Iranian planning?....

From Strategic Forecasting, Inc:

The Nuclear Deadlines and a Strengthening Iran
By Kamran Bokhari

For weeks now, Aug. 22 has been marked as a red-letter day: the day Iran would formally respond to the incentives offered by world powers in exchange for a halt to its nuclear program. Given all the other things that have been occurring in the region -- especially the psychological impact that Hezbollah's successful resistance to Israeli forces has had -- there was a good deal of speculation (and in some quarters, trepidation) about what the day would bring.

On the extremes, there were those among our readers who suggested Iran would launch a nuclear strike against Israel; others spoke of the potential for a direct U.S. military strike against Iran's nuclear facilities. We have not been among those predicting apocalyptic action. It is our view that, despite the presence of some extremists in both the American and Iranian camps, the nations and governments as a whole are rational actors that (rhetoric notwithstanding) will not take actions that threaten their own core interests or survival. In short, actions are governed by very real and practical limitations, regardless of what some may think about Mahmoud Ahmedinejad's mental state or George W. Bush's abilities as a leader.

That said, at least a little craziness surrounding the calendar date was to be expected. And the Iranians made sure to put on a good show.

The day began with reports that Iranian security forces had assaulted and briefly occupied an oil rig operated by Romania's Grup Servicii Petroliere (GSP) in Iran's territorial waters. The incident (which Iran described as a police action that disrupted a robbery attempt) lasted only a few hours but sent a clear signal that Iran is prepared to escalate matters if Washington moves toward punitive sanctions over the nuclear issue.

Shortly afterward, Tehran issued its formal response to the incentives package -- though details, at this writing, remain secret. Leaks likely will emerge in the coming hours or by evening in the United States. If our thinking is correct, Iran has not yielded to demands that it cease uranium enrichment (as Tehran steadfastly has said that it won't), but instead will have issued a response that plays to and widens political divisions among the five permanent U.N. Security Council (P-5) members and Germany.

The complexity of the response will demand considerable deliberation and debate within the P-5+Germany -- inviting infighting and delaying any meaningful action, such as a vote for sanctions against Iran. At this point, it appears that U.N. Security Council resolutions and diplomacy may be reaching the limits of their usefulness.

Events of the coming days will warrant attention, certainly, but the underlying reality is this: The Iranians, correctly or otherwise, perceive that their moment in history has arrived. With the nuclear issue, through Hezbollah, and to some extent in Iraq, they are moving to secure their interests and extend influence -- seeing before them the opportunity to establish Persian, Shiite Iran as a hegemon in the Middle East and a power within the Muslim and wider worlds.

And for the United States, like its Western allies, there are few meaningful options left to block it.

The Diplomatic Backdrop

To fully understand this, it's useful to review the recent buildup over the nuclear issue -- and to note that the 34-day Israel-Hezbollah war erupted precisely in the middle of that escalation. On June 1, the P-5+Germany agreed to a package of incentives and penalties designed to force Iran to give up uranium enrichment. Javier Solana, the EU foreign policy adviser, delivered the terms to Tehran, and the White House urged Iran to study them thoroughly before issuing a formal response. No firm deadline was set, but the United States and its European allies indicated that one would be expected within a matter of weeks. Details of the incentives were kept secret by both sides until July 13.

The terms include greater investments in water-power reactors, provisions for Iran to join the World Trade Organization, and the possibility that U.S. and European restrictions on purchases of civilian aircraft and telecommunications equipment from Iran will be lifted if Iran suspends uranium enrichment. The package also lists a "catalog of sanctions" that countries might enact if Iran refuses to halt enrichment. It was made obvious during this time that the P-5+Germany is less than united over the Iranian nuclear issue; Russia and China retained the right to opt out of U.N. sanctions for Iran, even if enrichment were to continue. In short, Russia and China reportedly could refuse to adopt sanctions of their own, but they would not block attempts by other U.N. members to sanction Iran.

Tehran several times rebuffed pressures to issue its response to the package, saying officials needed time to study the proposal. On June 29, the G-8 foreign ministers said they expected Iran's response to come on July 5, at a meeting between Solana and Iranian national security chief Ali Larijani. At that point, the Iranians made it clear that no response would come before mid-August. Finally, on July 21 (several days after the Israel-Hezbollah conflict had begun), they set the Aug. 22 date in stone. Throughout all of this, Tehran has steadfastly stated that it will not suspend enrichment.

