolutionary Guard’s “Qods (Jerusalem) Force,” the

unit that assists Iranian protégé forces abroad. During 2005-6, the height of sectarian conflict in

Iraq, Badr fighters in and outside the ISF, as well as JAM militiamen, were involved in sectarian

killings of Sunnis, which accelerated after the February 2006 bombing of the Al Askari Mosque

in Samarra.

The sectarian conflict empowered Shiite militias such as the JAM, but the arbitrary administration

of justice and sense of constant conflict created by the militias triggered a popular backlash

against them and against Iran. This was demonstrated in the January 31, 2009 provincial

elections, which represented a clear setback for Iran and its interests. The Islamic Supreme

Council of Iraq (ISCI), traditionally close to Iran politically and formerly an ally of Maliki’s

Da’wa Party, was hoping to sweep the elections in the Shiite south, but it did not come in first in

any Shiite province. Sadrist candidates also fared generally poorly. In most of the Shiite

provinces, the slate of Prime Minister Nuri al-Maliki—who is relatively pro-Iranian but whose

party does not have a militia and whose slate ran on a platform of rule of law—came in first. The

Sadrist faction and ISCI have forged a coalition with several other parties (“Iraqi National

Alliance”) to compete against Maliki in the March 7, 2010 national elections that will determine

the next four year government.

The Defense Department’s latest “Measuring Stability and Security in Iraq” report, dated

September 2009, appears to reflect a continued U.S. concern about Iran’s support for Shiite

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Iran: Regional Perspectives and U.S. Policy

militias in Iraq. The report reiterates previous assessments that Iran “poses a significant

challenge to Iraq’s long-term stability and political independence” and says that Iran can

influence Iraqi elections through its “sponsorship of Iraqi [Shiite] militant groups.”44 However,

the report did not repeat previous assertions that Tehran is also improving the training and

weapons systems received by the proxy militants.

Suggesting the degree to which the Iraqi government still views Iran as a benefactor, Maliki has

visited Iran four times as Prime Minister to consult on major issues and to sign agreements. On

March 2-3, 2008, Iranian President Ahmadinejad visited Iraq, a first since the 1979 Islamic

revolution. In conjunction, Iran announced $1 billion in credits for Iranian exports to Iraq (in

addition to $1 billion in credit extended in 2005, used to build a new airport near Najaf, opened in

August 2008, which helps host about 20,000 Iranian pilgrims per month who visit the Imam Ali

Shrine there). Suggesting Iran’s earlier generosity is being reciprocated, in February 2009, the

Iraqi government awarded a $1 billion contract to an Iranian firm to help rebuild Basra, and to

repair ancient Persian historical sites in southern Iraq.45 The the two countries now conduct about

$4 billion annually in bilateral trade, according to Iraq’s Trade Minister46, and the February 2009

visit of Iranian Foreign Minister Mottaki resulted in a plan to increase that trade to $5 billion

annually through increases in oil and electricity-related trade.47

Prospects

Iran’s influence in Iraq remains substantial, but might be beginning to wane. The Shiite militias

that Iran has supported are far weaker than they were two years ago. Iran’s influence could fall

further if Maliki’s coalition prevails in the March 7, 2010 election and he continues to assert

Iraq’s independence and sovereignty from all influences, including U.S. and Iranian. Some

experts have long predicted that Iran’s influence would fade as Iraq asserts its nationhood, as the

security situation has improved, and as Arab-Persian differences reemerge. Many experts point

out that Iraqi Shiites generally stayed loyal to the Iraqi regime during the 1980-1988 Iran-Iraq

war. Najaf, now relatively secure and prosperous, might eventually meet pre-war expectations

that it would again exceed Iran’s Qom as the heart of the Shiite theological world.

On the other hand, U.S. forces will be drawing down to about 50,000 by August 2010, and some

fear that this will expose vulnerabilities among government forces that allow Shiite militias and

Sunni insurgent groups to flourish again and challenge stability. If the security situation

deteriorates sharply as the U.S. withdraws, Iranian influence could experience a resurgence –

assuming the current government in Iran fends off a major challenge by its own opposition.

The full text of the report is available at http://www.defense.gov/pubs/pdfs/9010_Report_to_Congress_Nov_09.pdf

“Iran Offers $1 Billion Loan for Iraq Projects,” Reuters, March 1, 2008.

See Gina Chon, “Iran’s Cheap Goods Stifle Iraq Economy, Wall Street Journal, March 18, 2009.

“Iraq-Iran Trade Meeting Pledges $5 Billion,” UPI.com, February 12 ,2009.

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Turkey48

Perspectives and Interests

Turkey and Iran share an almost 500 kilometer (310 mile) border that was established in the 17th

century, and they have not been to war since then. Over the years, however, their bilateral

relations have been characterized by both conflict and collaboration. 49 Tensions sometimes

surfaced from the neighbors’ competing regional ambitions and from their rival forms of Islam:

most Turks are Sunnis, while most Iranians are Shiites. After Iran declared itself an Islamic

Republic in 1979, some predicted a worsening of relations because the Turkish Republic

established in 1923 had abolished the caliphate, the office of the Prophet Muhammad’s

successors, and adopted a constitution that guaranteed secularism as a basic principle of the state.

However, Ankara’s pragmatic policy of accepting and officially recognizing the new Islamic

Republic speedily and focusing on economic relations proved the forecasters wrong.

The ruling Justice and Development Party (AKP) in Turkey has Islamist roots and a foreign

policy doctrine of seeking “zero problems” with neighbors and of nurturing beneficial relations

with all, including Iran. Powered by a robust economy, the AKP government has continued the

realistic pragmatism or pronounced self-interest of its predecessors toward Iran. Since AKP came

to power in 2002, Turkish-Iranian relations have expanded markedly. Officials have exchanged

numerous visits, culminating in Iranian President Mahmud Ahmadinejad’s visit to Turkey in

August 2008. The AKP government hosted him in Istanbul, thereby working around

Ahmadinejad’s antipathy to Turkish secularism by enabling him to avoid a usually obligatory

visit in the capital of Ankara to the mausoleum of Mustafa Kemal Ataturk, the founder of the

Turkish Republic. Turkish President Abdullah Gul reciprocated by visiting Iran for a regional

summit in March 2009, when he met both Supreme Leader Ayatollah Ali Khamene’i and

President Ahmadinejad.

Turkey’s pragmatism or realpolitik was evident in official reactions to Iran’s June 12, 2009,

presidential election as President Gul and Prime Minister Recep Tayyip Erdogan were among the

first international leaders to congratulate Ahmadinejad on his re-election. Foreign Minister Ahmet

Davutoglu later declared controversies over the outcome to be an internal Iranian affair. AKP’s

domestic critics charged that these “reflexive and premature” actions may have undermined

Turkey’s stature and credibility as an interest in stability embodied in the status quo appeared to

trump values.50 Prior to visiting Iran in October 2009, Prime Minister Erdogan told the British

newspaper, The Guardian, “There is not doubt he (Ahmadinejad) is our friend…. As a friend, so

far we have good relations and have no difficulty at all.”51

Prepared by (name redacted), Specialist in Middle Eastern Affairs, December 2009.

See also Gokhan Cetinsaya, “Essential Friends and Natural Enemies: the Historic Roots of Turkish-Iranian

Relations,” Middle East Review of International Affairs, an online journal, Vol. 7. No. 3, September 2003.

“FM Urges Iranians to Accept Election,” Hurriyet Daily News, June 23, 2009, and Ilhan Tanir, “Davutoglu, the

Architect, Miserably Fails to Deliver,” Hurriyet Daily News, June 27, 2009.

Robert Tait, “Iran is our Friend, Says Turkish PM Alongside Swipe at Disdainful EU,” The Guardian, October 26,

2009.

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Iran: Regional Perspectives and U.S. Policy

Policy Priorities

Turkey seeks to further regional stability and its own national interests in its relations with Iran.

Ankara has made common cause with Tehran in seeking to preserve the territorial integrity of Iraq

in order to prevent its division into ethnic states that might serve as a model for separatists. Both

Turkey and Iran have separatist/terrorist foes who attack them from safe havens in northern

Iraq—the Kurdistan Workers Party (PKK) and the Party for a Free Life in Kurdistan (PJAK),

respectively— and both place a high priority of combating these threats. At the same time,

Turkish officials have encouraged Iraqi Kurds to play a greater role in Baghdad to help counter

what the Turks fear might become excessive Iranian influence over a Shiite-led Iraqi

government.52 Ankara also may believe that greater involvement in the central government might

moderate the Iraqi Kurds’ separatist inclinations.

