''Intelligence Brief: Iran''

PINR:

On October 12, 2005, Iran released a statement expressing its willingness to resume negotiations with the E.U.-3 -- composed of the United Kingdom, France and Germany -- over its controversial nuclear research program. The statement marked Iran's first official response to the September 24, 2005 I.A.E.A. resolution that called Iran in "noncompliance" with the Nuclear Non-Proliferation Treaty (N.P.T.); the resolution stated that if Iran failed to end uranium conversion and failed to answer further questions about its nuclear program, it would be referred to the U.N. Security Council for vote on possible sanctions.

After the September 24 I.A.E.A. vote, Iran reacted sharply by threatening with economic repercussions companies based in the countries that voted for the resolution. Tehran also threatened to enrich uranium immediately, in defiance of the resolution. However, as PINR argued on September 26, it was unlikely that Iran would move to enrich uranium immediately since such an act would antagonize its few allies in the nuclear dispute. [See: "Confrontation Looms as I.A.E.A. Passes Resolution on Iran"]

While Iran's allies in its nuclear dispute -- most significantly Russia and China -- may be unconcerned with Iran's nuclear research program, they would like to avoid a major international confrontation over the issue, especially if it would pit them against the United States and the European Union. Such a diplomatic confrontation would damage relations between the world's major powers and possibly have economic ramifications for the countries involved. Therefore, it is safe to assume at this stage that Russia and China are persuading Iran to take a more moderate stance on the nuclear issue.

Russia Entrenches its Position

Since the September 24 resolution, Russia has refused to budge from its supportive position of Iran's nuclear research program. The United States has hoped to convince Russia to back away from its support of Iran, since such a development would isolate Tehran and pressure it to comply with the demands of the I.A.E.A. This effort was part of the purpose of U.S. Secretary of State Condoleezza Rice's visit to Central Asia this October. However, after meeting with Russian officials on October 15, Rice was unable to make any headway.

Instead, Russian Foreign Minister Sergei Lavrov announced that Russia does "not see grounds" for referring Iran to the U.N. Security Council. Lavrov also said that, "No one, including the United States, calls into question our right to continue the construction of the nuclear power plant in Bushehr." Bushehr is the site of the nuclear power plant that Russia is building for Iran in exchange for US$1 billion. Many fear that when this plant goes operational, Tehran will be in a better position to develop nuclear arms.

Russia's support of Iran's nuclear program stems from a few factors. For one, the successful completion of Bushehr will be met with more contracts for nuclear reactors throughout Iran, which would provide a needed inflow of hard currency to Russia's nuclear industry. Moscow has been supplying Tehran with large amounts of military hardware and it does not want to jeopardize these contracts.

Russia also has geopolitical concerns about the United States being able to weaken the Iranian government, and is against a change of government in Tehran. A regime change in Iran could be met with a more pro-U.S. and anti-Russian government, or could create instability in a delicate region. Washington retains little influence in Tehran, and Russia supports the Iranian government knowing that Iran makes it difficult for the United States to control the region.

Finally, Russia, which is still recovering from the breakup of the Soviet Union, has been reeling from Washington's ability to intervene in conflicts across the world. Washington's ability to weaken and isolate the regime in Tehran would further display the United States' power on the world stage.

Iran Refuses to Freeze Disputed Activities

While Iran has retreated from its threatening rhetoric displayed after the September 24 resolution, it has not backed down from its desire to enrich uranium and control the nuclear fuel cycle. Even though after September 24 Tehran announced its willingness to cooperate with the I.A.E.A. and is open to discussions with the E.U.-3, it has remained steadfast in its refusal to give up its goal of controlling the nuclear fuel cycle.

Iran's refusal to back down on this issue will lead the United States to press further for action against Iran. Rice has said that Iran should face the U.N. Security Council, and U.S. Ambassador to the United Nations John Bolton accused Iran on October 14 of having pursued "a nuclear weapons program for up to 18 years."

French and U.S. Positions Converge

As the November 24 I.A.E.A. meeting draws near, France has moved increasingly toward the U.S. position on Iran. Though in the past few years France has shown little interest in pressuring Iran on its nuclear research program, in recent months Paris appears to be using Iran to improve its relations with Washington. Additionally, its support of the United States has been relatively costless, since pressure on Iran has remained strictly diplomatic.

