A high-risk game of nuclear chicken

AsiaTimes Online
31 January 2006


Middle East

A high-risk game of nuclear chicken
By F William Engdahl

In the past weeks, media reports have speculated that Washington is
"thinking the unthinkable", namely, an aggressive, preemptive nuclear
bombardment of Iran, by either the United States or Israel, to
destroy or render useless the deep underground Iranian nuclear
facilities.

The possibility of war against Iran presents a geostrategic and
geopolitical problem of far more complexity than the bombing and
occupation of Iraq. And Iraq has proved complicated enough for the
US. We try to identify some of the main motives of the main actors in
the new drama and the outlook for possible war.

The dramatis personae include the Bush administration, most
especially the Dick Cheney-led neo-conservative hawks in control now
of not only the Pentagon, but also the Central Intelligence Agency,
the UN ambassadorship and a growing part of the State Department
planning bureaucracy under Condoleezza Rice.

It includes Iran, under the new and outspoken President Mahmud
Ahmadinejad. It includes President Vladimir Putin's Russia, a nuclear-
armed veto member of the UN Security Council. It includes a nuclear-
armed Israel, whose acting premier, Ehud Olmert, recently declared
that Israel could "under no circumstances" allow Iranian development
of nuclear weapons "that can threaten our existence". It includes the
European Union, especially Security Council permanent member, France,
and the weakening President Jacques Chirac. It includes China, whose
dependence on Iranian oil and potentially natural gas is large.

Each of these actors has differing agendas and different goals,
making the issue of Iran one of the most complex in recent
international politics. What's going on here? Is a nuclear war, with
all that implies for the global financial and political stability,
imminent? What are the possible and even probable outcomes?

The basic facts

First the basic facts as can be verified. The latest act by
Ahmadinejad in announcing the resumption of suspended work on
completing a nuclear fuel enrichment facility along with two other
facilities at Natanz, sounded louder alarm bells outside Iran than
his inflammatory anti-Israel rhetoric earlier, understandably so.

Mohamed ElBaradei, Nobel Peace Prize-winning head of the
International Atomic Energy Agency (IAEA), the UN body, has said he
is not sure if that act implies a nuclear weapons program, or whether
Iran is merely determined not to be dependent on outside powers for
its own civilian nuclear fuel cycle. But, he added, the evidence for
it is stronger than that against Saddam Hussein, a rather strong
statement by the usually cautious ElBaradei.

The result of the resumption of research at Natanz appears to have
jelled for the first time a coalition between US and the EU,
including Germany and France, with China and even Russia now joining
in urging Iran to desist. Last August, President George W Bush
announced, in regard to Iran's announced plans to resume enrichment
regardless of international opinion, that "all options are on the
table". That implied in context a nuclear strike on Iranian nuclear
sites.

That statement led to a sharp acceleration of EU diplomatic efforts,
led by Britain, Germany and France, the so-called EU-3, to avoid a
war. The three told Washington they were opposed to a military
solution. Since then we are told by German magazine Der Spiegel and
others the EU view has changed, to appear to come closer to the
position of the Bush administration.

It's useful briefly to review the technology of nuclear fuel
enrichment. To prepare uranium for use in a nuclear reactor, it
undergoes the steps of mining and milling, conversion, enrichment and
fuel fabrication. These four steps make up the "front end" of the
nuclear fuel cycle.

After uranium has been used in a reactor to produce electricity it is
known as "spent fuel", and may undergo further steps, including
temporary storage, reprocessing and recycling before eventual
disposal as waste. Collectively these steps are known as the "back
end" of the fuel cycle.

The Natanz facility is part of the "front end" or fuel-preparation
cycle. Ore is first milled into uranium oxide (U3O8), or yellowcake,
then converted into uranium hexaflouride (UF6 ) gas. The uranium
hexaflouride then is sent to an enrichment facility, in this case
Natanz, to produce a mix containing 3-4% of fissile U-235, a non-
weapons-grade nuclear fuel. So far, so good, more or less in terms of
weapons danger.

Iran is especially positioned through geological fortune to possess
large quantities of uranium from mines in Yazd province, permitting
Iran to be self-sufficient in fuel and not having to rely on Russian
fuel or any other foreign imports for that matter. It also has a
facility at Arak which produces heavy water, which is used to
moderate a research reactor whose construction began in 2004.

That reactor will use uranium dioxide and could enable Iran to
produce weapons-grade plutonium, which some nuclear scientists
estimate could produce an amount to build one to two nuclear devices
per year. Iran officially claims the plant is for peaceful medical
research. The peaceful argument here begins to look thinner.

Nuclear enrichment is no small item. You don't build such a facility
in the backyard or the garage. France's large Tricastin enrichment
facility provides fuel for the nuclear electricity grid of
Electricite de France (EDF), as well as for the French nuclear
weapons program. It needs four large nuclear reactors, just to
provide more than 3,000MWe (megawatts electrical) power for it. Early
US enrichment plants used gaseous diffusion. Enrichment plants in the
EU and Russia use a more modern centrifuge process that uses far less
energy per unit of enrichment. The latter or centrifuge process is
also the Iranian type.

