OSINFO - Open Sources Information

Posted on Jun 26, 2008

By Scott Ritter

I am a former U.N. weapons inspector. I started my work with the United Nations in September 1991, and between that date and my resignation in August 1998, I participated in over 30 inspections, 14 as chief inspector. The United Nations Special Commission, or UNSCOM, was the organization mandated by the Security Council with the implementation of its resolutions requiring Iraq to be disarmed of its weapons-of-mass-destruction capabilities. While UNSCOM oversaw the areas of chemical and biological weapons, and ballistic missiles, it shared the nuclear file with the International Atomic Energy Agency, or IAEA. As such, UNSCOM, through a small cell of nuclear experts on loan from the various national weapons laboratories, would coordinate with the nuclear safeguards inspectors from the IAEA, organized into an “Action Team” dedicated to the Iraq nuclear disarmament problem. UNSCOM maintained political control of the process, insofar as its executive chairman was the only one authorized to approve a given inspection mission. At first, the IAEA and UNSCOM shared the technical oversight of the inspection process, but soon this was transferred completely to the IAEA’s Action Team, and UNSCOM’s nuclear staff assumed more of an advisory and liaison function.

In August 1992 I began cooperating closely with IAEA’s Action Team, traveling to Vienna, where the IAEA maintained its headquarters. The IAEA had in its possession a huge cache of documents seized from Iraq during a series of inspections in the summer of 1991 and, together with other U.N. inspectors, I was able to gain access to these documents for the purpose of extracting any information which might relate to UNSCOM’s non-nuclear mission. These documents proved to be very valuable in that regard, and a strong working relationship was developed. Over the coming years I frequently traveled to Vienna, where I came to know the members of the IAEA Action Team as friends and dedicated professionals. Whether poring over documents, examining bits and pieces of equipment (the IAEA kept a sample of an Iraqi nuclear centrifuge in its office) or ruminating about the difficult political situation that was Iraq over wine and cheese on a Friday afternoon, I became familiar with the core team of experts who composed the IAEA Action Team.

I bring up this history because during the entire time of my intense, somewhat intimate cooperation with the IAEA Action Team, one name that never entered into the mix was David Albright. Albright is the president of the Institute for Science and International Security (ISIS, an institute which he himself founded), and has for some time now dominated the news as the “go-to” guy for the U.S. mainstream media when they need “expert opinion” on news pertaining to nuclear issues. Most recently, Albright could be seen commenting on a report he authored, released by ISIS on June 16, in which he discusses the alleged existence of a computer owned by Swiss-based businessmen who were involved in the A.Q. Khan nuclear black market ring. According to Albright, this computer contained sensitive design drawings of a small, sophisticated nuclear warhead which, he speculates, could fit on a missile delivery system such as that possessed by Iran.

I have no objection to an academically based think tank capable of producing sound analysis about the myriad nuclear-based threats the world faces today. But David Albright has a track record of making half-baked analyses derived from questionable sources seem mainstream. He breathes false legitimacy into these factually challenged stories by cloaking himself in a résumé which is disingenuous in the extreme. Eventually, one must begin to question the motives of Albright and ISIS. No self-respecting think tank would allow itself to be used in such an egregious manner. The fact that ISIS is a creation of Albright himself, and as such operates as a mirror image of its founder and president, only underscores the concerns raised when an individual lacking in any demonstrable foundation of expertise has installed himself into the mainstream media in a manner that corrupts the public discourse and debate by propagating factually incorrect, illogical and misleading information.

In his résumé Albright prominently advertises himself as a “former U.N. weapons inspector.” Indeed, this is the first thing that is mentioned when he describes himself to the public. Witness an Op-Ed piece in The Washington Post which he jointly authored with Jacqueline Shire in January 2008, wherein he is described as such: “David Albright, a former U.N. weapons inspector, is president of the Institute for Science and International Security.” His erstwhile U.N. credentials appear before his actual job title. Now, this is not uncommon. I do the same thing when describing myself, noting that I was a former U.N. weapons inspector in Iraq from 1991 to 1998. I feel comfortable doing this, because it’s true and because my résumé is relevant to my writing. In his official ISIS biography, Albright details his “U.N. inspector” experience as such: “Albright cooperated actively with the IAEA Action Team from 1992 until 1997, focusing on analyses of Iraqi documents and past procurement activities. In June 1996, he was the first non-governmental inspector of the Iraqi nuclear program. On this inspection mission, Albright questioned members of Iraq’s former uranium enrichment programs about their statements in Iraq’s draft Full, Final, and Complete Declaration.”

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Scott Ritter was a U.N. weapons inspector in Iraq from 1991 to 1998.

AP photo / Henry Arvidsson / United Nations

An Iraqi Scud missile awaits destruction by United Nations weapons inspectors in Iraq in this undated file photo.

The United States has pushed the international non-proliferation regime to the breaking point.

Anxiety over US attempts to define and direct the international non-proliferation regime may be provoking some dangerous decisions in the Middle East.

China Hand assesses US motives in undermining the nuclear proliferation regime in a wide-ranging discussion of the issues involving the Israeli bombing of Syria and the intertwined issues of US policy toward Iran and North Korea.

China Hand is the author of the Asian affairs website China Matters.
This article was written for Japan Focus and posted on May 9, 2008.

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Text of report by Qatari government-funded, pan-Arab news channel Al-Jazeera satellite TV on 5 May

["From Washington": A weekly feature, includes interviews with Imad Mustafa, the Syrian ambassador to Washington, and Ammar Abd-al-Hamid, Coordinator General of the Tharwah Project and head of the Tharwah Foundation in America, both (in succession) at the Washington studio, anchored by Abd-al-Rahim al-Fuqara - live.]

[Abd-al-Rahim Fuqara] David Foley, spokesman for the Near East desk at the US State Department, thank you. [Interview with Foley ends]

In a past interview with Al-Jazeera, the Syrian ambassador in Washington, Imad Mustafa, had directed stinging criticism at Washington's stand on this issue [Syria's alleged nuclear installation]. The Syrian ambassador -who also criticized reports that this issue has wrecked secret negotiations with the Israelis over the Golan Heights -denied there is any similarity between the way Americans received the issue of weapons of mass destruction in Iraq prior to its invasion and the way they received present accusations against Syria.

[Imad Mustafa] Of course the story is very ridiculous. However, we do not underestimate it. This is an [US] administration that shows a great measure of recklessness and the ability to fabricate and lie and inflict great damage on other nations as well as the American nation itself. This is not propaganda talk for the media, but the facts that are being experienced by the American people. We do not underrate this story. It is part of a system, and we consider the story as presented by the US Administration as another link in a series of continuous links which the US Administration uses against Syria at least since four years ago until the present time.

Of course there are two very basic differences between that period and this period. When the US Administration made its allegations at the time -despite the fact that there were those who doubted the allegations regarding Iraqi weapons of mass destruction -the US political establishment, generally speaking, had accepted this [the Bush] administration's and agreed to launching a war on Iraq. Now, both sections of the US political establishment, Democratic and Republican, are deeply dissatisfied because they realized that the US Administration lied to them and dragged them into a war that has become a quagmire of blood and destruction -blood and destruction in Iraq, and a great deal of blood and enormous losses in the United States. The war has destroyed Iraq and also wounded the national dignity of the United States. Of course the damage is unequal but it has occurred on both sides.

The difference is that from the moment the US Administration announced its fabricated story regarding the Syrian nuclear reactor there has been very deep dissatisfaction within both chambers of Congress -the House of Representatives and the Senate, congressmen and senators [last three words in English] -and within both of its parties, Republican and Democrat.

[Fuqara] Regardless of the criticism levelled by the Syrian Government at President George Bush's Administration in connection with this dossier by many Syrian officials, including yourself as Syrian ambassador, the issue of isolating Syria from Iran during this election period -the talk about a nuclear Iran, as we know a report was issued by the US intelligence service -has led to a retreat in the beating of the drums of war against Iran. Do you think the Americans believe that perhaps Syria could be an easier morsel than Iran in the election period?

