Russian Deputy Says Iran Is Developing the Bomb

The head of the International Affairs Committee of the Russian Duma today told the news agency Interfax that Iran may be capable of testing an atomic bomb within five years (Interfax, 29 June 2007). The announcement by the senior Russian parliamentarian Mikhail Margelov surprised political analysts. Margelov had returned from a visit to Tehran.

Margelov said the tone of Iranian officials he had met convinced him that Iran was “a country that has a maximum of five years left before it tests its own nuclear bomb.” He added that the bellicose tone in Iran's dialog with international organizations only strengthens his suspicion.

Margelov is the highest ranking Russian official accusing Iran of developing nuclear weapons. Russia has always insisted that the Iranian nuclear program was for peaceful purposes.

Not Just Gasoline Crisis, A Leadership Crisis

The consequences of imprudent and sophomoric policymaking by Iranian leaders are tragically displayed at gasoline stations throughout the country. The world’s fourth biggest oil producer does not have enough refineries to bring gasoline to the stations.

It has been apparent to all concerned except to the leadership and the government of the Islamic Republic that a country that is challenging the most powerful forces on earth should have prepared itself for a coming gasoline crisis. Instead they have squandered the Oil Stabilization Fund reserves on importing $10 billion worth of gasoline a year.

Today, a legislation introduced in the US Congress would make the life for the Iranian leaders even more difficult. Effective January 1, 2008, any company selling gasoline to Iran will not be able to sell gasoline in the US market. Considering the US market for gasoline is the largest in the world, not many companies regardless of their nationality would want to break that law.

People’s discontent is not just a demonstration of anger for being unable to fill in their cars, but a frustration with a leadership who can not get their acts together. The new Iran, in this new century, indeed needs a new leadership.

Iran and Palestine

On Monday, Palestinian President Mahmoud Abbas, Israeli Prime Minister Ehud Olmert, Egyptian President Hosni Mubarak, and King Abdullah of Jordan will meet in Egypt to give a push to the plans for establishing a Palestinian state.

The reports circulating in Washington indicate that during Olmert’s recent visit to the White House, President Bush expressed his strong desires to see a Palestinian state established before he leaves office in January 2009. Reports coming from the Jordanian capital of Amman also indicate that the Jordanian king on behalf of the leaders of Arab states of the Persian Gulf will offer Israel $10 billion in cash incentives when an agreement to establish the independent Palestinian state is reached.

Hamas leader and the deposed Palestinian premier Ismail Haniyeh today rejected the planned summit between Israeli and Arab leaders. Haniyeh said the only way to establish a Palestinian state is through “steadfastness and resistance” (AP, 24 June). The words used by Haniyeh are interpreted by political analyst as the belief that only through an attack on Israel could Palestinians achieve their statehood.

What is Iran’s position? Iran had some concerns about the Palestinian infighting and its positive outcome for Israel, but the split is final. It is becoming increasingly clear that now Iran is positioning itself fully behind Hamas. Iran’s foreign ministry spokesman told reporters that Palestinian groups should close their ranks and “launch a joint campaign against the Zionist enemy” (IRNA, 16 June). Ali Akbar Valayati, a senior foreign policy advisor to the Supreme Leader, said that the most important factor in Palestine is that the people support Hamas and they continue to stand by them (Jomhuri-ye Eslami, 20 June).

201 Majlis deputies issued a statement supporting Haniyeh’s position (ILNA, 20 June). Tehran’s Friday Imam was unambiguous: The West staged “a coup” and set aside the Hamas government (Ahmad Khatami’s Friday Prayer sermon, 22 June).

As Israel and the West are coordinating their actions to tighten the siege of Hamas in Gaza, the Iranians are reported to help consolidate the Hamas government with money, weapons, and military training. Ma'ariv published a report yesterday claiming that Iran is taking steps to transfer large sums of money to Hamas, and Iranian military experts are already in the Strip (Tel Aviv Ma'ariv, 22 June).

Palestinian Intelligence Director Toufiq Al Terawi actually went further and accused Iran of “playing a major role” leading to the control of Gaza by Hamas (Baghdad Al Mada, 24 June). Al Terawi said “collected evidence confirmed that Iran was the main financier and executioner of Gaza events.” He also supported the reports on Iran’s military aid to Hamas: “we are aware that hundreds of Hamas elements were being trained in Iran and other Arab countries; and that planning for the coup was a joint program coordinated by both Hamas and Iran, and Iran was abreast of all the details” (Baghdad Al Mada, 24 June).

The establishment of a militant Islamic state in the backyard of Israel will not be acceptable to Israel and to the West. Iran’s support of Hamas and its disassociation with the Arab-Israeli summit tomorrow would further isolate Iran in the region. Such isolation would ease concerns on the part of Arab states over tougher economic sanctions against Iran and any plan of attack on the country’s nuclear installations. Iran’s support of Hamas could prove to be extremely dangerous for its own sake.

Further Round of Sanctions

All indications point to the possibility of no breakthrough in the talks between Larijani and Solana tomorrow in Portugal. If the talks fail, we should expect a further round of sanctions against Iran. In the June 16 posting on this blog, Gasoline Crisis in Iran, I discussed the inability of the government to handle the current gasoline crisis, with the implication that any future sanctions against the sale of gasoline to Iran could bring down the economy. Even the limited sanctions so far have already proved costly:

- On the banking front, France’s Societe General became the latest major bank to stop investing in Iran. SocGen late last month withdrew financing for further development of the South Pars gas field (Reuters, 28 may 2007). The Iranian government allocated $720 million from its Oil Reserve Fund to the project (phases 17 and 18), but without SocGen’s financing, the completion of the $5 billion project is in doubt.