Turkish officials state that Iran has the right to develop nuclear energy for peaceful purposes and

have called on Tehran to cooperate with the International Atomic Energy Agency (IAEA) in order

to demonstrate that its nuclear program has peaceful intentions. Prime Minister Erdogan has

criticized the international community for its “double standards” in targeting Iran’s nuclear

program while ignoring Israel’s nuclear arsenal. He almost always mentions Israel (if not by

name, then as “the country in the region with nuclear arms”) when defending Iran, which he does

frequently. 53 For example, after discussing Iran with President Obama at the White House on

December 7, 2009, the Prime Minister said, “We do not want to see a country in our region

possessing nuclear weapons and we want the countries in the region who have nuclear weapons

to be rid of them.”54

Turkey seeks to have the dispute between Iran and the international community solved

diplomatically. Erdogan considers the idea of a military attack on Iran to be “an insanity” and has

warned Israel of “a response equal to an earthquake” if it used its relationship with Turkey,

referring to Turkish airspace to “wage aggression on a third party,” i.e., Iran.55 In October 2009,

Turkey cancelled Israel’s participation in an annual NATO military exercise in Turkey ostensibly

because of continuing public anti-Israel sentiment resulting from the December 2008-January

2009 Gaza conflict. Some analysts suggested that, in addition, Turkey did not want to give Israel

an opportunity to rehearse flying in Turkish airspace near the Iranian border. Turkey also opposes

the imposition of sanctions on Iran which might harm Turkey’s interests because it is a neighbor

and economic partner of Iran. It is likely to abstain should the U.N. Security Council vote on

sanctions as in November 2009, when the IAEA passed a resolution demanding that Iran

immediately freeze operations at a previously secret uranium enrichment plant. These misgivings

or disagreements concerning approaches to thwart Iran’s nuclear ambitions aside, Turkey still

does not want Iran to develop nuclear weapons and thereby upset the regional balance of power.

Finally, access to Iran’s energy resources is a high priority for Turkey, which imports 70% of all

the energy it consumes. Turkey depends on Russia for 68% of its gas supplies and wants retain

access to Iran for much of the rest and to lessen that dependence.

Anonymous comments of Turkish official, April 20, 2009.

“PM Visits Iran, Receives Praise over Nuke Row, Israel,” Hurriyet Daily News, October 27, 2009; “Turkish PM:

West Treats Iran Unfairly,” Agence France Presse, October 26, 2009.

Andrew Tully, “Obama, Turkish PM Agree to Tackle Iran,” http://www.rferl.org, December 8, 2009.

“Turkish PM Warns Against Attack on Iran,” Hurriyet Daily News, September 27, 2009l, “Turkey Warns IAF

Against Using Airspace,” Jerusalem Post, December 9, 2009.

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Iran: Regional Perspectives and U.S. Policy

Economic and Security Concerns

Turkish-Iranian relations have a very strong economic component. About 1.5 million Iranian

tourists visit Turkey annually, visa-free. Trade is growing and reached $10 billion annually in

2008, with Iranian exports of oil, oil products, and gas to Turkey accounting for $7.2 million of

the total.56 Officials of both governments have said that they hope to increase trade to $30 billion

a year in the next few years.57 A pipeline commissioned in 2001 carries natural gas from Tabriz

to Ankara. In 2007, Turkey and Iran signed a memorandum of understanding (MOU) for the

state-run Turkish Petroleum Corporation (TPAO) to be granted the right to develop natural gas

fields in South Pars, to extract up to 20 billion cubic meters (bcm) of additional gas, and to

transport it via a new 1,850 kilometer pipeline to Turkey. Turkey is to invest an estimated $3.5

billion and receive 50% of the gas produced. Both governments hope that the new pipeline will

eventually link with the planned 3,300-kilometer Nabucco pipeline. Scheduled to be completed in

2014, Nabucco is intended to carry natural gas from the Caspian/Central Asian region via Georgia

and Turkey to Austria, bypassing Russia. Iranian gas has the potential to make Nabucco more

viable especially if Russia dissuades the Central Asian states from using it and China competes

for their resources as well. Turkey and Iran have formed a joint company to transfer the gas to

Europe. However, the European partners in Nabucco (Hungary, Bulgaria, Romania, Germany,

and Austria) have declared, “No Iranian gas will be accepted unless the nuclear problem is

solved” and U.S. Special Envoy for Eurasian Energy Ambassador Richard Morningstar has

stated, “At present, we do not support Iran’s participation in the project.”58 Turkey opposes all

energy-related sanctions on Iran mainly because of its energy needs.

In addition, in 2007, Turkey signed an MOU to build three natural gas-fired power plants in Iran

and to import 3 to 6 billion kilowatt hours of electricity annually. The two neighbors also have

plans for an ambitious new road and rail transportation network to link the Turkish Black Sea port

of Trabzon and the Iranian Persian Gulf port of Bandar Abbas, and to establish a free industrial

zone on their border.

In private, Turkish officials have voiced some security concerns about a nuclear-armed Iran and

about the impact that such a development would have on the regional balance of power. They

note that Turkey is Iran’s closest neighbor and easily within range of its missiles -- even though

Iran has not threatened Turkey. These concerns may have prompted Turkey’s possible purchase of

U.S. Patriot air defense missiles. 59 As noted above, Prime Minister Erdogan and President Gul

have criticized the West’s policy on the issue and charged it with “double standards,” suggesting

that Iran is being judged more harshly than presumed nuclear power Israel. In November 2008,

Erdogan told a Brookings Institution audience, “We do not find it correct to tell just one country

to scrap nuclear weapons. We do not think this is an honest approach. Whoever has nuclear

weapons should scrap them first then let us all be rid of them.”60 The two leaders have repeatedly

put Turkey forward as a possible mediator between Iran and the United States and Turkey

accepted an IAEA suggestion that it act as a repository for Iran’s uranium, but Iran rejected the

Barcin Yinanc and Mustafa Oguz, “Turkey Rolls its Diplomatic Dice,” Turkish Daily News, August 14, 2008.

“Iran, Turkey Keen to Boost Trade Exchange,” Xinhua News Agency, October 28, 2009.

.“Austria Says Turkey’s Position in Nabucco Limited,” Turkish Daily News, May 23, 2008 and “Turkish Minister, US

Envoy Discuss Gas Pipeline Project,” Anatolia News Agency, June 4, 2009

The U.S. Department of Defense Security and Cooperation Agency notified Congress of the possible missile sale

worth $7.8 billion on September 9, 2009.

Transcript of speech accessible via http://www.brookings.edu.

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Iran: Regional Perspectives and U.S. Policy

idea.61 Ahmadinejad has said that there is no need for Turkish or any other mediation. President

Gul noted “the need for the Western world to understand Iran’s security apprehensions about its

regime” as well as Iran’s “need to persuade the Western world that it is not seeking the nuclear

weapon and that all its researches are within the peaceful framework.”62

Due to their common security concerns about Kurdish separatists, the Turkish and Iranian armed

forces have conducted joint operations against the PKK and PJAK in northern Iraq. Prime

Minister Erdogan has said that cooperation with Iran in dealing with terrorism will continue.

Prospects

Turkey is likely to consult closely with like-minded Arab Sunni powers, such as Saudi Arabia and

the United Arab Emirates, concerning the impact of Iran’s nuclear weapons’ ambitions on the

regional balance of power. Should Iran acquire nuclear arms, Turkey could, as a NATO member,

rely on NATO defense guarantees if it believes them to be credible. 63 If it does not have that

belief, Turkey could develop its own nuclear weapons program. Turkey already has plans for

nuclear power plants, the technical abilities needed for a weapons program, and some uranium

resources. At the same time as it pursues this path, Ankara is likely to continue to cultivate good

relations with Tehran in line with its “zero problems” approach to foreign policy and because of

its energy needs and economic interests.

Afghanistan64

Perspectives and Interests

As it attempts to stabilize Afghanistan, nearly eight years after the United States helped Afghan

militias overthrow the Taliban, the Obama Administration has seen Iran as potentially helpful – or

at least not an obstruction -- to its strategy for Afghanistan. The U.S. Special Representative for

Afghanistan and Pakistan, Ambassador Richard Holbrooke, has advocated a “regional”

component of the strategy, which focuses primarily on Pakistan but also envisions cooperation

with Iran to help keep Afghanistan calm.

During her visit to Turkey in March 2009, Secretary of State Hillary Rodham Clinton told a television interviewer,

“We are going to ask for your help in trying to influence Iranian behavior.” Borzou Daragahi and Ramin Mostaghim,

“U.S.-Turkey-Iran Talks Envisioned; ‘The Term ‘Mediation” is Used,’” Los Angeles Times, March 10, 2009. U.S.

Ambassador to Turkey James Jeffrey reported that President Gul had conveyed a message from Washington to Tehran

during his March 2009 visit to Iran that the United States is “serious on talking about issues like Afghanistan and Iraq.”

“Turkish President Sends Message of U.S. Sincerity to Iran,” Hurriyet Daily News, March 12, 2009.

Interview with President Abdullah Gul by Ghassan Sharbil, date not given, Al-Hayat, May 13, 2009, Open Source

Center Document, GMP20090513825009.

Turks might be skeptical of NATO’s guarantee because some NATO members (Germany, France, Belgium) were

reluctant to assist Turkey before the war against Iraq in 2003, and only after considerable pressure from other members

did the alliance deploy AWACS early warning planes and, on its behalf, the Netherlands sent Patriot missiles to

Turkey. NATO’s response was more united before the first Gulf war in 1991, when several member states sent

warplanes, men, and missiles to defend Turkey and deter Saddam Hussein.

Prepared by (name redacted), Specialist in Middle Eastern Affairs, December 2009

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Policy Priorities

Still, Iran and U.S. interests in Afghanistan, while in many ways coincident, are not identical.

