Iran Report: March 23, 2005

ASSEMBLY OF EXPERTS CONSIDERS PRESIDENTIAL ELECTION. Supreme Leader Ayatollah Ali Khamenei told members of the Assembly of Experts on 17 March that public participation in the upcoming presidential election will have a positive impact in the face of efforts by the "arrogant powers" to "dominate the world," the Iranian Students News Agency (ISNA) reported. "The vigilance of the people in electing the president, who must be pious and devoted to Islamic and revolutionary values, and must possess stamina and versatility, can have an important impact on the speed of the implementation of the [20-Year] Outlook Plan," he added.

The Assembly of Experts -- a popularly elected body of almost 90 clerics that is tasked with selecting and supervising the supreme leader -- held its semiannual meeting on 15-16 March. On the first day, Ayatollah Ali Meshkini was reelected chairman, ayatollahs Ali-Akbar Hashemi-Rafsanjani and Ebrahim Amini, were elected vice chairmen, and Qorban-Ali Dori-Najafabadi and Ahmad Khatami were elected secretaries, IRNA reported. The assembly's final statement, issued on 16 March, addressed the upcoming presidential election. "People should vote for an individual who will defend the ideals of the Islamic revolution and who will give priority to solving people's economic problems," it stated. (Bill Samii)

PREELECTION POLL PREDICTS TWO-ROUND ELECTION. Some 51.3 percent of the 7,100 people polled by IRNA in East Azerbaijan, Fars, Hormozgan, Isfahan, Kermanshah, Khorasan, Khuzestan, Mazandaran, Sistan va Baluchistan, Tehran, and Yazd provinces said they will "definitely" vote in the June 2005 presidential election, "Iran" newspaper reported on 13 March. Of those polled, 38.2 percent said they favored the reformists and 37.4 percent said the president's political tendency is irrelevant to them, while 56.6 percent said they did not care if the president is a cleric. According to the same survey, IRNA reported on 13 and 14 March, the favorite candidates are Ayatollah Ali-Akbar Hashemi-Rafsanjani, former parliamentary speaker Hojatoleslam Mehdi Karrubi, and former Foreign Minister Ali Akbar Velayati. None of the candidates would win an outright 50 percent or more in the first round, however, which would necessitate a second round in the election. (Bill Samii)

FORMER PRESIDENT STILL NONCOMMITTAL. Former President Ayatollah Ali-Akbar Hashemi-Rafsanjani continues to hold off on making a firm commitment to running in the June 2005 presidential election, saying on 14 March, "I have complete readiness [to be a candidate] in the elections, but I believe it is [too] early to make a decision," IRNA reported. He predicted that viable candidates will emerge and he will not need to run for the post he held from 1989-1997. He said on 13 March, however, that "As we are getting closer to the election, I feel my responsibility is getting heavier," Mehr News Agency reported. (Bill Samii)

POLICE CHIEF CONTEMPLATES PRESIDENTIAL RUN. Mohammad Baqer Qalibaf, the chief of Iran's national police force, announced on 12 March that he is considering running in the June 2005 presidential election, IRNA reported. He identified three areas he would focus on -- the economy, foreign affairs, and "social capital." Referring to the economy, he said, "The people's buying power has not seen suitable growth; we have even seen stagnation in certain areas." Turning to foreign affairs, he said, "Given Iran's outstanding geopolitical weight and the role which the country can play at the regional and global level, we have not properly tapped these capacities." And regarding the issue of "social capital," he said, "In the area of protecting our social capital, we face challenges which make us lose our productive role in the fields of science, politics, economy, and wealth as well as our social identity." Qalibaf said he would run if he could fulfill his objectives in these areas. (Bill Samii)

REFORMISTS CONSIDER PRESIDENTIAL OPTIONS. Islamic Iran Solidarity Party Deputy Chairman Mohammad-Reza Khabbaz said on 13 March that his organization has proposed creating a five-member committee to select the reformist presidential candidate, Mehr News Agency reported. Khabbaz said the selectors would be President Mohammad Khatami, former Prime Minister Mir-Hussein Musavi, Militant Clerics Association members Hojatoleslam Mohammad Asqar Musavi-Khoeniha and Hojatoleslam Mohammad Musavi-Bojnurdi, and Qom seminarian Ayatollah Hussein Musavi-Tabrizi.