Thus, in the midst of the Israeli-Hezbollah war, the U.N. Security Council passed legally binding Resolution 1696, setting Aug. 31 as the deadline for uranium enrichment to cease. There has been no meaningful change in the Iranian stance since the resolution was passed. Foreign Minister Manouchehr Mottaki, on Aug. 16, did say Tehran was willing to negotiate about enrichment suspension, so long as Iran's right to pursue enrichment in the future remained unquestioned and world powers ceased to question Tehran's intentions for its nuclear program. Significantly, Mottaki called, on the same day, for Western states to re-evaluate their relations with Muslim countries in light of the emerging reality in the Middle East -- clearly referencing the outcome of the Israel-Hezbollah war.

A New Regional Paradigm?

The outcome of the conflict between Israel and Hezbollah has given Iran the opportunity to strengthen the influence it wields in the Levant, while also bolstering perceptions that any attempts to solve the nuclear issue militarily could be very costly. The Israelis' mismanagement of the war effort worked to the advantage of the Iranians, who are intimating to other Muslim states that Israel not only is not an invincible military power, but now is a power in decline.

At a higher level, the war also has divided Arab states into two camps -- pro- and anti-Hezbollah -- and, at the same time, allowed Iran, through its sponsorship of Hezbollah, to project itself as the leader of all Muslim groups in the struggle against Israel. Given the psychological impacts that Hezbollah's successful resistance brings throughout the region, it is little surprise that Iran is surging forward with new, and probably excessive, confidence.

From Tehran's standpoint, this is the perfect moment to press its advantage and establish itself as a regional hegemon and global player. Events of the last few days should be viewed very much in this light.

For instance, during the weekend, a new round of Iranian military exercises -- the second this summer -- commenced, unveiling the country's new defense doctrine. The first stage of the war games -- code-named "Zarbat Zolfaghar," or "The Blow of Zolfaghar" (a reference to the double-pointed scimitar of Imam Ali) occurred in Sistan-Baluchistan, a province in the southeast, and will continue in 15 other provinces in the country over the next five weeks.

During the battle drills, the military test-fired 10 surface-to-surface Saegheh missiles, which have a range of 50-150 miles.Iran also unveiled what it calls a new "air mine system," which officials claimed could be used from low and high altitudes, and in general has upgraded its entire air defense system. These are attempts to mitigate Iran's vulnerability, since it lacks an air force. In fact, Brig. Gen. Mohammad Hassan Dadras, commander of Iranian ground forces, said on Saturday that no air force in the region would be capable of confronting the Iranian army. This seems to have excluded the United States, a non-regional power.

Along with that, the army's commander-in-chief, Maj. Gen. Ataollah Salehi, made the interesting statement that the Iranian military is prepared to meet any threat from Israel, which he described as an "insane enemy." And if the situation wasn't highly charged enough, there was an apparently deliberate escalation of a commercial dispute involving Romania's GSP. This seemed designed to generate jitters in the oil markets without directly harming Iranian interests.

From all appearances, the Iranians and their Shiite allies in the region are quite confident that this is their moment. We do not expect this to lead to any of the more extreme outcomes that have been speculated -- distances, for instance, argue against a direct strike by Iran against Israel -- but the political and military dynamics of the region certainly are shifting.

The Iraq Angle

As a result, the situation in Iraq must be considered carefully. As the Israel-Hezbollah conflict drew to a close, U.S.-Iranian exchanges concerning Iraq began to take on a more confrontational tone. Larijani, for example, on Aug. 7 accused Zalmay Khalilzad, the U.S. ambassador to Iraq, of meeting with terrorist groups there and encouraging attacks against Iranian and Shiite targets. Khalilzad's retorts over the following days were rather ambiguous, but he essentially accused Iran of using agents to foment sectarian violence in Iraq and to stage attacks against U.S.-led forces -- in retaliation, he suggested, for Israeli strikes in Lebanon.

