Monday, January 24, 2005 U.K. U.K.: "BP Avoids Iran Because of U.S. Sanctions, Browne Says (Update2)
Jan. 21 (Bloomberg) -- BP Plc, the world's second-largest publicly traded oil company, will avoid doing business in Iran because of U.S. sanctions, focusing instead on Russia, Africa and the Gulf of Mexico, Chief Executive John Browne said.

London-based BP is the biggest oil and gas producer in the U.S., a country that forbids its corporations from doing business with Iran, holder of the world's second-largest oil reserves. The U.S. says Iran wants to build nuclear weapons and calls Iran a sponsor of terrorism, a charge that Iran denies.

``To do business with Iran at the moment would be offensive to the United States, and therefore against BP's interests,'' Browne, 56, said in an interview yesterday at the company's headquarters. ``We're very heavily influenced by our American position.''

BP, with origins in the Anglo-Persian Oil Co. formed in 1909, was kicked out of the country in the 1970s, when Middle East countries nationalized their oil industries. After spending almost $100 billion on acquisitions, including Amoco Corp. and Atlantic Richfield Co., BP gets almost half of its revenue from the U.S. Most of its growth is coming in Russia.

The company is taking a first step to renew links with neighboring Iraq through a study of the nation's southern oil fields. Browne also said he isn't now seeking large acquisitions, because high oil prices inflate asset values, so takeovers would not be ``a winning move.''

Trouble Spot

U.S. relations with Iran, and opportunities there for BP, worsened after the attacks of Sept. 11, 2001, on New York and the Pentagon, where 15 of 19 hijackers were from Saudi Arabia. Iran was never accused in the plot. Browne said the attacks of Sept. 11 ``changed everything,'' and he hasn't held any discussions with Iran since then.

Relations are worsening. U.S. Vice President Dick Cheney yesterday said on MSNBC television that Iran is ``at the top of the list'' of potential trouble spots because its nuclear program and support for terrorist groups threaten to undermine stability in the Middle East.

The absence of BP leaves more room for other non-U.S. companies in Iran. Royal Dutch/Shell Group, based in London and The Hague, is developing Iran's offshore Soroush oil field. Paris- based Total SA exploited a phase of the South Pars natural gas deposit, the world's biggest. Japan's Inpex Corp. agreed last year to spend $2.5 billion to develop Iran's Azadegan field.

Buyback Projects

The Iran policy marks a reversal from past talks. BP had been seeking to help develop Iran's Bangestan field, where three deposits contain about 5.1 billion barrels of oil.

BP was in any case unhappy with Iran's favored investment route, so-called buybacks, whereby foreign companies operate a project in Iran to cover their costs and earn a profit before being forced to hand the project back to the Iranian state.

``You can't plan for the long term in this area,'' Browne said. ``When we were talking to Iran some time ago, we were trying to explore other ways.''

Browne has authorized BP to analyze oil reservoirs in southern Iraq, where most of the nation's exports are now flowing to the Persian Gulf because of violence in the north. The assessments will be done from outside of Iraq.

With the first elections since the 2003 toppling of President Saddam Hussein nine days away, there has been no letup in sabotage and terrorist attacks, much of it directed against the hundreds of miles of oil pipelines that crisscross Iraq.

`Not a Soldier'

``For a company like BP it is not the right moment to physically go into Iraq, the real issue is the security of our personnel,'' Browne said. ``People joined BP to do oil and gas, not to be a soldier.''

During the next 12 months, BP will study the Rumaila oil field, the country's largest by production, and hand its findings, for free, to the Iraqi Ministry of Oil to help the country decide how best to maximize output. U.K.-based Exploration Consultants Ltd., assisted by Shell, is conducting a similar study of the northern, Kirkuk field.

BP shares were down 1.5 pence at 511 pence as of 12:37 p.m. in London. BP last year rose 12 percent, beating Shell Transport & Trading Co.'s 6.9 percent advance though behind Exxon Mobil Corp.'s 25 percent jump.

``We want to help Iraq build its oil and gas business, if the circumstances are right,'' Browne said. ``We want to participate in it. Step one is to do the study for Iraq.''

Browne said the preparatory work is no guarantee that BP will get oil concessions if and when the country decides to allow foreign companies to develop its oil and gas resources.

``However keen we are, the question is how keen will the then- existing government of Iraq be to have us in,'' he said. That will depend, he said, on what BP can do for Iraq ``that they cannot otherwise do as a nation. That is a discussion that will continue for some time.''

Browne said that this decade may be the years of $30 a barrel oil, after lower prices during the 1990s limited investment in new production capacity and refineries.

To contact the reporter on this story:
Stephen Voss in London
John Dawson in London

To contact the editors on this story:
Tim Coulter in London at"

Indo-Asian News Service -> India-Diplomacy-Iran -> US action in Iran would affect India (COMMENTARY)

Indo-Asian News Service -> India-Diplomacy-Iran -> US action in Iran would affect India (COMMENTARY): "US action in Iran would affect India (COMMENTARY)
By Amulya Ganguli

Although people in India are more favourably disposed towards George W. Bush than those in European and Muslim countries where his unilateralism is widely criticised, there is one negative aspect of the US policies that can override their positive implications.