A prospective reformist presidential candidate, Mardom Salari Party Secretary-General Mustafa Kavakebian, said in a 10 March speech in the northeastern city of Khalkhal, "I, as a little man among the nation's children, intend to propound the new discourse, meaning that the elite have been kept outside the bounds of power for 26 years and feel compassion for the system [and] should find their place within the ranks of those in power," "Mardom Salari" reported on 12 March. Kavakebian said 12,000 people in the country have doctoral degrees, but ministers, ambassadors, and the country's senior leaders come from a group of only 2,700 people. He noted that some officials have seven or eight different positions. Kavakebian said the government is inefficient, because many of those in positions of power get there through "nepotism, cliques, and windfall-seeking." He said Iran has not fully realized "all aspects of religious government and Islamic values." (Bill Samii)

'CONVERGENCE' IMPORTANT IN IRANIAN POLITICS. The term "convergence" has gained currency recently in describing the modern newsroom, where the most modern technologies, skills, and methods are employed to relay information in a timely and useful fashion via a variety of formats. But in Iran, "convergence" (hamgerai) is used as part of the political discourse.

Conservative commentator Masud Dehnamaki said in an interview in the 2 March "Farhang-i Ashti" that divisions in the conservative Coordination Council of the Islamic Revolution Forces could yield new presidential candidates, but it is important to strive for "convergence." Addressing the same issue, columnist Hussein Safar-Harandi wrote in the 21 February "Kayhan" that the conservatives' failure to introduce one presidential candidate shows that they face "serious obstacles to their convergence."

Reformists also discuss convergence, with former legislator Hussein Ansari-Rad saying that free elections, publicly defined national interests, and citizens' exercising their rights represent the convergence of the people and officials, "Farhang-i Ashti" reported on 1 March. He added, "All kinds of disruption in the participation of the people in power and in the administration of the country would jeopardize this convergence."

"Convergence" is also used in a foreign-policy context, with Defense Minister Ali Shamkhani saying on 30 January: "Iran believes one of the effective ways in confronting expansionist ambitions of the world arrogance and the Zionist regime is to strengthen convergence and unity among regional countries," IRNA reported. (Bill Samii)

STUDENTS, TEACHERS, WORKERS STAGE PROTESTS. The Islamic Association of Amir-Kabir University announced that its recent sit-in was only an initial step, "Iran News" reported on 16 March. The association explained that, by it's actions, it is protesting "the antistudent establishments at this university."

An unspecified number of students participated in the sit-in at Amir-Kabir University on 12 and 13 March. They were protesting against the imposition of a "security climate" on universities and the presence there of "rogue elements," or militiamen affiliated with the Islamic Revolution Guards Corps (IRGC), Radio Farda reported on 13 March, citing student Mehdi Hariri. "We are in the second day...[and] not planning to stop...yet," Hariri told Radio Farda. He said the Basij militia active on campuses is intended "to oppose the real demands" of students. The militias are financed by "outside powers," parliament, and "certain other bodies inside universities," he told Radio Farda.

The Office for Strengthening Unity, an umbrella student group, has issued a statement backing the students, and members recently met with Higher Education Minister Jafar Tofiqi to convey student grievances, including the increasing difficulty of holding gatherings inside universities, Radio Farda reported.

Separately, a group of part-time teachers gathered outside parliament on 13 March to protest their work conditions, iribnews.ir reported.

In another job action, 200 employees of a refrigerator factory in Luristan Province demonstrated in front of the governorate in Khoramabad on 14 March, Radio Farda reported. The workers complained that since the factory was privatized in 2003 they have not received their wages or benefits on a regular basis and that five months have passed since they were last paid. The workers said that the factory does not get raw materials, so it cannot manufacture refrigerators. One of the workers, Morad Davudi, urged the government to pay attention to their demands.

There have been several incidents of labor and student unrest in Iran in recent weeks (see "RFE/RL Iran Report," 14 March 2005). (Vahid Sepehri, Bill Samii)

SCHOLARS VIEW DEMOCRATIC EFFORTS IN IRAN. President George W. Bush expressed his support for Iranians' democratic aspirations during a 16 March news conference in Washington, RFE/RL reported. He said, "I believe that the Iranian people ought to be allowed to freely discuss opinions, read a free press, have free votes, and be able to choose amongst political parties. I believe Iran should adopt democracy." Bush has touched on this theme several times since his inauguration (see "RFE/RL Iran Report," 6 and 14 February, 1 and 14 March 2005.

A few days earlier, on 10 March, Bush extended the "national emergency with respect to Iran" because of Iran's support for terrorism, its active opposition to the Middle East peace process, and its pursuit of weapons of mass destruction, according to the State Department website (http://usinfo.state.gov) (see "RFE/RL Iran Report," 15 March 2004). The national emergency regarding Iran was declared in Executive Order 12957 of 15 March 1995. It is distinct from the national emergency declared by President Jimmy Carter on 14 November 1979 by Executive Order 12170, "to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the situation in Iran" (see "RFE/RL Iran Report," 15 November 2004). Extension of EO 12957 continues the ban on U.S. investment in Iran's energy sector.

