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Bush Confronts New Challenge on Issue of Iran

By STEVEN R. WEISMAN

Published: November 19, 2004

ANTIAGO, Chile, Nov. 18 - While assembling a new national security team, President Bush is confronting what could become the biggest challenge of his second term: how to contain Iran's nuclear program and what some in the administration believe to be Tehran's support of violence in Israel and insurgents in Iraq.

In an eerie repetition of the prelude to the Iraq war, hawks in the administration and Congress are trumpeting ominous disclosures about Iran's nuclear capacities to make the case that Iran is a threat that must be confronted, either by economic sanctions, military action, or "regime change."

But Britain, France and Germany are urging diplomacy, placing their hopes in a deal they brokered last week in which Iran agreed to suspend its uranium enrichment program in return for discussions about future economic benefits.

Secretary of State Colin L. Powell thrust himself into the debate on Wednesday by commenting to reporters that fresh intelligence showed that Iran was "actively working" on a program to enable its missiles to carry nuclear bombs, a development he said "should be of concern to all parties."

The disclosures alluded to by Mr. Powell were seen by hard-liners in the administration as another sign of Iranian perfidy, and by Europeans as nothing new.

Although Mr. Powell has praised the negotiations between the Europeans and Iran, one administration official said that his comment suggested that there was "a steady tightening of outlook between hawks and doves" that Iran will use the negotiations as a pretext to continue its nuclear program in private.

Leading the charge for a tough line on Iran has been John R. Bolton, under secretary of state for arms control and international security. At the moment, administration officials say there are no prominent members of Mr. Bush's inner circle enthusiastic about the European approach of negotiating with Iran; most of the moderates are lower-level areas specialists in the State Department. But only last week Prime Minister Tony Blair persuaded Mr. Bush to endorse the European approach.

Though Mr. Powell will soon leave Mr. Bush's administration, he is about to face a tough choice on Iran - whether to have an extensive conversation with the Iranian foreign minister, Kamal Kharrazi, or to avoid any contact when the two men attend a conference in Egypt next week.

"The simple fact is the secretary doesn't want to meet with Kharrazi," said an administration official, adding that that he saw little opportunity for dialogue and that Mr. Powell may have been signaling his pessimism when he made the disclosure about Iran's missile capability.

The possible Powell-Kharrazi meeting could occur Tuesday at Sharm el Sheik, Egypt, where European, Middle Eastern and other envoys are attending a conference on the future of Iraq. A top aide to Mr. Powell said the secretary would go with talking points to discuss ways to improve Iranian-American relations, but that it was up to the Iranians whether the conversation would take place.

A European diplomat familiar with the British-French-German initiative said they were also pessimistic that Iran would back off its nuclear ambitions, but that they had no choice but to engage Iran because military options were distasteful or impractical after the troubled invasion and occupation of Iraq.

"America clearly understands that Iran will be one of its greatest threats in the second administration," this diplomat said. "But the Europeans understand that even the greatest threats also present a great opportunity to resolve problems."

Richard Haass, the president of the Council on Foreign Relations and a former policy and planning director under Secretary Powell, said he favored a major effort to offer incentives to moderate Iran's behavior, combined with threats of tough action if it does not.

European leaders say they want the United States to join with them in offering economic incentives to Iran, such as working to get Tehran to join the World Trade Organization - a step that could not occur without active American support.

Mr. Haass said it made no sense for the Europeans to offer incentives and for the United States to make threats. Both must be done together, he said.

The Iranian issue has vexed the Bush administration for so long that plans to produce a major policy paper within the administration simply ground to a halt last year and have not been revived. American contacts with Iran were cut off last May, when Iran was linked to groups that carried out bombings in Saudi Arabia.

Administration officials said there was fresh evidence that Iran supported insurgents in Iraq and had stepped up its support of the militant organization Hezbollah, which Israel now says is helping to subsidize organizations like Hamas and Islamic Jihad who have carried out suicide bombings there.

Indeed, an administration official said that Americans believed that Iran was supporting suicide bombers and insurgents in response to the pressure over its nuclear program - and specifically to warn Israel not to consider the kind of airstrike on a nuclear reactor that it carried out in Iraq more than two decades ago.

Officially, administration officials say that a military option like the one employed by Israel in 1981 against Iraq, when it bombed a reactor near Baghdad, is unrealistic because the Iranians have buried their most important nuclear facilities and can rebuild anything that is destroyed.

But an administration official said that a military strike or sabotage was not out of the question - "you never take the military option off the table," he said - and that in any case it was "money in the bank" for Iran to be concerned about such an option, because it might be goaded into a more conciliatory approach to the United States.

On the other hand, many in the administration say that Iran is not likely to enter into talks with the United States, as the Europeans want, because the revolutionary clerics who control the government are unalterably opposed to engaging with a country it considers the enemy.

"You can't call yourself a revolutionary regime and also negotiate with the Great Satan," said an administration official.

For months the United States's position has been not to threaten war but to force the issue to the United Nations Security Council, where sanctions - including a ban on oil imports and technology transfers - could be considered. But the European initiative has brought such talk to a halt.