By working with the United States on Iran, France is giving the U.S. more leverage with Tehran and hoping that an improved relationship will bring it future political and economic benefits. It is highly unlikely that France would support any military moves against Iran, and it is still unclear how willing it is to push for economic sanctions on the country.

Iranian President Mahmoud Ahmadinejad recently commented on France's changing position, stating, "France's position with regard to Iran's peaceful nuclear program is a brake on the development of bilateral relations" and that Iran is "waiting for the French government to take positive steps to repair the damage to relations between the two countries."

Iran Retaliates

It appears that Iran has partially fulfilled its promise of punishing certain states that have pressured it over its nuclear research program. While not confirmed, newspapers reported on October 19 that Iran is blocking imports of British and South Korean goods. The United Kingdom is used to having rocky economic relations with Iran, as Iran has banned U.K. imports several times in the past few years over political disagreements.

For South Korea, the import restrictions are more problematic, as the growth of Iran's consumer market has seen many imports of South Korean electronics and automobiles. It remains to be seen how long the alleged restrictions will last, or how encompassing they will be. For instance, the government in Tehran has not confirmed the implementation of any import restrictions. At this stage, Tehran will probably be cautious in the severity of its economic retaliation since such acts could backfire and isolate it within the international community.

However, Iran has not retaliated against India, which, to the apparent surprise of Tehran, voted for the September 24 resolution condemning Iran. India and Iran have been improving relations, especially on the economic front. Tehran hoped that the country would at least abstain from voting on the resolution.

India voted for the I.A.E.A. resolution due to pressure from the United States. In July 2005, India and the U.S. signed a nuclear deal that granted New Delhi access to civilian nuclear energy cooperation; however, the U.S. Congress has not yet approved the entire deal. The United States implicitly hinged its agreement with India on New Delhi's support for the September 24 resolution. Yet, as PINR argued on September 26, "because India was not behind drafting the resolution, and has shown little outspoken regard for punishing Iran due to its nuclear program, Tehran views India in a different light as it does the U.S. and the E.U.-3."

Indeed, since the September 24 vote, Iran has refrained from punishing India. Iran sees India as an important regional partner and wants to avoid a deterioration in relations. Additionally, the Indian government is internally divided over supporting further action against Iran, and despite its vote for the resolution, New Delhi has shown little interest in verbally condemning Iran and has instead tried to focus on the positive relations between the two countries. How Iran will react if India supports the United States in an actual U.N. resolution condemning Iran remains to be seen. India is no doubt doing its best to avoid such a development.

The Bottom Line

Other than the United States, all parties involved in the Iranian nuclear dispute are in a holding pattern. While the United States is trying to push the issue before the U.N. Security Council, other countries involved are hoping that this development can be avoided and that a compromise deal can be worked out.

The E.U.-3 have moved closer to Washington's position, but they continue to stress that they hope an agreement can be reached with Iran. Even France, which has taken a more assertive stance on Iran's nuclear program, would still likely hope to see some sort of accommodation reached.

China and Russia are against bringing Iran before the U.N. Security Council since that would put them in a position of potentially having to veto the resolution; a Russian or Chinese veto would open up a diplomatic row with the United States and the European Union.

The Non-Aligned Movement and the rest of the countries involved in the dispute want to see the confrontation fizzle out and do not want it to come before the U.N. Security Council. India has been pressured to support the United States and is in a difficult position because, on the one hand, it does not want to endanger its nuclear agreement with the United States, and, on the other, does not want to destroy its relationship with Iran.

Finally, Iran is trying to make its nuclear program look as innocuous as possible, and is lobbying governments to recognize its right, under the N.P.T., to control the nuclear fuel cycle. However, it has also shown its willingness to damage economic relations with states that are pressuring it, and has warned that a harsh U.N. resolution against it would result in its possible withdrawal from the N.P.T. and its willingness to punish those countries economically that refuse to support it politically.

How the conflict escalates depends largely on how willing the United States will be to bring Iran's nuclear issue before the United Nations. The I.A.E.A. board meets again November 24, and will then decide whether to refer Iran to the U.N. Security Council. As this date draws near, watch to see how successful the Bush administration is in gathering allies to condemn Iran.

Report Drafted By: Erich Marquardt