Hoover Institution Research Fellow Abbas Milani asserted at a 15 March symposium in Washington that Iran's "Democratic Movement" is very much alive. Milani explained that he was not talking about the reformist political organizations associated with President Khatami's 1997 election, suggesting that they are a spent force. The real democratic movement, he said, includes women, who have been forceful defenders of their rights since the 1979 revolution. He noted that women are active in all spheres and in the early 1980s they rejected the government's generous offer of early retirement. The prevalence of NGOs, Milani said, is another sign of a democratic movement. Milani said the Iranian diaspora can make a contribution to democratic efforts, and he saw cleavages within the regime as a hopeful sign.

Another scholar was less sanguine. Speaking at the same symposium, Hoover Institution fellow Michael McFaul said that Iran has some things in common with Georgia and Ukraine, which recently underwent relatively peaceful revolutions. However, McFaul noted that a number of important factors that existed in these post-Soviet states are absent in Iran. He said there is no economic crisis in Iran, and that the Iranian regime is more ruthless than the deposed governments in Georgia and Ukraine proved to be. He dismissed the political cleavages as disputes between, for example, hard-liners and semi-hard-liners, terming them political disputes that do not touch on fundamental issues about the state or the system. McFaul noted that Iran does not have an independent media or independent election monitors to report on episodes of malfeasance. In Georgia and Ukraine, according to McFaul, there was anger over violations of the constitution and the public and the media wanted their leaders to adhere to the constitution. In Iran, the constitution itself is the problem. McFaul also said Iran does not have a united or mobilized opposition.

Milani and McFaul, as well as co-panelists Ellen Laipson of the Henry L. Stimson Center and Larry Diamond of the Hoover Institution, all said that as much as Iranians dislike their government, they are very likely to have a sharply nationalistic reaction if a foreign power attacks Iran.

Tehran, it seems, remains very concerned about the possibility of U.S. military action. In an article published in a prestigious U.S. journal ("Middle East Policy," v. XII, n. 1, Spring 2005; provided courtesy of Blackwell Publishing), Foreign Minister Kamal Kharrazi warned the United States against interference in Iranian domestic affairs. Kharrazi writes that "foreign armies cannot bring democracy," adding that "the illusion that reform and democracy can be dictated from outside must be abandoned." According to Kharrazi, "foreign interventions...tend to spawn resistance and undesirable outcomes." Kharrazi claims that foreign involvement could undermine a country's reform process, and adds that such a process and democratization must be "homegrown and country specific, rather than imposed from outside."

In other parts of the article, Kharrazi denies that Iran is interfering in Iraqi affairs, claims that Iran is a stabilizing force in the region, and calls for a multilateral regional security framework. Kharrazi defends Iran's nuclear ambitions and claims that Supreme Leader Ayatollah Ali Khamenei has issued a religious decree against developing weapons of mass destruction.

The Iranian legislature, in its 9 March session, approved a special budget for discovering and countering U.S. plots and attempts to interfere in the country's domestic affairs, IRNA reported. The size of the budget was not disclosed. The legislation permits the cabinet to dispense up to 9 billion rials (approximately $1.14 million) to any foreign country or organization that acts in accordance with the objectives of the law. The budget can also be used for informing the public about the American "cultural onslaught," filing complaints against the U.S. in international courts, and filing complaints on behalf of victims of chemical weapons during the Iran-Iraq War.

"The Los Angeles Times" reported on 4 March that the White House is trying to determine how to use a $3 million budget to foster opposition activities in Iran. (Bill Samii)

KHATAMI CONCLUDES THREE-STATE TOUR. President Khatami returned to Tehran on 13 March -- one day after he left Venezuela, the last stop in a three-country trip, IRNA reported on 13 March (see "RFE/RL Iran Report," 14 March 2005). In Venezuela, Iranian and Venezuelan representatives signed 25 cooperation accords in industry, housing construction, sea transport, farming, and oil, EFE and Venezuela's univision.com reported on 12 March. Khatami inaugurated a joint-venture tractor construction plant on 12 March in Ciudad Bolivar, south of Caracas, which should make 5,000 tractors a year, EFE reported. The two states agreed to build the plant in December 2003, when President Hugo Chavez went to Tehran, AFP reported. The two countries are also to build a cement plant, set to produce one million tons of cement a year from 2006, EFE added. A statement signed by the presidents backed Iran's peaceful nuclear program and bid to enter the WTO, and praised the visit as boosting the "strategic alliance" of the two states, EFE reported. (Vahid Sepehri)