Iran perceives its key national interests in Afghanistan as exerting its traditional influence over

western Afghanistan, which Iran borders and was once part of the Persian empire, and to protect

Afghanistan’s Shiite minority. Iran’s assistance to Afghanistan has totaled about $1.164 billion

since the fall of the Taliban, mainly to build roads and schools and provide electricity and shops

to Afghan cities and villages near the Iranian border. This makes Iran among the top financial

donors to Afghanistan and is in many ways supportive of the U.S. policy of attempting to stabilize

Afghanistan in part through economic development. Iran did not oppose Karzai’s firing of Iran

ally Ismail Khan as Herat governor in September 2004, although Iran has opposed the subsequent

U.S. use of the Shindand air base,65 located in Herat Province, which Iran fears the United States

might use to attack or conduct surveillance against Iran.

During his visit to the United States in May 2009, Karzai said he had told both the United States

and Iran that Afghanistan must not become an arena for the broader competition and disputes

between the United States and Iran.66 In public statements, in part because of the economic

development work done by Iranian firms, President Hamid Karzai has, at times, called Iran a

“friend” of Afghanistan. In June 2009, Karzai67 congratulated Iranian President Mahmoud

Ahmadinejad for his re-election at a time when many Iranians took to the streets to dispute his

victory. Similarly, Karzai’s August 2009 re-election bid was flawed by charges of widespread

fraud, yet Ahmadinejad congratulated him for a victory on September 19, 2009 – long before it

was clear that a second round election run-off would not be held. The two leaders, along with the

President of Pakistan, have formed a tripartite summit process to discuss regional issues; the last

meeting was in May 2009, hosted in Tehran by Ahmadinejad.

At other times, the two countries have had disputes over Iran’s efforts to expel Afghan refugees.

About 1.2 million remain, mostly integrated into Iranian society, and a crisis erupted in May 2007

when Iran expelled about 50,000 into Afghanistan. About 300,000 Afghan refugees have returned

from Iran since the Taliban fell.

Economic and Security Concerns

The United States has reserved its strongest objections to Iran’s shipment of weapons into

Afghanistan. This could represent an Iranian attempt to build influence with armed opposition

factions in Afghanistan, through which Iran might be able to retaliate against the United States in

the event of U.S.-Iran conflict. The State Department report on international terrorism for 2008,

released April 30, 2009, said Iran continues to provide some training to and ships arms to

“selected Taliban members” in Afghanistan. Weapons provided, according to the State

Department report, include mortars, 107mm rockets, rocket-propelled grenades, and plastic

explosives. Several shipments of such weapons were captured by the U.S. military in

Afghanistan in 2007. Secretary of Defense Gates testified before the Senate Armed Services

Committee in late January 2009 that the Defense Department had seen a slight increase in Iranian

Rashid, Ahmed. “Afghan Neighbors Show Signs of Aiding in Nation’s Stability.” Wall Street Journal, October 18,

2004; CRS conversations with Afghan observers and international officials in Herat, October 2009.

Comments by President Karzai at the Brookings Institution. May 5, 2009.

Afghan President Congratulates Ahmadinejad on Victory", Fars News Agency, June 20, 2009; "International Protests

Over Iran Election Crackdown", Agence France-Press, June 15, 2009

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shipments of arms into Afghanistan in the few preceding months. On December 17, 2009, U.S.

Ambassador to Afghanistan Karl Eikenberry said that “Iran or elements within Iran have provided

training assistance and some weapons to the Taliban.”68

Iranian aid to Taliban fighters puzzle some experts since these shipments would appear to

jeopardize Iran’s relations with the Karzai government. Iran actively helped put together that

government, in cooperation with the United States – at the December 2001 “Bonn Conference.”

In addition, Iran has traditionally supported Persian-speaking non-Pashtun factions in

Afghanistan, who would presumably be suppressed and marginalized by any new Taliban-led

regime in Afghanistan. Iran saw the Taliban regime, which ruled during 1996-2001, as a threat to

its interests in Afghanistan, especially after Taliban forces captured Herat (the western province

that borders Iran) in September 1995. Iran subsequently drew even closer to the ethnic minoritydominated Northern Alliance than previously, providing its groups with fuel, funds, and

ammunition. 69 In September 1998, Iranian and Taliban forces nearly came into direct conflict

when Iran discovered that nine of its diplomats were killed in the course of the Taliban’s offensive

in northern Afghanistan. Iran massed forces at the border and threatened military action, but the

crisis cooled without a major clash, possibly out of fear that Pakistan would intervene on behalf

of the Taliban. Iran offered search and rescue assistance in Afghanistan during the U.S.-led war to

topple the Taliban, and it also allowed U.S. humanitarian aid to the Afghan people to transit Iran.

Prospects

Others see Iran as a marginal player in Afghanistan, because it is identified primarily with nonPashtuns and its links to Taliban fighters are tenuous and sporadic. Those who take this view

question whether U.S. engagement with Iran would contribute much to solving the core problems

plaguing the U.S. mission there. Still others believe that talks with Iran on Afghanistan could

lead to broader U.S.-Iran talks, or potentially even open up the possibility of using Iran as a

supply line for non-U.S. NATO forces in Afghanistan. Secretary of State Clinton made a point of

inviting Iran to the U.N.-led meeting on Afghanistan at the Hague on March 31, 2009. However,

since then, Iran has been faced with a growing and increasingly strong democratic opposition

movement and the Obama Administration might be re-thinking its degree of engagement with the

current regime. In addition, Iranian leaders have not accepted U.S. and partner country proposals

to formulate a mechanism to ensure that Iran’s nuclear program is for purely civilian and peaceful

purposes.

Comments by Ambassador Eikenberry on Radio Free Europe/Radio Liberty “Radio Azadi.” RFE/RL press release,

December 17, 2009.

Steele, Jonathon, “America Includes Iran in Talks on Ending War in Afghanistan.” Washington Times, December 15,

1997.

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Egypt70

Perspectives and Interests

Throughout history, Egypt and Iran have, at times, been fierce rivals, a natural outgrowth of the

region’s balance of power. Egypt envisions itself as the standard-bearer of Arab nationalism, and

Persian Iran serves as a foil. During the Cold War, Egypt was militarily aligned with the Soviet

Union while Iran was a U.S. client state. Then, in the late 1970s, as a result of the Camp David

Peace Accords and the Iranian revolution, Egypt and Iran essentially traded places in their

regional allegiances. Egypt’s peace treaty with Israel resulted in a much closer relationship with

the United States, while Iran’s revolutionary theocratic government perceived the United States,

its moderate Arab allies, and Israel as its primary adversaries in the Middle East, and Iran

developed a closer relationship with Russia. For over 30 years, this pattern has persisted and, in

recent years, new dimensions have been added to the Egyptian-Iranian rivalry.

Iran and Egypt severed diplomatic ties in 1980, a year after the Iranian revolution. Iran not only

objected to Egypt’s peace treaty with Israel, but also to its hosting of the deposed Shah and its

support for Iraq during the 1980-1988 Iran-Iraq war. As a provocation, Iran applauded the

assassination of former Egyptian President Anwar Sadat, naming a street after the assassin

(Khalid Islambouli). The Egyptians have insisted that this street be renamed and the mural of

Islambouli along side it be removed before normal ties can be restored.

Policy Priorities

Currently, Egypt is concerned about Iran’s support for Palestinian militants, particularly Hamas,

Iran’s influence in Iraq, and Iran’s nuclear program. Hamas's control of the Gaza Strip poses a

challenge for neighboring Egypt. Hamas's call for armed resistance against Israel and its alleged

Iranian financial and military support71 runs counter to Egypt's foreign policy, which is largely

based on its peace treaty with Israel and friendly relations with the United States.

A nuclear-armed Iran and its effect on the regional balance of power is a pressing security

concern. Egypt firmly opposes Iran’s nuclear ambitions, and, as is the case with its stance toward

Israel’s clandestine nuclear program, Egypt has called for a “nuclear-free zone” in the Middle

East. Egypt is a signatory to the Nuclear Non-Proliferation Treaty (NPT) and has pledged not to

develop weapons programs of its own. It also has rebuffed U.S. talks of a nuclear shield

protecting Gulf states and possibly Egypt from an Iranian attack.

In 2006, the Mubarak government announced its own intention to develop a civilian nuclear

energy program.72 To date, progress on its development has been slow, and most experts expect

Prepared by (name redacted), Specialist in Middle Eastern Affairs, December 2009.

In the aftermath of Israel’s Operation Cast Lead in Gaza between December 2008 and January 2009, Hamas

reportedly sought Iranian military assistance in replenishing and upgrading its stockpiles. According to one report in

Jane’s Defence Weekly, an arms convoy destroyed by Israeli aircraft while transiting through Sudan on its way to the

Egypt-Gaza border was carrying Iranian-supplied Russian Igla-1E (SA-16 'Gimlet') and Igla (SA-18 'Grouse') surfaceto-air missiles (SAMs) as well as what the security and intelligence sources said were Stinger missiles. See, “Iran was

Source of Hamas SAMs Destroyed in Sudan Airstrike,” Jane’s Defence Weekly, April 3, 2009.

Egypt’s nascent nuclear program was frozen in 1986 following the accident at the Chernobyl power plant in the

Ukraine; however, it maintained a small experimental nuclear reactor. In May 2009, the International Atomic Energy

(continued...)