To make weapons-grade uranium requires more than conventional
civilian electric power-grade uranium fuel. "Unmaking" weapons-grade
uranium today is also a geopolitically interesting process, not
irrelevant to the current dispute over Iran. Since the collapse of
the Soviet Union, under agreements designed to ensure that the Soviet
nuclear arsenal would be converted to peaceful uses, military weapons
uranium came on to the civilian market under a US-Russian agreement.

Today more than half of all the uranium used for electricity in the
US nuclear power plants comes from Russian military stockpiles.
Currently, 20% of all electricity produced in the US is nuclear-
generated, meaning that Russian uranium fuels some 10% of all US
electricity.

In 1994, a US$12 billion contract was signed between the US
Enrichment Corporation (now USEC Inc) and Russia's Techsnabexport
(Tenex) as agents for the US and Russian governments. USEC agreed to
buy a minimum of 500 tonnes of weapons-grade uranium over 20 years,
at a rate of up to 30 tonnes/year beginning in 1999. The uranium is
blended down to 4.4% U-235 in Russia. The USEC then sells it to its
US power utility customers as fuel. In September this program reached
its halfway point of 250 tonnes, or elimination of 10,000 nuclear
warheads.

Worldwide, one sixth of the global market of commercial enriched
uranium is supplied by Russia from Russian and other weapons-grade
uranium stocks. Putin has many cards to play in the showdown over
Iran's nuclear program.

The issue of whether Iran was secretly building a nuclear weapon
capability first surfaced from allegations by an Iranian exile
opposition group in 2002.

Natanz has been under the IAEA's purview since suspicions about
Iran's activities surfaced. It was prompted by reports from an
Iranian opposition organization, National Council of Resistance of
Iran (NCRI), and led ElBaradei to tour Iran's nuclear facilities in
February 2002, including the incomplete plant in Natanz about 500
kilometers south of Tehran.

The NCRI is the political arm of the controversial People's
Mujahideen of Iran, which both the EU and US governments officially
brand terrorist but unofficially work with increasingly against the
Tehran theocracy.

Possible Iranian strategy

It's undeniably clear that Ahmadinejad has a more confrontational
policy than his predecessor. The Iranian ambassador to Vienna,
speaking at a conference in Austria where this author was present
last September, shocked his audience by stating essentially the same
line of confrontational rhetoric: "If it comes to war, Iran is
ready ..."

Let's assume that the Western media are correctly reporting the
strident militant speeches of the president. We must also assume that
in that theocratic state, the ruling mullahs, as the most powerful
political institution in Iran, are behind the election of the more
fundamentalist Ahmadinejad. It has been speculated that the aim of
the militancy and defiance of the US and Israel is to revitalize the
role of Iran as the "vanguard" of an anti-Western theocratic Shi'ite
revolution at a time when the mullahs' support internally, and in the
Islamic world, is fading.

Let's also assume Ahmadinejad's actions are quite premeditated, with
the intent to needle and provoke the West for some reason. If pushed
against the wall by growing Western pressures, Ahmadinejad's regime
has apparently calculated that Iran has little to lose if it hit back.

He is also no rogue agent in opposition to the Iranian clergy.
According to the Pakistani newspaper Dawn of January 24, Ayatollah
Ahmad Jannati, secretary of the Guardian Council of the Constitution,
stressed Iran's determination to assert its "inalienable" rights: "We
appreciate President Ahmadinejad because he is following a more
aggressive foreign policy on human rights and nuclear issues than the
former governments of [Mohammed] Khatami and [Hashemi] Rafsanjani,"
the ayatollah reportedly said. "President Ahmadinejad is asking, 'why
only you [Western powers] should send inspectors for human rights or
nuclear issues to Iran - we also want to inspect you and report on
your activities'."

The paper's Tehran correspondent added, "The mood within the
country's top leadership remains upbeat and the general belief was
that it would be possible to ride out international sanctions - if it
comes to that."

In this situation, some exile Iranians feel it would bolster
Ahmadinejad and the ayatollahs to be handed a new UN sanction
punishment. It could be used to whip up nationalism at home and
tighten their grip on power at a time of waning revolutionary spirit
in the country.

Ahmadinejad has been taking very provocative, and presumably
calculated measures including breaking nuclear-facility seals, and
announcing a major conference that would question evidence that the
Nazis conducted a mass murder of European Jews during World War II.
Yet he also has stressed several times publicly that in accord with
strict Islam law, Iran would never deploy a nuclear device, a weapon
of mass destruction, and that it is only asserting its right as a
sovereign nation to an independent full-cycle civilian nuclear program.

The history of Iran's nuclear efforts should be noted. It began in
1957 when Reza Shah Pahlevi signed a civilian Atoms for Peace
agreement with Dwight D Eisenhower's administration. Iran received a
US research reactor in 1967. Then in 1974 after the first oil shock,
the shah created the Atomic Energy Organization of Iran, explicitly
tasked to develop civilian nuclear power to displace oil, freeing
more oil for export, and for developing a nuclear weapon.

The Bushehr reactor complex of civilian power reactors was begun by
West Germany in the 1970s under the shah, the same time Iran began
buying major shares of key German companies, such as Daimler and
Krupp. After his 1979 ascent to power, Ayatollah Ruhollah Khomeini
ordered all work on the nuclear program halted, citing Islamic
beliefs that weapons of mass destruction were immoral.