TEHRAN CONSIDERS WOLFOWITZ WORLD BANK NOMINATION. An Iranian state radio analyst using the name "Mr. Fathi" discussed on 17 March the White House's nomination of Deputy Defense Secretary Paul Wolfowitz to head the World Bank. Fathi argued that the nomination has upset many governments because Wolfowitz is a "neoconservative who is the planner of America's attack on Iraq." Fathi suggested that Wolfowitz does not have the expertise to head the global development bank. Fathi acknowledged that Wolfowitz's time as ambassador to Indonesia, when that country received loans from the World Bank, contributed to poverty eradication. The Iranian state radio analyst cited personnel moves involving Undersecretary of Defense for Policy Douglas Feith and Undersecretary of State for Arms Control John Bolton, as well as Condoleezza Rice's move from national security adviser to secretary of state, as evidence that President Bush is increasingly sensitive to the international community. "By sending the neoconservatives to political and economic institutions, he wants to make them familiar with international realities and show them that there is extensive opposition to American policies in the international scene," Fathi said. The Wolfowitz appointment, Fathi said, marks the decline of neoconservative influence in U.S. defense institutions. (Bill Samii)

RADIO FARDA ON IRAN AND TERRORISM: Difficult U.S., Iran Relations Marked By Mutual Distrust (Part 1). Iran has made great strides in recent years in rebuilding bridges to Europe and Asia after the tumultuous early years of the Islamic Revolution. Those years saw the new Islamic regime seeking to export its revolutionary values abroad and assassinating opponents. The early excesses led many countries to regard the Islamic Republic as a rogue state and to try to isolate it politically and economically.

Today, Iran claims its right to again be a full member of the world community. But doubts linger about how much Iran has moved away from its use of terrorism as a political tool. Washington, for example, still considers Iran to be a state sponsor of terrorism and cites as evidence what it says is Tehran's continued support of Middle Eastern terrorist groups, the killings of dissidents in Iran, and interference in Iraq. Why does Washington view Tehran as part of an "axis of evil" and as an enemy in the global war on terrorism?

In an effort to find the answers, Radio Farda issued a four-part series on Iran and terrorism. Part 1 looks at the difficult historical relationship between the United States and the Islamic Republic -- a relationship both sides say has been marked by terrorist actions by the other. This series is based on material prepared by Radio Farda's Mehdi Khalaji and Ardavan Niknam, with additional reporting by Parichehr Farzam. This article is also available on the RFE/RL website: http://www.rferl.org/featuresarticle/2005/3/6F308FEC-5954-4318-80B0-1BF30124D108.html

In Washington's eyes, 4 November 1979 marked the beginning of the Islamic Republic's state sponsorship of terrorism. That's when a crowd of militants unopposed by police stormed the U.S. Embassy in Tehran. The well-organized attackers took 52 American members of the staff hostage and held them for 444 days. By the time the incident ended, in January 1981, the United States had severed diplomatic ties with Tehran and had attempted -- unsuccessfully -- to liberate the hostages in a commando operation.

U.S. President Jimmy Carter announced the failure of the American commando operation this way: "I share the disappointment of the American people that this operation was not successful." The rescue operation had to be unexpectedly aborted after a helicopter developed engine trouble in a staging area in the Iranian desert. The mission ended in the deaths of eight Americans, as two U.S. transport planes collided.

Gary Sick was the principal White House aide for Iran during the Islamic Revolution and the hostage crisis. He says those events continue to shape the tense relationship Tehran and Washington have today: "A lot of this also goes back to the early days of the revolution, which was seen not only as a revolution against the Shah but a revolution against the United States. The concept of 'Death to America,' the 'Great Satan' and other such slogans and words have become very much part of the revolution, particularly after the mass demonstrations associated with the takeover of the U.S. embassy. So it is very much part of Iran's domestic politics. At the same time, the United States suffered greatly because of the takeover. And Iran became the U.S.'s 'Satan.' They are now part of the axis of evil. Many politicians have identified them as the sort of permanent bad guys in the Middle East and that, of course, is increased by the fact that Israel regards Iran as its number-one enemy. So, between Israel and the U.S., the rhetoric on the American side is in some cases no less as dramatic as on the Iranian side. And this has become part of American domestic politics, too, which immensely complicates any kind of discussion or any hope for developing better relations."

For Tehran, the hostage taking also remains a powerful symbol. But it portrays the event as a just reaction against what it calls decades of U.S. exploitation of Iran.

As an example, Tehran charges the United States with helping orchestrate the 1953 coup that toppled the government of Prime Minister Muhammad Mossadeq after he nationalized Iran's then foreign-dominated oil industry. Some U.S. involvement was subsequently acknowledged by U.S. Secretary of State Madeleine Albright in 2000.

Tehran also saw the United States as propping up the government of Muhammad Reza Shah Pahlavi, which was overthrown in the Islamic Revolution in January 1979. Revolutionary leaders regarded the Shah's government as corrupt and ruthless in its use of its state security organization, SAVAK, to target opponents.