But the thinking among many administration officials is that if the European deal to get Iran to suspend its uranium enrichment activities falls apart in coming months - if, for example, inspectors are unable to verify compliance - administration hawks will surely enlist others in a campaign to confront Iran with threats.

The decision, said European and American diplomats, will be made by Mr. Bush with his new secretary of state, Condoleezza Rice, who is said by aides to be of two minds about the problem just as Mr. Powell is - willing to try diplomacy, not sure that it will work and ready to look at other possibilities if it does not.

Kay: Wrong evidence on Iraq sets tougher standard for Iran

[Excerpt]
Thursday, November 18, 2004 Posted: 10:33 AM EST (1533 GMT)

NEW YORK (CNN) -- False warnings about Iraq's nuclear capabilities have "seriously impeded" the United States' ability to issue warnings about any intelligence on Iran's nuclear program, a former chief weapons hunter said Thursday.

Despite Secretary of State Colin Powell's acknowledgment that he had seen information indicating Iran may be trying to produce nuclear missiles, proof of such a program may now be more difficult to find, David Kay told CNN's "American Morning."

Kay, who headed President Bush's Iraq Survey Group in its search for weapons of mass destruction before resigning last December, said it was "likely" that Iran still had not disclosed all its activities but the bar for evidence is higher after Iraq.

"We have the makings, really, of a perfect storm," Kay said. "U.S. intelligence capability to warn -- and the secretary of state's capability to warn -- about weapons programs has been seriously impeded by the false warnings given about Iraq."

Kay also questioned the origins of the information released earlier this week.

"This intelligence seems to be based on dissident groups," he continued. "In the case of Iraq, dissident groups fed us misinformation. And then finally, the (International Atomic Energy Agency's) own capability in Iran is seriously in question. For 15 years they missed a program. So you can say it's likely, but it's going to be very hard to convince the Europeans and others that that is what is happening."

The National Council of Resistance of Iran -- which is on the State Department's list of terrorist organizations -- revealed satellite photographs this week it said showed a hidden nuclear plant in Iran, allegations the Iranians denied.

"This allegation is timed to coincide with the next meeting of the board of governors of the IAEA," Iran's top nuclear negotiator, Hussein Moussavian, said. "And every time just before the meeting there are these kind of allegations either from the United States or terrorist groups. And every time these allegations have proven to be false."

Powell, en route to the Asia-Pacific Economic Cooperation summit in Santiago, Chile, told reporters he had seen intelligence that appears to "corroborate" the resistance group's information.

"And it should be of concern to all parties," said the secretary, who announced his resignation this week. "I'm talking about information that says that they not only had these missiles, but I'm aware of information that suggests they were working hard as to how to put the (missiles and the nuclear devices) together."...

The IAEA said it is investigating the resistance group's claims. The group has "a checkered record," Kay said.

"It's been right about some information," he said. "It's been seriously wrong. I think the Iranians will have no trouble discrediting it coming so soon after a supposed agreement with the Europeans."

In that agreement, Iran agreed to completely suspend its uranium enrichment program and invited the IAEA to inspect its activities.

In his weekend report to the Board of Governors, IAEA director Mohamed ElBaradei said all of Iran's declared nuclear materials were accounted for, but left open the possibility that there could be some undeclared material.

Kay said the only way to know for sure is give the IAEA full authority to find out.

"The report is nuanced and speaks of what they observed and admits that there may be things that they have not observed," he said. "The real imperative now is to empower the IAEA, the only people on the ground in Iran, with the capability to do real inspections and see if the Iranians allow it."

EU Agreement will Fail to Stop Iran from Getting WMDs, Critics Warn

November 19, 2004
Forward
Marc Perelman

Israel: 'Too Much Carrot, No Stick'

This week's nuclear deal between Iran and three European countries has triggered a wave of criticism from Israeli and Jewish communal officials, who warn that the pact will fail to halt Tehran's pursuit of nuclear weapons. Iran's agreement with France, Germany and England requires Tehran to immediately freeze its uranium enrichment activities pending negotiations on a final accord. A final deal would reward Iran with political and economic benefits if Tehran provides verifiable guarantees that its nuclear program is solely for peaceful purposes.

This week's deal all but sinks American and Israeli hopes of quickly getting the United Nations Security Council to slap sanctions on Iran for allegedly violating its obligations under the nuclear nonproliferation treaty. The Bush administration, which has relied on European diplomacy to slow Tehran's efforts, voiced cautious support for the agreement. Israel and Jewish organizations, however, say that the interim deal simply will allow Iran to buy time.

Jerusalem is "obviously very disappointed" with the deal, Israeli Foreign Minister Silvan Shalom told reporters following his Monday meeting in Washington with outgoing Secretary of State Colin Powell. On Wednesday, an Iranian opposition group announced that Tehran was covertly enriching uranium at a military site. Given that the group's previous disclosures of Iranian nuclear activities have been confirmed, the claim seemed certain to bolster Israeli concerns.