[Mustafa] In the intensive meetings I held with a great number of US politicians in the past two or three days I concluded or sensed the following -and these are all indications, signs, and conclusions and are not irrefutable facts: Yes, the present US Government is very dissatisfied because it lost the momentum of determination to launch a war or an aggression against Iran, and because of the absence of a political public opinion in the United States that defends such a war. This administration believes -and this is an analysis and not a definitive assertion -that it can revert to increasing the momentum of beating the rums of war if it suddenly declares there is a new nuclear crisis in our region, and it then places us together, we the states of the axis of evil, the rogue states, and so it comes up and announces to the American people a story whose gist is that there is a great danger in that region: the rogue and evil states, such as Syria and Iran, are acquiring nuclear weapons, and the good, democratic, and angelic state, Israel, is in great danger and we must do something to save Israel from the evil of those rogue states. Such reckless impetuosity did not [changes thought] It astonishes me that sometimes my enemy is so naive, superficial, and stupid.

They have not planned well for this matter. We are now in Syria watching how this new story will collapse under two kinds of blows: internal blows and external blows, in the sense that the media establishment, the legislative establishment, the political establishment, and the US intelligence establishment within the United States have begun to deal blows to this story, and such blows are escalating. You can monitor my words in the near future. Voices have begun to rise -they are still few at present, but they are rising steadily, and they are very clearly and strongly casting doubts on this story. There are also external blows. In the past three days I quickly monitored scores of articles published by experts in nuclear technology from various states in Western Europe and the United States who have begun to analyse why this story is silly and farcical and why -in technical and precise terms -such a story does not meet the minimum standards of credibility.

[Fuqara] In the light of such tension, the issue of the Golan Heights and the reports about contacts between the Israelis and Syrians to reach agreement on this matter, do we conclude from what you are saying that this dossier has been closed - and buried -at any rate for an indefinite period?

[Mustafa] The dossier did not exist in the first place, so that we can say it is closed and buried. Syria has a clear and declared stand, and we do not hesitate about it. We are members of the Arab peace initiative, and we believe that peaceful talks that lead to regaining the legitimate rights of the Palestinian people and to Syria and Lebanon regaining their occupied territories are the only path to a just and comprehensive peace in the region. As Syria says publicly we do not object to the resumption of peace talks that lead to the establishment of a just and comprehensive peace. We believe it is ridiculous and laughable that some Arabs believe stories published by the Israelis without pausing to consider, such as that Syrian-Israeli talks are being held in secret. Why should we hold talks in secret when we say publicly that we do not object to the resumption of serious and open peace talks in accordance with the [1991] Madrid [conference] terms of reference and international legality?

Of course, the reason is very simple. Whenever Israel wants to extort - and exert pressure on - the Palestinian negotiator to frighten him so that he desists from grumbling and complaining that Israel is not giving him anything, and when at the same time it is talking to him it continues to build settlements and persists in its massacres and killings and destruction of the Palestinian people, Israel frightens the negotiator and says to him: Beware, beware, we can sell you at any moment. We are now negotiating in secret with Syria.

[Fuqara] Another aspect of the pressure and the tension with regard to Syria is the aspect of the Syrian opposition and its activities here in Washington. You have said there is no similarity between Syria's case and the Iraqi case prior to the invasion of Iraq. However, perhaps with the Syrian government caught between the hammer of US pressure and the anvil of opposition pressure - and the opposition's activities here in America provides one of the aspects of such similarity -do you take the activities of the Syrian opposition here in Washington seriously?

[Mustafa] I must be very, very truthful with you. Is there an opposition in Syria? Of course there is. There is an opposition within every country in the world without exception. Is the clique of mercenaries who knock on the doors of the Congress, the US State Department, the National Security Council, and Elliott Abrams [US Deputy National Security Adviser for Global Democracy Strategy] here in the hope of getting a handful of US dollars considered mercenary [presumably he means "an opposition"]? That is an insult to the Syrian opposition. Are they considered an opposition? No, they are not considered an opposition. Even the Syrian opposition -with which I differ -does not accept to stoop so low. Here in the United States the Americans call them in English Chalabi and wine [nabidh] [metaphor for seekers of free cheese and wine]. They dream of one day attaining the position which the Iraqi opposition had reached when it was seeking to earn a living at the doors of AIPAC [American Israel Public Affairs Committee], the US National Security Council, the office of US Vice President Dick Cheney, and other US establishments. There is nothing called Syrian opposition in the United States. There is a group of persons who believe they can achieve some material and personal gains if they shout as loudly as they can in the presence of Iliana (Rosewetmann) and Elliott Abrams that they want to topple the Syrian regime and replace it with a regime "friendly" to the United States and Israel. I think that Iliana (Rosewetmann), Elliott Abrams, and those of their ilk like to have such people and they use them.

[Fuqara] Let me relay to you some of what the Syrian opposition says -

[Mustafa, interrupting] The mercenaries, not the opposition.

[Fuqara] At any rate those groups which are active at present.

[Mustafa] Yes, the mercenaries.

[Fuqara] Call them what you will. Those groups that are active in Washington and that have met with congressmen. They say the Syrian Government has arrested many of the leaders of the Damascus Declaration in December 2007. Those groups say they are launching a media campaign to acquaint the Arab and Western worlds with what they call human rights violations in Syria. They say more than that. They say that just as the Syrian regime has isolated them within Syria they want to isolate it abroad. What is your view?

[Mustafa] I am pleased with the way you phrase the assertion. I accept that the Arab viewer and listener now knows that this clique -which I call mercenary and not an opposition -comes to the Congress and meet with leading Zionist congressmen and then they go to Elliott Abrams and Dick Cheney and say to them, help us to isolate Syria or to isolate the Syrian government. I believe Arab public opinion and world public opinion, and even US public opinion -there is very little reaction to such assertions. They are very much exposed, and I do not want to waste time and effort in explaining what the action of those people means for fateful issues connected with the homeland -the homeland that is being slaughtered in Iraq, Lebanon, and Palestine. There are unparalleled big plots and incredibly strong pressure is being exerted on what they call their homeland, Syria. I think the Arab viewer can judge their behaviour by himself.

[Fuqara] Ambassador, I have one last point. In view of the stands taken by the Bush Administration, and in view of the media coverage given to the Syrian dossier here in the United States, do you believe that Syria's argument -as you described it now -is more capable of convincing US public opinion of the correctness of Syria's stand or the Syrian government's stand than those groups which are active in the United States are capable of convincing US public opinion of the correctness of their stands towards the Syrian government?

[Mustafa] Fortunately, US public opinion has gone through the experience of Chalabi and those of his ilk in the past and it was deeply shocked. There is a very deep shock among the American people as a result of the way by which they were dragged to the quagmire of blood in Iraq. Now the American people view those mercenaries who call themselves an opposition -and I insist on differentiating between an opposition and mercenaries -with profound disdain that could be greater than the disdain which I feel or the ordinary Syrian citizen feels towards such people.

[Fuqara] The Syrian ambassador in Washington, Imad Mustafa. The response of the Damascus Declaration groups will come after the break.

Welcome to the third part [first part was interview with Foley] of "From Washington." Syrian groups that describe themselves as in opposition to the Syrian regime and come under the canopy of the Damascus Declaration held a series of meetings in Washington last week. One of those meetings was held in the Congress. We are now joined by Ammar Abd-al-Hamid, Coordinator General of the Tharwah [Wealth] Project and head of the Tharwah Foundation in America. Mr Abd-al-Hamid, why did you visit Washington?

[Abd-al-Hamid] To present the issue of human rights and the serious deterioration in human rights conditions in Syria to the US Congress, in order to obtain Congress's support and backing for our just demands for the freeing of all political prisoners and allowing the opposition to operate freely in Syria.

[Fuqara] Why do you focus on Congress specifically?

[Abd-al-Hamid] Because the laws are made by Congress, and because we want through such contacts to have influence on both Republicans and Democrats and on any future US administration be it Republican or Democrat.

[Fuqara] What was the result of those meetings?