- Iran holds second largest gas reserves after Russia. However, it has been unable to build the all-important liquid natural gas (LNG) plants. The compressed gas is cost-efficient to transport over long distances where pipelines do not exist. The US companies Bechtel and KBR control the constructions of almost all LNG plants in the world, and are prohibited to work in Iran. The continued participation of any foreign investors in LNG plants, including France’s Total in Pars LNG, now seems in doubt.

- Oil production has become stagnant at around 4 million barrels a day. The government goal for production of five million barrels a day could not possibly be met. US sanctions against its companies, and secondary US sanctions against non-US companies, for investing in oilfield development has resulted in deteriorating state of the oilfields in the country.

- The Iranian government has transferred home its financial reserves that were previously deposited in European banks for fear of being blocked. The government lost income from interest on these funds. A number of high net worth individuals have also transferred home their deposits in the European bank for the same fears and under pressure from their bank managers. The flow of such considerable cash back to Iran and Ahmadinejad’s expansionary populist economic policies has created an inflation that is getting out of control.

- The IMF is forecasting a 6% growth in GDP if the oil prices remain high. The problem is that almost all the growth will come from oil revenues, making inflation even more out of control.

- The inflation rate is estimated by Iran analysts to be over 20%. With unemployment rate in high teens, such high inflation will create serious problems for the government. Iranian governments in recent memory facing such high inflation and unemployment have fallen.

Latest Report on Iran’s Nuclear Program

Iranian interior minister Mostafa Pourmohammadi today reported that Iran now has 3,000 centrifuges in operation and has already produced and warehoused over 100 kilogram of enriched uranium (ISNA, 22 June 2007).

Pourmohammadi was most probably referring to 100 kg of low enriched uranium (LEU) produced at Natanz. LEU is a form of uranium enriched to contain more than 3.5% U-235. LEU is normally used as the fuel for nuclear power plants. Iran, however, does not have any operational nuclear power plants. The plant at Bushehr, if and when completed, requires LEU that would be supplied by Russia.

LEU can also be used as stockfeed to produce highly enriched uranium (HEU), containing 90% U-235. In terms of enrichment work, the 3.5% material is already most of the way to 90% uranium. HEU is primarily used to build uranium bomb.

The 100 kg stock of LEU reported by Pourmohammadi can be re-enriched to produce more than 60 kg of HEU, enough for an atomic bomb.

In a related development, Iran’s chief nuclear negotiator Ali Larijani on Thursday told Michael Hirsh of Newsweek that Iran would take a “longer stride” in its nuclear program if facing a third sanction by the UN Security Council. When asked what the longer stride would be, Larijani said that it will be announced later (Newsweek online, 21 June 2007).

P.S. The interior ministry this afternoon denied ISNA’s report on the statement made by Mr. Pourmohammadi. ISNA is an Iranian news agency based in Tehran. Mr. Larijani’s office, however, has not yet denied the Newsweek story.

The Government and the Iranians Abroad

The arrest in Tehran of the three Iranian-Americans and not allowing a fourth Iranian-American from leaving the country is wrong and tragic; it is also an indication of the government’s resolve to limit the civil society and its contact with the outside world. For this government, the new ideas of the 21st century should not enter Iran. Under the guise of accusing these Iranian-Americans of organizing foreign-inspired velvet revolution in the country and making false propaganda against Iran, the government in effect wants to cut all the ties of the country’s civil society and its NGO’s with the outside world. The government, with all its bravado about science, technology and progress, prefers its citizens to be ignorant of the world around them. And the government, with all its talks about human capital, wants to keep Iranian-Americans and European-Iranians out of Iran.

The tragic byproduct of the government’s repressive tactics will be the curtailment of the activities of the NGO’s inside the country. More than anytime in recent memory, the NGO’s are needed to supervise the activities of their governments; Iran is no exception. The leadership of the Islamic Republic, however, prefers to rule over the country without such supervision. Our civil institutions, our democratic movements and our sense of pride for our country will all fall victim to misplaced and repressive policies of the government.

News from Iran

Talks of military attack by the US or Israeli Air Forces against Iranian nuclear installations coupled with the reports on the tightening economic sanctions dominated the coverage in the Iranian media. Iranian President Mahmoud Ahmadinejad became the first leader in the Islamic Republic to openly raise his concern over a possible US military attack on Iran. Ahmadinejad said the intelligence he has receive indicate that the US is planning for such attack. The Iranian government also moved to ration the consumption of gasoline by government-owned vehicles but it failed to pass similar regulations in the parliament for private cars. Iran imports nearly half of its rapidly growing domestic gasoline needs and it feels vulnerable to US-led sanctions against the sale of gasoline to Iran. On the regional front, the attack in Samarra against the Asgareyn Mosque caused uproar in the media. The country’s Supreme Leader blamed the US as the responsible party for the attack. Iran also denied a claim by US Secretary of Defense Robert Gates that the Islamic Republic was supplying arms to Taliban in Afghanistan. Earlier in the month, the British Prime Minister Tony Blair had made a similar assertion.