In 1995, the Russian Foreign Ministry signed a contract with the
Iranian government to complete the stalled Bushehr plant, and to
supply it with Russian nuclear fuel, provided Iran agreed to allow
IAEA monitoring and safeguards. According to an article in the March
2004 MERIA Journal, that 1995 Russia-Iran deal included potentially
dangerous transfers of Russian technology, such as laser enrichment
from Yefremov Scientific Research Institute. Iran's initial deal with
Russia in 1995 included a centrifuge plant that would have provided
Iran with fissile material. The plant deal was then canceled at
Washington's insistence.

The monitoring of Bushehr continued until the reports from the NCRI
of secret nuclear weapons facilities in 2002 led to increased
pressure on Iran, above all from Bush, who labeled Iran one of a
three-nation "axis of evil" in his January 2002 State of the Union
speech. That was when the Bush administration was deeply in
preparation of regime change in Iraq, however, and Iran took a back
seat, not least as Washington neo-conservatives such as Ahmad Chalabi
had convinced the Pentagon his ties to Tehran could aid their Iraq
agenda.

Since that time, relations between Washington and Tehran have become
less than cordial. Iran has been preparing for what it sees as an
inevitable war with the US. Brigadier General Mohammad-Ali Jaafari,
commander of the Revolutionary Guards, told the official IRNA news
agency on October 9: "As the likely enemy is far more advanced
technologically than we are, we have been using what is called
'asymmetric warfare' methods. We have gone through the necessary
exercises and our forces are now well prepared for this." This
presumably includes terrorist attacks and the use of weapons of mass
destruction and their means of delivery, ballistic missiles.

On January 20, Iran announced it had decided to withdraw investments
from Europe. This was the same week UBS Bank in Zurich announced it
was closing all Iranian accounts. According to US Treasury reports,
Iran has an estimated $103 billion in dollar-denominated assets
alone. There is potential to cause short-term financial distress,
though likely little more should Iran sell all dollar assets abruptly.

What seems clear is that Iran is defiantly going ahead with
completion of an independent nuclear capability and insists it is
abiding by all rules of the nuclear Non-Proliferation Treaty (NPT)
and the IAEA.

Iran also apparently feels well-prepared to sit out any economic
sanctions. The country is the second-largest Organization of
Petroleum Exporting Countries (OPEC) oil producer (4.1 million
barrels per day in 2005) next to Saudi Arabia (9.1 million.) Russia
with 9.5 million bpd production in 2005 takes claim to being the
world's largest oil-producing country.

Iran has also accumulated a strong cash position from the recent high
oil price, earning some $45 billion in oil revenue in 2005, double
the average for 2001-03. This gives it a war chest cushion against
external sanctions and the possibility to live for months with
cutting its oil exports, all or partly. That is clearly one of the
implicit weapons Iran knows it holds and would clearly use in event
the situation escalated into UN Security Council economic sanctions.

In today's ultra-tight oil supply market, with OPEC producing at full
capacity, there would be no margin to replace 4 million Iranian
barrels a day. A price shock level of $130 to $150 is quite likely in
that event.

Iran now has decisive influence within the Shi'ite-dominated new
Iraqi government. The most influential figure in Iraq is Shi'ite
spiritual leader, Ayatollah Ali al-Sistani, the 75-year-old cleric
born in Iran. On January 16, after the new Iraqi government offered
Sistani Iraqi citizenship, he replied, "I was born Iranian and I will
die Iranian." That also gives Tehran significant leverage over
political developments in Iraq.

The Israeli options

Israel has been thrown into political crisis at just this time of
Iran's strident moves, with the removal of the old warrior, Ariel
Sharon, from the scene following his illness. Israeli elections will
be held on March 28 for a new government. Contenders include the
current acting prime minister, Ehud Olmert. Israeli media report that
Bush has decided to do what he can to try and ensure that Olmert,
standing in for the incapacitated Sharon, is elected to be full-time
prime minister. Rice has invited Olmert to visit Washington, probably
some time next month.

Other reports are that the vice president, we might say the
"spiritual leader" of the US hawks, Cheney, has been covertly aiding
the Benjamin Netanyahu candidacy as new head of the right-wing Likud.
Netanyahu is also directly tied to the indicted US Republican money-
launderer, Jack Abramoff, during the time Netanyahu was Sharon's
finance minister.

Washington journalists report that Cheney, and his advisers David
Addington and John Hannah, are working behind the scenes to ensure
that former premier Netanyahu succeeds Olmert. Cheney is working to
defeat the more moderate Kadima Party formed by Sharon and his more
moderate ex-Likud allies.

Bush has not come out with direct vocal support for Olmert, but
Olmert has stressed that he will continue to work with America to
realize a Palestinian state. Israeli media report the new middle-of-
the-road (Israeli middle) party of Olmert and Sharon-Kadima will
probably win a landslide - to the dismay of Cheney's and Karl Rove's
Christian Right and the neo-conservative base.

According to the Palestine newspaper, al-Manar, the Bush
administration is conducting secret contacts with the Palestinian
Authority and Arab countries in an effort to have them help
strengthen Olmert's stature. The US reportedly informed them that it
was interested in having Olmert head Kadima and "continue the process
that Sharon began to solve the Palestinian-Israel conflict".

The paper further reports that Washington feels that Olmert is a
"smart leader who will be able, with his advisors, to lead the peace
process and rebuff the political machinations against him".