The leader of the Islamic Revolution, Ayatollah Ruhollah Khomeini, made anti-Americanism a principle of the Islamic Republic's foreign policy, lashing out at Washington in many of his speeches: "We are here to prevent America committing evil acts, to defend ourselves. We do not expect America to do any good to us. We trample upon America in these matters. We will not let it interfere with our affairs. Nor will we let any other party interfere [with] us. And if they want to invade, we will not let their planes land. We will kill their paratroopers in midair."

Today, relations between the United States and Iran continue to be characterized by hostile statements on each side. Occasional attempts at starting talks to ease tensions have always run aground due to preconditions set by both sides.

Iran says there can be no talks until the United States first ends it efforts to isolate Iran through unilateral sanctions.

The United States says there can be no talks until Iran ends what it charges is its state sponsorship of terrorism and its rejection of the Arab-Israeli peace process. Washington also wants Tehran to renounce any efforts to acquire nuclear weapons and long-range missiles.

U.S. Vice President Dick Cheney put Washington's position toward Iran this way in a recent statement: "[Iran] has been a major source of state-sponsored terrorism, if you will, and [is] devoted to the effort to destroy the peace process. We find that clearly something that we can't accept, and we've made clear our opposition to that, as well as to their efforts to acquire weapons of mass destruction."

Iran denies it supports terrorist groups or is seeking to acquire nuclear weapons.

U.S. Accuses Iran Of Extending Its Support For Mideast Terrorist Groups (Part 2) To back up its charges that Iran is a state sponsor of terrorism, the United States cites evidence it says proves that Tehran provides financial and possibly some weaponry to militant groups in the Mideast opposed to Israel. These militant groups -- including Lebanon's Hizballah and radical Palestinian Islamic groups like Hamas -- have previously carried out or continue to carry out attacks that kill civilians as part of their conflict with the Jewish state.

Iran does not hide its close relations with Hezbollah, which include meetings in Damascus or Tehran with leaders of the group. But it calls the Shi'a Hizballah -- which helped force Israeli troops from southern Lebanon in 2000 -- a liberation movement, not a terrorist group. The Islamic Republic extends the same terminology to Sunni Palestinian groups like Hamas because they also are fighting to evict Israel from what Tehran says is Muslim land. Tehran does not recognize Israel as a state.

Part 2 of RFE/RL and Radio Farda's four-part series on Iran and terrorism looks at the evidence cited to substantiate accusations that Iran supports militant groups in the Middle East. This also examines more recent U.S. charges that Iran is extending this same pattern of support to radical groups opposing the U.S. intervention in Iraq. Both sets of accusations are a central cause of the tensions that continue to prevent Washington and Tehran from re-establishing relations 26 years after Iran's Islamic Revolution. This series is based on material prepared by Radio Farda's Mehdi Khalaji and Ardavan Niknam, with additional reporting by Parichehr Farzam. This article is also available on the RFE/RL website: http://www.rferl.org/featuresarticle/2005/3/27490CEF-998D-4EBC-8176-A24CE9C37CDA.html

Immediately after taking power in Iran, the Islamic Republic's founder, Ayatollah Ruhollah Khomeini, called for exporting the Islamic Revolution to other countries. In one of his messages, Khomeini said "we will not rest until the slogan, 'There is but one God and Muhammad is his Prophet,' echoes through the whole world."

He considered Israel -- which had good ties with the deposed Shah and is a close ally of Washington -- an enemy in his global struggle, second only to the United States. The reason was what he considered Israel's illegitimate occupation of Muslim land.

The feelings about Israel were expressed in propaganda campaigns aimed at both domestic and foreign audiences. In Iran, the last Friday of the Muslim fasting month of Ramadan was proclaimed as Qods Day. Qods is the Arabic name for Jerusalem. Qods Day was to remember that the city -- Islam's third holiest after Mecca and Medina -- is under the control of a non-Muslim power.

Ayatollah Khomeini described Qods Day as marking a Muslim struggle not only against Israel but all "arrogant" powers: "Qods Day is a day to warn all superpowers that Islam is no more under their domination through their evil mercenaries."

When Israel invaded Lebanon in 1982, the conflict with the Palestinians spread to include a country with a sizable Shi'a community. Shi'a Iran responded by supporting the Lebanese Shi'a Hezbollah as a guerrilla force battling Israel's establishment of an occupied "buffer zone" across much of southern Lebanon.