The point that may cause some concern in New Delhi is not so much the continuing close US-Pakistani relations, but the possibility of the Americans pursuing a policy bordering on hostility towards Iran. As President Bush's observation that all options, including the military one, are being weighed by his administration shows Washington's attitude towards Tehran has become much tougher than before when the possibility of military action was never mentioned.

Any deterioration of the US-Iranian ties is of concern to India on two counts. For a start, the Indo-Iranian relations are in a category of their own. They can be traced to pre-historic times when the Aryans lived in both countries and had close interactions. In the 7th century, the Zoroastrians left Iran following the arrival of the Arab Muslims and migrated to India, where they have prospered as members of the Parsi community. In modern times, India and Iran have more often adopted an identical approach on international affairs than be on opposite sides of the fence.

But it isn't only the cordial relations that make India sensitive to any sign of tension in the region. What is a lot more worrying is the claim by reputed American journalist Seymour Hersh that the American commandos are already in Iran on a mission to locate its nuclear installations. Even more disturbing is his assertion that the American forces have infiltrated into Iran from Pakistan.

This hint of cooperation between the US and Pakistan has made observers find an explanation not only for the high praise which Pakistan President Pervez Musharraf regularly receives from the US for aiding its war against terror, but also the surprising US acquiescence in Musharraf's decision to pardon Pakistani nuclear scientist A.Q. Khan despite his clandestine acts of selling nuclear know-how to Iran and other countries.

For India, this proximity between Washington and Islamabad and the former turning a blind eye to Pakistan's secret encouragement of nuclear proliferation mark a return to the Cold War days. At that time, too, the US and Pakistan were extremely close in the fight against communism. But that's not all; the US used Pakistan to establish contacts with communist China to prepare for Richard Nixon's historic visit.

As a quid pro quo for such facilities, America not only supplied arms and ammunition to Pakistan, but also remained unperturbed by the nuclear cooperation between Beijing and Islamabad. At present, India will not obviously mind the American enlistment of Pakistani help in battling the Al Qaeda and the Taliban in Afghanistan since the jehadis pose a grave threat to India as well. But a US-Pakistan axis against Iran is another matter.

For one thing, the US will now have lesser inhibitions in continuing arms supplies to Pakistan even if this doesn't extend to the supply of nuclear-capable F-16 aircraft for the time being. For another, the revival of the close Cold War ties between Washington and Islamabad cannot but make the latter more intransigent in its attitude towards India vis-à-vis Kashmir.

There is a third worry. Notwithstanding Secretary of State-designate Condoleezza Rice's testimony before the US foreign affairs committee that America has contingency plans to prevent the Pakistani nuclear weapons from falling into the hands of Islamic fundamentalists, India will obviously not be able to rest easy, especially if any US (and Israeli) intervention in Iran sets off a chain of unpredictable events in the Middle East.

The only saving grace is that unlike the days of the Cold War, the India-American relations are now warmer. As a result, not only will New Delhi's concerns be appreciated in Washington, the US will also pay greater heed to the belief in India about the essentially unstable nature of the Pakistani polity, manifest in the absence of a genuine democratic atmosphere (evident in the banishment of two former prime ministers, Benazir Bhutto and Nawaz Sharif) and the suspected presence of fundamentalist elements in the army and the notorious Inter-Services Intelligence.

The current disturbances in Balochistan are yet another example of the powerful anti-establishment ethnic and religious factors which simmer just below the surface in Pakistan, occasionally making certain areas ungovernable. It is elements of this nature that have enabled the Al Qaeda and Taliban fugitives, including Osama bin Laden and Mullah Mohammed Omar, find a safe haven on the Pakistan-Afghanistan border.

As is evident, therefore, the entire region from the northwest of Pakistan through Afghanistan and up to Iran is extremely volatile because of the presence of religious fanatics and a hostile feudal culture that ensures that the writ of the government doesn't run in large areas. To make matters worse, strident anti-American sentiments are known to prevail because of what is perceived as an American invasion and occupation of Iraq.

If Iran, too, is targeted in any way, it will amount to adding fuel to fire. Unfortunately, the conflagration is bound to affect India.

(The writer is a current affairs analyst. He can be reached at

Indo-Asian News Service"

Malaysia warns US against attacking Iran :

Malaysia warns US against attacking Iran : "Malaysia warns US against attacking Iran

Agence France-Presse
Kuala Lumpur, January 23, 2005|14:30 IST
Malaysia, which chairs the world's biggest grouping of Muslim countries, has warned the United States that an attack on Iran would be of "great concern" to the Islamic world.

Defence Minister Najib Razak, who is also Deputy Prime Minister, was reacting to a statement by US President George W Bush last week that he could not rule out using force, if Tehran failed to rein in its nuclear plans.

