By Laura Rozen, National Journal
© National Journal Group Inc.
Thursday, Jan. 18, 2007

While the Iraq debate was gripping Washington over the past few weeks, the Bush administration was also shifting its policy toward neighboring Iran -- in a more confrontational direction.

	The White House wants to use "all means short of war" to confront Iran.

U.S. officials, who asked not to be identified, say that the Iran policy has expanded from focusing chiefly on Iran's nuclear ambitions to challenging Tehran's suspected misbehavior across the Middle East. Indeed, one source said succinctly that the new policy is geared to "confront Iran in every way but direct armed conflict, using all means short of war."

The more aggressive policy is driven by several factors, U.S. officials say. The first is the emergence of a Saudi-led coalition of Sunni Arab governments, plus Israel, all of which are alarmed at Iran's flexing of power in the region and, in particular, at Tehran-backed Hezbollah's efforts to bring down the government in Lebanon. In addition, this loose coalition fears Iran's possible role in supporting militant proxy groups that threaten to destabilize other countries, specifically Hamas in the Palestinian territories and Shiite groups in the Gulf States, Iraq, and Saudi Arabia.

Moreover, the Bush administration and the American military in Iraq are increasingly concerned about what they see as a direct Iranian role in providing more-sophisticated armor-piercing explosive charges to militant groups that are attacking coalition forces in Iraq. These "shaped" charges multiply the killing power of the roadside bombs that detonate daily in Iraq.

Under the new policy, the United States will aggressively seek to expose and confront Iranian networks thought to be supplying radical proxies in Iraq, U.S. sources involved with the policy said. In addition, the U.S. is doubling its naval power in the Persian Gulf, considering covert ways to counter Hezbollah in Lebanon, and sending Patriot missiles to jittery allies in the Gulf. Bush administration officials are "projecting a lot of confrontation with Iran," says one American source privy to the administration's Iran policy debate who asked not to be further identified. "But they don't mean to signal war. They don't mean war. It's war by other means.

"For a long time, Americans were beating the nuclear weapons drum, and countries in the region were saying, 'Yeah, yeah, yeah, we hear you, sure, whatever you say,' " he continued. "I think, in the region, while people were concerned about the nuclear issue, what really spooked the Arab regimes was the reaction after Hezbollah's triumph in Lebanon and the popular reaction in their own countries of infatuation with Hezbollah, and Iran's defiance."

The American source spoke shortly after U.S. forces had taken the dramatic step of raiding a quasi-official Iranian government outpost in Erbil, in Kurdish northern Iraq, where they seized computers and documents and detained five Iranians. The Iran office "was housing individuals believed to be closely associated to activities targeting Iraqi and coalition security forces and contributing to sectarian violence," a State Department official told National Journal.

Yet some sources indicate that elements inside the U.S. government -- in the U.S. intelligence community, in particular -- are trying to head off a possible administration move to escalate the confrontation with Iran over its suspected actions in Iraq. Some officials reportedly have doubts about the precise nature of the evidence indicating Iranian involvement in Iraq. For instance, after a highly publicized U.S. military raid on December 21 at the compound of Iraqi Shiite leader Abdul Aziz al-Hakim, the head of the Supreme Council for the Islamic Revolution in Iraq, U.S. forces detained several Iranians who were meeting there. All of them were ultimately released and were returned to Iran, partly at the behest of the Iraqi government, which said it had invited the Iranians.

Contrary to some initial reports that American troops had found damning maps and documents on the detained Iranians, some U.S. government sources indicate that the Hakim raid did not produce definitive proof of Iranian involvement in supplying Iraqi militants. "They are trying to walk this back," one U.S. official said. "There are no smoking guns about Iran in Iraq," said another knowledgeable U.S. source. "That's the problem. Sort of like the WMD."

