01 May 2012

Iran and Israel: A Brief and Optimistic Update

Remember how a couple of months ago everyone was talking about an imminent Israeli air strike against Iranian nuclear facilities? And how the Obama administration was trying very hard to placate Israeli PM Netanyahu?

If you missed the hoopla surrounding this issue here is a summary of all the hard rhetoric. At the time, I reasoned that despite all that bluster, Israel had no intention to undertake such a risky move (especially one with so little payoff) and surmised that there were probably other goals behind this campaign.

Then there was a lull in the sound and fury. It coincided with a meeting on 14 April between Iran and the so called P5+1 (5 permanent Security Council member + Germany) in Istanbul. I am guessing that the location was a subtle signal to Iran. On the positive side, it meant that a regional issue was handled within the region and Iran was not "summoned" to one of the Western capitals as it used to be the case. The host country was a Muslim neighbor and probably the only Sunni entity without an ax to grind against Shiites. On the negative side, it was a reminder to Iran that Turkey was an ascending regional power and its interests were more aligned with the US than with the Islamic Republic.

During the negotiations the Turkish FM Davutoglu (the architect of the now defunct "zero problems with our neighbors" policy) proved to be a skilled intermediary and managed to mollify both sides behind closed doors. But, on the face of it, these talks were hardly a resounding success story, as the two sides simply agreed to continue to talk. This month they will meet again in Iraq.

Fast forward to two days ago, when Yuval Diskin the former head of Shin Bet (Israel's version of MI5 or FBI or CSIS) issued a blunt warning that the Netanyahu government was misleading the Israeli public about the positive effects of an air strike.
He said:
“They tell the public that if Israel acts, Iran won't have a nuclear bomb,” he explained. “This is misleading. Actually, many experts say that an Israeli attack would accelerate the Iranian nuclear race."
Not unexpectedly, this lead to an avalanche of criticism from Netanyahu cabinet members and officials. Even without any knowledge of Israeli politics you could rightly guess that such harsh words from former intelligence chiefs are very rare.

I was curious about what triggered his intervention. Especially since a few days earlier IDF Chief of Staff Lt. Gen. Benny Gantz told Haaretz newpaper that he did not believe that Iran will decide to build nuclear weapons. While Gen. Gantz' tone is much more measured than the Diskin outburst, his statement directly contradicted both his Defense Minister and his Prime Minister.

Yesterday, the New York Times had a front page piece entitled "Experts Believe Iran Conflict Is Less Likely." Despite the less than stellar results of the Istanbul round, the administration officials played it as a turning point:
The talks two weeks ago in Istanbul between Iran and the United States and other world powers were something of a turning point in the current American thinking about Iran. In the days leading up to the talks, there had been little optimism in Washington, but Iranian negotiators appeared more flexible and open to resolving the crisis than expected, even though no agreement was reached other than to talk again, in Baghdad next month. 
The paper of record, as they would like to call themselves, argued that this new shift away from conflict was due to changing circumstances in both countries:
The threat of tighter economic sanctions has prompted the Iranians to try more flexible tactics in their dealings with the United States and other powers, while the revival of direct negotiations has tempered the most inflammatory talk on all sides.
A growing divide in Israel between political leaders and military and intelligence officials over the wisdom of attacking Iran has begun to surface.

From where I stand, it looks like the General Gantz and Yuval Diskin interventions helped the Americans to frame the current negotiations in a specific way. It served to downplay the heated rhetoric coming from the Israeli leadership and gave the Iranian regime cover. That means that the Americans believe that Iran is getting ready to give up their nuclear ambitions ahead of the July 1 deadline for crippling sanctions (including their exclusion from the SWIFT system making all import and export transactions extremely difficult).

This way, Iranian mullahs can avoid the appearance of backing down because they were afraid of an Israeli strike. Instead they are likely to claim that, as Gen Gantz suggested, they never had any such plans in the first place.

In fact, chief negotiator Saeed Jalili said in Istanbul that the Supreme Leader Ayetullah Ali Khameini issued a fatwa declaring all nuclear weapons "haram" (sinful). That is a significant step given the religious foundations of Iran's political system.

My guess is that they will announce some tangible verification measures during Baghdad talks. They did not do it in Istanbul because they were playing for time: they probably want to advance their nuclear know-how as much as they can and every week counts. As most intelligence analysts believe, Iran wants mostly the knowledge not so much the weapons. The know-how can never be taken away, it can be operationalized if needed and it cannot be used as a pretext for a preemptive attack.

Making a deal in Baghdad had another side benefit. This way, their regional rival Turkey would not be able to claim any credit in that outcome. Instead, the spotlight would be on Iran's best friend in the region, Iraq' Shiite PM Nouri al-Maliki.

Turkish Iraqi relations have recently turned chilly over Syria and when the Arab League met in late March in Baghdad (Iraq is the current president of the League) one of Maliki's first moves was to rescind Turkey's long standing observer status. A nuclear deal in Baghdad would be a nice coup for Maliki.

The American efforts to frame the debate also aim to reduce tensions in the region. With Syria a burning wreck, the US wants the overheated rhetoric between Israel and Iran removed from the agenda. It serves no good purpose. More importantly, in the current climate it could lead to an accidental escalation.

Finally, with this concerted move, the administration is trying to prevent a speculative rise in oil  prices. The Times article suggest election year concerns but there is more to it than that. The US recovery is very fragile and the economy could plunge back into a recession very easily. Eurozone crisis will likely get worse over the course of this year and higher oil prices are the last thing they need. And emerging economies in Asia and Latin America have been slowing down.

In short, I believe that, not only will there not be an Israeli strike against Iran, there will be some kind of deal in the next couple of months, ahead of the July 1st deadline.

We'll see if my cautious optimism based on these events is warranted.

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