"It is clear to us that they are trying to develop nuclear weapons and that it should be prevented," he said. "The Europeans are all the time talking about carrot and stick, but we see only the carrot, not the stick."

Shalom argued that Iran had purposely timed the latest deal to head off discussion of its nuclear program at the November 25 meeting of the U.N.'s International Atomic Energy Agency. Iran is promising to suspend its uranium enrichment program starting November 22, three days before the atomic agency's board of governors was expected to debate the Iranian nuclear dossier and the possibility of sending the matter to the Security Council.

"I told [Powell] that each time before a vote [the Iranians] do something," Shalom said. "This time they announced the suspension of enriching uranium. But we demand not suspension but full cessation."

While officially pushing for a tougher stance, the Bush administration has quietly supported the negotiations between the Europeans and Iran. State Department spokesman Richard Boucher said at a daily briefing Tuesday that the pact was a useful step but needed to be implemented and verified.

Last year, Iran and the so-called "Euro-3" reached a similar agreement. But Tehran reneged after several months, fueling convictions in Israel and in hawkish American circles that Iran is in fact determined to acquire nuclear weapons.

While this week's deal is more sophisticated and leaves less room for interpretation, Israel and its supporters say that for Iran, the new pact is simply a delaying tactic. Tehran is just "buying time," said Malcolm Hoenlein, the executive vice chairman of the Conference of Presidents of Major American Jewish Organizations, an umbrella group of 52 national organizations generally viewed as the community's consensus voice on Middle East affairs.

Hoenlein said that the deal failed to provide a mechanism for the verification and dismantling of Iran's nuclear weapons production infrastructure. He also complained about possible rewards that the Europeans are prepared to bestow on Iran, pointing to news reports suggesting that Europe offered Iran a role in addressing the Israeli-Palestinian conflict. The text of the interim agreement announced this week did not provide any details regarding the package of rewards Iran would get in return for giving up its nuclear program.

The negotiations over a comprehensive agreement are expected to start next month. Jewish organizational officials also complained that the interim agreement does not contain long-term guarantees that Iran would not seek to master the technical means to manufacture nuclear weapons. Hoenlein said that Iran could reach that stage within six months to a year, an estimate confirmed by an Israel official on condition of anonymity.

One Jewish communal leader who has been in touch with Bush administration officials said that "the Americans are very unhappy with the deal." The communal leader predicted that American officials would push for a final pact requiring the complete suspension of nuclear activity before May or June 2005, when Iran fully develops the ability to produce nuclear weapons.

For now, Jewish organizations are calling for heightened vigilance in holding Iran to its commitments. "Given Iran's previous history of deception of the IAEA, we hope that this time, it is different," said Andrew Schwartz, a spokesman of the American

Israeli Public Affairs Committee, the pro-Israel lobbying powerhouse that has aggressively been warning lawmakers on Capitol Hill about Tehran's nuclear activities. "This agreement must be carefully monitored by the U.S. and the [U.N.'s atomic agency] in order to ensure Iranian compliance."

Pooya Dayanim, president of the Iranian Jewish Public Affairs Committee, a Los Angeles-based group with close ties to the Bush administration and opposition forces in Iran, noted that Iranian officials were already stressing that the suspension of its nuclear activities was temporary.

"My advice to the U.S. and other wise nations," Dayanim said, "is to assume the worst and draft their contingency plans accordingly."

Ori Nir contributed to this report from Washington.

The American military has been well aware of where Iranian military assets are every since we went into Bagdad. They are all up there on the big board.

Iran condemns Falluja attack but offers to help US

By Najmeh Bozorgmehr in Tehran and Guy Dinmore in Washington
Published: November 18 2004 18:24 | Last updated: November 18 2004 18:24

Iran on Wednesday condemned the US attack on the city of Falluja while also offering to help the US extricate itself from the “quagmire” of Iraq.

Iran's statements and actions are being closely watched by the Bush administration as Colin Powell, outgoing secretary of state, prepares to meet his Iranian counterpart, Kamal Kharrazi, in Egypt at a conference next week on Iraq's future.

Officials in Washington said there was considerable scepticism over Iran's intentions in Iraq, but still a willingness to have the highest- level discussion with Iran for three years.

“Well, they'll get a message from everybody that this is the time to help Iraq,” Mr Powell said of the meeting to be held at the resort of Sharm El Sheikh, bringing together Iraq, its neighbours and the main world powers.

“And anything that serves to either destabilise the country or destabilise the government, or to allow actions to take place from their countries that would put the coalition forces at risk, would not be helpful or useful,” Mr Powell said in Brazil late on Wednesday.

Ayatollah Ali Khamenei, Iran's supreme leader, described the attack on Falluja and the deaths of civilians in the rebel stronghold as a “big injustice by warmongering world tyrannies against some oppressed Muslims”.

“How can Islamic and Arab governments be indifferent viewers?” he asked. He urged them to “at least raise their voices of protest” but did not advocate any retaliatory measures against US forces.