Iran Nuclear Program

· Iranian chief nuclear negotiator Ali Larijani and EU foreign policy chief Javier Solana will meet in Portugal on Saturday 23 June to discuss Iran’s nuclear program.
· The Iranian envoy to IAEA, Ali Asghar Soltanieh, said “nuclear Iran” is now a “reality”; Soltanieh said negotiations were the only way to resolve the standoff with Iran over its nuclear program; Soltanieh denied the published report that Iran’s heavy-water reactor being built at Arak poses a danger to anyone.
· IAEA chief Mohammad ElBaradei called on Iran to stop expanding its uranium enrichment program; ElBaradei said Iran did not have any nuclear power plant running and should have no urgency to increase its enrichment capacity; he said the halt in enrichment would open door to talks and would halt further sanctions by the UN against Iran; IAEA had warned of ‘significant rise” in Iran’s enrichment capacity; diplomats close to IAEA had said that Iran will have 8,000 operational uranium enriching centrifuges by year’s end; in April, IAEA had put the number at 1,300.
· Iranian President Mahmoud Ahmadinejad said Iran doesn’t give a hoot for UN resolutions; Ahmadinejad said just as the previous resolutions did not have any effects on Iran; the Iranian people will keep ignoring any future resolutions too.
· King Abdullah of Saudi Arabia called for a peaceful resolution of Iranian nuclear standoff; King Abdullah also said that Saudi Arabia strongly supports non-proliferation of nuclear weapons.
· Israeli Prime Minister Ehud Olmert called for harsher sanctions against Iran; Olmert also called on the West to institute economic sanctions against Iran beyond the UN Security Council requirements.
· Iranian representative to OPEC Hossein Kazempour Ardabili said Iran will not rule out using oil as a weapon if attacked by the US over its nuclear program; he said if Iran stops exporting oil, the prices would climb above $100 a barrel; Kazempour Ardabili also said that Iran will not have any problem importing gasoline; Iran imports about 40% of its domestic gasoline needs; the gasoline import has been identified as a source of leverage by the US against Iran over its nuclear program.

Iran-US Relations

· Iranian President Mahmoud Ahmadinejad said the intelligence he has received indicate that the US is making plans to attack Iran militarily over its nuclear program; Ahmadinejad said the US will not succeed and Iran will continue to build it nuclear capability.
· US Secretary of Defense Robert Gates accused Iran of supplying arms to Taliban; the Iranian government strongly denied the accusation.
· Iranian Supreme Leader Ayatollah Ali Khamenei said the US and Israel were behind the bombing at Samarra; the blast destroyed the minarets of the Asgareyn Mosque where two of the Shia Holy Imams, the Asgaries, are buried; Khamenei said the intelligence services of the “occupiers” [US] and the “Zionists” [Israel] designed the crime.
· Iranian Foreign Minister Manouchehr Mottaki said Iran is studying Iraqi request for another round of talks with the US to discuss Iraqi security; Mottaki said the talks could be held after assessing results of the first round of negotiations, which took place on 28 May in Baghdad.

Leading Domestic Storylines

· The government started a gasoline rationing program for government-owned vehicles; the price of gasoline was increased by 25% to 41 cents per gallon; the plans for rationing the gasoline by private cars was postponed; Iran imports nearly half of its domestic gasoline needs; any disruption in gasoline imports would have profound effects on the Iranian economy; the rationing plan was to minimize Iran’s reliance on foreign sources of gasoline; US has considered to use the gasoline imports as a leverage in stopping Iran’s nuclear program.
· Iranian foreign ministry spokesman Mohammad Ali Hosseini condemned Queen of England’s decision to grant kinghood to British author Salman Rushdie; Sir Salman was condemned to death by the late Ayatollah Khomeini for writing the novel “The Satanic Verses”; Iran’s foreign ministry spokesman called the British decision an insult to Islam.
· Iranian demonstrators thrown paint and eggs at the guests of a British Embassy’s annual party in honor of Queen’s birthday, the demonstrators succeeded in stopping the guest to enter the embassy building in Tehran; they called for the British Embassy to “shut down” and chanted “death to England” slogans.
· A strong earthquake shook central Iranian province of Qum; the Iranian Interior Ministry announced that there were no reported casualty as a result of the earthquake; the epicenter of the 5.9-Richter quake was in the small town of Kohak in Qum province.

Leading Regional Storylines

· Iran’s Chairman of the Expediency Council Akbar Hashemi-Rafsanjani urged the warring Palestinian factions to end Muslim in-fighting; Iran’s Supreme Leader Ayatollah Ali Khamenei accused Israel of “provoking” the Palestinian in-fighting.


· Iran's foreign ministry spokesman Mohammad Ali Hosseini said Iran has received indications from the Russian president that Russia would not follow through with an offer to allow the US to use a radar station in Azerbaijan as part of an American missile defense against Iran; Hosseini said that the use the radar station in Azerbaijan would cause instability and insecurity in the region.
· Russia will not sell its latest jet fighters to Iran and Syria; the Russian defense export agency, Rosoboroneksport, announced the news; Rosoboroneksport chief Sergey Chemezov told Interfax news agency that Russia has no plans to supply fighters to the two countries.

Gasoline Crisis in Iran

The inability of Ahmadinejad’s government to tackle the growing problem of gasoline consumption in the country and its devastating effect on the economy is a preview of worst days ahead. First, the related facts:

- During the two years of Ahamidenejad’s presidency, the oil prices have risen by $15 a barrel.