[Abd-al-Hamid] Actually they were very positive. We found a great deal of acceptance and support for our demands in Congress, by both Republicans and Democrats, especially as our demands were natural. We did not say "liberate us from Al-Asad's tyranny" or anything of the sort, but we said we want any dialogue you hold with the Al-Asad regime to be conditional on a real and tangible improvement in human rights issues in Syria. Our call for the release of prisoners held because of their views - especially the Damascus Declaration prisoners -was clear. However, we did not confine our demand to the Damascus Declaration prisoners for we wanted the release of all political detainees and the complete closure of that dossier, because it is inhuman and unacceptable for it to continue at this time in Syria. We need all the capabilities that exist in the arena to work on building the homeland, especially in the present difficult economic conditions.

However, very regrettably, Al-Asad's regime continues to object in this matter and to exert all kinds of pressure on all those who oppose its views and it arrests and exiles them. At the same time the regime's policies are leading us to the brink of the abyss and unsafe confrontations with the international community. Its internal policies lead to the fragmentation of Syrian society as we can see at present in Syria where corruption has become so rampant that the Syrian citizen cannot even find a loaf of bread.

[Fuqara] In order to be precise, are you saying that your demands at those meetings that were held in Congress do not aim to change the regime in Syria but aim to change the Syrian regime's policies?

[Abd-al-Hamid] Yes, changing the regime is a matter for the Syrian people. We operate by exerting popular pressure on the regime so that it changes its policies. We seek to start the political process so that we can bring about change from within through elections and free and genuine referenda, and not through military change imposed from outside or even economic pressure exerted from outside. Change is the responsibility of the Syrian people. We have learnt from the Iraqi experience. The lesson was clear: Any change that comes from the outside will lead to disasters. However, that does not prevent the existence of external diplomatic pressure on the regime by putting conditions for dialogue and for any normalization of relations between the Syrian regime and the international community. Such conditions should prescribe respect for human rights, the freedom of expression, and the release of political detainees.

Thus it is a clear manoeuvre for us. Our talk in this regard is clear. Yes, as I heard the ambassador say a few moments ago they can distort such talk and it is their insistence on distorting what we say and on talking in this manner that implies disregard for us which makes the matter so aggravated. That makes us insist more and more on our stand. We cannot act in the same dirty way by which the regime deals with us, but we must act using the same internationally known and recognized methods by communicating with the international community and its leaders in order to put forward our cause and so that our cause always remains alive in the arena every time this regime talks to any person in the international community.

[Fuqara] During our interview with the Syrian ambassador he -as you heard -described you as mercenaries. Such descriptions are made in the light of the relations that existed between the United States and some sections of the Iraqi opposition abroad prior to the invasion. Do you fear that the Arab World could be less sympathetic to you than the Americans for instance?

[Abd-al-Hamid] Arab sympathy did not yield for us any positive results in the past so that we slay ourselves at the altar of Arab sympathy. There are many assertions and many accusations, and such assertions are no longer of importance to us in the opposition. We are working. They say and they accuse and they persecute, but we are working seriously. The Syrian opposition is no longer weak as it was some years ago. It is now working with a clear institutional method. When we held elections within the framework of the Damascus Declaration we did not form a government-in-exile, but there were elections and we formed a secretariat inside the throbbing heart of Syria. We knew very well that the matter will lead to arrests, but there was a premeditated decision that such a risk is necessary because we wanted to give the international community a clear and big picture that we are committed to the political process and the peaceful democratic course and to working from within Syria and not from outside. After the Damascus Declaration group took such action we now have the opportunity to convey a clear message when we talk to the international community, congressmen, members of the US Administration, or any person. There are persons who we can say are the real leaders who at least represent the opposition.

[Fuqara] Ammar Abd-al-Hamid, Coordinator General of the Al-Tharwah Project and head of the Al-Tharwah Foundation in America, thank you for participating in this programme.

Source: Al-Jazeera TV, Doha, in Arabic 1930 gmt 5 May 08

[Report by Andras Szigetvari: "Threats of War Coming From Lecture Hall"]

Vienna - The most remarkable statement of the evening was made somewhat incidentally. Israeli historian Benny Morris presented a gloomy scenario, saying that the sanctions against Iran had failed and that Tehran was not even deterred by the Israeli nuclear arsenal. As a result, there was only one option left: Israel had to launch a preemptive strike against the Iranian nuclear programme. "Using conventional weapons. And if that does not suffice, unconventional ones." In other words, it would be a preemptive nuclear strike. "Many innocent people would die," Morris said. But that would still preferable to a nuclear holocaust in Israel.

On Saturday [ 3 April], Morris was one of the speakers to open the two-day conference entitled The Iranian Threat held in Vienna's university. The conference organized in a lecture hall by the "Stop the Bomb" platform was not undisputed. Critics have called it an anti-Iran campaign.

It started with considerable turmoil, because a journalist of the Iranian news agency Irna was refused admittance. The organizers gave as reason for the restriction of the freedom of the press that the news agency was a state-run institution and, therefore, part of the criminal regime. In addition, it was necessary to protect the Iranians in exile participating in the conference. However, a video recording of the conference would be made and published on the Internet.

Sitting together with Morris on the rostrum were Yossi Melman of the [Israeli] daily Haaretz, Paulo Casaca, Social Democratic Member of the European Parliament, and Patrick Clawson of the Washington-based Institute for Near East Policy.

No Sympathy

They were all agreed that Iran was striving to have nuclear weapons and that that had to be prevented. Clawson argued that "irrespective of whether we find this ridiculous or not, the Iranian leadership is, indeed, convinced that it is able to destroy the West." The regime in Tehran was propelled by a religious and a revolutionary (Marxist) agenda. Since the Islamic revolution of 1979, Iran had pursued a terrorist programme. It targeted political opponents at home and, at the moment, Israel and the US troops in Iraq abroad. Melman than outlined the history of the Iranian nuclear programme.

During the reign of the shah already, Iran had tried to develop a military nuclear programme. After the Islamic revolution, the project was put on hold, but reactivated in the late 1980s. One reason was that Iran felt let down during the war against Iraq. "Iraq used chemical weapons, which is banned. Yet no one in the world expressed any sympathy for Tehran," Melman pointed out. Criticism was voiced with regard to the business deals of OMV with Tehran and the policy of "appeasement" [previous word published in English] pursued by the Europeans.

Morris then argued that even a US security guarantee for Israel would not dissuade Iran from using its nuclear weapons. A US counterstrike following an Iranian nuclear attack on Israel was not realistic: "Israel would already be destroyed, so what would be the purpose of a second strike? Would Obama or Clinton really press the button?" But an Iranian bomb would be fateful, even without it ever being used. No Arab state would dare to make peace with Israel then.

Source: Der Standard website, Vienna, in German 5 May 08

Statement of Graham Allison Director, Belfer Center for Science and International Affairs Harvard University

Committee on Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security

April 24, 2008

Overview:

This case involves a new skill: ``red teaming.`` In order to ``red team,`` you assume the role of an advisor to your adversary and explore actions that will best advance his objectives. As noted in class, when the key finding of the December National Intelligence Estimate (NIE) on Iran was emerging, the intelligence community assigned a group to ``red team`` Iran`s behavior. They were asked to assume that Iran`s intention was to deceive the United States into concluding that the Iranian nuclear program had been halted. Although the red team made a persuasive case that Iran`s actions were consistent with this objective, the intelligence community ultimately rejected that hypothesis and came to the conclusion it reported.

Given the serious questions surrounding the Iranian nuclear program after the NIE, the President wants the National Security Council`s best estimate as to what Iran`s strategy will be going forward. National Security Advisor Stephen Hadley believes that the best way to think about Iran`s goals and assess its future actions is to step into the shoes of Supreme Leader Ayatollah Khamenei and try to see the world through his eyes. Although Iranian President Ahmadinejad is the public face of Iran`s nuclear efforts, Hadley knows that ``the nuclear file`` rests with the Supreme Leader. As a result, he has commissioned a number of ``red teams`` to assess the options available to Khamenei.