These statements were clarified a bit on Aug. 14: Maj. Gen. William Caldwell, the top U.S. military spokesman in Iraq, said there "is nothing that we definitively have found to say that there are any Iranians operating within the country of Iraq," though the Americans believe that "some Shia elements have been in Iran receiving training." Caldwell said it is not clear how much the government of Iran knows about or endorses such activity.

Ultimately, the American fear appears to be that Iran, if backed into a corner, would use the Shiite militias in Iraq against the United States. To an extent, this is a reasonable fear, but there also are reasons why Iran would not be willing to push things beyond the level of "managed chaos." For one thing, it is not in Iran's interest for Iraq to descend into full civil war, since uncontrolled sectarian violence could lead to repercussions on the Iranian side of the border. In fact, the political and financial investments that Iran has been making in Iraq would indicate that Tehran wants to make sure the situation, though violent, does not spin utterly out of control.

The Iranians have realized that they will not be able to exert any more influence over Baghdad than they can now, through the Shiite-dominated government -- so the goal is to make sure that Tehran secures the gains it has made in Iraq. Moreover, Iran is well aware of the delicate ethnic and political balance that holds the government in Baghdad together and keeps the intra-Shiite rivalries within acceptable parameters.

If our assumption holds -- that Iran will escape any punitive consequences for its actions on the nuclear front -- this fear of uncontrolled chaos in Iraq could be one of the few points of leverage left for the United States. It is a weak card in what is certainly a bad hand for Washington, and poses great risks for the Bush administration itself. However, if the Americans are incapable of achieving their own goals in Iraq or in the nuclear issue, the next best option would be to ensure, through their own political maneuverings with the Sunnis, that the Iranians will not be able to achieve their goals either.

Latest Moves, Next Moves

As we issue this report, developments in the last 24 hours have been these:

Solana and Larijani spoke by phone on Aug. 21, saying they were open to "further contacts" about Tehran's nuclear ambitions.

The deputy director of Iran's Atomic Energy Organization said "suspension of uranium enrichment has now turned practically impossible."

Foreign Ministry officials said Tehran's response to the incentives package would be "multi-dimensional" and hopefully lead to a comprehensive negotiated settlement.

Supreme Leader Ayatollah Ali Khamenei said Tehran will continue its pursuit of nuclear technology.

Tehran barred U.N. nuclear inspectors from an underground nuclear facility at Natanz, and the chairman of the parliament's National Security and Foreign Policy Commission said a bill is being drafted that would require inspections by the International Atomic Energy Agency to cease immediately if sanctions are placed on Iran.

The Iranians delivered their point-by-point counteroffer to the P-5+Germany, saying they were offering a fresh approach and are ready for "serious negotiations," beginning Aug. 23.

Clearly, the Iranians have spent the past several weeks preparing not only the terms of their counteroffer, but also the international atmosphere in which those terms would be presented. Their goal has been to make sufficient positive gestures that not only Russia and China, but perhaps European powers as well, might be loathe to side with the United States over possible sanctions. At the same time, they have been sufficiently bellicose to ensure the world knows there will be international repercussions if things don't go their way.

The United States itself lacks political leverage over Iran, and the diplomatic process -- as it currently stands -- will not bring about the results Washington seeks. Therefore, the Bush administration's best option is to ensure that even if Tehran wins the current diplomatic battle, it will not win the entire war over uranium enrichment. We would expect Washington to argue that since there is no way to guarantee the Iranians will honor any deal they make on the nuclear issue, no deals can be made.

At most, the United States will open a new process to discuss the process of slapping eventual sanctions on Iran. Moreover, the pick-and-choose menu that was included in the June incentives package basically ensures that no meaningful sanctions will be enacted, even if U.N. Security Council members should eventually choose to go that route. All of the sound and fury over the incentives package will, in the end, signify next to nothing. And Iran is well aware of this.

So long as a military option is not on the table for the U.N. Security Council members -- and at this point, it is not -- it appears that Iran will emerge unscathed from this contest. This should not be taken to mean that Iran will be on the fast track for acquiring nuclear weapons, since that is a function of technology rather than politics. But it does mean that Iran is growing stronger within a region where, on all sides, fundamental interests and assumptions are now being reassessed.

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