- The extra cash has not been invested in long-term development projects and unlike all other Persian Gulf oil producing states, Iran has not used the added income to diversify its economy. Instead, the huge amount of the extra cash on hand has been transformed into more imports and more consumption.

- Greater consumption has, among other things, resulted in the purchase of nearly a million new cars a year. Parallel to this, the gasoline consumption has risen at rates unprecedented in the country.

- The daily gasoline consumption is reaching 80 million liters a day (more than 21 million gallons a day).

- During the past 28 years, the country’s oil refining capacity has not increased appreciably. As the result, with 80 million liters of gasoline consumption a day, Iran needs to import between 30 million to 40 million liters of gasoline a day to meet the demand.

- In addition to gasoline, the government also needs to import some 30 million liters a day of diesel fuel.

- If the country continues to import gasoline and diesel at such levels, it needs to spend nearly all its “Oil Stabilization Fund,” the savings from higher oil prices than budgeted.

In face of such crisis, what has the government done?

- It increased the gasoline price to 100 toumans a liter (41 cents a gallon). This is still among the cheapest gasoline in the world, and it will not curb the demand significantly. And the government actually restored back the price of diesel fuel from 45 toumans a liter (18 cents a gallon) to 16 toumans a liter (6 cents a gallon); basically free!

- The increase of gasoline price to 41 cents a gallon has already worsened the inflation rate, estimated by Iran economic analysts to be at more than 20% annually.

- For fear of added inflationary pressures and popular unrest the government appears to be unwilling to curb the consumption levels through any further price increases.

- As an alternative, the government wanted to ration the gasoline consumption. The reports from Tehran indicate that the plan was to ration 3-4 liters (1 gallon) of gasoline a day at 100 toumans per liter (41 cents/gallon), with additional consumption at four times that price. The plan was postponed after a closed-door meeting of Majlis last Monday resulted in no decision to ration the consumption yet.

- On the whole the government (including Majlis) does not have the political will to tackle this growing problem.

The implications of the government inability to formulate a coherent policy to deal with the crisis are huge. The country is spending all its new-found fortune as the result of increase in oil prices on imported gasoline and diesel fuel. The crisis also has two other profound implications:

- If the West imposes a UN-sponsored sanction against sale of gasoline to Iran, the economy and the whole country will come to its knees within a few days.

- In the absence of any sanctions, the current expenditure on gasoline subsidies will worsen the inflation, already at more than 20%. Inflations at that level can bring, and have brought down governments in Iran.

Brewing Confrontation with the US

US and Israeli Air Forces began large-scale air maneuvers in the Negev Desert in Israel. The week-long exercises are organized to mimic a possible US-Israeli joint military operation against the Iranian nuclear facilities. In a related development, The Jerusalem Post quoted a high-ranking US military officer as saying the US Navy has drawn up plans for a naval blockade designed to cut off Iran’s oil exports. According to the report, the US Navy would not block the Straight of Hormuz but instead would patrol farther out and turn away tankers on their ways to load Iranian oil (Please see posting on 11 June 2007 on this blog).

These days rising tensions over the country’s nuclear program and a sense of “brewing confrontation” between US and Iran, as IAEA chief Mohammad El Baradei puts it, is in evidence in Tehran. President Ahmadinejad became the first Iranian official to openly express concern over a possible military attack on the country. Ahmadinejad told reporters the intelligence he has received indicate that the US is planning an attack on Iran (Keyhan, 6 June 2007).

The Iranian leaders, however, are remaining as defiant as ever, if not indeed more militant, on the nuclear standoff. IAEA reported that Iran could have 8,000 operational centrifuges enriching uranium by the end of the year. 8,000 centrifuges in operation would be a significant rise in Iran’s nuclear capability. On 18 April, IAEA reported the existence of only 1,300 centrifuges. The rise in numbers translates to Iran’s capacity to bring some 30 new centrifuges on line every day. At this rate, within the next two years Iran could have some 30,000 centrifuges enriching uranium.

Iran is set to produce a large amount of enriched uranium, although it does not have even a single nuclear power reactor in operation. Such rush to produce nuclear fuel without a reactor makes sense only if Iran was using this amount of fuel to produce tens of nuclear warheads. Hence, the brewing confrontation: US is on record not to allow a nuclear Iran and Iran is on the verge of becoming nuclear.

Iran Nuclear Capability Rising: IAEA

The UN atomic agency believes Iran could have 8,000 operational centrifuges enriching uranium by December, AFP reported today. The number, if accurate, would be a significant rise in the country’s nuclear capability.

News from Iran

Iran’s worsening relations with the US dominated the media coverage in Iran. The reports on possible military attacks on Iran’s nuclear installations by the US and Israel were extensively covered. Iranian media also covered the reports of a joint air maneuvers by the US and Israeli Air Forces in Negev Desert in Israel. The exercises were seen as mimicking an actual joint operation against the country’s nuclear installations. The government vowed to continue the uranium enrichment program. It warned the West of worst consequences for Western interests across the world if attacked over its nuclear program.