In order to ensure maximum coverage, Hadley has assigned each of the red teams a slightly different task. Whereas some of the other teams will consider the extent of Iran`s commitment to acquiring nuclear weapons and the impact of domestic politics on the Supreme Leader`s decision-making, your task is to focus on the Model I analysis of what path Khamenei will take assuming he has decided to acquire nuclear weapons. Specifically, Hadley asks you to assume that Khamenei has a clear operational objective: acquiring at least three nuclear weapons as rapidly as possible (and in any case by December 2009)*-without triggering a military attack that would successfully wipe out or severely retard Iran`s nuclear weapons program. Given this objective, Hadley wants you to prepare a ``red team`` memo articulating three strategic options Iran might pursue and an assessment as to which option the Supreme Leader is most likely to choose.

Hadley stipulates that you should assume that the March 2008 parliamentary elections in Iran and the Iranian presidential elections in 2009 will not change in any substantive way the direction of Iran on the nuclear issue. He then offers the following scenario to guide your analysis: * Note that some of the hypothetical facts about Iran`s nuclear program in this scenario differ from the assessment offered by the NIE and IAEA reports. This variance is by design; Hadley wants you to analyze the ``worst case scenario`` in which the United States has underestimated Iranian technical capabilities. Key hypothetical sentences or paragraphs are marked with an asterisk.

Situation:

The date is March 3, 2008. All conditions relevant to the case are materially the same as they were on March 3, except for any hypotheticals introduced specifically in the case.

You are a foreign policy expert and longtime advisor to Iran`s Supreme Leader, Ayatollah Khamenei. At a recent strategy meeting, the Supreme Leader declared that the Islamic Republic`s vital national interests are:

1. Survival of the regime as an Islamic republic with its fundamental institutions and values intact;

2. The stability of Iran and its territorial integrity;

3. Prevention of a military attack upon Iran;

4. The enhancement of Iran`s power, first within the region, and in time beyond.

The Supreme Leader has stated his judgment that these interests can best be advanced by Iran`s acquiring a small arsenal of nuclear weapons (large enough to test one bomb while retaining other weapons to use in extremis). This must be done, he insists, in a way that avoids any provocation likely to trigger a military attack by Israel and/or the United States. Before asking you to determine how best to achieve this goal, the Supreme Leader provides you with a quick update on the current state of Iranian nuclear capabilities. He begins by noting that the American NIE was correct on at least one account: Iran did indeed suspend the covert program to develop warheads for missiles in the fall of 2003. Khamenei ordered the suspension* because the U.S. discovery of the secret Natanz enrichment facility and Arak heavy water plant was made public in August 2002, and he believed that continuation of the warhead program risked provoking attack. Thus, Iran postponed further work on the warhead designs.

The suspension of the warhead program, however, did not signal a shift in Iran`s determination to acquire nuclear weapons. Rather, it shifted the focus to acceptable overt programs, including the development of advanced missiles (with help from North Korea) and overt uranium enrichment (as permitted by the Non-Proliferation Treaty). This concentration on uranium enrichment reflects the government`s recognition that acquiring weapons-grade material remains the principal hurdle to its bomb program.

Iran`s efforts to produce weapons-grade material are on track. As reported by the IAEA, the Pakistani P-1 centrifuge line at Natanz has been operating with 3,000 centrifuges. Analysts calculated that the centrifuges were spinning intermittently at about 20% efficiency. According to the February 2008 IAEA report, Iran had 75 kilos of 4% low enriched uranium (LEU) as of December 2007. After three months of additional production, the Iranian stock is now at 140 kilos.* Although this figure is well short of the 1,950 kilos of LEU needed to create three bombs (650 kilos each), the Supreme Leader is encouraged by the fact that Iran has increased its rate of production significantly and will be able to produce 100 kilos of LEU per month going forward.* In particular, the Supreme Leader is excited about the prospects for Iran`s new generation of centrifuges, the IR-2. These next- generation centrifuges are substantially more efficient than the existing Pakistani-designed P-1s: Iran would need only 1,200 IR-2 centrifuges to produce enough weapons-grade uranium for a single bomb in one year. This is a marked improvement over the P-1 technology, which would require running 3,000 centrifuges consistently to produce a single bomb`s worth of highly-enriched uranium (HEU) in a year. Production and operation of the IR-2 has advanced to the point that the initial cascade of these new centrifuges is operating.* Additional centrifuges are being installed at a rate that will create at Natanz a cascade of 1,200 centrifuges within six months, and 3,000 within 12-15 months.* The IR-2s are produced indigenously in Iran without any foreign components and Iran has the capability to produce these centrifuges at a much higher rate if necessary. As a result, Iran`s indigenous production lines could produce enough IR-2s to supply a covert enrichment site, if such a decision was made.

Moving on to the sensitive issue of covert nuclear activities, the Supreme Leader reveals that Iran currently has no covert enrichment program. It has, however, prepared several locations at which a covert enrichment program could begin as soon as centrifuges are installed.* It has also made plans for plausible cover based on associated services, including electricity and transportation at current military bases as well as a site with ongoing mining operations. Given these precautions, the Supreme Leader believes that Iran can keep a covert site secret.

Having provided these background facts about the Iranian nuclear program, the Supreme Leader now turns to the broader question of Iran`s strategic relationships and interactions with the rest of the world. He chuckles as he reveals the nickname for President Bush that he occasionally uses among close colleagues: ``our unwitting Secret Agent 007.`` He muses, ``Who was Iran`s biggest enemy? Saddam Hussein. Who eliminated Saddam? President Bush! Who was Iran`s number two adversary? The Taliban in Afghanistan. Who toppled the Taliban? President Bush!``

Although he acknowledges that President Bush`s inclusion of Iran in the ``axis of evil`` grated on many, the Supreme Leader believes that these words were actually, in effect, a subtle substitute for serious action. He points to the fact that even though the U.N. Security Council sanctions have been tightened over time, they still amount to little more than gestures. The impact of these sanctions on Iran`s ability to advance its core objectives and acquire the nuclear arsenal that the Supreme Leader desires has been minimal. Moreover, just as many Iranians began to worry about the possibility that the sanctions would be tightened to the point that they could severely constrain Iran, the December NIE anesthetized international urgency about Iran`s nuclear activity and drastically reduced the likelihood that the Security Council will approve sanctions with real bite. Moreover, the Supreme Leader continues to be encouraged by reports from Beijing. The Chinese have indicated that while they are now doing everything possible to ``make nice`` to the U.S. to get through the 2008 Olympics, they are ready to proceed with major economic arrangements for the production of oil and gas that will be supplied to China.

Despite being sanguine that the international community will struggle to impose further sanctions on Iran for its enrichment activities, the Supreme Leader acknowledges that the economic situation in Iran is much graver than it should be, especially given the high price of oil. Privately, he derides Ahmadinejad for mismanagement of the economy, which has led to the near depletion of the emergency oil reserve fund, a rise in inflation from 12-19%, the rationing of petrol last summer, and a growing jobless rate that some estimate as much as 20%. Nevertheless, he has made clear to you that Iran is willing to weather more economic hardship if necessary to reach its objective of gaining the bomb.

The Supreme Leader remains wary of the potential for a military response from the United States or Israel. Having analyzed this issue carefully, the Iranian national security establishment is aware that the United States and Israel possess capabilities for bombing Iranian sites in a manner that would significantly delay Iran`s acquisition of nuclear weapons. To counter such attacks, Iran has been developing a more robust deterrent by strengthening its ally Hezbollah (whom it believes defeated Israel in the 2006 war in Lebanon), demonstrating its capacity to kill what Hezbollah calls ``American hostages`` in Iraq through the supply of advanced IEDs, and reinforcing the international terrorist networks that allow Hezbollah to conduct attacks on Israelis, Americans, or others globally (as it did when bombing Israeli interests in Argentina in 1992 and again in 1994).