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Iran: Regional Perspectives and U.S. Policy

that it will be at least a decade before the construction of nuclear power plants will be completed.

Although Egypt may have legitimate energy shortfalls that are driving the pursuit of nuclear

energy, most analysts suspect that concern over Iran’s quest for nuclear weapons is behind the

Egyptian initiative.

Economic and Security Concerns

Between 2007 and 2008, for reasons not entirely clear, Egypt and Iran began a dialogue to

tentatively explore improving bilateral relations. During that period, Iran had been reaching out to

a number of Sunni Arab states, as some commentators called it a charm offensive designed to

assuage fears of its regional ambitions and nuclear program. Egypt may also have been looking to

raise eyebrows in U.S. policymaking circles, hoping that its independent initiative with Iran might

draw more Bush Administration attention and political support at a time when relations had been

strained due to U.S. concerns about human rights in Egypt.

In December 2007, former Iranian National Security Council Chief Ali Larjani, a close aide to

Ali Khamanei, visited Egypt and held talks with President Mubarak. As a follow up, on January

30, 2008, Mubarak held talks with Iran's then Majles (parliament) Speaker Gholam Ali Haddad

Adel in Cairo. Adel was the first senior Iranian parliamentary official to conduct high-level talks

with Egyptian counterparts in three decades. At the end of March 2008, Former Iranian President

Mohammed Khatami visited Cairo for additional discussions.

However, the supposed Egypt-Iran rapprochement was short-lived, as neither side appeared ready

to reconcile differences. In July 2008, an Iranian group, the Committee for Commemoration of

Martyrs of Global Islamic Movement, re-edited an old Al Jazeera documentary on the murder of

former Egyptian President Anwar Sadat and released it publicly as a new documentary entitled,

“Execution of a Pharaoh.” The film positively portrayed Sadat’s assassin as a martyr. Although

Iran attempted to distance itself from the film, relations again soured. In October 2008, Egyptian

Foreign Minister Ahmad Abu-al Ghayt warned Iran that anyone “who intervenes in Egypt's

internal affairs will not be happy with the response they receive. The Iranians cannot interfere in

our internal affairs.”73

Although Egyptian-Iranian relations have been cool for decades, tensions remained relegated to

the diplomatic and cultural spheres. Iran and Egypt maintain a limited economic relationship,

with bilateral trade estimated at $99 million in 2008.74 However, in April 2009, the discovery of

an alleged Hezbollah military cell in Egypt significantly heightened tensions. On April 8, 2009,

the Egyptian government declared that it had uncovered a 49-person Hezbollah “cell”

clandestinely operating in Egypt. According to authorities, cell members had been monitoring

ship traffic at the Suez Canal and were planning terrorist attacks against Sinai tourist resorts,

(...continued)

Agency (IAEA) reported that it had found traces of highly enriched uranium in Egypt. Egypt is a signatory to the

Nuclear Non-Proliferation Treaty (NPT) that allows for the peaceful production of nuclear energy. In 2005, the IAEA

investigated Egypt’s nuclear activities and concluded that Egypt had conducted atomic research but that the research

did not aim to develop nuclear weapons and did not include uranium enrichment. Egypt admitted to failing to disclose

the full extent of its nuclear research activities to the IAEA.

"Egypt Wary of Iran's Perceived Growing Influence in Region," Open Source Center, November 5, 2008, pp.

GMP20081105425001 Egypt, Iran -- OSC Report in English .

International Monetary Fund (IMF), Direction of Trade Statistics, Islamic Republic of Iran, September 2009.

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particularly those frequented by Israelis. Egypt also accused Hezbollah of smuggling weapons to

Hamas along the Egypt-Gaza border and spreading “Shi’ite ideology” inside Egypt. On April 10,

Hezbollah chief Sheikh Hassan Nasrallah acknowledged that one of the plotters in custody had

been dispatched to Egypt to conduct “reconnaissance” for Hezbollah.

Prospects

The revelation of a Hezbollah cell serves Egyptian interests in several ways.75 First, it draws a

sharp contrast between it and Iran, the primary U.S. and Israeli adversary in the region. By

demonstrating that Egypt is a direct target of Iran’s regional meddling, Egypt may hope to rally

other moderate Arab states behind it, while placing Iran’s Arab allies (such as Hezbollah, Hamas,

Syria, and Qatar) on the defensive. Second, Egyptian leaders had been eager to retaliate against

Iranian-backed Hezbollah after the Lebanese Shiite organization called for the overthrow of the

Mubarak regime for its alleged lack of support to Palestinians in Gaza during Israel’s Operation

Cast Lead between December and January 2009.

Nevertheless, by the end of 2009, tensions in the Egyptian-Iranian relationship had eased, as

evident by the December 2009 meeting between Iranian Parliament Speaker Ali Larijani and

President Mubarak in Cairo. In a news conference following their meeting, Larijani said that “As

for the economic relationship, there is a positive tone from the two sides.” According to one

report, he also remarked that “Israel was the Islamic world's main enemy, and that Iran and Egypt

had the same strategy with regard to the Palestinian cause but different ways of implementing the

strategy.”76 One unnamed Egyptian official claims that during their meeting, Larijani proposed to

improve Iranian-Arab relations, saying “the message is offering a new Iranian approach to resolve

outstanding issues.”77 Most analysts remain skeptical of the Iranian proposal, suggesting that it

may be another “charm offensive” similar to previous attempts mentioned above.

Overall, so long as Iran pursues a nuclear program and continues to strongly back Hamas and

Hezbollah, Egypt will feel threatened and will work to counterbalance Iranian policy. However, a

direct confrontation appears highly unlikely. For now, Iran will use non-state actors to provoke

and pressure Egypt, while the Mubarak government will continue to rally other Sunni Arab states

around its mantle of leadership to keep Iran in check. Egypt also will continue to demand that

Israel and the United Sates prioritize the Arab-Israeli peace process in order to reduce the allure

of Iran’s so-called axis of resistance.

The cell’s “discovery” also comes nearly two weeks after CBS News reported that, in January 2009 - at the height of

Israel’s Operation Cast Lead in Gaza - the Israeli Air Force allegedly had conducted an air strike against trucks driving

from Sudan to Egypt, carrying Iranian-supplied weapons bound for Hamas militants. News of Israel’s air strike may

have temporarily embarrassed Egypt, which, as a result, may have been eager to demonstrate its resolve to act

decisively against Iranian intelligence and weapons smuggling in its sphere of influence.

"Iran Speaker Positive on Egypt Investment Cooperation," Reuters, December 21, 2009.

"Iran Makes New Bid for Improving Ties with Arabs," Associated Press, December 21, 2009.

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Syria78

Perspectives and Interests

For over 30 years, close Syrian-Iranian relations have been a mainstay of Middle East power

politics. Starting with the 1979 Iranian revolution and spanning the 1980-1988 Iran-Iraq war, the

arming and training of Shiite militias in Lebanon after Israel’s invasion in 1982, and the

maturation of Palestinian militant groups such as Hamas over the last decade, Syria-Iran ties have

grown stronger, as both governments have built an alliance based on shared strategic interests

rather than shared cultural and religious affinities.79 Though their partnership has changed over

the years, with Syria now serving as the junior partner, both sense that their self-described “axis

of resistance” is becoming more powerful, as their non-state proxies, Hezbollah and Hamas,

exercise more influence on the politics of the region.

Nevertheless, many observers continue to question the permanence of a Syrian-Iranian alliance,

as some analysts assert that Syrian foreign policy is essentially pragmatic rather than

revolutionary. They argue that should a solution to the Israeli-Palestinian conflict emerge, Syria

would end its policy of resistance and join other Arab states in making peace with Israel. Other

experts suggest the foundation of the Syrian-Iranian relationship—a shared concern over Iraq,

support for Hezbollah in Lebanon, and countering Israel—is deeply rooted in the geopolitics of

the region and cannot be easily overturned.

Policy Priorities

From a military and economic standpoint, Syria is a weak state, but its active support of

Palestinian, Lebanese, and Iraqi militants/terrorist groups gives it a disproportionate regional role.

Syria is surrounded by powerful U.S-allied neighbors (Israel and Turkey and Iraq) whom Syria

seeks to counter through its own alliances. Though Syria’s self image is pan-Arab and the

majority of its citizens are Sunni Arabs, predominantly Persian Shiite Iran has a similar foreign

policy outlook, creating the foundation for close relations.

The Asad regime’s primary policy priority is to control Lebanon either directly or indirectly.

Many hard-line Syrian nationalists consider their smaller, weaker neighbor to be an appendage of

a greater Syrian nation and an artificial French colonial creation. In order to wield substantial

influence in the byzantine world of Lebanese confessional politics, Syria needs allies, particularly

now that it no longer occupies the country. Iranian-backed Hezbollah, the Lebanese Shiite

terrorist group/militia/political party/charitable organization, serves as Syria’s primary local

partner. Without Hezbollah, Syria would have far more difficulty influencing Lebanese politics.

The Syrian-Hezbollah partnership also is valuable to Iran. According to the U.S. State

Department’s 2008 Country Reports on Terrorism, Syria allowed Iran to use its territory as a

transit point for weapons bound for Hezbollah. Hezbollah provides Iran with an entree into the

Levant, allowing it to project power far beyond its immediate borders and to threaten Israel by

Prepared by (name redacted), Specialist in Middle Eastern Affairs, December 2009.