At the same time, Iranian media carried remarks by President Mohammad Khatami, who said Iran was willing to help the US escape from the “quagmire” of Iraq.

“We are ready to help save them [the Americans] so that the Iraqi nation can be saved,” he told Iranian reporters on Wednesday.

Analysts in Washington did not see the two statements as necessarily contradictory. But any indication that Iran's Shia regime was offering support to the Sunni insurgents would be extremely damaging to what are regarded as frail prospects of a limited dialogue between Washington and Tehran.

Mr Khatami said Iran's willingness in the context of next Monday's conference to co-operate over Iraq did not translate into a desire to address bilateral issues with the US under current circumstances.

In negotiating Tehran's suspension of critical elements of its nuclear programme last week, the EU3 France, Germany and the UK also won a commitment from Iran to help the political process in Iraq “aimed at establishing a constitutionally elected government”.

Mr Powell said Iran should not interfere with the legislative elections, scheduled for January 2005, or seek to influence them.

The US has given its cautious endorsement of the nuclear agreement. But Mr Powell also said he had seen “information” that Iran had been actively working on developing “delivery systems” for a nuclear weapon. He did not elaborate.

What is with the NY Times today? Another ....it's gonna be bad article....

Is Iran a new challenge? I think the president labeled them correctly when he used the term Axis of Evil.....

By the way the other article is here:

Iraq at the Tipping Point

What is your opinion of Yasser Arafat?

-- Very positive 7.55 % (38)
-- Positive 20.08 % (101)
-- Not sure 21.07 % (106)
-- Negative 22.47 % (113)
-- Very negative 28.83 % (145)

http://www.iranian.com/Poll/

what some in the administration believe to be Tehran's support of violence in Israel and insurgents in Iraq.

Just because Tehran wept at Arafat's passing and called on the bombers to continue bombing--

Just because Tehran has backed al Sadr and sent thousands of jihadists to Baghdad--

The New York Times: Always Fighting for America's Enemies.

false warnings given about Iraq

It is to laugh:

Thanks to Chirac, Annan, Schroeder and Kerry, U.S. entry was delayed 14 months while Russian special forces moved Hussein's WMDs to Syria.

The main stream media has been very hawkish on Iran while the Bush administration has been focused on Iraq.

Now that Iran is becoming a focus the same media is switching to a much more dovish position.

Nothing the Bush administration does can be seen as succeeding. Success will affirm the wisdom of the Bush policy and more importantly the bankruptcy of the left.

EU drafts UN nuclear resolution on Iran-diplomats

18 Nov 2004 17:29:16 GMT

Source: Reuters

(Recasts with draft resolution, U.S. comment; previous TEHRAN)

By Louis Charbonneau

VIENNA, Nov 18 (Reuters) - France, Britain and Germany are drafting a resolution on Iran for a key meeting of the U.N. nuclear watchdog next week and Washington is pushing the trio to include some tough language, diplomats said on Thursday.

Iran promised the European Union on Sunday to freeze its uranium enrichment programme, sparing it a referral to the U.N. Security Council for possible sanctions and opening the door to political and economic incentives the EU trio are offering.

"They are preparing a resolution that will deal with the suspension of the enrichment programme and verification of the suspension by the IAEA," a Western diplomat close to the Iran-EU negotiations told Reuters.

The draft resolution will be submitted to the International Atomic Energy Agency's (IAEA) board when it meets on Nov. 25.

"It will be ... in line with the report of (IAEA chief Mohamed ElBaradei)," the diplomat said.

The IAEA said in a new report on its two-year investigation of Iran's nuclear programme that Iran had not diverted any of its declared nuclear materials to a weapons programme, but did not rule out the possibility secret atomic activities existed.

Diplomats said Washington would like the Europeans to include a so-called "trigger mechanism" in the resolution that would set the stage for a referral to the Security Council if Iran resumed activities linked to uranium enrichment or was found to be hiding any more sites from the IAEA.

But they said the EU three would prefer to avoid any harsh U.S.-backed language that could disrupt the delicate talks aimed at persuading Tehran to permanently abandon enrichment.

Enrichment is a process of purifying uranium for use in nuclear power plants or in weapons. Washington says Iran is using its nuclear power programme as a front to develop weapons, a charge Tehran vehemently denies.

"Our views are very clear about Iran. Iran needs to follow through on the recent agreement they came to with our European friends," White House spokesman Scott McClellan said.

"They need to fully comply with the IAEA and their inspections. They need to suspend their enrichment-related and reprocessing activities."

CONCERNS ABOUT SUSPECTED NUCLEAR SITE

The freeze of Iran's enrichment programme is due to take effect on Nov. 22. Diplomats close to the IAEA said that most of the programme was already frozen and the agency would be able to verify suspension of the remaining parts fairly soon.

However, diplomats said the EU was disturbed by new allegations coming from U.S. Secretary of State Colin Powell and a group of Iranian exiles who have provided some accurate information about Iran's nuclear programme in the past.