Although he is no betting man, the Supreme Leader likes his odds on the gamble that the United States will not launch a military attack before December 2009. With President Bush supporting Secretary Rice`s push for a major step forward in the Israeli- Palestinian conflict, the Bush Administration is overloaded and thus likely to remain distracted. Khamenei is somewhat more concerned with the rhetoric emerging from the 2008 presidential candidates. Iranian analysts have tracked McCain`s presidential debate statements that he would be much tougher on Iran; though many Iranians enjoy the Beach Boys, they were not amused by McCain`s rendition of ``Bomb bomb bomb, bomb bomb Iran`` during a town hall meeting in South Carolina. At the same time, the Democrats have been almost as bad. Having watched several transitions in the United States, however, the Supreme Leader is confident that it will take any new administration a year to get its own act together, and that in any case, its priorities will begin with Iraq. This means that Iran can draw even greater leverage from its ability to manipulate events on the ground in Iraq. Though Iran has cooperated with the reduction in violence accompanying the surge by supporting the Maliki government (making it the only government in the region to support the elected Shi`a-dominated government there) and limiting the number of advanced IEDs, it has also demonstrated its ability to turn up the level of violence if necessary. Accordingly, American policymakers will have to tread carefully in threatening Iran militarily.

Israel, on the other hand, seems to be a more pressing concern. The Iranian security establishment carefully noted the Israeli national security community`s unanimous declaration that an Iranian nuclear bomb would pose an ``existential threat`` that no government of Israel could tolerate. Their best judgment is that Israel is quite serious, particularly after Prime Minister Olmert declared that ``under no circumstances and at no time can Israel allow anyone with malicious designs against us to have control of nuclear weapons that threaten our destruction.``

More recently, after the release of the December 2007 NIE, former Israeli Deputy Defense Minister General Ephraim Sneh reiterated the need for ``harsher action against Iran`` and maintained that Israel must ``be prepared to forestall this threat on [its] own.`` One month later, Israeli Defense Forces Chief of Staff Gabi Ashkenazy reiterated that ``the reality of a nuclear Iran is one which we cannot tolerate.`` A final decision about the likelihood of an Israeli preemptive strike is highly dependent on internal Israeli politics (Model III for Farsi readers of Essence). In this respect, though Iran cheered Israel`s first defeat at the hands of an Arab foe when Hezbollah fought it to a standstill in Lebanon in 2006, some Iranian analysts worried that their terrorist friends had been too successful. Specifically, the concern was that the defeat would catalyze the collapse of the Olmert government and produce a new regime more inclined to launch a preemptive strike against Iran. In particular, they feared that if Netanyahu replaced Olmert, Israel would have a prime minister likely to pull the military trigger. But fortunately, Olmert has remained in power and Israeli politics seem paralyzed.

Ironically, Iranian analysts have concluded that Israel`s attack on Iraq`s Osirak reactor in 1981 actually advanced the date on which Saddam would have acquired a nuclear weapon-since he quadrupled the budget for this activity after the attack. Some members of the security establishment have indeed suggested that an attack on Iran`s nuclear facilities would be good for the Islamic regime since it would unify the public behind the government. Nonetheless, the Supreme Leader`s judgment is that attack must be avoided at almost all costs. Crucial to success in this effort will be to lull and deceive the Zionists and their great Satanic supporter.

Assignment:

You are to develop three strategic options for achieving the stated operational objectives: completing an arsenal of at least three nuclear devices/weapons by the end of the first year of the new American administration without provoking a military attack. You should outline these strategies in an options memo to the Supreme Leader and then recommend which course of action he should pursue. The interests, objectives, and options should be those of Iran, not the United States or any other parties. In writing the memo, you should take account of the background facts described above and in the readings. You should also do your best to internalize the assumptions and worldview of the Supreme Leader before making your recommendations.

Hadley reminds you that your memo should make sure to address the following:

-- What is the current state of Iran`s nuclear capabilities?

-- Given its current capabilities, what are the different paths Iran can follow to acquire three nuclear bombs?

-- Which acquisition process/strategy is most likely to avoid a military reprisal while still ensuring completion by December 2009?

-- How should Iran avoid provoking the United States and Israel, or alarming the IAEA?

Logistics:

Memos and outlines should be submitted to the course website no later than 11:00 a.m. on March 10. In addition, you are required to bring two hard copies of the assignment to class. No late papers will be accepted.

Group presentations are to be no longer than 10 minutes. Groups must post their presentation to the course website and email a copy of their presentation to Graham_Allison@harvard.edu and Meghan_O`Sullivan@harvard.edu prior to 11:00 a.m. March 10 for their review.

For those students writing a memo or outline, you are permitted (not required) to attach an appendix no longer than one-half page that identifies questions of fact or analysis that you do not know the answer to, but you believe the individual writing the memo in the real world would be able to answer. These questions should relate to your analysis and/or recommendations. List the questions and then provide some indication as to who, where, or how these questions would likely by answered.

Statement of Dennis Ross Counselor and Ziegler Distinguished Fellow, Washington Institute for Near East Policy

Committee on Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security

April 24, 2008

When President George W. Bush assumed office in 2001, Iran was not a nuclear power state. However, when he leaves office next January, Iran will either have acquired that status or be on the verge of having done so. Listen to its president, Mahmoud Ahmadinejad, and you hear that Iran has 3000 operating centrifuges and is now installing an additional 6000 IR-2 centrifuges that will be five times as efficient as those already operating. Even if President Ahmadinejad exaggerates the exact status of the Iranian efforts, the Iranians probably will solve the technological problems that have limited their ability to operate their centrifuges on a non-stop basis within a year's time. And, once they have done so, they will be able to enrich uranium and stockpile fissionable material.

If nothing else, this tells us that our current policies are not going to prevent Iran from acquiring the capacity either to assemble nuclear weapons or build a break-out capability. It tells us as well that the next administration will have fewer options available and less time to prevent Iran from crossing the nuclear weapons threshold. In my testimony today, I will address our stakes in preventing Iran from going nuclear, its vulnerabilities that provide us leverage, and the range of different options we might employ to alter Iran's behavior before it is too late.

Our Stakes in Changing Iran's Behavior

Iran has certainly posed challenges and threats to America's interests since the Iranian revolution in 1979. But in the 1980's, Iran was consumed and drained by eight and half years of war with Iraq. Even after the 1991 U.S. defeat of Saddam Hussein in the first Gulf War, Iraq remained a threat and a counterweight to Iran. But that counterweight disappeared with our removal of Saddam's regime. And, today Iran seems to be on a roll, effectively challenging America's interests throughout the Middle East. From Iraq to Lebanon to the Palestinian Authority and Israel, Iran's policies are not only at odds with ours, but seem designed to frustrate and undermine U.S. goals and partners. Arab governments in private lament Iran's growing strength in the region. They worry about the increasing shadow it casts over the region and its ability to exploit militancy and anger in the Middle East to put them on the defensive. The fact that the complaints about Iran are made more in private than in public already says something about Iran's coercive potential in the area.

An Iran with a nuclear weapons capability would surely add to that coercive potential. Arab and Israeli leaders with whom I have spoken explain that they fear that should Iran have nuclear arms, it will transform the landscape of the region. Iranian leaders will feel emboldened to use terror and terror groups to threaten or subvert others in the area, including particularly those who might be inclined to pursue peace with Israel, knowing that their nukes provide an umbrella of protection or a built-in deterrent against responses.

To be sure, Israelis are worried not only about an increasing Iranian coercive capability. They see an Iranian nuclear weapons capability posing an existential threat to the state of Israel. Tell the Israelis that Iran will act rationally, knowing that Israel can retaliate with a devastating nuclear counterstrike if Iran or its proxies ever used nuclear or dirty bombs against Israel, and they are not reassured. For starters, they point to the language of Iranian President Ahmadinejad, who has denied the Holocaust and Israel's right to exist; declared that Israel (or the ``Zionist entity`` as he refers to it) will be ``wiped off the face of the map;`` and proclaimed recently that Israel's collapse is ``imminent.`` Israelis take small comfort from those who are seen as more pragmatic than Ahmadinejad in the Iranian leadership, like former Iranian President Akbar Hashemi Rafsanjani; even he, they will point out, has said that Iran could absorb many nuclear bombs and survive and Israel, given its small size, could not survive even one.

It is not just Israel's small geographic size and concentrated population that worries Israelis. It is the ideological-messianic fervor of at least some in the Iranian leadership. The Israelis question whether that segment of the Iranian leadership (which believes in the apocalyptic return of the ``Hidden Imam``) can actually be deterred and believe that they cannot run the risk of trying to find out. As a result, the risk of an Israeli preemptive military action to blunt or delay the Iranian nuclear program is quite high.