The US would have to produce "irrefutable" evidence of Iran's nuclear weapons capabilities to avoid making the same mistake it made over Iraq, Najib said in remarks published in Kuala Lumpur on Sunday.

"I don't know the basis of President Bush's statement but his last allegation (that Iraq had weapons of mass destruction) has proven to be baseless," Najib was quoted as saying by local media.

Both Iran and Iraq are members of the 57-nation Organisation of the Islamic Conference (OIC), of which Malaysia is the current Chairman.

"We do not know what kind of information they have regarding Iran's nuclear capabilities, but I think what the world wants is hard and irrefutable evidence, if at all, Iran is a threat to the world," he said.

"I don't think that anyone is convinced at this stage that Iran is a threat."

Malaysia strongly opposed the US-led invasion of Iraq, and Najib said any attack on another Islamic country would be of great concern to Muslim nations and the world.

"What is important is the sovereignty of the country concerned and the fact that there are international laws to be considered under the United Nations charter."

Iran, which denies wishing to acquire a bomb, in November announced the suspension of its nuclear enrichment programme following protracted talks with Britain, France and Germany.

In mid-December, the three countries again took up talks with Tehran to try to conclude a long-term deal, whereby the Iranians would definitively give up any ambitions of producing a nuclear weapon"

Guardian Unlimited Politics | Special Reports | Straw flies to US for talks on Iran

Guardian Unlimited Politics | Special Reports | Straw flies to US for talks on Iran: "Straw flies to US for talks on Iran

Ewen MacAskill, diplomatic editor
Monday January 24, 2005
The Guardian

The foreign secretary, Jack Straw, was due to fly to Washington last night for talks with Condoleezza Rice, who is due to be confirmed this week as secretary of state, on tackling Iran's alleged covert nuclear weapons programme.

Ms Rice has indicated that she intends to take a much tougher line towards Iran than that pursued by Mr Straw and the rest of the EU.

Britain, France and Germany are in negotiations with Iran aimed at securing its agreement not to pursue a uranium enrichment programme which would enable it to make a nuclear bomb.

Iran consistently denies that it wants a bomb, but the US is sceptical about Iran's claims and the EU's diplomatic efforts.

It would like to see Iran referred as quickly as possible to the UN security council with a view to imposing economic sanctions. Israel has raised the possibility of bombing Iran's nuclear plants.

A Foreign Office source travelling with Mr Straw denied that the US privately supported the EU talks as a means of adding pressure on Tehran.

Mr Straw's list of topics for discussion with Ms Rice is topped by developments in the Israeli-Palestinian conflict, the FO says. He also wants to discuss the Iraq elections and the EU plan to lift its arms embargo on China, which the US opposes."

Times Online - Industry sectors

Times Online - Industry sectors: "Iran angered by BP's policy
By Times Online

BP's announcement that it is to freeze plans to operate in Iran will be viewed as "an unfriendly act which will not be forgotten", according to reports from Tehran this morning.

Reuters is reporting that Iran's Oil Minister, Bijan Zanganeh saying, "We do not consider this a friendly approach and we will not forget it. We think it is a move taken by BP for the Americans."

BP's chief executive Lord Browne told the Sunday Times that it was "impractical" for BP to do business in Iran due to the company's large operations in the United States. Under US sanctions, Washington can take measures against companies that invest in Iran, which has almost a tenth of the world's oil reserves.

"Politically, Iran is not a flyer ... One day I hope it is," Lord Browne said. For the full article, click here.

Oil industry sources in Tehran told Reuters last month that BP and Total were out of the running to develop the Bangestan oilfield in south-western Iran which they had been bidding for.

Meanwhile, on London's International Petroleum Exchange, Brent crude touched eight-week highs this morning, as cold weather in the United States spurred heating oil buying.

Brent was trading at $46.38 a barrel, just off its intraday peak of $46.40, the strongest level since November 30."

Jerusalem Post | Mossad chief Threatens War

Jerusalem Post | Breaking News from Israel, the Middle East and the Jewish World: "Mossad chief: Iran nuke program nearly independent

Iran's nuclear program is close to the "point of no return," at which they will no longer need outside or international help to enrich uranium for use in atomic weapons, Mossad Chief Meir Dagan told the Knesset Foreign Affairs and Defense Committee Monday.

He also said that the international community is not using all of its capabilities to curb the Iranian program.

Dagan also agreed with the assessment that United States Vice President Dick Cheney mentioned last week the possibility of Israeli action against Iran in order to provoke the European countries to take action."

CBS News | Brits Not Eager To Attack Iran | January 24, 2005�07:00:01

CBS News | Brits Not Eager To Attack Iran | January 24, 2005�07:00:01: "Brits Not Eager To Attack Iran

LONDON, Jan. 24, 2005
British Prime Minister Tony Blair (above left, at the White House with President Bush last November) has paid a heavy political price for his backing of the war in Iraq. (Photo: AP)

The case for going to war against Iran is in fact stronger than the case against Iraq. It is widely believed that Iran is doggedly pursuing both uranium enrichment and plutonium production programs for producing nuclear weapons.