Jubin M. Goodarzi, Syria and Iran: Diplomatic Alliance and Power in the Middle East (New York: Tauris Academic

Studies, 2006).

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proxy. As long as Israel still occupies the Golan Heights, Syrian leaders apparently believe that

this serves Syrian interests as well.

In 2009, Israeli and other foreign governments accused Syria of continuing to serve as an Iranian

conduit for weapons shipments to Hezbollah. In November 2009, Israeli forces siezed a freighter

named the Francop en route from Iran to the Syrian port of Latakia which contained, according to

reports, thousands of medium-range 107- and 122-millimeter rockets, armor-piercing artillery,

mortar bombs, hand grenades, and ammunition for Kalashnikov rifles.

Economic and Security Concerns

Though the Syrian-Iranian relationship is primarily a diplomatic alliance, Iranian trade with and

investment in Syria (or at least the appearance of them) have somewhat expanded in recent years,

perhaps partially in response to Western policymakers’ attempts to woo Syria away from Iran. In

the financial sector, Iran has stated its intention to establish a joint Iranian-Syrian bank, possibly

involving Bank Saderat and the Commercial Bank of Syria – entities which have been sanctioned

by the U.S. Treasury Department. In the manufacturing and industrial sectors, the Iran Khodro

Industrial Group has established two car assembly plants in Syria. Iranian companies also have

invested in concrete production, power generation, and urban transportation. In the energy sector,

Syria, Iran, Venezuela, and Malaysia established a joint petroleum refinery in Homs, Syria. In

addition, Iran, Turkey, and Syria reached a new natural gas deal that would allow Iran to export

105 billion cubic feet of natural gas annually to Syria via Turkey. Despite increased Iranian

investments, the overall volume of Iranian-Syrian trade remains low. According to the Economist

Intelligence Unit, bilateral trade may total between just $160 and $400 million.80

Prospects

Barring a major change in Lebanese affairs or a breakthrough in Israeli-Palestinian peace

negotiations, Syrian-Iranian relations will most likely remain strong. As an indication of their

enduring ties, both countries signed a defense cooperation agreement in December 2009, despite

many Arab and Western attempts to divide them.

Nevertheless, some experts suggest that the alliance has its weak points, and that Western and

moderate Arab governments should try to exploit them. In October 2009, King Abdullah of Saudi

Arabia paid an historic visit to Syria that was interrupted by many as a return to somewhat normal

Saudi-Syrian relations. As a result of the king’s visit, some observers anticipate that Saudi

investment in Syria may resume or even increase.81

Although it is difficult to discern the true state of Iranian-Syrian relations due to the opaque

nature of both regimes, tensions may have developed over the issue of Syrian peace talks with

Israel. After Syria attended the November 2007 U.S.-sponsored Annapolis peace conference, one

Syrian media outlet asserted that it was Syria's right to pursue its own interests, stating that it was

“fine for Syria to knock at doors that appear closed, as there is often someone inside to open

[them].”82 According to a report by the Washington Institute for Near East Policy, “Iranian

"Syria economy: Iran bank deal?," Economist Intelligence Unit, October 14, 2008.

"Syria and Saudi end tariff war," The National (UAE), November 2, 2009.

Open Source Center Report, " Iran-Syria -- Leaders Hail Ties; Syrian-Israeli Talks Cause Concern," August 8, 2008,

(continued...)

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officials have likewise issued public warnings to the Assad regime not to go too far in these

discussions. In June 2008, a senior advisor to Supreme Leader Ayatollah Khameini cautioned

Syria of the consequences of peace on its relations with Tehran.”83

The Saudi media has focused on exploiting tensions in Iranian-Syrian relations. In 2008, the

London-based, Saudi-owned Al Hayat pan-Arab daily noted that Syrian President Bashar al

Asad’s recent visit to Tehran had been a “failure” in reassuring Iran of his intentions regarding

indirect Syrian-Israeli peace talks. According to the report, “sources told Al Hayat that these

reports contain information, not sheer speculation or analysis, that Syrian President Bashar al

Asad’s recent visit to Tehran was not successful with regard to the stand on the Syrian-Israeli

negotiations.... The same reports added that the Iranian concerns prompted Iran to ask the Syrian

side a lot of questions during al Asad's visit, which did not end in an agreement. In fact, these

reports used the phrase ‘the failure of the visit.’”84

The future direction of Hezbollah may hold the key to the strength of the Syrian-Iranian alliance.

The group has multiple aims, as it seeks to balance an anti-Israel, pro-Iranian revolutionary

regional agenda while appearing to uphold both Lebanese national interests and the independent

interests of its Shiite constituents. Sometimes it succeeds in merging these agendas, as when

Hezbollah claims it is acting as a national liberation movement struggling to free Lebanon from

Israeli occupation, even after Israel’s 2000 withdrawal from the south. Other times, particularly

after its 2006 war with Israel, critics of Hezbollah have been successful in blaming it for

wreaking havoc on the state itself and serving as a pawn of foreign, in this case Iranian and

Syrian, interests.

Although many analysts charge that Hezbollah’s ties to Iran are immutable, others believe that

Hezbollah seeks greater independence from its Iranian and, to a lesser extent, Syrian patrons.

According to one RAND study, “Hezbollah statements suggest that it does not consider its

interests to be in perfect alignment with those of Iran, and its behavior reaffirms this

assessment—Hezbollah continues to focus its energies on internal Lebanese politics.”85 For now,

Hezbollah remains a hybrid organization with a militia, an intelligence apparatus, terrorist

capabilities, charities, private companies, religious institutions, and a political party. For

Hezbollah to evolve into a strictly non-violent movement, a Lebanese-Israeli peace treaty would

have to be signed. Should that occur, however unlikely, some experts assert that without a

common enemy (Israel) binding them together, Iran, Syria and Hezbollah’s interests would

diverge, and Syria would perceive Hezbollah more as a competitor for control over the Lebanese

political scene. In this scenario, Syria and Iran would find themselves without a common proxy

advancing their mutual interests.

(...continued)

IAP20080808570001 Iran-Syria -- OSC Report in English.

David Schenker, Decoupling Syria from Iran: Constraints on U.S.-Syrian Rapprochement, Washington Institute for

Near East Policy, Jerusalem Issue Briefs, December 2008.

BBC Monitoring Middle East, "Iran concerned about Israel-Syria talks Arabic article," August 10, 2008, Al-Hayat

website, London, in Arabic 10 Aug 08/BBC Monitoring.

RAND, Dangerous but not Omnipotent: Exploring the Reach and Limitations of Iranian Power in the Middle East,

2009.

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Lebanon86

Perspectives and Interests

Lebanon, and in particular Lebanon’s Shiite population, have looked to Iran for financial support

and political backing since (at least) 1982. At the time of the Iranian Revolution, Lebanon was

engulfed in a civil war (1975-1990). As part of his policy to export the revolution, the founder of

the Islamic Revolution of Iran, Ayatollah Ruhollah Khomeini, reached out to Lebanon’s Shiites,

who had long felt underserved and underrepresented in Lebanon. During the Israeli invasion of

Lebanon in 1982, Iran sent a contingent of Pasdaran security forces into Lebanon. The force

armed and trained Shiite militia groups that later formed the terrorist organization Hezbollah, and

provided medical attention and other services to Lebanese affected by the Israeli invasion.

Iran’s support for Lebanese Shiites during the civil war cemented a partnership that both sides

consider mutually beneficial. Hezbollah requires outside funding and military support and Iran

requires a proxy to pressure Israel and the United States. Iran is one of a number of regional

actors vying for influence in Lebanon, and Lebanon’s policy priorities reflect this reality.

Policy Priorities

During the Syrian occupation of Lebanon (1976-2005), Lebanese-Iranian relations paralleled

Syria’s relationship with Iran. Since Syrian withdrawal from Lebanon in 2005, Lebanon’s politics

have reflected the sectarian realities in Lebanese politics and Lebanon’s policy toward Iran has

changed little. Iranian support for Shiites in Lebanon (and Hezbollah in particular) serves as a

counterpoint to Saudi Arabian support for Sunni groups. This foreign patronage, when considered

along with Lebanon’s consensus government, requires that any Lebanese government maintain a

friendly relationship with all regional actors to avoid upsetting the delicate political balance

among its religious sects and political parties.

Some analysts argue that Syria’s withdrawal from Lebanon left a power vacuum that has been

filled by Iran via its proxy Hezbollah. Others argue that, despite initial concerns following

Hezbollah’s 2008 siege of Beirut, the outcome of the June 2009 parliamentary elections

represented a setback for Iranian influence in Lebanon and in the Levant.87 Regardless, as long as

Lebanese politics includes a stake for Shiites and, most of all, Hezbollah, the Lebanese

government, whatever its composition, will likely maintain a friendly orientation toward Iran.

The Lebanese government has supported Iran’s right to peaceful nuclear energy and has not

articulated any official concerns about a possible Iranian nuclear weapons program.

Economic and Security Concerns

Trade between Iran and Lebanon is limited. The International Monetary Fund (IMF) estimated it

at $192 million in 2007 and $247 million in 2008.88 Iran and Lebanon also established a joint

Prepared by (name redacted), Analyst in Middle Eastern Affairs, December 2009.