Iran Nuclear Program

· Ali Asghar Soltaniyeh, Iran's ambassador to International Atomic Energy Agency (IAEA), said Iran will continue its uranium enrichment program without delay.
· IAEA chief Mohammad El Baradei said that the “brewing confrontation” with Iran over its nuclear program must be “defused”; El Baradei said he was increasingly disturbed by the current stalemate over the issue; he urged all parties concerned to urgently break the stalemate and defuse any future confrontation.
· Javad Vaidi, a senior nuclear negotiator for Iran met in Vienna with Robert Cooper, a top aid to EU foreign policy chief Javier Solana; Vaidi and Cooper told reporters that they prepared the groundwork for another meeting between Solana and Iran’s chief negotiator, Ali Larijani; however, Vaidi’s scheduled meeting on that day with IAEA’s Olli Heinonen was cancelled; reports from Vienna indicated Vaeedi’s refusal to engage in any substantive discussion over Iran’s nuclear program during his meeting with Cooper led to cancellation of the meeting by Heinonen.

Rising Tensions over Iran Nuclear Program

· US and Israeli Air Forces started a week-long air maneuvers in the Negev Desert in Israel; the exercised are to mimic a possible US-Israeli air attack on Iran’s nuclear facilities; according to video reports of the exercises shown on Lebanese TV, a score of warplanes were being used in the maneuvers; the exercises were dubbed Joint Military Strike against Iranian Nuclear Facilities.
· A senior US military officer has told The Jerusalem Post that senior officers in the US armed forces have thrown their support behind President Bush over any operation against Iran to stop its nuclear progress; he Post quotes the senior officer as saying that the US Navy has also drawn up plans for a naval blockade designed to cut off Iran’s oil exports; according to the report, the US Navy would not block the Straight of Hormuz but instead would patrol farther out and turn away tankers on their ways to load Iranian oil.
· The Pentagon announced that Admiral Michael Mullen, currently Chief of Naval Operations, will become Chairman of the Joint Chiefs of Staff; The top two military officers with responsibilities over any US military operation in Middle East are now navy admirals, although the wars in Iraq and Afghanistan are “ground wars”; the selections indicated that the Pentagon is thinking more about Iran and is selecting commanders best suited to manage future conflicts in the Persian Gulf.
· Iran's acting Deputy Interior Minister Mohammad Bagher Zolghadr said the US interests all over the world would be exposed to danger if Washington launched attacks on the Islamic Republic; Zolghadr said the U.S. bases in the region are within the range of Iran’s medium-range weapons; he said if the security of the Persian Gulf is disturbed, the oil prices will hit $250 a barrel.
· Ali Aqamohammadi, a senior advisor at Iran’s National Security Council, warned that lack of flexibility by the West toward Iran’s nuclear program will have “negative consequences for the world.”
· Iran’s director of the Center for Strategic Studies and former defense minister Rear Admiral Ali Shamkhani denied a DefenseNews.com report that during an interview he had threatened the Arab states of the Persian Gulf; Shamkhani was quoted as saying that Iran will hit the Persian Gulf states militarily and will destroy them if the US or Israel attack Iran; Shamkhani denied the report and characterized the interview as a “total fabrication”; DefenseNews.com said the interview did take place and defended the accuracy of it reporting.
· Israel launched Ofek 7, a satellite for military use; Ofek 7 will concentrate on gathering intelligence on Iran.

Worsening Iran-US Relations

· Iran’s Foreign Minister Manouchehr Mottaki called the continued detention of five Iranian officials by the US military in northern Iraqi city of Erbil “illegal and illegitimate”; Mottaki said Iran “will make the Americans regret taking this illegal and indecent act”; the Iranian foreign ministry has submitted a request to the Swiss Embassy in Tehran [which represents US interests in Iran] asking to meet the five detained Iranian diplomats.
· The Iranian ambassador to the UN filed a complaint with the UN General Assembly and the Security Council against US support of the armed opposition group Jundallah; Jundallah has carried out terrorist attacks in southeastern province of Baluchistan; the Iranian government accused the US support of blatant interference in Iran's domestic affairs.
· Iran criticized the US government for failure to react to a threat against Iran launched by US Senator Joseph Lieberman; Lieberman had called for “aggressive” actions against Iran; he told the CBS news program Face the Nation that any action against Iran could include a military strike.

Leading Domestic Storylines

· Iran’s foreign ministry spokesman Mohammad Ali Hosseini confirmed that Ali Shakeri had been the fourth Iranian-American detained in Iran; the authorities had previously confirmed the detention of Haleh Esfandiari, Kian Tajbakhsh and Nazee Azima; a growing number of prominent human rights organizations as well as political figures have asked Iran to release the four Iranian-Americans without delay.
· Iran’s National Gasoline Smart Card Program went into effect (3); only people with the Smart Cards can purchase gasoline; Naseri, the spokesman for the program, said people who have not received their cards should borrow a card from friends or family members before the rationing is introduced; there were no indications when that the rationing of gasoline would be introduced.

Leading Regional and International Storylines

· Russian Foreign Minister Sergei Lavrov said if the US freezes its plans to build a missile defense shield in Europe, the Iranian nuclear problem could be resolved; Lavrov told ITAR-TASS that building the shield would “seriously complicate” efforts to end the standoff over the Iranian program; Iran analysts believed that Russia was using Iran as a bargaining chip to stop US missile defensive shield program.
· Nicaraguan President Daniel Ortega arrived in Tehran; Ortega said his visit to Iran indicated the start of a new chapter in the expansion of the two countries’ relations; Iran's President Mahmoud Ahmadinejad said that Tehran and Managua will always side with each other and will strive for the establishment of a world order based on justice, peace and brotherhood.

