Geopolitical Intelligence Report - August 22, 2006 Part 2

Team Infidel

Forum Spin Doctor
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

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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