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Iran Pursues A Grand Bargain

US President George W. Bush and Iranian counterpart Mahmoud Ahmadinejad. Photo courtesy of AFP.
by Martin Walker
UPI Editor Emeritus
Washington (UPI) Sep 18, 2006
Unless Javier Solana, the chief diplomat for the European Union, can magically pull a rabbit out of the hat, the Bush administration is heading for a blunt choice between a military strike and acquiescing as Iran achieves nuclear power status.

The one alternative to this grimly binary choice appears to be some kind of Grand Bargain between Iran and the United States, elusive as that may seem with the current President Mahmoud Ahmadinejad in Tehran. A conference in Washington last week, organized by the New American Foundation, explored what such a Grand Bargain might look like, and whether it could be feasible.

The conference based its work on the offer made by the Iranian government in April 2003, and as reported exclusively in this column on May 8 this year.

The bargain, as spelled out by the Iranians, offered to accept a two-state solution for Israel and Palestine, to rein in Iranian support for what the United States considered terrorist groups, cooperation with the United States in Iraq and Afghanistan and against al-Qaida, and to join a comprehensive security agreement with the countries of the Persian Gulf. This would include an agreement to exclude nuclear weapons, which in effect suggested that Iran was prepared to suspend its nuclear program.

In return, Iran wanted full diplomatic recognition from the United States along with a suspension of U.S. sanctions and an agreement to drop plans for regime change and support for groups opposed to the Iranian regime. The Iranians also offered that while they wanted to pursue their peaceful nuclear power program and enrich nuclear fuel for their reactors, they were prepared to put this under an international inspection regime even more intrusive than that required by the International Atomic Energy Agency.

One of the central Iranian concerns was the impact of U.S. sanctions on Iran's oil and gas industries, which had left them with obsolete drilling and extraction and refining technologies. This had cut their potential output to some two million barrels a day, when it could be producing six million barrels or more, and Iran was prepared as part of the grand bargain to bring in U.S. oil corporations as partners.

This was a formal offer, transmitted through the Swiss Embassy in Tehran (which acts as custodian for U.S. interests since Washington has no formal diplomatic ties with Tehran) and then followed up by a senior Iranian general in further talks with U.S. officials on the sidelines of a conference in Athens.

The U.S. officials involved were Mr. and Mrs. Flynt Leverett. She was a State Department career diplomat, one of the three U.S. diplomats authorized to deal with Iranian officials, with whom she had already discussed cooperation against al-Qaida. He had been hired early in 2002 by Condoleezza Rice, then President George W. Bush's national security adviser in the White House, to be her senior aide on the Middle East. She had asked him to "be prepared to throw the long ball" in drafting proposals to get the Israel-Palestine peace process back on track, which meant defining final status plans on eventual borders including Jerusalem.

In talks with both Leveretts on the Iranian proposals for a grand bargain, they impressed on this reporter their belief that the Iranian offer was serious, had the support of the then Iranian government and of the country's supreme religious authority Ayatollah Ali Khamenei, and was very much worth pursuing. After their talks in Athens, the Leveretts drafted a report which went to then Secretary of State Colin Powell, who said he thought it was an important development, but would be a non-starter in political terms.

The timing is important. The Iranian offer had been drafted in Iran in late March 2003, during the period when the U.S. invasion of Iraq was under way, but before the stunningly swift advance of the American troops had taken Baghdad. The offer was thus being considered in a Washington at the height of its moment of military triumph, when neo-conservatives were suggesting that the liberation of Iran could be the next step.

Times have changed. The Ahmadinejad regime in Tehran is far less accommodating than that of its predecessor President Khatami, who visited the United States last week. The United States is weaker, politically, diplomatically and possibly also in military terms with its overstretched troops bogged down in Iraq and now facing an escalating crisis in Afghanistan.

Even while the U.S. Air Force and Navy could no doubt mount a devastating series of air strikes against Iran's nuclear development facilities, the 130,000 U.S. troops in Iraq would be highly vulnerable to guerilla and militia attacks. Moreover, their supply lines for food, ammunition and above all fuel stretch back to Kuwait and would make inviting targets for Iran-inspired retaliation.

But not all the developments since 2003 have strengthened Iran. Despite the oil price bonanza, Iran's economy is in poor shape. With roughly the same population, its GDP is half that of Turkey. Even the official unemployment figures have risen to 12.4 percent (a massive understatement) under Ahmadinejad and what few jobs have been created are in the public sector. The Tehran stock market lost 25 percent of its value last year and another 12 percent so far this year.

In June, 50 of the country's leading economists wrote an open letter saying that Ahmadinejad's economic policies lacked "expertise and scientific basis." Inflation is officially running at 12 percent, but most economists reckon it to be close to double that level. There are credible reports of large-scale capital flight to Dubai and elsewhere, fueled by Ahmadinejad's fatuous decree to state and private banks to cut their interest rates, whose main impact has been to dry up bank lending.

The Grand Bargain that Tehran put on the table three years ago may these days carry a somewhat stiffer price tag, but it may still represent the basis of a settlement that could on the one hand avoid the need for military action, and on the other keep Iran's nuclear program purely civilian and bring it under international inspection and controls.

In short, there may just be a miraculous rabbit inside the hat, but the EU's Javier Solana is unlikely to be able to find it, let alone bring it out, unless the Bush administration becomes fully and directly engaged in the negotiations and in the security guarantees it would require.

Source: United Press International

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Washington (UPI) Sep 18, 2006
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