What a difference two years make. In the run-up to the invasion of Iraq, Prime Minister's Tony Blair's office issued two public dossiers that made the case for war. Britain's arguments then - that Saddam Hussein had weapons of mass destruction that could be used with only 15 minutes advance warning - were even stronger than the White House case. And just as fallacious.

Now that there is talk in Washington of a possible attack on another member of the so-called "Axis of Evil," the British government has prepared another dossier. This one, issued quietly in the British parliament shortly before the President's second inauguration, makes the case against a military attack on Iran's nuclear facilities. The 200-page document makes it clear that if America attacks Iran, Britain will not back it.

Blair paid a heavy political price for his unstinting support of America's war on Iraq. It cost him the good will of most of the rank and file of his Labor Party, and if Britain had a more credible opposition party, it could have cost him his job. Blair is not about to go down that road twice.

The new dossier, produced by Foreign Secretary Jack Straw, makes the case for curbing Iran's nuclear ambitions by negotiations rather than force. Publicly, the British government is trying to avoid an argument with its closest ally. Privately, tensions are running high between the two countries.

The White House is also trying to avoid a public split. It is paying lip service to the effort by Britain, France and Germany to use the diplomatic route to persuade Iran to give up its weapons program. Privately, administration officials put no more faith in European diplomacy than they did in the U.N. efforts before the Iraq war.

Strange, all this, since the case for going to war against Iran is in fact stronger than the case against Iraq. It is widely believed that Iran is doggedly pursuing both uranium enrichment and plutonium production programs for producing nuclear weapons.

It has conducted a massive cover-up, developed hidden underground facilities, and repeatedly tried to deceive the UN's nuclear watchdog, the International Atomic Energy Agency.

Minutes of a key meeting of the IAEA last November state that "the agency is not yet in a position to conclude there are no undeclared nuclear materials or activities in Iran."

Moreover, Iran is committed to the destruction of Israel and has been labeled a state sponsor of terrorism, notably of Israel's archenemy, Hezbollah. Iran is at the top of the Bush administration's list of potential trouble spots.

To understand what is going on here, it is helpful to look at the facts as we know them. There is widespread agreement on the basic elements of the dilemma over how to handle Iran:

Unless a way can be found to stop it, Iran will have a nuclear weapon within the next few years.

Threats by Israel to launch a unilateral strike against Iranian facilities are intended to pressure America to act. Israel lacks the means to wipe out the Iranian program.

An American strike would delay the Iranian program, but would also invite retaliation.

Iran has ways to retaliate. It could stir up serious trouble for America in Iraq's Shiite population, and it could help drive up world oil prices to painful levels.

America already has a lot on its hands in Iraq and Afghanistan, so an invasion of Iran to force regime change would stretch our armed forces to the limit. Iran has three times the land area and four times the population of Iraq.
None of this necessarily precludes the possibility that the White House will decide to take on Iran next. But Britain hopes it will convince the presidents' advisors to give diplomacy a chance. If America does decide to go to war again, it will go it alone - or at least without its strongest ally. "

How loyal will Blair be if U.S. struck Iran?

How loyal will Blair be if U.S. struck Iran?: "

How loyal will Blair be if U.S. struck Iran?
1/24/2005 10:30:00 AM GMT

How loyal will Blair be to George Bush if the U.S. pushes for a military strike on Iran?

Amidst all the troubles that have occurred following the invasion of Iraq, the one thing the Bush administration could always depend on to be constant and present is Britain's unswerving loyalty to the United States. But it seems that relationship is about to hit a very rocky patch.

Tony Blair's relationship with George Bush is coming under considerable strain especially with the recent murmurings from the White House about a possible military strike on Iran.

British officials are increasingly concerned that months of patient European initiated diplomacy aimed at lessening any Iranian nuclear ambitions may end if the U.S. pursues its preferred military option.

British concerns weren't lessened following Syemour Hersh's report on American commandoes already being in place inside Iran scouting for possible nuclear sites. In fact this covert action has intensified concerns that London and Washington are possibly heading to an embarrassing split over the issue.

Washington is becoming increasingly convinced that the EU-3 Iran initiative is failing to produce the desired results. European negotiators were recently described by David Kay, the former U.S. weapons inspector, as "impotently manipulable". A prominent Washington defence hawk warned: "At some point the Americans are going to turn to the Europeans and say, 'The goal is disarmament but all we are getting is arms control. It's time for a bigger stick'."

Some within the British government feel that Dick Cheney is the one driving the American administration's policy on Iran, his recent statement that if one is to "…look around at potential trouble spots. Iran is right at the top of the list," didn't allay any fears.

Furthermore, there's concern that the Pentagon could act on the basis of flawed intelligence provided by satellite photos - the same source of evidence the Americans used when declaring Iraq's possession of weapons of mass destruction. British sources have described these photographs as "alarmingly inconclusive."

"They tell us, 'Look, bulldozers have been down this road three times. Something's going on'," said one well informed source. "They are very dismissive when European humint (human intelligence) suggests something different."