Hajir Teymourian, a Middle East expert in London, describes Tehran's activity this way: "The most important terrorist organization that Iran helped form was Hizballah, which was set up in 1982 by Iran's ambassador in Lebanon, Ali Akbar Mohtashami-Pur. According to journalists, it still receives tens of millions of dollars of economic and military aid from Iran annually. For 12 years, Hizballah was the major kidnapper of Western citizens in Lebanon, and caused Iran's government to be internationally isolated as a terrorist state -- an isolation that still continues -- and inflicted billions of dollars of damages on Iran's economy. I think no one doubts that [the militant Islamic groups] Hamas and the Islamic Jihad are also supported by Iran."

On the world stage, Tehran always denied that it gave military support to Hizballah, a group that not only became notorious for kidnapping Westerners in Lebanon in the 1980s but also for killing more than 240 U.S. soldiers in a 1983 suicide bombing of their Beirut barracks. It also hijacked a U.S. commercial airliner in 1985.

But inside Iran, figures such as Hassan Abbasi, a high-ranking commander of the Revolutionary Guards and head of the Islamic Republic's Center for Doctrinal Studies, openly spoke of the country's close ties with Hezbollah. He described the group's activities as "sacred:" "If something can be done to terrorize and scare the camp of infidelity and the enemies of God and the people, such terror is sacred. This terrorism is sacred. Lebanon's Hizballah was trained by these very hands. Pay attention! Do you see these hands? Hizballah, Hamas, and Islamic Jihad were trained by these very hands."

Gary Sick was the principle White House aide for Iran during the Islamic Revolution and is a prominent U.S. expert on the Islamic Republic. He says factional struggles within the Iranian establishment have made it hard to know whether the support of Hizballah comes directly from Iran's elected government or, instead, from hard-line organizations like the Revolutionary Guard, which enjoy considerable independence.

"Obviously, Iran claims absolutely that it does not support terrorism. But it does, however, make no apologies that it supports Hizballah, which from the Iranian point of view and from Hizballah's point of view is fighting a war of liberation against Israel. They consider that a legitimate activity. They deny that they, in fact, train and support terrorist activities. Iran has a particular problem, and that is that Iran is comprised of two or three different governments, different groups of people, different factions, each of which has a certain amount of control over things that happen. It is possibly very true that people such as President [Mohammad] Khatami may not, in fact, even know what people in some parts of the Revolutionary Guards, for instance, are doing with Hizballah. But, in any case, the government is held responsible. So Iran has created a problem for itself to some degree by its rhetoric, very strong rhetoric, which some people say is more 'Palestinian' than the [rhetoric of the] Palestinians themselves."

Tallal Salman is editor of Lebanon's "Al-Safir" daily. He believes Iran not only supports Hizballah but also tries to extend support to Palestinian militant groups -- though it is logistically more difficult to do so: "Any resistance [movement] has its own conditions. Lebanon is geographically tied to Syria, and in terms of military support and training, Iran does have the means to help Hizballah. But it is much more difficult in Palestine. Iran obviously gives political support to Palestinian groups, and also other forms of support that we may not be able to detect. But I believe that even today, there is an organic connection between Iran, Hizballah, and Palestinian groups."

In one sign of support for Palestinian militant groups, Iran hosted former Palestinian leader Yasser Arafat as one of its first foreign visitors immediately after the Islamic Revolution. At the time, many Iranians reportedly named their newborn sons Yasser in enthusiasm for the Palestinian cause. More recently, in January 2002, Israel stopped a ship loaded with arms which Arafat eventually acknowledged was destined for the Palestinian Authority. Both Israel and the United States said the arms originated in Iran, which Tehran denied.

But as Arafat pursued on-and-off peace talks with Israel, Iran's relations with him cooled. Tehran saw his attempts to negotiate as falling short of its own policy of fully opposing the Jewish state.

In recent months, Washington's concerns over Iran as a sponsor of terrorism in the Middle East have shifted from the Arab-Israeli conflict, further east to Iraq.

Kenneth Katzman is a regional expert with the Congressional Research Service in Washington, D.C. He says the concern for many in Washington is that Iran is supporting groups in southern Iraq who might want to form a nondemocratic, strict Islamic government modeled after Iran.

Iraqi and U.S. officials have accused Iran -- as well as Syria -- of interfering in Iraq by permitting groups in their countries to supply Iraqi insurgents with money and other resources.

U.S. President Bush repeated the charges against both countries recently. He said: "We will continue to make it clear, to both Syria and Iran, that -- as will other nations in our coalition, including our friends the Italians -- that meddling in the internal affairs of Iraq is not in their interest."

Iran and Syria reject charges of interfering in Iraq. Last month (16 February) the two countries declared that they had formed a mutual self-defense pact to confront "threats" -- an apparent reference to the United States.

Outside of the Middle East, Iran also appears to have sought to use its aid to Bosnia-Herzegovina's Muslims during the conflict there to secretly train fundamentalist groups.