The National Council of Resistance of Iran (NCRI) said Iran got bomb-grade uranium and a warhead design from Abdul Qadeer Khan, the father of Pakistan's atomic bomb. It also said Iran's Defence Ministry was secretly purifying uranium for weapons at a plant in Tehran in violation of the promise it made on Sunday.

Hossein Mousavian, Tehran's chief delegate to the IAEA, dismissed the allegations as "a well-timed lie". "The group wants to make another fuss ahead of the IAEA board meeting," he said. "They want to poison the board's atmosphere."

U.S. Secretary of State Colin Powell said on Wednesday Washington had intelligence suggesting Iran was working on the technology to deliver a nuclear warhead on a missile.

"I have seen some information that would suggest they have been actively working on delivery systems," Powell said in Brazil. "I'm talking about what one does with a warhead."

Diplomats said the IAEA planned to request a visit to the new site in northeast Tehran to verify the NCRI's accusations.

(Additional reporting by Parisa Hafezi in Tehran and Saul Hudson in Brazil)

America and Iran Must Play Nice

November 19, 2004

by Noel Sheppard

Iran, Great Britain, France, and Germany agreed in principle this Sunday to a nuclear non-proliferation pact that might dramatically change the complexion of the Middle East as well as the War on Terror for decades to come.

Certainly, there are issues yet to be ironed out, and the whole package is contingent somewhat upon American approval and involvement. However, Iran has temporarily accepted a list of requests by the EU that include a continued suspension of all uranium enrichment and reprocessing activities. They have also agreed to restrictions concerning the production and purchase of centrifuges, plutonium separation, and the construction of facilities for such a purpose. In addition, they will permit verification of their compliance with these provisions via inspections performed by the IAEA. Lastly, Iran has pledged as part of this agreement to not only assist in combating terrorism, but also to support the democratic process in Iraq.

Unfortunately, none of this means much until the United States and Iran sit down at the same table to, for the first time in years, open up a serious diplomatic dialogue. This might somewhat be complicated by the announcement of Colin Powell’s resignation as Secretary of State, as well as that of Richard Armitage, the Deputy Secretary. Hopefully, this won’t become too large an issue in stalling this process.

To be sure, one needs to look at this occurrence with guarded optimism, but optimism nonetheless. This agreement could represent the beginning of a diplomatic process between the U.S. and Iran with a potential that is nothing less than awesome when viewed from both an international security perspective as well as an economic one. Serendipitously, a clever yet elegantly performed minuet between our two nations a few weeks prior might have adroitly set the wheels in motion for this outcome.

On October 19, as he was being interviewed by AP aboard Air Force One, President Bush said that he would accept an Islamic government in Iraq. "I will be disappointed. But democracy is democracy. If that's what the people choose, that's what the people choose.” This apparently sent quite a signal to Tehran, as the Iranian leadership clearly has been concerned about what kind of government their neighbor would possess after the upcoming elections. Undoubtedly, Shiite rule would thrill them. As a result, within just hours of Mr. Bush’s remarks, Iran had its own somewhat shocking proclamation when the head of their Supreme National Security Council, Hasan Rowhani, stated that Tehran supported our president’s re-election efforts.

As if that wasn’t enough, that same day, Grand Ayatollah Kazem al-Haeri, a senior Shiite leader in Iran, made a similarly stunning announcement that he was cutting ties with the upstart Shiite cleric in Iraq, Muqtada al-Sadr. When combined with the other two events, especially given the timing of all three, it quite appears that Tehran was not only trying to send signals to the U.S., but also potentially cutting off al-Sadr’s legs in hopes of advancing an election that Iran likely now would love to occur given the possibility of a Shiite government being installed. Yet, this still begs the question: Why is Iran suddenly so interested in appeasing its public enemy number one?

Likely, since the Islamic revolution occurred in 1979, we Americans have a rather jaded view of Iran. This is not a Third World nation by any means. In fact, this is a country that quite prides itself on education, and, as a result, has a very high literacy rate by comparison to most of its neighbors. Additionally, Iran has the second largest oil and natural gas reserves in the world, as well as the 18 th largest population base of 69 million. Moreover, their 12 th ranked GDP continues to outperform most of the globe having shown a 4.5% expansion in 2003, and a projected growth rate of 4.4% in 2004. From an economic standpoint, this GDP puts them ahead of Brazil, Australia, Switzerland, Belgium, Sweden, Austria, Turkey, Saudi Arabia, and many others.

In sum, Iran is a potential economic dynamo that conceivably has yet to really flex its financial muscle. But, that is changing. They currently have oil export contracts with Japan, China, South Korea, Taiwan, and much of Europe, as well as natural gas contracts with Turkey, Russia, Nigeria, Algeria, and Greece, with pending operations in Bulgaria, Romania, Austria, Pakistan, India, and China. In addition, as they produce more electricity than they use, they currently sell electric power to Afghanistan, and have offered to do the same for Iraq.

However, this growth is beginning to show some serious cracks. As depicted in a recent Department of Energy briefing, “ Despite relatively high oil export revenues, Iran continues to face budgetary pressures, a rapidly growing, young population with limited job prospects and high levels of unemployment; heavy dependence on oil revenues; significant (but declining) external debt; high levels of poverty; expensive state subsidies (billions of dollars per year) on many basic goods; a large, inefficient public sector and state monopolies.”

