News from Iran

The local media highlighted positive reports on Iran’s foreign relations in the wake of the recent US National Intelligence Estimate. President Mahmoud Ahmadinejad became the first leader of the Islamic Republic to perform hajj in Mecca at the personal invitation of Saudi King Abdullah. Ahmadinejad’s visit was seen as a consolidation of warming relations between Iran and Saudi Arabia. Russia began delivering nuclear fuel to Iran’s Bushehr power plant and signed an agreement to sell Iran 130 Tupolev civilian aircraft. Iranian officials rejected calls to suspend their uranium enrichment program now that Russians have provided fuel for the country’s first nuclear power plant nearing completion. On the domestic front, anti-government student protests continued for the second week and twenty-nine reformist and moderate parties formed a grand coalition to challenge pro-government groups in the upcoming parliamentary elections. Former presidents Khatami and Rafsanjani will lead the coalition.

Iran Nuclear Program

· Russia began delivering nuclear fuel to Iran’s Bushehr nuclear reactor; Gholam Reza Aghazadeh, head of Iranian Atomic Energy Organization (IAEO), welcomed Russia’s delivery of nuclear fuel to Bushehr; he said the arrival of Russian nuclear fuel was “particularly important because of Russia’s role in the UN Security Council and 5+1 group”; Aghazadeh said 1,000-megawatt power plant at Bushehr was 95% complete and it was expected to go online in 2008; first consignment of fuel delivered to Bushehr contained 163 main and 17 auxiliary fuel assemblies of U235 isotope enriched by 3.62%.
· Russia announced all deliveries of nuclear fuel to Bushehr will be under IAEA control; a Russian foreign ministry spokesman said Iran has submitted written guarantees that the fuel will be used only for Bushehr; Russia contended “new conditions” have been created whereby Iran should now undertake steps required by UNSC resolutions.
· US President George Bush said Iran now needs to halt enrichment of uranium; a White House spokesman, Gordon Johndroe, also said, “If the Russians are providing the Iranians fuel, the Iranians have no reason to enrich uranium themselves”; President Bush said, “Iran was a threat to peace, Iran is a threat to peace, and Iran will be a threat to peace if we don't stop their enrichment.”
· Iran rejected calls to suspend its uranium enrichment program; IAEO Deputy Director Mohammad Saeedi said delivery of nuclear fuel by Russia did not mean Iran would suspend its enrichment activities; IAEO Director Gholam Reza Aghazadeh said Iran was planning to build a 360-megawatt nuclear power station and needed to continue its enrichment program.

US-Iran Relations

· Iranian President Mahmoud Ahmadinejad called US National Intelligence Estimate on Iran’s nuclear program a “declaration of surrender” by US; he added the NIE was a “change in their attitude” and it was “a correct move.”
· US State Department Acting Undersecretary John Rood said in a conference in Budapest that US needs a shield against Iran’s missile threat.
· Mohsen Hakim, the Iraqi political leader and advisor to United Iraq Coalition, said attitudes of US officials toward Iran has changed for better; Hakim, in Washington for talks with US officials, said US-Iran relations was a topic of discussion; Hakim added, “Perhaps, the change of tone in Washington was consistent with US National Intelligence Estimate (NIE) acknowledging non-diversion of Iranian nuclear program.”
· Iran and US talks were planned at ambassador level; Iranian Foreign Minister Manouchehr Mottaki said there were “no need to raise the level of talks”; Iran agreed to a fourth round of talks with US on Iraqi security; three previous meetings were held in Baghdad earlier this year with a fourth expected to be held in January 2008.

Major Regional/International Storylines

· Iranian President Mahmoud Ahmadinejad became the first leader of the Islamic Republic to perform hajj in Mecca; Ahmadinejad arrived in Saudi Arabia at invitation of King Abdullah; Ahmadinejad’s visit was seen as a consolidation of warming relations between Iran and Saudi Arabia.
· GCC Secretary General Sheik Abdulrahman said Persian Gulf states will not develop their cooperation with Iran before reaching a settlement on three islands of Abu Musa and Greater and Lesser Tumbs claimed by UAE; an Iranian foreign minsitry spokesman rejected any negotiation or arbitration on the islands and said the islands were an integral part of Iranian territory.
· Russia announced it will sell 130 Tupolev civilian aircrafts to Iran; announcement came shortly after Russia delivered first shipment of nuclear fuel to Iran for its Bushehr power plant.
· China and Iran signed a $2 billion dollar oil contract; China agreed to invest in Yadegaran oil fields in southwestern Iran; the contract was the first major oil contract signed after release of US NIE; Iran signed a memorandum of understanding with major Chinese banks to ease banking restrictions on Iranian commercial transactions; US sanctioned a number of Iranian banks, including Bank Melli, Iran’s premier commercial banking institution; Iran wanted to keep Bank Melli operations in China intact.
· Iranian Foreign Minister Manouchehr Mottaki said Iran was getting close to restore ties with Egypt; he added “the Islamic Republic is prepared to open its embassy in Cairo in the shortest time”; Iran’s Speaker of parliament, Gholam Ali Haddad-Adel, was scheduled to visit Cairo in late January; Haddad-Adel will be highest ranking Iranian official to go to Egypt since Iran’s 1979 revolution.
· Iran and Pakistan resumed talks on IPI gas pipeline; India was the third part of IPI (Iran-Pakistan-India) proposed pipeline but did not attend the meeting; officials said Iran and Pakistan reached agreement on final gas sale purchase agreement; the agreement called for Iran to build pipeline to Pakistani border and Pakistan would built pipeline in its territory.
· Iran protested to Azerbaijan over spy trial; Iranian foreign ministry summoned Azeri ambassador to Tehran over “baseless accusations” of Iranian agents plotting a coup against Azeri government; an Azerbaijani court convicted and sentenced 15 people on charges of conspiring with Iranian intelligence services to topple the government of President Ilham Aliyev.
· Iran’s Foreign Ministry Spokesman Mohammad Ali Hosseini condemned Israeli air raids in Gaza; Hosseini said “Israel’s targeted assassinations and killing of innocent civilians are true achievements of Annapolis conference.”
· Foreign Ministry Spokesman Mohammad Ali Hosseini called Palestine conference in Paris “ineffective” and “inefficient”; Hosseini said Paris conference did not examine Palestinian issues fairly.

Major Domestic Storylines

· Hundreds of students held rallies at University of Tehran against Ahmadinejad’s government; the protests were second large demonstration at the university in less than a week.
· Twenty-nine moderate and reformist parties formed a grand coalition to challenge pro-government groups in upcoming Majlis elections; former presidents Khatami and Hashemi Rafsanjani were main figures behind new coalition.
· IRGC Navy staged naval war games in Persian Gulf; IRGC Naval Commander Brig. Gen. Ali Razmjoo said exercises were aimed at “enhancing the combat readiness” of his force; Gen. Ramzjoo said his forces fired surface-to-air missiles at mock hostile targets and tested new weapons and equipment; two-day maneuvers were second phase of “Ettehad-86” (Unity-08) war games.
· Iranian troops killed 12 members of Jundallah rebel group in Iranian Baluchistan.
· Chris du Burgh will sing “The Lady in Red” and will play with Iran’s top pop group Arian next summer in Tehran; the Irish singer will be the first Westerner to play a concert in Iran since 1979 revolution.