US-Israel War Games / Naval Blockade Plans

US and Israeli Air Forces yesterday began large-scale air maneuvers in the Negev Desert in Israel. According to Israeli Army Radio, the week-long exercises are organized to mimic a possible US-Israeli joint military operation against the Iranian nuclear facilities.

In a related development, a senior US military officer has told The Jerusalem Post that senior officers in the US armed forces have thrown their support behind President Bush over any operation against Iran to stop its nuclear progress (The Jerusalem Post online edition, 11 June 2007.)

The Post quotes the senior officer as saying that the US Navy has also drawn up plans for a naval blockade designed to cut off Iran’s oil exports. Under the most-likely scenario, the US Navy would not block the Straight of Hormuz but instead would patrol farther out and turn away tankers on their ways to load Iranian oil.

The Iranian officials have also made threats of their own against the US interests if and when they are faced with a military attack on the nuclear facilities and/or a naval blockade to cut off oil exports.

The Western analysts believe that Iran can engage in attacks on US interests in the region at anytime, with or without a US military attack on its installations and/or a naval blockade. As such, the analysts argue, the US needs to embrace itself for such attacks at anytime and, at the same time, plan possible military actions against Iran independent and in spite of it.

US Intensifies Two-Track Pressure on Iran

On economic front, the US has stepped up commercial pressure on Iran. On Friday, Washington black-listed four more Iranian companies for their involvement in the country’s nuclear program. According to reports coming out of Israel, the White House has told the Israelis it plans to tighten economic sanctions on Iran and assess their impact at year-end.

On Wednesday, Israel’s deputy prime minister Shaul Mofaz also said that diplomatic efforts to stop Iran’s nuclear program should bear results by the end of 2007 (please see the posting for Wednesday 6 June on this blog).

The Group of Eight, the world’s leading industrialized nations, on Friday threatened to take “further measures” if Iran continues its uranium enrichment program in defiance of UN Security Council resolutions.

On the military front, the Pentagon today selected the chief of Navy Admiral Michael Mulen to head the US military. Admiral Mullen, along with the newly-appointed commander of US Central Command, admiral William Fallon, whose area of responsibility includes the Persian Gulf, are the top two US military commanders who would manage any future conflicts with Iran. The two admirals have extensive experience in aircraft carriers and cruise missile warfare.

An Admiral to Head US Military

The Pentagon announced today that Admiral Michael Mullen, currently Chief of Naval Operations, will become Chairman of the Joint Chiefs of Staff.

The selection of Admiral Mullen to head the US military came only three months after another senior naval officer, Admiral William Fallon, was selected to head the US Central Command (CENTCOM). The area of operation for CENTCOM includes the Middle East and the Persian Gulf.

The top two military officers with responsibilities over any US military operation in the region are now navy admirals. The on-going conflicts in Iraq and Afghanistan are, however, ground wars. These selections must indicate that the Pentagon is thinking more about Iran and is selecting commanders best suited to manage future conflicts in the Persian Gulf. Admiral Mullen during his long career has commanded a guided missile destroyer, a guided missile cruiser and an aircraft carrier strike group. He became the chief of navy in September 2005.

Russia Using Iran as Bargaining Chip

Russian Foreign Minister Sergei Lavrov said today that if the US freezes its plans to build a missile defense shield in Europe, the Iranian nuclear problem could be resolved. Lavrov told ITAR-TASS that building the shield would “seriously complicate” efforts to end the standoff over the Iranian program.

Lavrov did not elaborate on how the two programs are linked. But using the old Kremlin lingo, he made it clear that if a compromise on the missile shield project is worked out with the US, Russia will back US proposals on Iranian nuclear program at the UN.

The US and Russian presidents will meet at Bush family home in Kennebunkport, Maine on July 1-2. Iran is reportedly at the top of their agenda.

Ahmadinejad-Israel Saga Continues

A senior member of the Israeli cabinet suggested today that his country is running out of patience with the US-backed diplomatic overture to stop Iran’s nuclear program. Shaul Mofaz, Israel’s deputy prime minister, said, “I believe diplomatic efforts should bear results by the end of 2007” (AFP, 6 June 2007).

The latest Israeli threat against Iran came a few days after President Ahmadinejad renewed his rhetoric against Israel. Ahmadinejad told a gathering in Tehran that the “reverse countdown for the destruction of Israel has begun” (ISNA, 3 June 2007).

Israel has repeatedly stated that it will not accept the full development of Iran’s uranium processing and enrichment program. At present Iran is producing UF6 gas at uranium conversion facility (UCF) in Isfahan. UF6 is then being enriched by centrifuges at Natanz uranium enrichment facility to produce enriched UF6. The concern is that Iran could use the centrifuge systems to produce highly enriched uranium (HEU) which would then be sent back to Isfahan for reconverting it to natural and enriched uranium metal. The uranium metal is the core ingredient of a nuclear warhead.

Iran argues that the enriched uranium will only be used as the fuel for its nuclear power reactors, and it has the right to operate these reactors. The problem with this argument is that Iran does not have any nuclear power plants in operation.

Iran has reported that it has already produced more than 270 tons of enriched UF6 and it is substantially increasing its capability to produce much more enriched uranium. The present inventory is enough for a number of reactors. In the absence of even a single reactor in operation, Iran’s emphasize to develop its enrichment program could be seen as a strong indication that the program is a part of a nuclear weapon project.