Israel's 'bit' role

Yet British and other officials warn that intelligence on Iranian nuclear development is far from complete. While Iranian leaders have boasted about some of their nuclear assets, American experts are divided over whether a parallel, clandestine programme is being developed in hardened bunkers out of sight of U.S. satellites.

"We just don't know where all the stuff is," said one British official. "We don't know how far they have dispersed or duplicated facilities and we don't know how much of what we can see is dummy or decoy construction. In short, we can't be sure we've got all the targets to stop them from building a weapon."

Further complicating the Iranian issue is Israel, which has vowed to act if Tehran's nuclear development continues. Shaul Mofaz, Israel's defence minister, warned two years ago that "under no circumstances would Israel be able to tolerate nuclear weapons in Iranian possession".

A point U.S. Vice-President Cheney acknowledged last week when he said that Israel "might well decide to act first and let the rest of the world worry about cleaning up the diplomatic mess afterwards".

Despite reports in Israel that Washington is secretly encouraging Tel Aviv to strike, many U.S. analysts believe that the limited range of Israeli air force bombers would make the mission exceptionally perilous.

A former CIA analyst Kenneth Pollack, stated, "I know we would all like the Israelis to take care of this problem for us, but that is why you are hearing them shout so loudly. They are deathly afraid that the Iranians are getting close. They know they can't take care of it and they want us to do so."

But the Iranian leadership doesn't appear to be overly worried by the U.S.'s military threats. "They do not have accurate information about our military capabilities," Ali Shamkhani, Iran's defence minister, retorted last week.

Another government spokesman dismissed reports of American special force activity in Iraq as "a ridiculous bluff" and "psychological warfare".

Behind the Iranian leaderships statements lies what British officials believe is a persuasive argument against a military attack: far from encouraging Iranian reformers to rise up against their government, any form of U.S. intervention might actully unite the country behind Ayatollah Ali Khamenei, the country's supreme leader."

Press Briefing by Ari Fleischer: Richard Perle is "Outside"

Press Briefing by Ari Fleischer: "Q Can you say whether Iraq is the end goal here? Some of the President's advisors have said they thought it would be good to go on to other countries in the region, to democratize or liberate. What is it? Can you clarify for the American people --

MR. FLEISCHER: Who has suggested that?

Q Perle, for one. Richard Perle.

MR. FLEISCHER: I'm not aware of anybody who works for the President who has said that. There may be outside people who have some thoughts. "

The Persian Puzzle: An Interview With Kenneth Pollack (Clouded and Fuzzy Thinking)

The Persian Puzzle: An Interview With Kenneth Pollack: " | The Persian Puzzle: An Interview With Kenneth Pollack

What's next for U.S. foreign policy in Bush's second term? Iran, that's what.

Kenneth Pollack
Interviewed By Bradford Plumer

January 24, 2005

E-mail article
Print article

E-mail the editor

Iran, between its burgeoning nuclear program, it's active support for terrorism, and it's reported meddling in the Iraqi elections, is headed for a showdown with the Bush administration. But what to do about it? In his new book, The Persian Puzzle, Kenneth Pollack argues that regime change is not the answer to dealing with Iran—instead, the Bush administration is going to have to flex some diplomatic muscle. It certainly won't be easy: the U.S. and Iran have built up a lot of animosity over the past few decades, and overcoming this distrust will be difficult, requiring a series of carrots and sticks from both the United States and her allies.

Pollack, a veteran of both the CIA and the National Security Council, recently sat down with over the phone to talk about Tehran's long, bloody relationship with the West, its nuclear program, the prospects for regime change, and most critically, the future of America's Iran policy. Going through the history of Iran, as you do in your book, is really useful. It seems that the conflict between Iran and the U.S. isn't so much about a geostrategic rivalry, or even necessarily about an ideological conflict per se, so much as a lot of bad blood built up between the two over the past few decades.

Kenneth Pollack: Absolutely. I think if you could remove all of the baggage—all of the ideology, the history, whatever else—and look in purely geostrategic terms, I think it's hard to figure out why the US and Iran would necessarily be in conflict. In fact during the shah's era, before 1979—recognizing that there were all kinds of other problems—the US and Iran worked together splendidly at the strategic level.

But the source of the problem is this history—our support for the Shah, the CIA coup in 1953—has become infused into the Iranian political discourse. The regime that came to power in 1979 during the Iranian revolution actually defined itself as anti-American, and that's now a critical ingredient in the Iranian domestic political debate. That really is the source of our problems—the regime in Tehran continues to see itself as opposing the US. In their eyes, everything the US does is directed at them in a very malevolent way, and therefore they have to fight back against it. So that's the Iranian side. On our side, why has the U.S. failed to engage the Iranian regime over the years?

KP: Two reasons. The less important reason is that, in the United States, Iran is nothing but a whipping-boy. Few Americans have any real use for Iran. Most of us, what we know and remember about Iran are things like the hostage crisis in 1980, or they think about the Iranian attacks in Lebanon, or on the Khobar Towers. So you don't get a whole lot of political mileage in the United States by going out and advocating better relations with the Iranians.