Analyst Nima Rashedan says much of the evidence of such activities comes from documents seized by NATO forces in Bosnia-Herzegovina: "This is a case that happened in a place in Bosnia. Before the Dayton Accords and the presence of the United States and NATO in Bosnia, the Islamic Republic had sent groups to Bosnia, including the Revolutionary Guards' Qods Force, led by Mohammad Reza Shams Naqdi, and his deputy, Hussein Allahkaram, based near Sarajevo -- another group from the Intelligence Ministry -- who had set up a camp, training fundamentalists close to [Alija] Izetbegovic's Democratic Action Party, to establish the intelligence apparatus of Bosnia. Later, NATO attacked the camp and arrested a number of people, including Iranian intelligence officials. The most interesting point was the discovery of documents that were part of the curriculum for the training of Bosnian intelligence recruits by Iranians. Among the instructions in the texts were methods for killing opposition figures and silencing journalists. That is, the Intelligence Ministry instructed a foreign organization's members how to intimidate, hunt, kidnap, eliminate, and threaten the families and the financial sources of journalists."

(Part 3 of Radio Farda and RFE/RL's series on Iran and terrorism, which will be in next week's "RFE/RL Iran Report," looks at charges that hard-line elements of the Iranian regime have used terrorism to silence dissidents at home. Part 4 examines the continuing impact of the Salman Rushdie affair on Iranian foreign relations.)

IRAN-PAKISTAN-INDIA PIPELINE IMPERILED. As the owner of the world's second-largest proven natural gas reserves, Iran is keen to exploit this resource as a source of revenue. It is therefore pursuing gas export deals with a number of countries.

One of the biggest potential customers so far is India, and negotiations for a pipeline stretching across Pakistan have been going on since the mid-1990s. A recent flurry of diplomatic visits suggested that the deal was about to be concluded, but U.S. security concerns and Indian anger over Iranian business practices are putting this in doubt.

Iran and India signed an agreement for an overland natural gas pipeline in 1993, and in 2002 Iran and Pakistan signed an agreement on a feasibility study for such a pipeline. India-Pakistan tensions over Kashmir and related security concerns have delayed the project. In late-February and early-March, diplomats from all three countries said a deal would be signed soon. Iranian Foreign Minister Kamal Kharrazi said the pipeline would be 2,700 kilometers long, and India would buy 7.5 million tons of LNG [liquefied natural gas] a year for 25 years (see "RFE/RL Iran Report," 7 March 2005).

On 16 March, however, Indian Petroleum Minister Mani Shankar Aiyar announced that his country might withdraw from the gas deal. "We will not buy gas from Iran if we cannot sell it in India," Press Trust of India reported him as saying. Aiyar explained that Iran wants to charge as much for natural gas as it does for LNG [about $4 per million British thermal unit (MBTU)], whereas the main Indian consumers -- the fertilizer and power sectors -- are unwilling to pay more than $3 per MBTU. With the addition of transportation and transit charges to the Iranian price, Aiyar said, the gas would end up costing $4.50 per MBTU. Aiyar added that India and Pakistan will need approximately 200 million standard cubic meters of gas daily, and Iran should offer a special price for such a large order.

Tehran, furthermore, is insisting on a "take-or-pay" agreement, in which India must pay for the agreed amount of gas even if it does not take delivery of it, Press Trust of India reported on 9 March. India reportedly prefers a "supply-or-pay" contract, in which Iran must deliver gas to the Indian border or pay for the contracted quantity. Tehran also rejected India's request for natural gas that is rich in petrochemicals, preferring instead to deliver "lean" gas that does not contain butane, ethane, or propane.

It could be a coincidence, but Aiyar's suggestion that the deal could fall through comes at the same time that U.S. Secretary of State Condoleezza Rice is visiting India and Pakistan. In fact, she referred to the proposed pipeline during a 16 March press conference in New Delhi, RFE/RL reported. According to Rice, "We have communicated to the Indian government our concerns about gas pipeline cooperation between Iran and India. I think our ambassador has made statements in that regard and so those concerns are well known to the Indian government."

The timing of the Indian petroleum minister's comments suggest that New Delhi is pressuring Tehran for a better deal, and it could be taking advantage of Rice's visit to leverage its position.

India's Other Suppliers... India is a huge and growing natural-gas market. According to the U.S. Energy Information Administration (EIA; http://www.eia.doe.gov/emeu/international/contents.html), natural gas use in Iran was nearly 25 billion cubic meters in 2002 and is projected to reach 34 billion cubic meters in 2010 and 45.3 billion cubic meters in 2015. India produces gas and has worked with outside partners -- including Bechtel, Gaz de France, General Electric, Total, and Unocal -- to increase production, but it is looking to other countries to fulfill its requirements.