The Bush White House even informed Olmert, according to the paper,
that it would like him to keep Sharon's advisors on his team,
especially Dov Weisglass and Shimon Peres. Weisglass, Sharon's
personal lawyer and broker of ties to Washington, recently said he
was in almost daily contact with Rice.

On January 22, Olmert addressed the issue of Iran. According to
Israeli State Radio, he said Iran was trying to engage Israel in the
conflict surrounding Tehran's ongoing nuclear enrichment efforts, and
that he concurred with Sharon's position that Israel would not lead
the battle against Iran. He said that "responsibility falls first and
foremost on the United States, Germany, France and the Security
Council. We do not have to be the leaders".

By contrast, his defense minister, Shaul Mofaz, stated Israel would
not tolerate Iran achieving nuclear independence, a statement that
analysts feel signals a military action by Jerusalem is possible,
with or without official US sanction.

This all would indicate that there is a definite split within Israel
between a future Olmert government not eager to launch a preemptive
military strike on Iran's nuclear facilities versus the ever-hawkish,
neo-conservative-tied Netanyahu. Notably, prominent Washington neo-
conservative, Kenneth Timmerman, told Israeli radio in mid-January
that he expected an Israeli preemptive strike on Iran "within the
next 60 days", ie just after Israeli elections or just before.

Timmerman is close to Richard Perle, the indicted Cheney chief of
staff, Lewis "Scooter" Libby, Douglas Feith and Michael Ledeen.

The question is whether ordinary Israelis are war weary, whether with
Palestine or with Iran, and seek a compromise solution. Polls seem to
indicate so. However, the very strong showing of Hamas in the January
25 Palestine elections could change the Israeli mood. The day after
their vote success, Hamas leader Mahmud al-Zahhar claimed that his
movement would not change its covenant calling for the destruction of
Israel, reported the Israeli online news portal Ynet.

Last week, a new element appeared in the chemistry of the long-
standing Israeli Likud-US Congress influence nexus. Larry A Franklin,
a former Pentagon Iran analyst and close friend of leading Pentagon
neo-conservatives, was sentenced to 12 years and seven months in jail
for sharing classified Pentagon information with pro-Israel lobbyists
through an influential Washington-based lobby organization, AIPAC,
the American-Israel Public Affairs Committee.

AIPAC has been at the heart of ties between the Israeli right-wing
Likud and members of the US Congress for years. It is regarded as so
powerful that it is able to decide which Congressmen are elected or
re-elected. Previously it had been considered "untouchable". That is
no longer true it seems.

Franklin pleaded guilty last October to sharing the information with
AIPAC lobbyists and Israeli diplomat, Naor Gilon. Steve Rosen and
Keith Weissman, who were fired from AIPAC in 2004 in the affair, are
facing charges of disclosing confidential information to Israel,
apparently about Iran. The sentencing is causing major shock waves
throughout leading US Jewish organizations, including the Anti-
Defamation League of B'nai Brith. The conviction has hit a vital
lobbying tool of AIPAC and other pro-Israel lobby groups, namely,
expenses-paid trips for US Congressmen to Israel. Hundreds of
politicians are taken to Israel every year by non-profit affiliates
of groups such as AIPAC and the American Jewish Committee - trips
Jewish leaders say are a vital tool in pro-Israel lobbying.

The Bush administration had tried to bury the Franklin case,
unsuccessfully. It could only delay the trial until after the
November 2004 US elections. The Franklin scandal as well as the
Abramoff lobbying affair have both hit severe blows to the suspicious
money network between Likud and the White House, potentially fatally
weakening the Israeli hawk faction of Netanyahu.

The Russian factor in Iran

The role of Putin's Russia in the unfolding Iran showdown is central.
In geopolitical terms, one must not forget that Russia is the
ultimate "prize" or endgame in the more than decade-long US strategy
of controlling Eurasia and preventing any possible rival from
emerging to challenge US hegemony.

Russian engineers and technical advisers are in Iran constructing the
Bushehr nuclear plant, involving at least 300 Russian technicians.
Iran has been a strategic cooperation partner of the Putin government
in terms of opposing US-United Kingdom designs for control of Caspian
oil. Iran has been a major purchaser of Russian military hardware
since the collapse of the Soviet Union, in addition to buying Russian
nuclear technology and expertise.

In March, Iran-Russia relations took a qualitative shift closer when
Moscow agreed to the sale of a "defensive" missile system to Tehran,
worth up to $7 billion when taking future defense contracts into
account. In 2000, Putin had announced Russia would no longer continue
to abide by a secret US-Russia agreement to ban Russian weapons sales
to Iran that the government of Boris Yeltsin had concluded. Since
then, Russian-Iranian relations have become more entwined, to put it
mildly.

Moscow currently says it is in talks with Iran to build five to seven
additional nuclear power reactors on the Bushehr site after
completion of the present reactor. Russia expects to get up to $10
billion from the planned larger Bushehr reactors deal and additional
arms sales to Iran.

It is currently building the reactor on credit to be paid by Iran
only after the completion of the project. Sanctions and admonitions
will not change Russia's relationship with one of the most demonized
states in America's "axis of evil". Iran has become a major
counterweight for Moscow in the geopolitical game for Washington's
total domination over Eurasia, and Putin is shrewdly aware of that
potential.