Second reason, and I ultimately think the bigger source of our problems, has actually just been neglect. It's one of the most consistent patterns that I found in U.S. foreign policy—both in my research, and also from my 17 years in government and in the policy community. The US has just consistently tried to ignore Iran. And this is ironic because the Iranians believe that the United States is as obsessed about them as they are about us. Now the most pressing Iran issue right now is their nuclear program. Take me through the "Triple-Track" approach you outline in your book for dealing with this issue.

KP: Sure. The first track is to say the Iranians, "Look, we think there is a deal to be cut here. You give up your nuclear program, put it under the sort of inspection and monitoring regime that we had in Iraq, give up your support for terrorism, and stop opposing the Middle East peace process. In return, we'll lift our sanctions, we'll settle all the claims dating back to the shah's era, we'll bring you into the World Trade Organization, we'll give you security guarantees, and we'll create a security structure in the Persian Gulf that benefits you."

The problem, of course, is that we've been offering this deal to the Iranians for the past 20 years, and they've never been able to pick it up, often for domestic political reasons. So here you fall back to the second track: a true carrot-and-stick approach, where we work with Europe and Japan to persuade the Iranians that they're going to have to make a choice. One of the problems we had in the 1990s was that we and the Europeans were on different sheets of music on Iran. We were only interested in sticks: just hit the Iranians and hit 'em harder with sanctions. The Europeans, meanwhile, were only interested in carrots—no matter what the Iranians did, they would turn a blind eye and still offer trade, investment, and foreign aid. But Europe's starting to change their approach?

KP: The Europeans are starting to show that they're finally serious about the Iranian nuclear program, and they appear to be willing to use sticks against Iran. So I think it is imperative that as part of the second track, the United States sit down with the Europeans and say, "Let's make this very clear to the Iranians. Either they can give up their nuclear program and their support for terrorism, in which case we'll given them all kinds of benefits. Otherwise, we'll join in comprehensive, multilateral sanctions that will cripple their very fragile economy." And do you think this would really work?

KP: What we've seen from the Iranians over the last 15 years is that any time they thought they really were going to get multilateral sanctions, they jumped out of their socks, and reversed course immediately. They're very vulnerable on the economic front. So what if we can't get Europe and Japan on board?

KP: Exactly. I'm not convinced that the second track is going to work. I've seen the Europeans sound tough before and not willing to come through. If that's the case, the Iranians will find it out very quickly. So you have to have the third track: pure containment. Laying down "red lines" for the Iranians, so they know what is and is not permissible. Working harder to shut down the flow of nuclear technology to Iran. Setting up some kind of security structure in the Persian Gulf that will hopefully make other countries feel less anxious about their own security. We need to make Iran understand that they are not able to act aggressively in the Persian Gulf, and that they are paying some kind of price for this continued intransigence. Now many people have suggested that regime change or some sort of military strike might be better options for dealing with Iran's nuclear program. What do you think about these options?

KP: Let's start with the disarming strike. I think here it's a matter of weighing the costs and benefits. We just don't know a great deal about the Iranian nuclear program, especially where all of the key Iranian nuclear sites are. I mean, in 2002 we suddenly found about Arak and Natanz, to our surprise. So it's just unclear. This would be a very big effort, we're talking about days of air-strikes, maybe even weeks, and we wouldn't know what, if anything, we'd accomplished. Meanwhile, we would also pay some very high prices for a strike. We'd set back regime change, because the people would rally around the government. It would preclude any further diplomacy. And beyond all that, the Iranians are very skilled terrorist, and we'd have to expect that they'd hit back at us as hard as they could. Especially in Iraq, where they have a great deal of power and influence. If they wanted to, they could wage a clandestine war against us in Iraq that would be truly horrific. So it just doesn't look like the costs and befits add up, at least not until a) we have a much better intelligence picture of the nuclear program, b) we're much less vulnerable in Iraq, and c) not until we've exhausted all of our other options. You don't want to go down this path unless we've at least tried all the diplomatic options.

As far as regime change, I think you need to look back at Iran's history. First off, regime change is coming—it's clear that the Iranian people generally want a very different form of government. It's coming very slowly. Most Iranians are sick and tired of revolutions. They've had one for the last 25 years, and they don't want another one. Those who've tried to spark another revolution have failed time and again. I don't think there's any evidence that somehow, if the U.S. gave these guys the high sign, it would make regime change somehow more likely. Every time the U.S. has tried to interfere in Iranian affairs to help a particular group of Iranians, it's backfired on us, and hurt the group we tried to help. Look, regime change will eventually happen, but this isn't an answer to the very short-term problem of the nuclear program. So now how does the current deal that Iran struck with the Europeans fit into your triple-track approach?