One idea is to connect Bangladesh's natural gas reserves with the Indian gas grid. Burma could be a source of natural gas, too. Two Indian companies -- Oil and Natural Gas Corporation (ONGC) and Erstwhile Gas Authority of India, Ltd (GAIL) -- own equity in Burmese natural gas reserves, and Burmese officials have indicated an interest in running a pipeline to West Bengal in India.

Qatar -- with the world's third-largest natural-gas reserves (14.4 trillion cubic meters) -- is another competitor for the Indian market. India's Petronet and Qatar's Ras Laffan LNG Company (Rasgas) signed an agreement for the provision of 10.3 billion cubic meters per year of LNG, and deliveries began in January 2004, according to the EIA.

Indian Petroleum Minister Aiyar visited Moscow and Kazakhstan in late February to discuss energy issues. He reportedly said that India is willing to pay $2 billion for a 15 percent stake in Yuganskneftegaz, "The Financial Express" reported on 12 March. He also said India could invest $25 billion in the entire Russian energy sector. India's cabinet recently authorized discussion of the Turkmenistan-Afghanistan-Pakistan Natural-Gas Pipeline Project (see "RFE/RL Afghanistan Report," 25 February 2005). Iran does not, as a result, have a stranglehold on the Indian market.

...And Iran's Other Markets. Iran natural-gas reserves are estimated at 26.6 trillion cubic meters, according to the Energy Information Administration, but the country only produced about 76.5 billion cubic meters of natural gas in 2002. Most of that gas was used domestically, although Iran did export some gas to Armenia and Turkey.

Iran is eager to reach other markets. Iranian Petroleum Minister Bijan Namdar-Zanganeh and Omani Oil and Gas Minister Muhammad bin Hamad bin Sayf al-Rumhi on 15 March signed an agreement on the export to Oman of 10 billion cubic meters of natural gas annually, beginning in 2006, IRNA reported.

The same day, Zanganeh and Kuwaiti Energy and Oil Minister Ahmad Fahd al-Ahmad al-Sabah signed a deal for the export to Kuwait of 10 million cubic meters of natural gas a day, beginning in late 2007, IRNA reported. Zanganeh said the deal with Kuwait is worth more than $7 billion over 25 years. He went on to say that the legal documents relating to the deal will be drawn up in a few months.

Earlier in March, the possibility of Ukraine purchasing 15 billion cubic meters of natural gas from Iran every year was discussed at an Iran-Ukraine energy commission meeting in Kyiv. Two pipeline routes are being considered -- Iran-Armenia-Georgia-Russia-Ukraine or Iran-Armenia-Georgia-Black Sea-Ukraine. Other countries that have signed gas-related memoranda, or at least discussed the topic, with Iran include Austria, Bulgaria, China, Greece, Italy, and Turkey.

Iran likes to present every meeting as a major accomplishment by staging the signing of a memorandum of understanding, but these are not binding contracts. Conclusion of the deal with India is potentially very important for Iran, because it will curtail some of its political isolation and will earn it a place in the international gas market. But Tehran's pricing policies and Washington's opposition may scuttle Iran's effort to achieve a natural gas breakout. (Bill Samii)

IRAN WANTS STABLE OIL-PRODUCTION QUOTAS. OPEC announced on 16 March that it has raised its oil production quota from 27 million barrels per day to 27.5 million bpd, Reuters reported. If necessary, it will increase this by another 500,000 bpd. Saudi Oil Minister Ali al-Naimi explained that his country wants to keep the price in the $40-$50 range.

The Iranian government did not want the production ceiling to change. Petroleum Minister Namdar-Zanganeh explained on 15 March that there is an excess supply, prices are relatively high, and "we should not make a decision that gives the wrong signal to the oil market and further overheats the market and harms OPEC in the long run," state television reported. Namdar-Zanganeh explained that those who want to increase production believe that real production is 600,000-700,000 barrels per day more than the official figure, state radio reported. He went on to say nobody is talking about reducing production.

According to the "Financial Times" on 8 March, Iran is already pumping at full capacity and cannot produce more oil. Only Saudi Arabia and Kuwait have the capacity to produce more oil, Reuters reported on 16 March.

Iran's economy depends on oil-export revenues (around 80 percent of total export earnings, 40-50 percent of the government budget, and 10-20 percent of gross domestic product, according to the Energy Information Administration), and every $1 increase in the price of oil increases Iranian revenues by approximately $900 million per year. The current price for a barrel of oil is above $50, but the Iranian budget for 2005-06 is based on a $28 price and the price for 2004-05 was around $19.90.

The proposed budget calls for increased oil and gas production over the next five years, Mahshahr parliamentary representative Kamal Daneshyari, who heads the legislature's Energy Committee, said in the 6 February "Mardom-Salari." (Bill Samii)