Of these economic issues, potentially the most dire is their unemployment problem. As reported in a recent Middle East Economic Survey, the troubles began in 1979 when the new government encouraged the population to procreate with the goal of having a 20 million-man army of Islamic revolutionaries. As a result, these 15 to 24-year-old “Baby Boomers” comprise 25% of the available workforce, but have a 32% unemployment rate. Unfortunately, the current GDP growth of 4.5%, though brisk by American standards, is well under the 8% required to produce enough jobs sufficient to just hold the unemployment rate at its current level. As a result, the projections are that unemployment in this demographic will increase to over 50% within the next two years.

Without question, there are a variety of other serious factors that are exacerbating the unemployment problem in Iran which are further addressed in the aforementioned MEES report. However, it is quite clear that this is reaching a cataclysmic level, and with elections next year, President Khatami certainly wants to be able to show the Iranian people that he has a plan to resolve it. Undoubtedly, this is some of the impetus for this nuclear arrangement with the EU, and why Iran wants to bring America back to the diplomatic table; Khatami must believe that the only way they’ll attain the kind of economic growth necessary to produce a sufficient number of jobs is if Iran can get America to finally end the sanctions.

From our perspective, as American corporations have not been able to actively trade with Iran since President Clinton first imposed these sanctions in 1995, this represents an extraordinary opportunity. With oil and natural gas prices quite close to non-inflation adjusted all-time highs - representing an economic impediment to the global economy - nothing would symbolize more of a tonic to the world financially than to be able to tap into Iran’s vast reserves. For instance, Iran is currently only producing about four million barrels of oil a day, down from a high of 6 million in the early 1970’s. Without significant upgrades as well as increases in the quantity of oilrigs across their nation, this number is projected to decline by about 250,000 barrels/day each year.

As a result, Iran is in desperate need of financial partners to assist them in refurbishing their oil industry, and helping them to expand their natural gas delivery capacities. Also, due to scarce and aging refineries, Iran is actually a net importer of gasoline, with this number increasing every year. When you add it all up, you have a nation rich in what the world needs, yet possessing such a dire economic condition that they are now forced to play, “Let’s Make a Deal.”

Of course, it is safe to assume that they would like nothing more than to be able to deal with the U.S. However, if we remain intransigent, they will continue to expand their partnerships throughout the world out of necessity. In fact, one can certainly guarantee that, in the event America chooses to not join this pact, other countries will be inclined to expand their trading relationships with Iran. Given this, it seems imperative for America to not make the same mistakes that we did following Desert Storm.

To be more precise, it is now quite apparent that countries like France, Germany, Russia, and China engaged in trade activities with Iraq after the end of the first Gulf War in ways that clearly violated the armistice. As these countries have fully demonstrated that treaties will be ignored when there is money at stake, we need to create a trading environment with Iran that will prevent another Iraq-like situation in the future wherein the international community will tolerate Iranian imperialism, aggression, or exploration into nuclear weaponry for fear that reprisals will cost them financially.

In reality, the sanctions that we currently have in force against Iran only have teeth because we represent such a powerful trading partner. However, with China, Japan, and India exploding economically, America at some point could be less important to Iran if they are forced to survive without us, and are successful in doing so. Then, with large contracts involving these three financial behemoths, along with France, Russia, Germany, et al, Iran could end up at some point in time being in a position where all of these countries were economically dependent enough upon them that it would be quite unlikely that any would participate in punitive policies implemented by the U.N. in response to some future transgression. And, since the U.S. would have no such contracts, sanctions solely imposed by us would be virtually meaningless.

By contrast, if America fully engages Iran immediately, and has its hand in developing the Iranian economy to its fullest, not only would this benefit us both financially, but also it would be significantly more painful for them in the future to not abide by any treaties that we had entered into. Beyond this, such a relationship, along with continued inspections by the IAEA, would be by far the best strategy for us to stay constructively involved in their weapons explorations endeavors moving forward, and to better be able to identify any violations of such treaties. Lastly, and maybe most important, Iran as a legitimate trading partner would likely become a much greater international ally in the War on Terror, and could, under the right trade circumstances, be required to end its funding for terrorist organizations like Hamas and Hezbollah. Likely, this would encourage Syria, who has similar economic problems, to do the same. Just imagine how this might change the landscape of the Middle East.

Given all that has transpired with the U.N.’s Oil-for-Food program, Arafat’s embezzled millions, and some rather overt betrayals by a few of our NATO allies, it should be quite clear to us that, in the end, it’s all about the money. If our goal is to export capitalism, we shouldn’t be shocked when folks start acting like capitalists. Maybe we need to keep this in mind when we finally sit across the bargaining table from Iran for the first time in many years.

Noel Sheppard

Noel Sheppard is a business owner, economist, and writer residing in Northern California. He receives email at slep@danvillebc.com.