That, alone, might argue for an intensive American effort to prevent Iran from developing or acquiring a nuclear weapons capability. As important as it is to avoid such an Israeli action, given all the possible consequences of it, we have additional reasons to prevent Iran from going nuclear. For one thing, the fear of increased Iranian coercive capabilities--- particularly as it relates to being more aggressive in terms of pushing a Shia agenda or even subversion in states like Saudi Arabia---is likely to produce a perceived need for a counter nuclear capability. The Saudis have already expressed an interest in having nuclear power. While they may say they will not acquire a nuclear weapons capability, their words seem to parallel the Iranian-professed interest in having nuclear power-and the Saudis have no doubt that Iran is seeking a nuclear weapons status.

The Saudi relationship with Pakistan, previous secret arms deals between the two, and its financial means all suggest that the Saudis might buy or have Pakistan station nuclear weapons on Saudi soil to create their own deterrent of Iran. Egypt, given its status in the region, might also decide that it must develop its own nuclear capability. Several months ago, a senior Egyptian official told me that if Iran goes nuclear, ``it will mean the end of the NPT.``

Such a sentiment should be taken seriously. It reflects a perception in the region that a nuclear Iran requires a response- and it may not be one that can be satisfied only by new American security assurances. While some may believe that traditional deterrence will contain a nuclear Iran and our security assurances to Middle East states will offset Iran's capacity to intimidate or blackmail them, the problem, unfortunately, is that our security assurances may not be particularly relevant to the threats that most worry Middle Eastern regimes. True, our security assurances may counter overt threats, but how relevant are they to preventing Iran from feeling more able to subvert its neighbors? Whether giving the Israelis a reason not to strike Iran preemptively or giving the Saudis and others a reason not to create their own nuclear counter to Iran, we have a strong stake in preventing Iran from going nuclear.

Certainly it has been the policy of the Bush administration to try to prevent it. But that policy, while producing three UN Security Council resolutions, has largely failed because it has not forced the Iranian government to face an unmistakable choice between its economic well-being and integration into the regional and global community-politically and economically-or having nuclear capabilities and being truly isolated and cut off economically from the international financial system. Iran has pronounced vulnerabilities and those vulnerabilities do provide leverage for affecting its behavior. Unfortunately, the ability to exercise that leverage was undercut by the National Intelligence Estimate (NIE). Before discussing Iran's vulnerabilities, it is important to understand how the NIE affected efforts to pressure the Iranians.

The National Intelligence Estimate and its Impact

The December 3, 2007 public release of the NIE, titled ``Iran: Nuclear Intentions and Capabilities,`` transformed the landscape on dealing with Iran. By asserting that Iran halted its nuclear weapons program in 2003, it created the impression that Iran was not pursuing nuclear weapons and was not a near-term threat. If it was not a near-term threat, why pursue sanctions? Why build pressure on it? And, of course, why should all options, including the military, be on the table?

It is ironic that Iran was not sanctioned by the United Nations for its covert nuclear weapons program, it was sanctioned for its open pursuit of uranium enrichment, which if continued over time (something the NIE acknowledges is continuing) could be used to develop nuclear weapons. It is also ironic that the NIE concluded that Iran had stopped its weapons program in 2003 ``primarily in response to international pressures,`` which ``indicates Tehran's decisions are guided by a cost-benefit approach.``' Perhaps the greatest irony of all is that by framing its judgments the way it does-emphasizing the covert nuclear weapons program and efforts rather than the overt enrichment developments---the NIE has inadvertently succeeded in considerably reducing the ``cost`` factor in the current international approach to Iran.

I say that because apart from the British, French, and Germans, the international reaction after the NIE seems different from before it. One almost needs to divide the approach toward dealing with Iran into the pre-NIE and post-NIE periods. Pre-NIE, the Russians and Chinese were prepared to act immediately on a third UNSC sanctions resolution against Iran; post-NIE, they both raised questions about doing so and postponed consideration of such a resolution. It took until March 3, 2008 to adopt the third Security Council Resolution (1803), and it is weak and sends a signal as much for what it does not cover as for what it does.

Pre-NIE, the Saudis were trying to raise the pressure on the Iranians on their nuclear program. In early November, Saud al Faisal, the Saudi foreign minister, called on Iran to respond to a Gulf Cooperation Council proposal to ``create a consortium for all users of enriched uranium in the Middle East. The consortium will distribute according to needs-and ensure no use of this enriched uranium for atomic weapons.`` Faisal suggested that Switzerland could be the site of the enrichment plant for the consortium and made clear that this proposal, which he revealed had been conveyed privately to Iran one year earlier but not produced a response, would answer the Iranian desire for civil nuclear power and not prejudice Iranian rights in any way. Why go public at this point unless the purpose was to put pressure on Iran?

But that was pre-NIE; post-NIE, there has been no additional mention of the proposal; on the contrary, the GCC invited Ahmadinejad to attend their last meeting (an unprecedented invitation) and King Abdullah of Saudi Arabia also invited the Iranian president to go to Mecca--hardly signs of increasing pressure on Iran. Similarly, after keeping Iran at anus length, Egypt invited Iranian official Ali Larijani to Cairo for discussions after the NIE; and former Egyptian Ambassador to the United States Ahmad Maher wrote in a January 2008 commentary that Israel was the problem for the Arab world, not Iran, and that the ``disputes between Arabs and Iran`` can be resolved ``through a dialogue.``

In Iran itself, one also sees a pre-NIE reality and a different post-NIE reality. Ahmadinejad was clearly on the defensive prior to the NIE, and he went on the offensive after it. He seized on the NIE, proclaiming a great victory and at a one point referred to the intelligence report as a ``declaration of surrender. But he was not content only to claim a great victory over the United States and others who opposed the Iranian nuclear activities; according to his office's news service, he also ``belittled`` those in Iran who had criticized (presumably him) the high cost Iran was paying over the nuclear issue.

If nothing else, those like Rafsanjani who were warning about Ahmadinejad's nuclear approach seem to have been undercut. And, there is one other development involving Ali Khamenei that may prove very important; it, too, comes in the post-NIE period. Iran scholar and Shiite theologian by training Mehdi Khalaji notes that in a January 3 speech, Khamenei, for the first time, ``admitted that Iran's shift in nuclear policy-which began right after Ahmadine.ad came to office-was by his order.`` Whether coincidence or not, the Supreme Leader in the post-NIE environment is taking a more visible role on tile nuclear issue, meeting with Dr. ElBaradei on January 12. While it is probably too much to claim that the NIE has changed his view, his readiness to be more clearly identified with the nuclear program is, nonetheless, clearly apparent.

It is hard to escape the conclusion that the leverage and choices that can be employed vis-a-vis Iran in the aftermath of the NIE have been reduced. Having fewer choices or options, however, does not mean we have none. Iran still has vulnerabilities and interests that might be susceptible to both positive and negative incentives and disincentives.

Iran's Vulnerabilities and Our Diplomatic Choices

Our basic objective toward Iran should be to prevent Iran from developing nuclear weapons and to alter its de-stabilizing, anti- peace policies in the Middle East. Do we have the means and the leverage to do so? In the aftermath of the NIE and Iran's continuing enrichment developments, that remains unclear, but Iran certainly has some very basic vulnerabilities.

Iran's Vulnerabilities and Our Diplomatic Choices

Its oil output is declining at a time when its domestic consumption is increasing rapidly. Presently, Iran is falling more than 300,000 barrels per day below its OPEC export quota not because Iran's leaders do not want to meet their quota but because they cannot meet it. When one considers that Iran derives 85 percent of its export income from its sale of oil, and that those revenues constitute half of the government's total revenues, it is not hard to see the potential for leverage.

Mehdi Varzi, a former Iranian diplomat and National Iranian oil official, has gone so far as to say that ``Oil is as important as the nuclear issue; it will affect the very survival of the regime.`` One senior British official, who very much agrees with this sentiment, told me that ``if you want to affect the Mullahs, let them see that they are not going to have the money to subsidize the civilian economy-and the key to that is cutting off investment and technology transfer to the energy sector.`` In effect, this official was saying that should the Mullahs, who are primarily concerned with preserving their power and privilege, come to believe that Iran's economic lifeline is going to be cut and the oil revenues are going to dry up, they may well decide that the nuclear program is not worth the cost.