Israel argues that it can not accept a nuclear Islamic Republic. Ahmadinejad’s rhetoric against Israel provides justification for Israel’s concerns.

On domestic front, Ahmadinejad’s rhetoric is unraveling his presidency. The moderate forces in Iran blame the growing international isolation of the country on its president’s call for destruction of Israel.

News from Iran

This week Iran commemorated the 18th anniversary of Ayatollah Khomeini’s death. During the memorial services the Iranian leaders took hard lines on nuclear issues and harshly criticized the US for pushing a new round of sanctions against Iran over its nuclear program. Ayatollah Khamenei and President Ahmadinejad both repeated Khomeini’s characterization of the US as an enemy of Iran and pledged that they would counter any US attempt to halt or to destroy Iran’s nuclear program. The rhetoric coming from Tehran during the week was the harshest heard in recent years.

On regional issues, Iran denied arming the Taliban in Afghanistan to inflict more casualties on Western troops, as alleged earlier by the British Prime Minister Tony Blair. The Iranian president also denied published reports that Iran was supporting militarily and financially the Iraqi militias, especially in Basra region.

Domestically, Iran set the date for the elections of the new parliament, Majlis. The date, 18 March 2008, is already proving to be controversial due to its closeness to Iranian New Year (21 March) and its holiday period. The reformist newspapers are charging that the government wanted to prevent a high turnout which normally favors the moderate and reformist candidates.

Iran continued its detention of the four Iranian-Americans it arrested last month despite calls for their immediate and unconditional release.

The Nuclear Program

· Iran’s Supreme Leader Ayatollah Ali Khamenei said Iran will not beg for the right to attain nuclear technology; Khamenei said that Iran will defend its rights and will never retreat in face of dange; President Mahmoud Ahmadinejad said it was “too late” to stop Iran’s nuclear program; Iran has passed the point where the West wanted it to stop, he said; Ahmadinejad said Iran would not back down in its standoff with the west over the nuclear issue; he said imposing new sanctions against Iran was like playing with the “lion’s tail”; Ahmadinejad added that the Islamic Republic is “invincible” in the face of Western threats; the foreign ministry spokesman Mohammad Ali Hosseini said a probable new set of sanctions by UN Security Council against Iran will not dissuade the country from its nuclear course.
· Iran’s chief nuclear negotiator, Ali Larijani, said after his meeting with EU foreign policy chief Javier Solana that the nuclear standoff could still be settled in the coming weeks; Larijani said for the talks to continue, the UN Security Council must drop preparations to debate a new round of sanctions against Iran; Larijani made a pledge to Solana that Iran will provide answers on past suspicious activities to IAEA.
· Iran’s chief nuclear negotiator Ali Larijani met German foreign minister Frank-Walter Steinmeier over Iran’s nuclear program; Larijani met Steinmeier on the eve of Group of Eight (G8) summit in the German town of Heiligendamm; G8 leaders were expected to discuss the Iranian nuclear issue during their meeting.
· US Secretary of State Condoleezza Rice said Iran’s nuclear civilian program can not have nuclear fuel production capabilities; Rice said the west could not engage in endless negotiations with Iran, while Iran was perfecting its nuclear technology.
· US Secretary of Defense Robert Gates urged the world powers to impose stronger sanctions against Iran to pressure it to halt uranium enrichment; Gates said Iran will be able to build nuclear weapon between 2010 and 2015; Gates added that that some analysts believe Iran could make the weapons as early as 2008 or 2009; Gates said resolving Iran’s nuclear problem militarily is in no one’s interest.

US-Iran Relations

· Iran’s foreign ministry spokesman Mohammad Ali Hosseini said Iran did not need US advice about how to deal with Iranian-Americans who have been detained in Tehran; US President George Bush had condemned the arrests and had called for the immediate and unconditional release of the Iranian-American detainees; Iranian President Mahmoud Ahmadinejad said that the arrest were a judicial matter, independent of the country’s executive branch; the daily Keyhan, part of the Supreme Leader’s House, reported that the detained Iranian-Americans have been charged with fomenting “velvet revolution” in Iran.
· US warned Iranian-Americans and other US citizens against travel to Iran; the State Department said in a statement the American citizens may be subject to harassment or arrest while traveling or residing in Iran.
· Iran’s chief nuclear negotiator Ali Larijani said the US plan to set up a missile interceptor system in Europe to counter threats from Iran was a “joke”; Larijani said Iran did not have long-range missiles capable of reaching Europe; he also that Europe as Iran’s biggest trade partner and not an adversary.


Leading Domestic Storylines

· Iran commemorated the 18th anniversary of Ayatollah Khomein’s death.
· Iranian ministry of interior set 14 March 2008 as the date of the next elections for the parliament, Majlis; reformist newspapers said the date was very close to the start of the Iranian New Year holidays and coincided with an Islamic holiday; they said the ministry’s choice for a date like that was to minimize popular participation in the all-important elections; high turnouts has always favored moderate and reformist candidates.

