Iran Returns to the Global Stage

Iran Returns to the Global Stage
November 10, 2008

Stratfor

After a three-month hiatus, Iran seems set to re-emerge near the top
of the U.S. agenda. Last week, the Iranian government congratulated
U.S. President-elect Barack Obama on his Nov. 4 electoral victory.
This marks the first time since the Iranian Revolution that such
greetings have been sent.

While it seems trivial, the gesture is quite significant. It
represents a diplomatic way for the Iranians to announce that they
regard Obama's election as offering a potential breakthrough in 30
years of U.S. relations with Iran. At his press conference, Obama said
he does not yet have a response to the congratulatory message, and
reiterated that he opposes Iran's nuclear program and its support for
terrorism. The Iranians returned to criticizing Obama after this, but
without their usual passion.
The Warming of U.S.-Iranian Relations

The warming of U.S.-Iranian relations did not begin with Obama's
election; it began with the Russo-Georgian War. In the weeks and
months prior to the August war, the United States had steadily
increased tensions with Iran. This process proceeded along two tracks.

On one track, the United States pressed its fellow permanent members
of the U.N. Security Council (Russia, China, France and the United
Kingdom) and Germany to join Washington in imposing additional
sanctions on Iran. U.S. Undersecretary for Political Affairs William
J. Burns joined a July 19 meeting between EU foreign policy adviser
Javier Solana and Iranian national security chief Saeed Jalili, which
was read as a thaw in the American position on Iran. The Iranian
response was ambiguous, which is a polite way of saying that Tehran
wouldn't commit to anything. The Iranians were given two weeks after
the meeting to provide an answer or face new sanctions.

A second track consisted of intensified signals of potential U.S.
military action. Recall the carefully leaked report published in The
New York Times on June 20 regarding Israeli preparations for
airstrikes against Iran. According to U.S. — not Israeli — sources,
the Israeli air force rehearsed for an attack on Iran by carrying out
a simulated attack over Greece and the eastern Mediterranean Sea
involving more than 100 aircraft.

At the same time, reports circulated about Israeli planes using U.S.
airfields in Iraq in preparation for an attack on Iran. The markets
and oil prices — at a high in late July and early August — were
twitching with reports of a potential blockade of Iranian ports, while
the Internet was filled with lurid reports of a fleet of American and
French ships on its way to carry out the blockade.

The temperature in U.S.-Iranian relations was surging, at least
publicly. Then Russia and Georgia went to war, and Iran suddenly
dropped off the U.S. radar screen. Washington went quiet on the entire
Iranian matter, and the Israelis declared that Iran was two to five
years from developing a nuclear device (as opposed to a deliverable
weapon), reducing the probability of an Israeli airstrike. From
Washington's point of view, the bottom fell out of U.S. policy on Iran
when the Russians and Georgians opened fire on each other.
The Georgian Connection

There were two reasons for this.

First, Washington had no intention of actually carrying out airstrikes
against Iran. The United States was far too tied down in other areas
to do that. Nor did the Israelis intend to attack. The military
obstacles to what promised to be a multiday conventional strike
against Iranian targets more than a thousand miles away were more than
a little daunting. Nevertheless, generating that threat of such a
strike suited U.S. diplomacy. Washington wanted not only to make Iran
feel threatened, but also to increase Tehran's isolation by forging
the U.N. Security Council members and Germany into a solid bloc
imposing increasingly painful sanctions on Iran.

Once the Russo-Georgian War broke out, however, and the United States
sided publicly and vigorously with Georgia, the chances of the
Russians participating in such sanctions against Iran dissolved. As
the Russians rejected the idea of increased sanctions, so did the
Chinese. If the Russians and Chinese weren't prepared to participate
in sanctions, no sanctions were possible, because the Iranians could
get whatever they needed from these two countries.

The second reason was more important. As U.S.-Russian relations
deteriorated, each side looked for levers to control the other. For
the Russians, one of the best levers with the Americans was the threat
of selling weapons to Iran. From the U.S. point of view, not only
would weapon sales to Iran make it more difficult to attack Iran, but
the weapons would find their way to Hezbollah and other undesirable
players. The United States did not want the Russians selling weapons,
but the Russians were being unpredictable. Therefore, while the
Russians had the potential to offer Iran weapons, the United States
wanted to reduce Iran's incentive for accepting those weapons.