Thanks to Chirac, Annan, Schroeder and Kerry, U.S. entry was delayed 14 months while Russian special forces moved Hussein's WMDs to Syria.

Never forget. The shrill high voices on the left stll never stop. "Iraq had no WMDs. What WMDs?" I believe the left hates this President so much the fact that the WMDs were moved to Syria because we waited and waited and waited to move into Iraq would be front page NYT's but the truth does not help "The Left's agenda.

Bump!

Thanks to Chirac, Annan, Schroeder and Kerry, U.S. entry was delayed 14 months while Russian special forces moved Hussein's WMDs to Syria.

This needed to be repeated. I also find the article that Dr.Zin posted about Israel VERY telling. No one is watching this "nuclear Iran" issue more closely than Israel, and since Israel is disappointed with the EU's "carrots and more carrots" way of dealing with it, Israel will have to DEAL WITH IT themselves. If/when Israel DOES deal with it, the whole region could blow up. Iran's leaders know this, and they don't care. They have their own controls to force down everyone's throats, even if it means the deaths of thousands of people. For instance, one thing Iran's leaders need to do is stop sending terrorists into Iraq, but they WON'T. They are a thorn in the side of peace, not a help.

If the Middle East is about to explode, then perhaps that could be why the following article made the news yesterday. I don't know if the article is true or not, but it is interesting in the light of the power struggle going on between the leaders of Iraq, and the leaders of Iran, sigh.

http://www.mosnews.com/news/2004/11/17/iraq.shtml

Russia Agrees to Send Troops to Iraq — Weekly

Created: 17.11.2004 11:13 MSK (GMT +3), Updated: 15:17 MSK

Russia has agreed to send a small number of troops to Iraq to protect oil wells and support the U.S.-led military campaign there, an aide in the Bush administration has said.

The Russian Kommersant-Vlast magazine spoke with the aide on conditions of anonymity, and he said that he had heard the information at a recent meeting in the White House.

The meeting mentioned by the source was held in the wake of a report released by the CIA alleging that Iraq had circumvented sanctions against it through loopholes in UN’s oil for food program, and apparently sold off millions of dollars in oil to Russian politicians and businessmen. Russian companies, the report alleged, were also planning to ship weapons to Iraq just months before the start of the U.S.-led campaign to topple Saddam Hussein’s regime in March of 2003.

In light of these findings, the source said, many officials in the administration were wary of close military collaboration with Russia, but national security advisor Condoleeza Rice insisted on asking Russia for troops.

The Kommersant-Vlast magazine, which is owned by exiled business tycoon ?Boris Berezovsky noted, however, that high-placed sources in the Kremlin had denied reports earlier this year that Russia had agreed to send troops to Iraq.

White House: World Resolved to Halt Iran Nuclear Weapons

November 18, 2004
Nasdaq News
Alex Keto

LITTLE ROCK -- The Bush administration said Thursday that the international community is "resolved" not to allow Iran to become a nuclear power. "The international community is united in its resolve to make sure Iran does not develop a nuclear weapon," White House spokesman Scott McClellan said.

"Ultimately, our view is that Iran needs to stop all its enrichment related and reprocessing activities. There is no need for it," he added.

Doing so would "give everybody confidence that they're (the Iranians) not pursuing a nuclear weapon," he said.

McClellan made the comments a day after Secretary of State Colin Powell said U.S. intelligence has discovered that Iran is trying to modify some of its missiles to carry a nuclear warhead.

Powell made the comments at the Asia Pacific Economic Cooperation organization meeting in Santiago, Chile. U.S. President George W. Bush is to arrive in Chile Friday to attend the summit of APEC leaders over the weekend.

Powell also said he had seen intelligence that backs up the claim of a dissident group in Iran that Tehran continues activities related to developing a nuclear weapon.

McClellan declined to vouch for the accuracy of the reports by the dissident group, the National Council for Resistance in Iran, but said the International Atomic Energy Agency ought to look into the matter on its own. In the past, reports by the council have proven largely accurate.

-By Alex Keto, Dow Jones Newswires; 202-862-9256; Alex.Keto@dowjones.com

Iran's Nukes: The Crisis Is Far From Over

[Excerpt]

Chain Reaction
Is the crisis over? Hardly. U.S. officials and skeptical Iran watchers fear that Tehran is trying to buy time while continuing its nuclear program -- clandestinely if necessary. Iran maintains it is pursuing nuclear technology only for energy purposes. But some experts believe that as early as next year, Iran will have acquired enough knowhow to make weapons. That could spark a regional arms race, perhaps involving Saudi Arabia, Egypt, or Syria. "There is a high probability there would be a nuclear chain reaction that would ripple through the region," says arms-control expert Joseph Cirincione at the Carnegie Endowment for International Peace.