Leading Regional Storylines

· President Mahmoud Ahmadinejad said with the help of Palestinian and Lebanese people, “the reverse countdown for the destruction of Israel has begun”; Ahmadinejad said the world will witness the destruction of Israel in “near future”.
· Spain strongly condemned the remarks by President Ahmadinejad on Israel’s destruction; Spanish foreign minister Miguel Angel Moratinos told Iran ambassador to Spain that Madrid totally rejects those remarks; the French foreign minister Bernard Kouchner also condemned the remarks; Kouchner called them “unacceptable”.
· Iranian President Mahmoud Ahmadinejad denied US accusations that Iranian intelligence agents were helping fellow Shia militants in Iraq; the Iranian government has denied arming Iraqi militias with advanced missile, including Fajr-3.
· Iranian Foreign Minister Manouchehr Mottaki said Iran will not hold fresh talks with the US on Iraqi security if the US did not change its policies in Iraq; Mottaki said the continuation of the US occupation in Iraq was the root cause of the Iraqi insecurity.
· Afghan President Hamid Karzai said there was no hard evidence of Iran’s shipment of arms to the Taliban; British prime Minister Tony Blair had wrote in an article that appeared in The Economist, that Iran was arming the Taliban in Afghanistan to inflict casualties on Western troops; after a meeting with Karzai, US Secretary of Defense Robert Gates also told reporters that there were no proof Iran had sent arms to the Taliban; Gates said that there were indications weapons were flowing from Iran to Afghanistan into the hands of Taliban fighters, but it was unclear whether Iran was behind the shipment.
· Iranian Foreign Minister Manouchehr Mottaki said the US and Israel seek continuation of tension in Lebanon; Mottaki made the remarks in a meeting with the Syrian President Beshar Al Asad in Damascus; Mottaki added that the US and Israel want to prevent unity among the Lebanese.

Iran Hardens Stance on Nuclear Issue

In the past 24 hours, Iranian leaders have used uncompromising language in their standoff with the West over the nuclear issue. The hardening stance of the leadership runs counter to published reports that the country’s nuclear negotiator Ali Larijani had made some headway in his talks with EU foreign policy chief Javier Solana.

Ayatollah Khamenei today told a gathering at Imam Khomeini’s mausoleum that Iran will not beg for the right to attain nuclear energy and in defending its rights the country will never retreat in the face of danger. Khamenei said Iran’s rights have to be seized with determination.

Earlier, President Ahmadinejad had vowed Iran would not back down in the standoff over its nuclear program. Ahmadinejad said the Islamic Republic was invincible in the face of Western threats.

Foreign ministry spokesman Ali Hosseini said yesterday that the third set of sanctions by UN Security Council can not possibly dissuade Iran from its nuclear course.

These statements were made days after Larijani held talks with Solana in Madrid and announced afterward that the two sides has started examining new ways to settle the nuclear issue.

Ahmadinejad: Reverse Countdown for the Destruction of Israel Has Begun

President Mahmoud Ahmadinejad said today in Tehran that with the help of the Lebanese and Palestinian people, the “reverse countdown for the destruction of Israel has begun.” Ahmadinejad’s remarks were reported this morning by ISNA news agency.

Ahmadinejad also said the world will witness Israel’s destruction in the “near future.”

The Iranian president made the remarks during the ceremonies commemorating the 18th anniversary of Ayatollah Khomeini’s death.

Iran Arming Taliban, Blair Says

British premier Tony Blair in an article appearing in The Economist accused Iran of arming Taliban fighters in Afghanistan in order to stir chaos and inflict more casualties on Western troops.

The Prime Minister's allegation follows the disclosure in The Daily Telegraph that British intelligence believes that Iran has given the Taliban surface-to-air missiles.

Blair believes that Iran and the Taliban share an interest in killing Western troops inside Afghanistan and are co-operating accordingly.

"In Afghanistan, it is clear that the Taliban is receiving support, including arms from elements of the Iranian regime," Blair wrote.

"They believe if they inflict enough chaos, enough casualties of Western soldiers, we will lose the will."

Pentagon Chief Urges Strong Sanctions on Iran

US Defense Secretary Robert Gates urged the world powers today to impose strong sanctions against Iran to pressure it to halt uranium enrichment.

Gates said Iran will be able to develop nuclear weapons between 2010 and 2015, at the latest. He said some analysts believe Iran could develop the weapons as early as 2008 or 2009. Gates urged the UN Security Council to act right now in line with the uncertainty of when Iran could produce its first nuclear weapon.

Using the strongest threatening language yet coming directly from the Pentagon, Gates said, “Having to take care of this problem militarily is in no one’s interest.”

Rice Skeptic on Iran Compromise

US Secretary of State Condoleezza Rice said today in Madrid that she does not see any evidence that the Iranians are prepared to suspend their uranium enrichment program so that negotiations can begin.

In Washington, US State Department deputy spokesman Tom Casey told reporters that Iran, after another round of negotiations between Solana and Larijani, hasn’t change its views and that the US will soon start consultations with UN Security Council permanent members to develop the next round of sanctions.

Majlis Elections Set for 14 March 08

Iran’s interior ministry announced today that the elections for Majlis will be held on Friday 18 March, 2008. The pragmatic/reformist block headed by Khatami-Hashemi-Karoubi troika is expected to challenge the fundamentalist block that currently controls the Majlis and the presidency but lacks a unified leadership.

Bush Demands Iran Free Iranian-Americans

President George W. Bush today strongly condemned Tehran's arrest of several Iranian-Americans and called for their immediate release.

"I strongly condemn their detention at the hands of Iranian authorities. They should be freed immediately and unconditionally," said the president.