For official election results, see http://www.elections.gov.lb/. For a detailed analysis of the election outcome, see

Richard Chambers, "Lebanon's June 7 Elections: The Results," International Foundation for Election Systems (IFES).

Available online at http://www.ifes.org/files/IFES_LebanonReview060709Results.pdf.

International Monetary Fund (IMF), Direction of Trade Statistics, Islamic Republic of Iran, September 2009.

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economic commission to expand economic cooperation and bilateral ties. During a meeting in

March 2009, then-Lebanese Prime Minister Fouad Siniora stated that “There are lots of grounds

for the growth and expansion of commercial, industrial, infrastructure, and tourism cooperation

between the two countries, and our relations have to expand on a daily basis, therefore.”89

Official trade statistics do not include Iranian support for Hezbollah, which many analysts expect

is substantial. Prior to Lebanon’s June 7, 2009 parliamentary elections, Iran announced that it

would provide Hezbollah and its allies with $600 million in aid, heightening concerns about

Iran’s material support for Hezbollah.90

Other events indicate that Iran might also aim to increase its influence among non-Shiites in

Lebanon. Lebanon’s primary security concern is Israel. In spite of efforts on the part of the

Lebanese government and the international community to strengthen the Lebanese Armed Forces,

many Lebanese perceive Hezbollah as the best line of defense against possible Israeli attacks

along Lebanon’s southern border. In what appeared to be an attempt to improve the standing of

Hezbollah and its allies ahead of the parliamentary elections, Iran reportedly offered to provide

arms and financial support to the Lebanese Armed Forces “without conditions.” No official

agreement materialized. 91

Prospects

Since the civil war ended in 1990, Hezbollah, backed by Iranian largesse, has expanded its role in

Lebanese politics. Many analysts, and some among Lebanon’s non-Shiite groups, argue that

Hezbollah’s 2006 war with Israel and 2008 siege of Beirut demonstrate its growing strength in

Lebanese domestic politics and its ability to act as a spoiler of Western interests in the region.

These analysts have expressed concerns about the future of stability in Lebanon and the region if

Hezbollah were backed by the promise of an Iranian nuclear device.

In Lebanon, Sunnis and some Christians have expressed similar fears.92 As the regional influence

of Iran grows, so does Hezbollah’s strategic depth. Lebanese politics and policies are built around

the national memory of the civil war, and any prospect for a change in Lebanese politics or a shift

of power balance in the region underscores fears that Lebanon could again become a theater of

regional conflict, especially if international efforts to curb Iran’s nuclear program fail, or if Israel

decides to take military action against Iran.

U.S. Open Source Center (OSC) Document IAP20090312950001, “Lebanese PM Stresses Importance of

Strengthening Economic Ties with Iran,” Tehran IRNA, March 12, 2009.

U.S. Open Source Center (OSC) Document IAP20081216605003, “Iran Offers $600 million in Election Financial

Aid to Lebanese Hizballah,” Tabnak in Persian, December 15, 2008.

“Hezbollah: Iran to support Lebanon,” AlJazeera.net, May 30, 2009.

See, for example, U.S. Open Source Center (OSC) Document GMP20090615966007, “Lebanese Divided over Iran’s

Presidential Election,” The Daily Star (Beirut), June 15, 2009 and David Samuels, “The Year of the Elephant,” The

New Republic, May 20, 2009.

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Palestinians93

Perspectives and Interests

Since its 1979 Islamic Revolution, Iran has at least rhetorically, and at times materially, supported

the Palestinian national cause. Because Iran and its population were relatively remote from the

Arab-Israeli conflict—Iran does not border Israel or the Palestinian territories, it had not been a

party to any of the Arab-Israeli wars, and most Iranians are not Arab—many analysts believe that

the Islamic Republic’s adoption of the Palestinian cause after the 1979 revolution was calculated

to persuade Sunni and Shiite Arab populations throughout the region that the Iranian regime more

truly embodies the principles of Islamic leadership than the traditional Sunni Arab states of the

region. 94 Other reasons—geopolitical competition with Israel and the United States, sympathy for

the Palestinians as “victims of neo-colonialism” (given Iran’s sensitivity to foreign involvement

in its own affairs), religious and civilizational opposition to a Jewish/Zionist stronghold in a

predominantly Muslim region—also are possible.

Dating back to when the late Yasser Arafat and the Palestine Liberation Organization (PLO) were

in exile, the Palestinians have been historically ambivalent about openly accepting Iranian

support for their national cause. While Arafat courted Ayatollah Khomeini’s support at times,95 he

preferred to associate himself publicly with fellow Sunni Arab leaders (including Iran’s enemy

Saddam Hussein), and later developed greater ties with the West and engaged Israel through the

Oslo “peace process.” Arafat’s engagement of Israel led Iran to refocus its efforts on influencing

Palestinian groups that rejected Oslo—particularly Hamas, but also Palestinian Islamic Jihad and

others—and that sought to derail efforts to forge peace with Israel on terms that they and Iran

found objectionable. Since then, Hamas has grown significantly in influence—from the political

margins to rivaling Arafat’s Fatah movement in preeminence.

Mahmoud Abbas, Arafat’s successor as PLO Chairman, Palestinian Authority (PA) President, and

the head of Fatah, is clearly opposed to Iranian influence in Palestinian politics. From the

viewpoint of Abbas and his allies, Iran has sowed factional and geographical division among

Palestinians at a time when assembling credible, unified leadership to deal with Israel is vitally

important. Analysts might conclude that the threat Iran poses to Israel—with its nuclear program

and its support of militant groups such as Hamas and Hezbollah—has greatly increased the

difficulty of Abbas’s task of marshaling and sustaining international political will sufficient to

persuade Israel to (1) abandon its control over Palestinian territory and (2) agree to Palestinian

statehood in both principle and fact. Official representatives of the PLO and PA limit their

statements on Iran to its role in internal Palestinian affairs, and thus have not taken a public

position on the nuclear issue.

Some Palestinians who are skeptical of the Arab-Israeli peace process, however, believe that

Iranian support for Palestinian militants and Hezbollah provides needed leverage with Israel that

Prepared by James Zanotti, Analyst in Middle Eastern Affairs, December 2009.

Iran’s elite “Quds Force” unit of the Iranian Revolutionary Guard Corps, which is responsible for training Iran-allied

paramilitary groups throughout the region, is named after the Arabic/Persian word for Jerusalem (“Quds” or

“Ghods”)—a sign that Iran identifies its own strategic interests with the broader struggle throughout the Muslim world

to “liberate” Jerusalem.

For example, Arafat and the PLO reportedly assisted forces opposed to the Shah’s rule, and after the Iranian

revolution’s success in 1979, Khomeini transformed the vacant Israeli embassy in Tehran into an embassy for the PLO.

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the United States and Europe are unlikely to deliver to Abbas. Yet, even though Hamas welcomes

Iranian assistance, and even though Iran’s reputation among Arab populations has arguably been

bolstered in recent years by its anti-Western and anti-Israel positions and rhetoric, many believe

that Hamas and Iran intentionally maintain a measure of distance from one another. An alternate

interpretation is that they merely understate the extent of their ties. They appear to understand the

importance of Hamas maintaining an image among its domestic constituents as an authentic

Palestinian offshoot of the Muslim Brotherhood, instead of as an Iranian proxy—owing to the

ethnic, sectarian, and linguistic differences between Palestinians (who are predominantly Sunni

Arabs) and Iranians (who are mostly Shiite and non-Arab).

Policy Priorities

Iran’s future influence over the Palestinian political scene seems tied to Hamas’s fortunes, which

have been on the rise since Hamas’s political emergence in the late 1980s (and were accentuated

by its victory in Palestinian Legislative Council elections in 2006). By consolidating its control

over Gaza and pursuing popular support through resistance to Israel, Hamas appears to seek

legitimacy by establishing its indispensability to any Arab-Israeli political arrangement. Many

analysts believe that Hamas hopes to leverage this indispensability into sole or shared leadership

of the PA in both the West Bank and Gaza—either through a unity arrangement with Abbas and

his Fatah movement, or through presidential and legislative elections (which were supposed to

take place in January 2010 under PA law, but have been postponed pending factional agreement

on conditions for holding them)—and to gain membership in or somehow supplant the PLO,

which remains internationally recognized as the legitimate representative of the Palestinian

people.

Since its takeover of Gaza, however, some polls indicate that Hamas’s popularity has suffered.

Some analysts attribute this to doubts among Palestinians that Hamas is as incorruptible or as

committed to ordinary people’s best interests as was thought in 2006, partly due to the realities of

governing and to certain of Hamas’s practices (i.e., enabling/profiting from the smuggling of

goods through tunnels from Egypt, provoking harm to Gazan civilians by firing on Israeli targets

from dense urban populations during the 2008-2009 Gaza conflict).

Abbas and Fatah hope to regain influence in Gaza and to neutralize Hamas’s ability to act as a

peace process spoiler. To that end, they have alternated between, and sometimes have

simultaneously pursued, (1) mobilization of international support for a Palestinian state to

undercut Hamas’s appeal to Palestinian peace process skeptics and (2) engagement in

intermittent, Egyptian-brokered national unity discussions with the aims of integrating Hamas

more fully into PA institutions and of ending or reducing Hamas’s dependence on Tehran.