Mehdi Varzi and my British colleague may or may not be correct, but one thing is for sure: the Iranians need massive investment and technological help from the outside to prevent the continuing decline of their-oil output. Kazem Vaziri-Hamaneh, Iran's oil minister in 2006, put the decline of output at 500,000 barrels per day (b/d) each year. The total output of now roughly 3.9 million b/d, a half million barrels a day decline per year- married to growing internal consumption-creates an unmistakable squeeze. That has led some analysts to suggest that Iran's oil income could literally disappear by 2014 to 2015.

To be sure, Iran could impose strict conservation measures and it could gain access to outside technical expertise to help reverse the natural decline in many of its oil fields. It could also get foreign oil companies to invest in developing new fields that require more sophisticated techniques and technologies to exploit. But real conservation may provoke a domestic political backlash, particularly with internal consumption having tripled since 1980 and Iranians expecting to be able to benefit from their energy resources. Ahmadinejad claimed that lie would bring the oil revenues to every table; instead, he has brought rationing of gasoline, high inflation, high unemployment, and international isolation.

One measure of the isolation is that Iran was unable to sign any firm oil or gas contracts far the first two and a half years of Ahmadinejad's tenure. Only in the last few months----following the publication of the NIE--have the Iranians signed contracts with Malaysia, China, Italy, Switzerland, and Austria to develop oil and natural gas fields. (But even the biggest of these deals- the one with Malaysia-will eventually require Western subcontractors to produce and market the liquefied natural gas. )

The recent signings of these deals indicates the ongoing interest that foreign companies have in investing in onshore and offshore exploration blocks, but as Jeroen van der Veer, the chief executive of Royal Dutch Shell explained: ``We have a dilemma.`` Iran's oil and natural gas reserves are too big to ignore, but ``we have all the short-term political concerns; as you can See.`` Those ``short-term`` concerns have been made more acute by new unilateral U.S. sanctions which, among other things, are designed as much for their psychological as for their practical impact (e.g., the U.S. posture is geared toward raising questions about the danger and the cost of investing in Iranian front companies). In the words of Secretary of the Treasury Henry Paulson:

In dealing with Iran, it is nearly impossible to know one's customer and be assured that one is not unwittingly facilitating the regime's reckless behavior and conduct. The recent warning by the Financial Action Task Force, the world's premier standard setting body for countering terrorism finance and money laundering, corrfrrrns the extraordinary risks that accompany those who do business with Iran [Emphasis added].

And there can be no doubt that even the unilateral U.S. sanctions on three Iranian banks and the Revolutionary Guard-with the implication that we will sanction any company doing business with the IRGC-is having an affect. Saeed Leylaz, an Iranian economist and journalist, has said that ``Sanctions are like icebergs. Only 10% of the effect is directly attributable to the Security Council. Ninety percent is fear of the U.S.`` European businesses are cutting back on trade and investment in Iran, and the result is that prices on most goods are going up dramatically in Iran. According to one recent report, the prices on most commodities have risen by 50 percent in the last several months, particularly as many foreign manufacturers and distributors have become more wary of doing business directly with Iran lest they come under greater scrutiny of the U.S. Treasury department.

Will this produce a change in Iranian behavior? There is no sign of it to date. But it is interesting that Iran's well-connected bazaari class of merchants are being hit hard and apparently one such group complained to the Supreme Leader that sanctions were ``hurting their bottom line.``

The economic vulnerability is clear. The potential to squeeze the Iranians more on their oil revenues is also obvious, and need not involve trying to cut off Iranian exports which, given the very tight oil market, would drive prices far higher. It would, however, require cutting off all credit and outside investment in the oil sector. The Chinese and Russians have shown great reluctance to go along with anything so drastic, and, of course, simply squeezing Iran does not guarantee responsiveness. Indeed, there are those who believe the only way to produce a change in Iranian behavior is to offer the Iranians meaningful inducements while engaging the Iranian leadership. Here it is worth recalling that the Supreme Leader, Ali Khamenei, now appears to be taking a much more open and direct role on the nuclear issue. Even if he generally has preferred to operate on the basis of involving all the relevant elites when it comes to the nuclear issue, there is no question that, unlike the president of Iran, the Supreme Leader is the leading decision-maker.

Is it time to engage him and Iran. or is the best option to squeeze tighter? Or are there other alternatives or mixes of options that could still change Iran's behavior?

Diplomatic Options

1) Tighten the Noose. This is the path we are currently following. The Bush administration pushed for and got adoption of a third sanctions resolution at the UN-once again being willing to settle for sanctions that do not really target the Iranian economy for the sake of getting a resolution. While accepting less at the UN, the administration is pushing European governments to lean on banks, investment houses, and energy companies to prevent any new deals. As already noted, this is, in fact, having an impact.

Prior to the NIE, President Nicolas Sarkozy of France was encouraging EU-wide sanctions that would go well beyond the UN sanctions in cutting the economic lifeline to Iran. His argument was that much more needed to be done to force the Iranian leadership to see that the price of pursuing their nuclear program was simply too high-and, indeed, if it was not done, the risk of military action to prevent Iran from going nuclear would inevitably increase. He was not arguing for the use of force; rather he was trying to mobilize opinion in Europe to show that if more was not done economically to squeeze the Iranians and make them see the cost of the nuclear effort, those who saw Iran's nuclear program as a profound threat might see force as the only option.

While he has backed off this posture since the NIE, the idea of pushing for additional EU-wide sanctions remains on the table. And they would certainly have an impact in Iran. European companies may be cutting back and fearing the risk of investment in Iran, but a number of European governments are still providing several billion dollars of credit guarantees to their companies doing business in Iran. The figure was approximately $18 billion in 2005, and while significantly reduced, Italian, Spanish, Austrian (and even some German) firms are still benefiting from such guarantees.

So long as credit guarantees are still available, it will be hard to convince the Iranians that they will be subject to much stiffer economic pressures and that their economic lifeline will be cut off. Indeed, while obviously feeling increasing pressures from America's unilateral sanctions and efforts with the Europeans and others, it is interesting that when the Iranians held a conference in Tehran this past year to offer their own sweeteners on possible oil exploration contracts, dozens of European, Russian, and Chinese oil companies attended. According to Gholarn Hossein Nozari, the managing director of Iran's national oil company, this was a ``sure sign companies do not cower to U.S. pressure.``

Clearly, if one is pursuing this option of tightening the economic noose, more needs to be done. One way to do so would be to enlist the Saudis. They have a very high stake in Iran not going nuclear. While the NIE has made them less willing to challenge the Iranians publicly, or even to be seen as part of an open effort to contain or isolate Iran, there clearly are private ways to employ Saudi financial clout. For example, the Saudis have tremendous holdings in Europe and they could go privately to the relevant European governments, the key banking and investment houses, and the major energy companies and make clear that those who cut all ties to the Iranians would be rewarded by the Saudis and those who don't would fall into disfavor and receive no investments or business.

Something similar could be done with both the Chinese and the Russians. It is particularly important to do so with the Chinese who are driven by a mercantile mentality and are drawing special complaints from the Europeans for rushing to replace their companies whenever they pull back from Iran. China may seem to be a difficult case because it does receive about 13 percent of its oil from Iran. But make no mistake, if tile Chinese had to choose between Iran and Saudi Arabia, they would choose the Saudis. They have massive new investments in Saudi petrochemicals, are jointly financing new oil refineries, and the Saudis have agreed to fill a strategic petroleum reserve for China. Business is business and the Chinese have a higher stake in Saudi Arabia. Again, the Saudis need not broadcast what they are doing-but they do need to be enlisted to quietly pressure the Chinese to change their approach to Iran lest they lose out on a profitable future with Saudi Arabia.