The U.S. actions at the Hakim compound and against the Iranian office in Erbil dramatically underscored President Bush's comments in his January 10 television address on Iraq in which he singled out Iran as providing "material support for attacks on American troops" in Iraq, and vowed to "seek out and destroy the networks providing advanced weaponry and training to our enemies in Iraq."

Bush's new emphasis on Iran's suspected role as a destabilizing force in the region articulates what Middle East experts say is a growing conviction among Washington's Sunni allies that Iran poses an immediate threat to their regimes' interests and stability.

"The administration believes that the Saudis had an epiphany, that Iran is the lens through which they now view all their security concerns," says Patrick Clawson, an Iran expert and the deputy director of research at the Washington Institute for Near East Policy. "And that means the Saudis may be prepared to do a variety of things which previously they were not prepared to do."

Among the steps the Saudis now appear ready to take, according to Clawson, is to significantly fund Palestinian President Mahmoud Abbas, who has faced an upsurge in intra-Palestinian violence incited by Hamas, which is supported by Syria and Iran. Clawson cited Israeli Prime Minister Ehud Olmert's very positive public reference about the Saudi role in helping to promote peace. "It was extraordinarily unusual for an Israeli prime minister to refer to three helpful countries" -- Saudi Arabia, Egypt, and Jordan. "That was no accident. It was carefully worked out language." The Israeli media recently reported speculation about a rare meeting between Israeli and Saudi officials.

The emerging Washington-Saudi-Sunni-Israeli alliance to counter Iran "makes perfect sense," says Kenneth Katzman, a veteran Iran and Iraq analyst at the Congressional Research Service. "It is something that is evolving based on commonality of interests of the Saudis and Israel and other Gulf states to counter Iranian triumphalism. The Saudis are facing Iran in Iraq and in the Gulf states. Israel is facing Iranian-backed Hezbollah on its northern border with Lebanon. The Saudis are interested in their long-standing client in Lebanon, the Hariri family."

Middle East analyst Daniel Byman, who is the director of Georgetown University's Security Studies Program, said, "The most popular people in the Islamic world right now, and the two most popular people in Egypt, are Hezbollah's leader, Hassan Nasrallah, and Iranian President Mahmoud Ahmadinejad. And their popularity is increasing. They are like Che Guevara."

Sources close to the administration's Iran policy say the primary vehicle for U.S. government planning on Iran is the Iran-Syria Policy and Operations Group, an inter-agency body created in early 2006 that includes representatives and Iran specialists from the Office of the Vice President, the Office of the Secretary of Defense, the State Department, the Treasury Department, the Joint Chiefs of Staff, the National Security Council, and other agencies.

The overall group has four or five subgroups, including a recently combined one that focuses on "public diplomacy and promoting democracy" in Iran. That subgroup doled out some of the $85 million that Congress approved to support pro-democracy efforts in Iran. A second subgroup is devoted exclusively to Syria. A third focuses on counter-terrorism issues, and a fourth has a military agenda. Formally overseen by a steering committee headed by National Security Council Middle East adviser Elliott Abrams and James Jeffrey, the State Department's principal deputy assistant secretary for Near Eastern affairs, the so-called ISOG is managed day to day by David Denehy, a senior adviser at State's Bureau of Near Eastern Affairs and a former official with the International Republican Institute. Denehy has recently told some associates that he plans to move sometime early this year to the Office of the Vice President, where he would continue to coordinate the Iran-Syria group.

In addition to the ISOG, the Pentagon last spring set up a six-person Iranian directorate in the Office of the Secretary of Defense that includes three former members of the Office of Special Plans, a controversial unit established by former Defense Secretary Donald Rumsfeld that produced discredited intelligence analysis linking Saddam Hussein to Al Qaeda.

U.S. officials say that multiple inter-agency meetings on Iran are going on every day under the auspices of the Iran-Syria Policy and Operations Group, and that the pace of activity has quickened. "There are so many meetings; we're doing stuff, writing papers; actions are being taken," said one person involved with the group. "It's very intense."