The next round of talks between the Europeans and Iranians will be crucial to heading off that outcome. The two sides are supposed to meet in December to work out long-term plans for regulating Iran's nuclear program. Washington, which has no diplomatic relations with Tehran, won't take part. But U.S. officials and experts are calling for a deal that lays out penalties if Iran fails to comply. There should be "a policy of carrots and sticks to give Iranians a positive path toward economic integration or incremental punishments if they pursue nuclear weapons," says Kenneth M. Pollack, a Brookings Institution analyst and author of The Persian Puzzle: The Conflict Between Iran and America. An Administration source says the U.S. wants the IAEA to conduct "anytime, anywhere inspections" in Iran.

The Europeans may seek out just such a deal, partly because they were angry when Iran reneged on an earlier agreement. But if diplomacy fails, there will be few options left to keep Iran out of the nuclear club if it wants to join. The U.S. may have a hard time winning a sanctions vote in the U.N. China, which imports oil from Iran, has indicated that it would oppose sanctions. Military action, which has been discussed by top U.S. officials, might not work: Iran is believed to have 100 nuclear facilities, some underground. So in the end the world may have to learn to live with a nuclear Iran -- and the regional proliferation that could ensue. That's a sober prospect for the Bush Administration.

By Stan Crock in Washington, with Babak Pirouz in Tehran and Neal Sandler in Jerusalem

Nuclear accusation puts Iran deal at risk

By PAUL KORING
From Friday's Globe and Mail

Top U.S. officials have accused Iran of secretly modifying its new longer-range missiles so they can be fitted with nuclear warheads, a sharp escalation in the war of words that threatens to scuttle a fragile diplomatic deal worked out between Tehran and three leading members of the European Union.

Outgoing U.S. Secretary of State Colin Powell fired the latest broadside yesterday, saying secret intelligence strongly suggests that Iran is attempting to mate missiles with nuclear warheads. President George W. Bush's administration has long accused Tehran of a clandestine nuclear weapons program but has not suggested Iran has actually built them.

"I'm talking about information that says that they not only had these missiles, but I'm aware of information that suggests they were working hard as to how to put the two together," Mr. Powell told reporters on his way to the Asia-Pacific Economic Co-operation summit in Chile.

Angry Iranian officials denied Mr. Powell's accusations, which gave credence to allegations by an exile opposition group this week that Tehran is hiding more secret nuclear facilities from United Nations International Atomic Energy Agency inspectors.

"I totally deny these allegations," said Hossein Mousavian, Iran's senior envoy to the IAEA. "Iran has no undeclared nuclear activities."

The brouhaha erupted just days before a delicate diplomatic arrangement that was worked out by Britain, France and Germany and is to be presented to the IAEA. Tehran has agreed to suspend its uranium-enrichment program, which it says is intended solely for making nuclear-reactor fuel rods. In exchange, the IAEA board won't refer Tehran to the UN Security Council.

Washington, clearly irked by the European deal, wants tough trigger language worked into any IAEA resolution that would immediately send the matter to the Security Council if further Iranian transgressions or deceptions are uncovered.

"They have spent quite a bit of time over the years hiding their program and their intentions," White House spokesman Scott McClellan said yesterday.

As U.S. officials ramped up the rhetoric, some analysts said they believe Washington is deliberately seeking to undermine any face-saving compromise worked out by the Europeans.

"The administration wants to go down a path to confrontation," said Shireen Hunter, head of the Islamic program at the Washington-based Center for International and Strategic Studies and an expert on Iran. "The basic difference between the U.S. and the Europeans is that the Europeans are willing to work with the Iranian regime if they believe change is forthcoming."

Relations between Mr. Bush's administration and Tehran's Islamic regime have become increasingly hostile in recent years.

In early 2002, Mr. Bush lumped Iran with Iraq and North Korea as part of his "axis of evil," rogue countries he accused of seeking weapons of mass destruction and abetting terrorists. The United States has since invaded and toppled regimes in neighbouring Afghanistan and Iraq, and maintains 200,000 troops in the two countries.

Washington has also accused Tehran of interfering in Iraq, although it has stopped short of saying that it is actively supporting the insurgency there.

The top Iranian mullah, Ayatollah Ali Khamenei, has accused Mr. Bush's government of running roughshod over Islam and seeking to dominate the Middle East. Yesterday, he exhorted Muslims to voice their anger and protest over the U.S. assault on the Iraqi city of Fallujah.

"Killing thousands of civilians, executing the injured, arresting the innocent and destroying houses and mosques in Fallujah makes the eyes and hearts restless," he was quoted as saying by Iran's state news agency. "Doesn't this voice deserve a protest by governments and the people against the arrogant Western powers?"

Relations may get even worse as Mr. Bush moves into his second term. His nominee to replace Mr. Powell, outgoing National Security Adviser Condoleezza Rice, is even more hawkish toward the ruling theocracy in Tehran.

The United States "cannot allow the Iranians to develop a nuclear weapon," Ms. Rice said in August, warning that the President has a range of options to make sure that doesn't happen.

Taking a very tough line with Tehran may pay dividends as Washington seeks new leverage with Israel in its pursuit of rejuvenated Israeli-Palestinian peace talks. Israel now considers Iran its primary strategic enemy and a nuclear-armed Tehran could destabilize the entire Middle East.