Various U.S. and international policymakers, including Secretary of State Hillary Rodham

Clinton, have said or implied that organizational fissures may exist, particularly between Hamas’s

Gaza-based leadership and its leadership-in-exile—viewed as more closely tied to Iran—in

Damascus, Syria.96 Some believe that these potential fissures could be exploited by promising

Gazan Hamas leaders greater engagement and other incentives in return for moderating their

In testimony before the House Appropriations Subcommittee on State, Foreign Operations and Related Programs,

Secretary Clinton said, “In fact, we think there is some divisions between the Hamas leadership in Gaza and in

Damascus. There's no doubt that those in Damascus take orders directly from Tehran.” Transcript of Subcommittee

hearing: “Supplemental Request,” April 23, 2009.

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goals and tactics. Others have said that Hamas is more united than it seems, and that it benefits

from the portrayal of its leadership as divided because this perception provides Hamas with

greater flexibility in dealing with both Western actors who hold out hope of its moderation and its

Syrian and Iranian allies who are reminded not to take its rejectionist stance for granted.

Economic and Security Concerns

The Gaza Strip is at the epicenter of economic and security concerns over Iranian influence on

Palestinian life. Because Gaza and the West Bank are part of a customs union controlled by Israel,

the Palestinians do not conduct formal trade with Iran. Nevertheless, possible Iranian-supported

smuggling of weapons, cash, and other contraband into the Gaza Strip, along with Iranian training

for Hamas militants, is believed by many to reinforce both Hamas’s ability to maintain order and

control over Gaza and its population, and Palestinian militants’ ability to fire mortars and rockets

into Israel.97 Some reports say that contributions from Iran range from $20-30 million annually, 98

supplementing the funds Hamas receives from private individuals and organizations from the

Palestinian diaspora and greater Arab and Muslim worlds (particularly in Saudi Arabia and other

Gulf states).99 The deputy leader of the Iran-backed Hezbollah movement in Lebanon told the

Financial Times in May 2009 that Hezbollah has been providing “every type of assistance” to

Palestinians in Gaza, including military assistance, for some time.100 In addition, Hezbollah has

acted in some ways as a mentor or role model for Hamas, which has sought to emulate the

Lebanese group’s political and media success.101 During a December 2009 visit to Tehran, Hamas

politburo chief Khaled Meshaal (who is based in Damascus) said, “Other Arab and Islamic states

also support us ... but the Iranian backing is in the lead, and therefore we highly appreciate and

thank Iran for this.”102

The situation in Gaza came to a head with the December 2008-January 2009 conflict between

Hamas and Israel, leading to the death and injury of hundreds of Gazan civilians, the

displacement of thousands more, massive destruction of public and private infrastructure, and a

general deterioration in quality of life. In the conflict’s aftermath, dilemmas remain over how to

According to the State Department, in 2008, “Iran remained a principal supporter of groups that are implacably

opposed to the Middle East Peace Process. Iran provided weapons, training, and funding to HAMAS and other

Palestinian terrorist groups, including Palestine Islamic Jihad (PIJ) and the Popular Front for the Liberation of

Palestine-General Command (PFLP-GC). Iran’s provision of training, weapons, and money to HAMAS since the 2006

Palestinian elections has bolstered the group’s ability to strike Israel.” U.S. Department of State, “Country Reports on

Terrorism 2008,” Chapter 3, available at http://www.state.gov/s/ct/rls/crt/2008/122436.htm. See also Marie Colvin,

“Hamas Wages Iran’s Proxy War on Israel,” The Sunday Times (UK), March 9, 2008.

See Council on Foreign Relations Backgrounder, “Hamas,” available at http://www.cfr.org/publication/8968/#p8;

Matthew Levitt, “The Real Connection Between Iran and Hamas,” Counterterrorism Blog, available at

http://counterterrorismblog.org/2009/01/the_real_connection_between_ir.php.

See Don Van Natta, Jr., with Timothy L. O’Brien, “Flow of Saudi Cash to Hamas Is Under Scrutiny by U.S.,” New

York Times, September 17, 2003.

100

Anna Fitfield, “Hizbollah Confirms Broad Aid for Hamas,” Financial Times, May 12, 2009.

101

Several of Hamas’s current leaders were deported by Israel from the West Bank and Gaza to southern Lebanon in

December 1992. Not only did they persevere and bond through the hardships of a winter in exile, but they also

cultivated relations with and received mentorship from Hezbollah before being repatriated to the West Bank and Gaza

by Israel in February 1993 as a result of pressure from human rights organizations and the United States. See Paul

McGeough, Kill Khalid: Mossad’s Failed Hit ... and the Rise of Hamas, Crows Nest, Australia: Allen & Unwin, 2009,

p. 68.

102

Transcript of remarks by Khaled Meshaal, Al Jazeera TV, December 15, 2009, Open Source Document

GMP20091215648001 (translated from Arabic).

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reconstruct Gaza, support the recovery of its people, weaken Hamas’s control, and end

smuggling. Some advocate opening Gaza’s border crossings for commerce to ease the economic

pressures that may encourage smuggling; some advocate internationally coordinated antismuggling operations; some advocate both. In January 2009, the U.S interdiction of the Cypriotflagged ship Monchegorsk in the Red Sea after it reportedly left Iran with weapons-related

equipment and the Israeli bombing of an apparent arms-smuggling convoy in Sudan moving in

the direction of the Egypt-Gaza border were signs of possible Iranian involvement in

smuggling—perhaps in collusion with other states and non-state actors.103 Although construction

materials are generally not being allowed into Gaza through the border crossings, Iran has

proposed its own reconstruction plans and claims to be distributing funds to Gazans affected by

the conflict.104 These plans may reflect Iranian ambition to compete—in concert with Hamas—

against the PA, Gulf Arab states, and the international donor community for patronage and public

support among Palestinians and other Arabs in the region.

Prospects

How Iranian influence on the Palestinians is likely to play out could depend in large part on

events over the next several months. It is unclear how the popular unrest in Iran that has followed

its June 2009 presidential elections might affect the Iranian regime’s willingness and ability to

exercise influence in the wider region and the strategic approach taken toward the IranianPalestinian linkage by the United States and Israel. Thus far, the Obama Administration has

suggested that progress in the Arab-Israeli peace process (with the Palestinians and perhaps also

with Syria and Lebanon) could improve the prospects of both countering Iran’s nuclear threat and

reducing its support of Hamas and Hezbollah, while Israel seems less inclined to pursue ArabIsraeli peace until the Iranian problems are addressed directly. Iran’s internal political discord has

complicated prospects for direct U.S.-Iran diplomacy aimed at resolving the nuclear issue. As a

consequence, the U.S. focus on advancing the Arab-Israeli peace process could intensify.

Alternatively, concerns about Iran’s unpredictability might foster more of a “wait-and-see”

attitude by the United States and other key actors with respect to the peace process and other

diplomatic or strategic options in the region—possibly ceding the initiative to Palestinian

militants, Hezbollah, or other potential spoilers.

Some claim that a conciliatory tone that some detect from Hamas, particularly since Barack

Obama became President, may be due to the movement’s calculation that cultivating an image of

reasonableness presently serves its interests in light of (1) the diplomatic climate following

President Obama’s inauguration, (2) Israeli deterrence of Hamas-generated violence in the

aftermath of the Gaza conflict, and/or (3) geopolitical changes affecting Hamas’s principal

benefactors in the region—Syria, Hezbollah, and Iran.105 Those who are more skeptical of

103

Possible Iranian/Hezbollah weapons smuggling to Palestinians can be traced at least as far back as to the January

2002 case of the Karine A, a Palestinian merchant vessel carrying 50 tons of weapons (including Katyusha rockets and

anti-tank missiles) that was seized by the Israeli navy in the Red Sea during the second Palestinian intifada.

104

Iranian Press TV reported in July 2009 that Iran had given money to over 100 families in Gaza who had lost a

family member or their home in the conflict to allow them to build temporary housing: “Bypassing government

bureaucracy, the Martyrs' Foundation of the Islamic Republic of Iran has worked in partnership with the local Ansar

Charity Institute to provide the necessary assistance.” “After Israeli War, Iran Moves to Rebuild Gaza,” aljazeera.com

(citing Iranian Press TV), July 29, 2009. See also David Rosenberg and Saud Abu Ramadan, “Gaza Rebuild Splits

Palestinians as Iran, U.S. Clash,” Bloomberg, March 2, 2009.