The Saudis could also influence the United Arab Emirates. The UAE's commercial ties to Iran are growing, and Iranian companies are relocating to Dubai in an effort to circumvent the existing sanctions. While the UAE may fear coming under great Iranian pressure if they simply cut back on exports to Iran, which rose to $12 billion in 2006, the international community could give the emirates some cover. The UN could decide, for example, that it will create a monitoring team to oversee compliance with the sanctions imposed in resolutions 1737, 1747, and 1803; the UN has done this with many other sanctions regimes and it could establish such a team in the UAE. In Dubai's ``freewheeling business environment,`` a UN monitoring team could identify Iran's efforts to use the UAE to get around the sanctions and give the UAE an explanation for why it must cut down on illicit Iranian activity.

There clearly is room for the Bush administration to do much more to tighten the economic noose around Iran and sharpen the choices the Iranian leadership must make. Everything need not be done through United Nations Security Council resolutions indeed, that route has probably already been exhausted. Formal and informal sanctions, informal jaw-boning, and finding ways to get the Saudis to use their clout could all add to the pressures.

But is pressure alone likely to work? One could argue that if applied much more systematically and targeted effectively, it might yet work.

Perhaps, but pressure alone may only succeed in creating a siege mentality in the Iranian regime and, thus, strengthen the hand of the hardliners. Pressure that squeezes the regime far more effectively without tying it to an open door or to something from which Iranian leaders could also gain, may simply convince Iranian leaders that we seek only their humiliation. Pressure that offers only humiliation, meaning admission of defeat, is likely to make it easier for the hardliners to argue that giving in to this will whet the appetite of those in the United States who will be satisfied with nothing less than regime change. President Ahmadinejad appeared to make this very point in responding to his internal critics on why Iran should not concede on the nuclear question given the pressure: ``if we would take one step back in our confrontation with the arrogant powers regarding our nuclear program, we would have to keep taking more and more steps back till the very end. ``

The problem with the tightening the noose option is that the Iranian leadership may choose confrontation, believing it has nothing to lose. Furthermore, it is not likely to work fast enough to prevent the Iranians from going nuclear. Pressure has not worked so far, and the capacity of the Bush administration to ratchet it up dramatically in its last year is limited. So maybe it is time to try a different path.

2) Engagement without conditions. Secretary Rice might argue that the Bush administration has not sought a pressure-only approach; after all, the administration supported the EU incentives package in the summer of 2006, backed another proposal presented by EU representative Javier Solana in May 2007 that effectively offered a freeze on sanctions for a freeze on enrichment, opened up a dialogue with Iran on Iraq, and has proclaimed a readiness to discuss all issues if Iran will only suspend its enrichment activities.

However, critics of the administration paint a very different picture-one, they say, that is what the Iranians see. 26 From Tehran, the picture looks like one of unrelenting efforts to isolate or pressure Iran; even when Iran tried to be responsive after 9/11 on al Qaeda and Afghanistan it received no recognition or reciprocation, only the charge that it was part of the axis of evil. When it conveyed privately a readiness to put all issues on the table, including its nuclear program and support for Hezbollah and Hamas, in 2003, it was rebuffed with a simple rejection. While dialogue was being rejected, hostility was being projected through the attempt to promote a wall of Sunni Arab containment and economic pressures.

Critics of the administration policy do not try to excuse Iranian nuclear ambitions or Iranian support for terror. Instead, they argue that the pressure-only or isolation policies are doomed to fail and have built up a reservoir of deep suspicion throughout the Iranian elite. Given that, they argue for an engagement without conditions approach.

Analysts Mark Brzezinski and Ray Takeyh believe that the NIE's findings create an opening, not a problem. In their words, ``That Iran ceased work on its nuclear program several years ago is positive, as it provides an opportunity to start negotiations with Tehran without any preconditions. Moreover, it allows both parties to come to the negotiating table with a constructive tone.`` They and other critics of the administration see value in creating an environment for the talks in which neither side is seeking to pressure the other, ``making veiled threats,`` or dismissing each other's security concerns.

Preconditions would be inconsistent with trying to foster such an atmosphere for the talks. Moreover, to make such talks work, the critics argue for negotiations that will be comprehensive in scope and not incremental. They believe the agenda should cover the full array of concerns of both sides:

--Iran wants recognition of its legitimate security and regional interests, a U.S. commitment to accept the regime and give up efforts to change it, a recovery of its frozen assets, an end to economic embargoes, and the right to have civil nuclear power.

--The United States wants Iran to give up its pursuit of nuclear weapons, its support for terrorist groups and militias that threaten or hold existing governments hostage, and an end to trying to prevent Arab-Israeli peace.

For the critics who favor engagement without conditions, the tradeoffs are not difficult to imagine. In return for American acceptance of the legitimacy of the Iranian regime and resuming economic ties with it, Iran would have to stop providing all military equipment and training to Hezbollah, Harnas, and other regional militias, and publicly commit to a two-state solution to the Arab-Israeli conflict. In return for U.S. support far Iran's civil nuclear program, Iran would have to accept an intrusive inspection regime based on having permanent inspectors operating on a 24-hour-a-day, no-notice system of inspections. In return for U.S. acceptance of Iran's role in Iraq, Iran should be prepared to help to work out understandings not only between the Shia and Sunnis within Iraq but also with the Saudis to make such understandings more likely to hold. Finally, in return for our accepting Iran's regional position, Iran would join an effort with its neighbors to create a new regional security system resolving territorial disputes, accepting existing borders, limiting arms acquisitions, and opening trade.

Most of those who favor this engagement option believe that Iran's behavior can be modified. They see Iran as ``an unexceptional opportunistic power seeking to exert preponderance in its immediate neighborhood.`` While that might ordinarily argue for the use of carrots and sticks to affect Iran's choices, the engagers without conditions feel that Iranian suspicions are simply too high, their leverage toward their neighbors too great, their cash reserves too substantial, and their nuclear program too far along to have them respond to our ``sticks.``

But is all that true? Usually when regimes say pressure won't work on them that is precisely what they are trying to head off. President Ahmadinejad would not be facing some of his domestic criticism if not for concerns that his provocative posture, including specifically on the nuclear issue, was costly to Iran. Moreover, while high oil prices may be a boon for Iran, they have not eased the basic vulnerabilities of the economy or reduced unhappiness about it. Fuel heating shortages have triggered a torrent of new criticisms of Ahmadinejad's policies in the last few months, and late last summer one of Iran's leading clerics, Ayatollah Mahmoud Hasherni Shahroudi, the judiciarychief, blasted the president for what he termed ``heavy blows to the Iranian [economic] system.``

This is not to argue against engaging the Iranians. But it is to argue that engagement should not dispense necessarily with preserving pressures on the Iranian regime. To engage with no pressure might well convince the regime that the United States is conceding up front and there is no need to respond to what it seeks. It almost certainly would convince theta of our weakness. In my experience in negotiating with Middle Eastern parties- admittedly Arabs and Israelis, not Iranians--the tendency when one side thought it was on a roll and in a strong position was to believe that there was no need for it to compromise; ironically, when it found itself in a weakened position or on the defensive, it would tend to think that it could not afford to compromise.

What that would argue for with the Iranians is preserving pressure but also providing face-savers and inducements at the same time.

3) The Hybrid Approach--Engagement without Conditions but with Pressures. When I say engagement without conditions, I mean that there would be no preconditions for the United States talking to Iran. Iran would not, for example, have to suspend its uranium enrichment first. But to avoid Iran misreading this as a sign of weakness, pressures must be maintained. Iran must see that though the United States is no longer imposing a precondition for talks, it has succeeded in adding to pressures on Iran even while it is offering a way to reach an accommodation.

The logic of this option is that Iran must see that the costs of pursuing the nuclear option are real and will not go away, but that Iran has a door to walk through and can see what is to be gained by giving up the pursuit of nuclear weapons-----and those gains are meaningful to the Iranian leadership. The hybrid option is designed to concentrate the minds of Iranian leaders on what they stand to lose without humiliating them.

It ends the image that there is a price just for talking to the United States but does not leave the impression that America has caved in and effectively given up as talks begin--or that negotiations can provide a legitimate umbrella under which nukes can still be pursued.

So how to talk and preserve the pressures without making either side appear weak? One way to do so would be for the United States to go to the European