The Iranians have a long history with the Russians, including the
occupation of northern Iran by Russia during World War II. The
Russians are close to Iran, and the Americans are far away. Tehran's
desire to get closer to the Russians is therefore limited, although
under pressure Iran would certainly purchase weapons from Russia, just
as it has purchased nuclear technology in the past. With the purchase
of advanced weapons would come Russian advisers — something that might
not be to Iran's liking unless it were absolutely necessary.

The United States did not want to give Iran a motive for closing an
arms deal with Russia, leaving aside the question of whether the
Russian threat to sell weapons was anything more than a bargaining
chip with the Americans. With Washington rhetorically pounding Russia,
pounding Iran at the same time made no sense. For one thing, the
Iranians, like the Russians, knew the Americans were spread too thin.
Also, the United States suddenly had to reverse its position on Iran.
Prior to Aug. 8, Washington wanted the Iranians to feel embattled;
after Aug. 8, the last thing the United States wanted was for the
Iranians to feel under threat. In a flash, Iran went from being the
most important issue on the table to being barely mentioned.
Iran and a Formal U.S. Opening

Different leaks about Iran started to emerge. The Bush administration
posed the idea of opening a U.S. interest section in Iran, the lowest
form of diplomatic recognition (but diplomatic recognition
nonetheless). This idea had been floated June 23, but now it was being
floated after the Russo-Georgian War. The initial discussion of the
interest section seemed to calm the atmosphere, but the idea went
away.

Then, just before U.S. presidential elections in November, the reports
re-emerged, this time in the context of a new administration.
According to the leaks, U.S. President George W. Bush intended to open
diplomatic relations with Iran after the election regardless of who
won, in order to free the next president from the burden of opening
relations with Iran. In other words, if Obama won, Bush was prepared
to provide cover with the American right on an opening to Iran.

If we take these leaks seriously — and we do — this means Bush has
concluded that a formal opening to Iran is necessary. Indeed, the Bush
administration has been operating on this premise ever since the U.S.
troop surge in Iraq. Two things were clear to the Bush administration
in 2007: first, that the United States had to make a deal with the
Iraqi Sunni nationalist insurgents; and second, that while the
Iranians might not be able to impose a pro-Iranian government in
Baghdad, Tehran had enough leverage with enough Iraq Shiite factions
to disrupt Iraq, and thus disrupt the peace process. Therefore,
without an understanding with Iran, a U.S. withdrawal from Iraq would
be difficult and full of potentially unpleasant consequences,
regardless of who is in the White House.

The issue of Iran's nuclear program was part of this negotiation. The
Iranians were less interested in building a nuclear weapon than in
having the United States believe they were building one. As Tehran
learned by observing the U.S. reaction to North Korea, Washington has
a nuclear phobia. Tehran thus hoped it could use the threat of a
nuclear program to force the United States to be more forthcoming on
Iranian interests in Iraq, a matter of fundamental importance to Iran.
At the same time, the United States had no appetite for bombing Iran,
but used the threat of attacks as leverage to get the Iranians to be
more tractable.

The Iranians in 2007 withdrew their support from destabilizing
elements in Iraq like Muqtada al-Sadr, contributing to a dramatic
decline in violence in Iraq. In return, Iran wanted to see an American
commitment to withdraw from Iraq on a set timetable. Washington was
unprepared to make that commitment. Current talks over a Status of
Forces Agreement (SOFA) between Washington and Baghdad revolve around
just this issue. The Iraqi Shia are demanding a fixed timetable, while
the Kurds and Sunnis — not to mention foreign governments like Saudi
Arabia — seem to be more comfortable with a residual U.S. force in
place to guarantee political agreements.

The Shia are clearly being influenced by Iran on the SOFA issue, as
their interests align. The Sunnis and Kurds, however, fear this
agreement. In their view, the withdrawal of U.S. forces on a fixed
timetable will create a vacuum in Iraq that the Iranians eventually
will fill, at the very least by having a government in Baghdad that
Tehran can influence. The Kurds and Sunnis are deeply concerned about
their own security in such an event. Therefore, the SOFA is not moving
toward fruition.
The Iraqi Stumbling Block

There is a fundamental issue blocking the agreement. The United States
has agreed to an Iraqi government that is neutral between Washington
and Tehran. That is a major defeat for the United States, but an
unavoidable one under the circumstances. But a U.S. withdrawal without
a residual force means that the Iranians will be the dominant force in
the region, and this is not something United States — along with the
Iraqi Kurds and Sunnis, the Saudis and Israelis — wants. Therefore the
SOFA remains in gridlock, with the specter of Russian-Iranian ties
complicating the situation.