105

Some speculate that Syria may be encouraging Hamas, to whose exiled leadership it provides safe haven, to at least

appear more reasonable while Syria pursues a possible improvement in ties with the United States. Elections in

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Hamas’s intentions have countered that nothing of substance has changed in Hamas’s existing

positions, and that any reasonable-sounding statements are best explained as a ploy to give the

impression of moderation.106

Israel107

Perspectives and Interests

From its founding in 1948 until the fall of Mohammed Reza Shah Pahlavi in 1979, Israel had

good relations with Iran as, in the 1950’s, it pursued a policy of trying to surround its Arab

enemies with friends in the “periphery,” including Iran, Turkey, and Ethiopia. Israel provided the

Shah with weapons and trained his secret police, the infamous SAVAK, and Iran provided Israel

with oil, even during the Arab oil embargo after the October 1973 War.108

Ayatollah Ruhollah Musavi Khomeini, founder of the Islamic Republic of Iran in 1979, rejected

Israel’s right to exist and ended all bilateral cooperation. In the early years of the Republic, Israel

generally ignored Khomeini’s rhetoric because it viewed Saddam Hussein in Iraq as the greater

threat. Moreover, Israel indirectly served Iran’s interests in 1981, when it bombed Iraq’s Osirak

nuclear reactor, and is said to have secretly supported Iran briefly in the mid-1980’s during the

Iran-Iraq War (1980-1988).109

Yet, also in the 1980’s, Israel began to perceive Iran as a threat as Tehran provided ideological

inspiration and military support for the founding of the Lebanese Hezbollah, which later attacked

Americans and Israelis in the region, and Jews abroad. This threat perception grew as Israel

increasingly confronted Iranian-supported violent Palestinian terrorist groups (Hamas and

Palestine Islamic Jihad) which rejected the existence of Israel and sought to sabotage the peace

process.110

In October 2005, shortly after taking office, Iranian President Mahmud Ahmadinejad is said to

have called for Israel to be “wiped off the map,” and he has since repeatedly expressed virulently

anti-Israel sentiments. Israel perceives an existential threat from an Iran whose officials have

these views plus an intent to develop nuclear weapons. Israeli officials believe that a nuclear Iran

(...continued)

Lebanon and Iran in June may have—for the time being—turned the primary focus of both Hezbollah and the Iranian

regime to jockeying for power internally.

106

See Matthew Levitt, “Score One for ‘Hamaswood,’” Middle East Strategy at Harvard, August 11, 2009, available at

http://blogs.law.harvard.edu/mesh/2009/08/score-one-for-hamaswood/.

107

Prepared by (name redacted), Specialist in Middle Eastern Affairs, December 2009.

108

For background, see Trita Parsi, Treacherous Alliance: the Secret Dealings of Israel, Iran, and the United States,

New Haven: Yale University Press, 2007.

109

Ibid., and Orly Halpern, “Israeli Experts say Middle East was Safer with Saddam in Iraq,” Forward, January 5,

2007, who notes that Shimon Peres briefly advocated support for Iran at that time.

110

Hezbollah, Hamas, and Palestine Islamic Jihad (PIJ) are on the U.S. State-Department-designated Foreign Terrorist

Organizations (FTOs). he annual State Department Country Reports on Terrorism, accessible via http://www.state.gov,

notes that Iran provides financial, military, and training support to these groups.

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could pose a direct threat to Israel, provide a nuclear shield for terrorists, and possibly provide

them with a nuclear weapon.111

In a November 15, 2009, speech, Israeli Prime Minister Binyamin Netanyahu laid out his views

regarding Iran’s nuclear potential. He said

Iran’s pursuit of nuclear weapons threatens our security, peace in the Middle East, and

global stability. With nuclear weapons, its powers of destruction, already considerable,

would grow immensely. The moderates in the Middle East would be weakened and

extremists strengthened. Other countries in the region would join the race for nuclear

weapons. An Iranian regime that pledges to wipe Israel off the map would work day and

night to undermine any attempt to advance peace between Israel and its neighbors –

whether it is peace with the Palestinians, with Syria, and with anyone else.

In contrast, if Iran’s nuclear ambitions are thwarted, peace would be given a dramatic

boost. Hezbollah and Hamas would be considerably weakened and moderate forces

within the region would quickly become ascendant. That is why the fate of Iran’s nuclear

program is a true turning point in history. It would significantly influence our ability to

achieve a stable and secure peace in the Middle East.112

Policy Priorities

Stopping Iran from acquiring nuclear weapons is Israel’s number one foreign policy priority. The

Israeli government insists that Iran is an international, not just an Israeli problem. Like his

predecessors, Prime Minister Netanyahu said that he intended to enlist an international front to

increase sanctions on Iran and preserve Israel’s security interests.113 His government is trying to

prod the United States and other Western governments to progress from dialogue, to harsher

sanctions, to military action if Iran continues to refuse to abandon uranium enrichment. Israel also

hopes to influence Russia and China in order to end their obstruction of harsher U.N. sanctions

against Iran. It particularly seeks to dissuade Russia from selling advanced S-300 anti-aircraft

missiles to Iran, thereby enabling it to thwart an attack on its nuclear installations. As an interim

measure, on October 31, 2009, Netanyahu endorsed a U.S. proposal to have Iran move enriched

uranium outside of Iran as “a positive first step” in the effort “to unite the international

community to address the challenge of Iran’s attempts to become a nuclear military power.”

Israel’s Defense Minister Ehud Barak opined that the agreement would set Iran back by about a

year, but added “there is a drawback” in that it “recognized that Iran enriches uranium, on a low

level, on its soil for peaceful purposes. This is problematic for us.” He insisted, “what is required

is a halt to enrichment in Iran, not just an export of the enriched material to build fuel rods.” His

views reflect those of other Israelis who regarded the proposed agreement as a retreat from the

demand that Iran stop all uranium enrichment. 114 In the end, the views of Israeli officials did not

matter as Iran rejected the proposal.

111

For example, see remarks of Prime Minister Binyamin Netanyahu after meeting with President Obama on March 18,

2009.

112

Full text of speech to Saban Forum accessible at Israeli Ministry of Foreign Affairs website, November 15, 2009,

http://www.mfa.gov.il.

113

“Policy Speech by PM Netanyahu at Special Knesset Session,” accessible via Israeli Ministry of Foreign Affairs

website, July 22, 2009, http://www.mfa.gov.il.

114

Ethan Bronner, “Netanyahu Supports Plan to Transfer Iran’s Uranium,” New York Times, October 31, 2009, Herb

Keinon, et.al., “Barak: Vienna Proposal Will Only Delay Iranian Nuclear Program by a Year,” Jerusalem Post,

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Israeli officials have been skeptical about the Obama Administration’s outreach toward and

possible engagement with Iran. Defense Minister Barak said, “if there is an engagement, we

believe it should be short in time, well-defined in objectives, followed by sanctions.” Many times,

he has reaffirmed that Israel is taking “no options off the table,” signaling that a military strike is

among its policy choices. 115

The priority that Israel gives to Iran lowers the priority it accords to the Arab-Israeli peace

process. Because of the perceived Iranian threat, Israeli officials are wary of the possible

establishment of a Palestinian state that would be vulnerable to takeover by Iranian-supported

Hamas – thereby creating what Prime Minister Netanyahu calls “Hamastan,” an Iranian proxy, on

Israel’s borders. Israeli leaders link movement on the Syrian-Israeli peace track partly to Syria’s

distancing itself from its ally Iran, again noting that it is essential to keep Iran away from Israel’s

northern border.

Economic and Security Concerns

Israel has no economic relations with Iran and, therefore, has few, if any, direct economic

concerns. It is aware, however, that should Iran block the Straits of Hormuz and interfere with oil

shipments from the Gulf in retaliation for an attack, then Israel’s Western allies would be harmed,

and Israel could be affected as a result.

Israel’s security concerns are more immediate. Iran’s ongoing arming of Hamas, Palestine Islamic

Jihad, and Hezbollah is a threat to Israel’s security. Israel wants Egypt and the United Nations to

impede the smuggling of Iranian arms into Gaza and Lebanon, respectively. On at least five

occasions, Israel has seized ships that it says were smuggling Iranian weapons. Foremost, as

noted above, Israel believes that an Iran possessing nuclear arms would threaten its security and

existence.

Prospects

Israel is keeping “all options on the table.” It has been willing to give the United States and others

in the international community a chance to engage in a dialogue with Tehran to see if incentives

would induce Iran to stop enriching uranium or to enrich it outside of the country so that nuclear

fuel could be monitored and not diverted from peaceful purposes to a weapons program. If

dialogue does not work within a limited period of time, however, Israel expects the international

community to impose rapidly escalating sanctions on Iran.

As 2009 drew to a close, Israeli officials and commentators noted that President Obama said that

he would give Tehran until the end of the year to comply with international demands regarding its

nuclear program. Since Iran has not complied, the Israelis expect the United States and the other

members of the P5+1 (United Kingdom, France, Russia, China, and Germany) to ask the U.N.

Security Council to endorse harsher sanctions in January 2010.

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October 23, 2009.

115

Greg Jaffe, “US and Israel Differ on Strategy if Iran Talks Fail; Leaders Agree Goal is to Bar Nuclear Arms,”

Washington Post, July 28, 2009, Richard Boudreaux, “Gates’ Israel Trip Aims to Ease Iran Worries,” Los Angeles

Times, July 28, 2009.

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Should sanctions not work, Israel has indicated that it is preparing/prepared to take armed action.

Israel already may have signaled its readiness to thwart Iran’s nuclear ambitions by military

means if diplomacy fails. On September 6, 2007, the Israeli Air Force carried out an air raid

against a site in northeastern Syria. U.S. officials later confirmed that it was a nuclear reactor.116

Then, on June 20, 2008, the New York Times reported that the Israeli Air Force had conducted a

major exercise about 900 miles west of Israel, comparable to the distance planes would have to

fly to strike Iran’s uranium enrichment plant at Natanz.117 In June and July 2009, Israel sent a

submarine capable of launchin

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