A look at the map will reveal how geopolitically strategic Iran is
for Russia, as well as for Israel and the US. Iran controls the
strategic Strait of Hormuz, the choke point for oil from the Persian
Gulf to Japan and the rest of the world. Iran borders the oil-rich
Caspian Sea. Significantly, on January 23, the Russian daily
Kommersant reported that Armenia, sandwiched between Iran and
Georgia, had agreed to sell a 45% control of its Iran-Armenia gas
pipeline to Russia's Gazprom. The Russian daily added, "If Russia
takes over this [Iran-Armenia] pipeline, Russia will be able to
control transit of Iranian gas to Georgia, Ukraine and Europe."

That would be a major blow to the series of Washington operations to
insert US-friendly pro-North Atlantic Treaty Organization governments
in Georgia as well as Ukraine. It would also bind Iran and Russian
energy relations. While the Armenian government denies it has agreed,
negotiations continue, with Gazprom holding out the prospect of
demanding double the price or $110 per 1,000 cubic meters rather than
the present $54 unless Armenia agree to sell the stake to Gazprom.

Russia is pursuing a complex strategy regarding its cooperation with
Iran. Minatom, the Russian nuclear energy group, announced some time
back that Russia was in discussion with Tehran to increase Iran's
nuclear capacity by 6,000 megawatts by 2020. The Russian Ministry of
Foreign Affairs confirmed a year ago that Moscow would supply Iran
with fuel for the Bushehr reactor, even if it did not sign the IAEA
Additional Protocols.

While Putin has assured the world that Iran must demonstrate full NPT
compliance before the Russian nuclear transfers occur, the Russian
Foreign Ministry stated previously that the IAEA's failure to condemn
Iran opened the door for Russia to help build future reactors in that
country.

Putin has managed to put Russia square in the middle of the present
global showdown over Iran, a position which clearly tells some in
Moscow that Russia is indeed again a global player. Undoubtedly more.

Russian Defense Minister Sergei Ivanov, in a January 18 discussion
with the daily Nezavisimaya Gazeta, stated: "It is not profitable for
Russia to impose sanctions on Iran, since we just recently signed an
agreement to sell them nearly $1 billion worth of medium-range anti-
aircraft weapons. These modern weapons are capable of hitting targets
up to 25 kilometers away and will probably be used to defend various
testing sites in Iran. Therefore, if some attempt is made to strike
at the country and the deliveries from Russia are made quickly
enough, we can expect a strong response. In other words, Iran will be
able to defend itself."

Ivanov added a significant caveat: "However, if ballistic missiles
are used, then nuclear sites can be targeted effectively. We must not
forget that Russia has its experts working on some of these sites,
and is not interested in a military scenario, if only to protect them."

Russia's current strategy is to renew its earlier offer, rejected
initially by Tehran, to take the uranium fuel from Iran to Russia for
reprocessing - then returned to Iran for use in the country's
reactors - thus defusing the crisis significantly. Last Wednesday,
Iran's top nuclear negotiator, Ali Larijani, said that Tehran viewed
Moscow's offer as a "positive development", but no agreement has been
reached between the countries. Talks have continued over the
specifics, including Tehran's proposal to have China involved in the
Russian enrichment process.

After his meeting with Russian Security Council chief, Igor Ivanov,
Larijani told the media, "Our view of this offer is positive, and we
are trying to bring the positions of the sides closer." Further talks
come in February, after the planned emergency IAEA meeting of this
Thursday. Iran opposition groups claim the Russian talks are merely a
ploy to divide the West and buy more time. Larijani and Ivanov said
in a joint statement that Tehran's nuclear standoff must be resolved
by diplomatic efforts in the UN atomic watchdog agency.

The China factor in Iran

China, in its increasingly urgent search for secure long-term energy
supplies, especially oil and gas, has developed major economic ties
with Iran. It began in 2000, when Beijing invited Iranian president
Mohammed Khatami for a literal red carpet reception and discussion of
areas of energy and economic cooperation. Then in November 2004,
curiously at the occasion of the second Bush election victory, the
relation took a major shift as China signed huge oil and gas deals
with Tehran.

The two countries signed a preliminary agreement worth potentially
$70 billion to $100 billion. Under the terms, China will purchase
Iranian oil and gas and help develop the Yadavaran oil field, near
the Iraqi border. That same year, China agreed to buy $20 billion in
liquefied natural gas from Iran over a quarter-century.

Iran's oil minister stated at the time, "Japan is our number one
energy importer for historical reasons ... but we would like to give
preference to exports to China." In return, China has become a major
exporter of manufactured goods to Iran, including computer systems,
household appliances and cars. In addition, Beijing has been one of
the largest suppliers of military technology to Tehran since the
1980s. The Chinese arms trade has involved conventional, missile,
nuclear and chemical weapons. Outside Pakistan and North Korea,
China's arms trade with Iran has been more comprehensive and
sustained than that with any other country.

China has sold thousands of tanks, armored personnel vehicles and
artillery pieces, several hundred surface-to-air, air-to-air, cruise
and ballistic missiles as well as thousands of antitank missiles,
more than 100 fighter aircraft and dozens of small warships.