Obama's position during the election was that he favored a timed U.S.
withdrawal from Iraq, but he was ambiguous about whether he would want
a residual force kept there. Clearly, the Shia and Iranians are more
favorably inclined toward Obama than Bush because of Obama's views on
a general withdrawal by a certain date and the possibility of a
complete withdrawal. This means that Obama must be extremely careful
politically. The American political right is wounded but far from
dead, and it would strike hard if it appeared Obama was preparing to
give Iran a free hand in Iraq.

One possible way for Obama to proceed would be to keep Russia and Iran
from moving closer together. Last week, Obama's advisers insisted
their camp has made no firm commitments on ballistic missile defense
(BMD) installations in Poland and the Czech Republic, repudiating
claims by Polish President Lech Kaczynski that the new U.S.
president-elect had assured him of firm support during a Nov. 8 phone
conversation. This is an enormous issue for the Russians.

It is not clear in how broad of a context the idea of avoiding firm
commitments on BMD was mentioned, but it might go a long way toward
keeping Russia happy and therefore making Moscow less likely to
provide aid — material or psychological — to the Iranians. Making Iran
feel as isolated as possible, without forcing it into dependence on
Russia, is critical to a satisfactory solution for the United States
in Iraq.

Complicating this are what appear to be serious political issues in
Iran. Iranian President Mahmoud Ahmadinejad has been attacked for his
handling of the economy. He has seen an ally forced from the Interior
Ministry and the head of the Iranian central bank replaced.
Ahmadinejad has even come under criticism for his views on Israel,
with critics saying that he has achieved nothing and lost much through
his statements. He therefore appears to be on the defensive.

The gridlock in Baghdad is not over a tedious diplomatic point, but
over the future of Iraq and its relation to Iran. At the same time,
there appears to be a debate going on in Iran over whether
Ahmadinejad's policies have improved the outlook for Iran's role in
Iraq. Finally, any serious thoughts the Iranians might have had about
cozying up to the Russians have dissipated since August, and Obama
might have made them even more distant. Still, Obama's apparent
commitment to a timed, complete withdrawal of U.S. forces poses
complexities. His advisers have already hinted at flexibility on these
issues.

We think that Bush will — after all his leaks — smooth the way for
Obama by opening diplomatic relations with Iran. From a political
point of view, this will allow Bush to take some credit for any
breakthrough. But from the point of view of U.S. national interest,
going public with conversations that have taken place privately over
the past couple of years (along with some formal, public meetings in
Baghdad) makes a great deal of sense. It could possibly create an
internal dynamic in Iran that would force Ahmadinejad out, or at least
weaken him. It could potentially break the logjam over the SOFA in
Baghdad, and it could even stabilize the region.

The critical question will not be the timing of the U.S. withdrawal.
It will be the residual force — whether an American force of 20,000 to
40,000 troops will remain to guarantee that Iran does not have undue
influence in Iraq, and that Sunni and Kurdish interests are protected.
Obama promised to end the war in Iraq, and he promised to withdraw all
U.S. troops. He might have to deal with the fact that he can have the
former only if he compromises on the latter. But he has left himself
enough room for maneuver that he can do just that.

It seems clear that Iran will now return to the top of the U.S.
foreign policy agenda. If Bush re-establishes formal diplomatic
relations with Iran at some level, and if Obama responds to Iranian
congratulations in a positive way, then an interesting dynamic will be
in place well before Inauguration Day. The key will be the Nov. 10
meeting between Bush and Obama.

Bush wants to make a move that saves some of his legacy; Obama knows
he will have to deal with Iran and even make concessions. Obama also
knows the political price he will have to pay if he does. If Bush
makes the first move, it will make things politically easier for
Obama. Obama can afford to let Bush take the first step if it makes
the subsequent steps easier for the Obama administration. But first,
there must be an understanding between Bush and Obama. Then can there
be an understanding between the United States and Iran, and then there
can be an understanding among Iraqi Shia, Sunnis and Kurds. And then
history can move on.

There are many understandings in the way of history.

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