KP: I think that the European deal is a perfectly fine first step towards the second track. There are still big holes in that agreement—there is no threat of sanctions if Iran reneges, and there isn't a viable inspections program to actually monitor the deal. There's also nothing about terrorism. But I think if the United States were willing to get involved, we could take the deal and make it a lot better. Unfortunately, right now we are wasting a terrific opportunity. Standing on the sidelines and simply criticizing Europe when we have no viable alternative, that's not helping anyone. Time is passing. Iran's at least three—and probably more like 8 or 10—years off from having a nuclear weapon. But we do have a fairly narrow window—probably a year or two—to deal with this problem at the diplomatic level. Now you've been a big critic of the Non-Proliferation Treaty (NPT), arguing that it's inadequate to deal with states like Iran. Especially since it allows these countries to build a civilian nuclear program, and then pull out at the last minute when they have everything they need to build a nuclear bomb. So how should we go about updating the NPT?

KP: The basic problem with the NPT is there's no teeth in it, no penalties for countries that don't comply. Worse, as you say, the very naïve structure of the NPT has actually made it helpful for countries who want to acquire nuclear weapons. Iraq, North Korea, Iran, all used the NPT to build up their nuclear programs. Unfortunately I don't think you can solve the problem by calling a meeting of all NPT signatories and renegotiate the treaty. That's too difficult to do. What we could do, though, is call together a group of countries outside of the framework of the NPT, all of whom have an interest in squelching nonproliferation. We could ask them to adopt, on a multilateral basis, a series of sanctions that would be applied to states that do violate a more rigorous version of the NPT. Because of the importance of trade from the U.S., Europe, Japan, etc., I think the potential nuclear wannabes would take this very seriously. We've seen this historically—there have been several dozen countries that pursued nuclear weapons, and then discontinued their programs out of fear of sanctions they would incur by doing so. So this would just formalize the process. Now what if all of this fails? What happens if Iran does get nuclear weapons anyways—what do we need to worry about then?

KP: What people normally think about is the possibility that Iran will give nuclear weapons to terrorists—to Hizbullah or some similar group. I think that fear is mostly groundless. Iran has had WMDs—chemical and biological weapons—for at least 15 years, they've supported terrorist groups for 25 years, and they've never mixed the two. Iran uses terrorism very instrumentally as an element of foreign policy; they are not just intent on just killing as many people as possible, like al Qaeda. There's no reason to believe that would change.

The real concern is that Iran would do what Pakistan did. Pakistan wanted nuclear weapons, like Iran, purely for defensive reasons—to defend itself against India. The problem was that once Pakistan acquired the weapons, it allowed the country to be more aggressive. So they stepped up their support for the Kashmiri terrorists, and it led very quickly to the Kargil crisis in 2000, which almost sparked a nuclear war between India and Pakistan. That's the greater concern with Iran. What we saw in the last 8 years, Iran moderated its aggressive behavior largely out of fear of a U.S. conventional military response or a European economic response. Once Iran gets nuclear weapons, they may believe that they are no longer vulnerable to either. So how do we learn to live with a nuclear Iran?

KP: It's not going to be easy, and I'd like to avoid doing it if we can. But what I've seen from Iranian behavior over the past 15 years, since the death of Ayatollah Khomeini, really does convince me that it will be possible to live with a nuclear Iran. This is not a reckless regime like Saddam Hussein's was—it's nasty, aggressive, and ruthless, but it's also very pragmatic. That suggests that we could approach Iran like we approached the Soviet Union—laying down "red lines", making clear that things like destabilizing Saudi Arabia would be beyond the pale. We would also need to set up the kind of cooperative security arrangements in the Persian Gulf that we used in Europe during the Cold War, maybe even moving towards arms control. I think all of those things should allow us to work out a cold peace between ourselves and the Iranians. Is it possible that a nuclear Iran could be a positive thing in some respects? For instance, might the GCC countries start huddling closer to the United States, thus giving us more of an ability to push for political and social reforms on the Arabian peninsula? Or is that crazy?

KP: I don't think that's crazy. But it's just unclear which direction the GCC would go in. There's an equally plausible case that they would go in the opposite direction. Perhaps they'd decide that the US couldn't prevent Iran from going nuclear and therefore they either have to find their own means of deterring Iran, maybe by getting their own nuclear weapons, or else accommodate Iran entirely. On the other hand, if they saw the US being responsible and determined in response—if we made clear to the Iranians that they couldn't just come across the Gulf and do whatever they wanted to—then I think we'd have a much greater likelihood of getting the GCC to move in a more positive direction. Now what's your take on Iran's apparent support for al-Qaeda?

KP: Yeah, Iran is constantly doing this to us, where you shake your head and say, "What on earth are you guys doing?" I think that leaders in Tehran, for whatever reasons, were trying to keep their options open with al-Qaeda, especially since they didn't know what the U.S. was going to do after we got through with Iraq. I think they were also hoping to trade the al-Qaeda leadership they had in Iran for the MEK people we had in custody.