In addition, it is widely believed that China has assisted Iran in
the development of its ballistic and cruise missile production
capability. In addition, China has supplied Iran scientific
expertise, technical cooperation, technology transfers, production
technologies, blueprints and dual-use transfers.

In sum, Iran is more than a strategic partner for China. In the wake
of the US unilateral decision to go to war against Iraq, reports from
Chinese media indicated that the leadership in Beijing privately
realized its own long-term energy security was fundamentally at risk
under the aggressive new preemptive war strategy of Washington. China
began taking major steps to outflank or negate total US domination of
the world's major oil and gas resources. Iran has become a central
part of that strategy.

This underscores the Chinese demand that the Iran nuclear issue be
settled in the halls of the IAEA and not at the UN Security Council,
as Washington wishes. China would clearly threaten its veto were Iran
to be brought before the UN for sanctions.

EU relations with Iran

The EU is Iran's main trading partner concerning both imports and
exports. Clearly, they want to avoid a war with Iran and all that
would imply for the EU. The EU's balance of trade with Iran is
negative due to large imports of oil. Germany's new government under
Chancellor Angela Merkel has made a clear point of trying to reaffirm
close ties with Washington following the tense relations under former
chancellor Gerhard Schroeder, who openly opposed the Iraq war along
with France's Chirac in 2002 and 2003.

Chirac for his part is the subject of major controversy since he gave
a speech on January 19 in which he overturned the traditional French
nuclear doctrine of "no first strike" to say that were a terrorist
nation to attack France, he would consider even nuclear retaliation
as appropriate.

This declaration by a French president triggered an international
uproar. Whether it was French psychological warfare designed to
pressure Iran, or the reflection of a fundamental change in French
nuclear doctrine to one of preemptive strike or something similar, is
so far not clear. What is clear is that the Chirac government will
not stand in the way of a US decision to impose UN sanctions on Iran.
Whether that also holds for a US-sanctioned nuclear strike is not clear.

The EU-3, whose negotiations diplomatically have so far produced no
results, are now moving toward some form of more effective action
against Iran's decision to proceed with reprocessing. The only
problem is that other than nuclear saber-rattling, the EU has few
cards to play. It needs Iranian energy. It is also aware of what it
would mean to have a war in Iran in terms of potential terror
retaliations. The EU, to put it mildly, is highly nervous and alarmed
at the potential of a US-Iran or Israel-US vs Iran military showdown.

The Bush administration role in Iran

Unlike the Iraq war buildup where it became clear to a shocked world
that the Bush administration was going to war regardless, Washington
with Iran has so far been willing to let the EU states take a
diplomatic lead, only stepping up pressure publicly on Iran in recent
weeks.

On January 19, the US repeated that neither it nor its European
partners wanted to return to the negotiating table with Iran. "The
international community is united in mistrusting Tehran with nuclear
technology," said Rice. "The time has come for a referral of Iran to
the [UN] Security Council." Rice's choice of the word "referral" was
deliberate. If Iran is only "reported" to the Security Council,
debate would lack legal weight. A formal "referral" is necessary if
the council is to impose any penalty, such as economic sanctions.

The neo-conservatives, although slightly lower profile in the second
Bush administration, are every bit as active, especially through
Cheney's office. They want a preemptive bombing strike on Iran's
nuclear sites. But whatever Cheney's office may be doing, officially,
the Bush administration is pursuing a markedly different approach
than it did in 2003, when its diplomacy was aimed at lining up allies
for a war. This time, US diplomats are seeking an international
consensus on how to proceed, or at least cultivating the impression
of that.

Iraq and the deepening US disaster there has severely constrained
possible US options in Iran. In 2003, in the wake of the Iraqi
"victory", leading Washington neo-conservative hawks were vocally
calling on Bush to move on to Tehran after Saddam Hussein. Now,
because of the "bloody quagmire" in Iraq, the US is severely
constrained from moving unilaterally. With 140,000 troops tied down
in Iraq, the US military physically cannot support another invasion
and occupation in yet another country, let alone Iran.

Because of Iran's size, a ground invasion may require twice as many
troops as in Iraq, says Richard Russell, a Middle East specialist at
the National Defense University in Washington. While an air campaign
could take out Iran's air defenses, it could also trigger terrorism
and oil disruptions. Washington is internally split over the issue of
a successful nuclear strike against Iran,

The AIPAC and Abramoff impact Washington

Another little-appreciated new element in the US political chemistry
around the Bush White House are two devastating legal prosecutions
that have hit the heart of the black and grey money network between
Washington Republicans and the Israeli right-wing Likud.

Abramoff, the financial patron of several prominent Republicans,
including ex-House majority leader, Tom Delay, and Steve Rosen, the
key force behind AIPAC, were two of the most influential Jewish
lobbyists in Washington before legal scandals effectively ended their
careers and sent them scrambling to stay out of prison.

Abramoff has pleaded guilty to fraud, tax evasion and conspiracy
arising out of his work lobbying for Indian gambling casino
interests. That scandal could implicate far more Congressmen and even
some in the White House.

Rosen is fighting allegations that as chief strategist at AIPAC, he
received and passed classified national security information,
received from Pentagon aide Larry Franklin, to unauthorized parties.
Perhaps it is coincidence that two such high-profile damaging cases
to the lobbying power of right-wing Israeli hawk elements surface at
the same time, at just this time when war drums are pounding on Iran.