More likely, there were probably some real divisions within the Iranian government—some groups wanted to ally with al Qaeda against us, others didn't want to have anything to do with that. So I think that debate resulted in no decision being made for awhile. The problem was they left the al-Qaeda folks in Iran in the hands of their intelligence services and Revolutionary Guard, who didn't really keep an eye on them—and may not have kept an eye on them on purpose. As a result, al-Qaeda used Iran as a base to participate in the May 2003 Riyadh attacks. But I think the fact that Iran clamped down on them so quickly afterwards, and are now claiming to put these guys on trial, suggests that Tehran recognizes that they were way too lax with them. Now how about Iraq? You suggest in the book that there's a lot of common ground to work with between the U.S. and Iran over Iraq—that both want a stable Iraq. But what if this isn't true? There's a lot of reporting out there indicating that the adherents of Khomeini are afraid of the Iraqi Shia school in Najaf emerging to challenge the Iranian model of clerical rule. Is it possible that Iran might see some benefits in a relatively unstable and weak Iraq?

KP: Well, yes and no. I do not think they want a completely destabilized Iraq. Yes, I hear Americans talking about how the Iranians don't want Najaf to rival the Iranian clergy in Qom. But I've never heard an Iraqi or an Iranian suggest that as being something meaningful to them. In fact, if you were Khamane'i, it would be quite good for you to have Najaf eclipse Qom. The clerics in Qom are all against Khamene'i, they think he's completely illegitimate and untrained. So I don't think this is a factor.

That said, it is true that the Iranians are wary of us building too strong an Iraq, especially an Iraq that's very pro-Aemrican. But I don't think the Iranians are very afraid of that right now, because that doesn't seem to be terribly likely. More pressingly, the senior leadership in Iran is very concerned about chaos in Iraq. In their heart of hearts they would probably love to have an Iraq that's completely subservient to Tehran, but they know that's not going to happen. The experience of the Iran-Iraq war demonstrated that—Khomeini invaded Iraq in 1982 because he thought the Iraqi Shia would rise up against Saddam and join him, and they didn't. Instead they fought Iran tooth and nail. So the Iranians are under no illusions that the Iraqi Shia will be subservient to them. So they'll settle for a stable, pluralistic Iraq, dominated by Shi'a—they can live with that.

However, the problem is that some elements of the Iranian Revolutionary Guard are wild-eyed ideologues, some of whom really do believe in spreading the revolution, others of whom simply want to fight the United States. Those groups are in Iraq, trying to stir up trouble. But so far Tehran has mostly kept the yahoos under control, under a tight leash. By and large, most of what's going on in Iraq from the Iranian side is still good for us—they continue to tell SCIRI and Da'wa and other pro-Iranian groups to go along with the Americans. Are they trying to influence the elections? Of course they are—it's the Middle East. What did we expect? Are they doing it more than the Syrians or the Saudis? I doubt it. To some extent they have more influence so they might be doing it better, but this isn't somehow unique to Iran or uniquely dangerous. So what about reports that Iran is behind Sunni insurgent groups like Ansar al-Islam, or behind the al-Sadr insurgency?

KP: Yeah, I think that was wildly overblown. Again, this is a problem we've got—the neo-conservatives in the administration are doing with the Iran intelligence what they did in Iraq—cherry-picking. We're talking to all these Iraqis, who will tell us whatever they think we want to hear. For many Iraqis, it's very convenient to blame all of the insurgency problems on Iran, because they don't want to admit they have a problem with the Sunnis. Now your contention is that there are pragmatic elements of the Iranian leadership—Supreme Leader Ali Khamene'I and former president Akbar Hashemi Rafsanjani especially—but that they're limited by the radical elements in the regime. Doesn't it seem, though, that the hardliners are increasing their control in the government, and there's not much room for engagement any more?

KP: Well, I don't think that's necessarily the case. Iranians are going to have a big decision to make in 2005 when they elect a new president. This time around Mohammed Khatami is not going to be a candidate, the reformist movement has effectively been completely disqualified, and so Iranians are going to have to choose among different brands of hardliners. But the differences between hardliners matters. We're all expecting that Khamene'i is going to pick the candidate who will likely win the election. So who will he pick? You've got everyone from Rafsanjani—who is the ultimate technocratic pragmatist, though completely unscrupulous of course—all the way to people like Ali Larijani or Ahmad Janati, who are basically Iranian versions of the neocons. So who Khamene'i picks I think will give us a good sense of where he wants to take the country. Even if the Iranians do come around, what about the Bush administration? Thus far, they seem to be wholly focused on regime change, and have shown no interest in negotiating. Is that going to change anytime soon?

KP: Yeah, I agree. My sense is that they remain so committed to regime change, even though I think they recognize that there is very little likelihood that it will succeed anytime soon. So they're unwilling to participate in the carrot and stick approach that I've outlined, because they believe that that will mean compromising on regime change. They may well be right about that. But to my way of thinking, it's foolish, making perfect the enemy of the good. What is important right now is stop Iran's nuclear program, their support for terrorism, their opposition to Middle East peace process. And there's a likelihood that we can do so. I wouldn't squander that very real chance to pursue what is something of a will-o-wisp.

What do you think?

Bradford Plumer is an editorial fellow at"