AIPAC's drama began on August 2004, when on the eve of the Republican
national convention, the Federal Bureau of Investigation raided the
organization's offices, looking for incriminating documents. A year
later, the US Attorney for the Eastern District of Virginia indicted
Rosen, by then AIPAC's director of foreign policy issues, and Keith
Weissman, who had been an AIPAC Iran analyst.

The government disclosed it had had the men under surveillance for
more than four years and alleged that they had received and passed
along classified information. The indictment named Franklin as their
co-conspirator. Franklin, who has agreed to cooperate with
prosecutors, pleaded guilty in October to passing classified
documents to unauthorized persons and improperly storing such
documents in his home. He was sentenced to 12-and-a-half years in
prison last week.

Bush, as de facto head of his party, faces a potentially devastating
November Congressional election. With the quagmire of Iraq continuing
and more Americans asking what in fact they are dying for in Iraq, if
not oil, Bush's popularity has continued to plunge. He has now only
46% of popular support. More than 53% of people have expressed an
unfavorable opinion of Bush. The Hurricane Kartina debacle of bungled
responses by the White House, the growing perception that Bush has
"lied" to the public, all are working to seriously undermine
Republican chances in November.

The stench of insider deals, not only with Cheney's Halliburton, is
growing stronger and getting major media coverage, which is new.
Conservative traditional Republicans are outraged at the
unprecedented federal spending binge Bush Republicans have indulged
in to protect their own special interests.

In a recent article Michael Reagan, conservative son of the late
president Ronald Reagan, wrote, "Republican congressional leaders
promised individual members of Congress up to $14 million 'in free
earmarks' [special spending allocations] if they would support, which
they did, the massive $286.5 billion Bush transportation bill."
According to Reagan: "The bill came to a total of 6,300 earmarked
projects costing the taxpayers $24 billion, a clear case of bribery.
The people being bribed were members of Congress. The people making
the bribes were members of Congress. Congressmen bribing congressmen."

A recent Fox News poll indicated that Americans saw the Republican
congressional majority as materially more corrupt and more
responsible for the current spate of scandals than the Democrats by a
wide margin.

Conplan 8022

In January 2003, Bush signed a classified presidential directive,
Conplan 8022-02. This is a war plan different from all prior in that
it posits "no ground troops". It was specifically drafted to deal
with "imminent" threats from states such as North Korea and Iran.

Unlike the warplan for Iraq, a conventional one, which required
coordinated preparation of air, ground and sea forces before it could
be launched, a process of months, even years, Conplan 8022 called for
a highly concentrated strike combining bombing with electronic
warfare and cyberattacks to cripple an opponent's response-cutting
electricity in the country, jamming communications and hacking
computer networks.

Conplan 8022 explicitly includes a nuclear option, specially
configured earth-penetrating "mini" nukes to hit underground sites
such as Iran's. Last summer, Defense Secretary Donald Rumsfeld
approved a top secret "Interim Global Strike Alert Order" directing
around-the-clock military readiness to be directed by the Omaha-based
Strategic Command (Stratcom), according to a report in the May 15
Washington Post.

Previously, ominously enough, Stratcom oversaw only the US nuclear
forces. In January 2003, Bush signed on to a definition of "full
spectrum global strike", which included precision nuclear as well as
conventional bombs, and space warfare. This was a follow-up to the
president's September 2002 National Security Strategy, which laid out
as US strategic doctrine a policy of "preemptive" wars.

The burning question is whether, with plunging popularity polls, a
coming national election, scandals and loss of influence, the Bush
White House might "think the unthinkable" and order a nuclear
preemptive global strike on Iran before the November elections,
perhaps early after the March 28 Israeli elections.

Some Pentagon analysts have suggested that the entire US strategy
towards Iran, unlike with Iraq, is rather a carefully orchestrated
escalation of psychological pressure and bluff to force Iran to back
down. It seems clear, especially in light of the strategic threat
Iran faces from US or Israeli forces on its borders after 2003, that
Iran is not likely to back down from its clear plans to develop full
nuclear fuel cycle capacities, and with it the option of developing
an Iranian nuclear capability.

The question then is, what will Washington do? The fundamental change
in US defense doctrine since 2001, from a posture of defense to
offense, has significantly lowered the threshold of nuclear war,
perhaps even of a global nuclear conflagration.

Geopolitical risks of nuclear war

The latest Iranian agreement to reopen talks with Moscow on Russian
spent fuel reprocessing has taken some of the edge off of the crisis
for the moment. On Friday, Bush announced publicly that he backed the
Russian compromise, along with China and ElBaradei of the IAEA. Bush
signaled a significant backdown, at least for the moment, stating,
"The Russians came up with the idea and I support it ... I do believe
people ought to be allowed to have civilian nuclear power."

At the same time, Rice's State Department expressed concern the
Russian-Iran talks were a stalling ploy by Tehran. Bush added.
"However, I don't believe that non-transparent [sic] regimes that
threaten the security of the world should be allowed to gain the
technologies necessary to make a weapon." The same day at Davos, Rice
told the World Economic Forum that Iran's nuclear program posed
"significant danger" and that Iran must be brought before the UN
Security Council. In short, Washington is trying to appear
"diplomatic" while keeping all options open.

Should Iran be brought before the UN Security Council for violations
of the NPT and charges of developing weapons of mass destruction, it
seems quite probable that Russia and China will veto imposing
sanctions, such as an economic embargo on Iran, for the reasons
stated above. The timetable for that is likely some time about March-
May, that is, after a new Israeli government is in place.

At that point there are several possible outcomes. The IAEA refers
Iran to the UN Security Council, which proposes increased monitoring
of the reprocessing facilities for weapons producing while avoiding
sanctions. In essence, Iran would be allowed to develop its full fuel
cycle nuclear program and its sovereignty is respected, so long as it
respects NPT and IAEA conditions. This is unlikely for the reasons
stated above.

Iran, like India and Pakistan, is permitted to develop a small
arsenal of nuclear weapons as a deterrent to the growing military
threat in its area posed by the US from Afghanistan to Iraq to the
Emirates, as well as by Israel's nuclear force.

The West extends new offers of economic cooperation in the
development of Iran's oil and gas infrastructure and Iran is slowly
welcomed into the community of the World Trade Organization and
cooperation with the West. A new government in Israel pursues a peace
policy in Palestine and with Syria, and a new regional relaxation of
tensions opens the way for huge new economic development in the
entire Middle East region, Iran included. The mullahs in Iran slowly
loose influence. This scenario, desirable as it is, is extremely
unlikely in the present circumstances.

Bush, on the urging of Cheney, Rumsfeld and the neo-conservative
hawks, decides to activate Conplan 8022, an air attack bombing of
Iran's presumed nuclear sites, including, for the first time since
1945, with deployment of nuclear weapons. No ground troops are used
and it is proclaimed a swift surgical "success" by the formidable
Pentagon propaganda machine. Iran, prepared for such a possibility,
launches a calculated counter-strike using techniques of guerrilla
war or "asymmetrical warfare" against US and NATO targets around the
world.

The Iran response includes activating trained cells within Lebanon's
Hezbollah; it includes activating considerable Iranian assets within
Iraq, potentially in de facto alliance with the Sunni resistance
there targeting the 135,000 remaining US troops and civilian
personnel. Iran's asymmetrical response also includes stepping up
informal ties to the powerful Hamas within Palestine to win them to a
Holy War against the US-Israel "Great Satan" Alliance.

Israel faces unprecedented terror and sabotage attacks from every
side and from within its territory from sleeper cells of Arab
Israelis. Iran activates trained sleeper terror cells in the Ras
Tanura center of Saudi oil refining and shipping. The Eastern
province of Saudi Arabia around Ras Tanura contains a disenfranchised
Shi'ite minority, which has historically been denied the fruits of
the immense Saudi oil wealth. There are some 2 million Shi'ite
Muslims in Saudi Arabia. Shi'ites do most of the manual work in the
Saudi oilfields, making up 40% of Aramco's workforce.

Iran declares an immediate embargo of deliveries of its 4 million
barrels of oil a day. It threatens to sink a large oil super-tanker
in the narrows of the Strait of Hormuz, choking off 40% of all world
oil flows, if the world does not join it against the US-Israeli action.

The strait has two 1-mile-wide channels for marine traffic, separated
by a 2-mile-wide buffer zone, and is the only sea passage to the open
ocean for much of OPEC oil. It is Saudi Arabia's main export route.

Iran is a vast, strategically central expanse of land, more than
double the land area of France and Germany combined, with well over
70 million people and one of the fastest population growth rates in
the world. It is well prepared for a new Holy War. Its mountainous
terrain makes any thought of a US ground occupation inconceivable at
a time the Pentagon is having problems retaining its present force to
maintain the Iraq and Afghanistan occupations. World War III begins
in a series of miscalculations and disruptions. The Pentagon's
awesome war machine, "total spectrum dominance" is powerless against
the growing "asymmetrical war" assaults around the globe.

Clear from a reading of their public statements and their press, the
Iranian government knows well what cards its holds and what not in
this global game of thermonuclear chicken.

Were the Bush-Cheney-Rumsfeld axis to risk launching a nuclear strike
on Iran, given the geopolitical context, it would mark a point of no
return in international relations. Even with sagging popularity, the
White House knows this. The danger of the initial strategy of
preemptive wars is that, as now, when someone like Iran calls the US
bluff with a formidable response potential, the US is left with
little option but to launch the unthinkable - nuclear strike.

There are saner voices within the US political establishment, such as
former National Security Council heads, Brent Scowcroft or even
Zbigniew Brzezinski, who clearly understand the deadly logic of
Bush's and the Pentagon hawks' preemptive posture. The question is
whether their faction within the US power establishment today is
powerful enough to do to Bush and Cheney what was done to Richard
Nixon when his exercise of presidential power got out of hand.

It is useful to keep in mind that even were Iran to possess nuclear
missiles, the strike range would not reach the territory of the US.
Israel would be the closest potential target. A US preemptive nuclear
strike to defend Israel would raise the issue of what the military
agreements between Tel Aviv and Washington actually encompass, a
subject neither the Bush administration nor its predecessors have
seen fit to inform the American public about.

F William Engdahl, author of A Century of War: Anglo-American Oil
Politics and the New World Order, Pluto Press, can be contacted via
his website, www.engdahl.oilgeopolitics.net.

(Copyright 2006 F William Engdahl.)