Blowup? America’s Hidden War With Iran


Richard Moore

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    Blowup? America's Hidden War With Iran
    By Michael Hirsh and Maziar Bahari
    Monday 19 February 2007 Issue

Jalal Sharafi was carrying a video game, a gift for his daughter, when he found 
himself surrounded. On that chilly Sunday morning, the second secretary at the 
Iranian Embassy in Baghdad had driven himself to the commercial district of 
Arasat Hindi to checkout the site for a new Iranian bank. He had ducked into a 
nearby electronics store with his bodyguards, and as they emerged four armored 
cars roared up and disgorged at least 20 gunmen wearing bulletproof vests and 
Iraqi National Guard uniforms. They flashed official IDs, and manhandled Sharafi
into one car. Iraqi police gave chase, guns blazing. They shot up one of the 
other vehicles, capturing four assailants who by late last week had yet to be 
publicly identified. Sharafi and the others disappeared.

At the embassy, the diplomat's colleagues were furious. "This was a group 
directly under American supervision," said one distraught Iranian official, who 
was not authorized to speak on the record. Abdul Karim Inizi, a former Iraqi 
Security minister close to the Iranians, pointed the finger at an Iraqi 
black-ops unit based out at the Baghdad airport, who answer to American Special 
Forces officers. "It's plausible," says a senior Coalition adviser who is also 
not authorized to speak on the record. The unit does exist - and does specialize
in snatch operations.

The Iranians have reason to feel paranoid. In recent weeks senior American 
officers have condemned Tehran for providing training and deadly explosives to 
insurgents. In a predawn raid on Dec. 21, U.S. troops barged into the compound 
of the most powerful political party in the country, the Supreme Council for the
Islamic Revolution in Iraq, and grabbed two men they claimed were officers in 
Iran's Revolutionary Guards. Three weeks later U.S. troops stormed an Iranian 
diplomatic office in Irbil, arresting five more Iranians. The Americans have 
hinted that as part of an escalating tit-for-tat, Iranians may have had a hand 
in a spectacular raid in Karbala on Jan. 20, in which four American soldiers 
were kidnapped and later found shot, execution style, in the head. U.S. forces 
promised to defend themselves.

Some view the spiraling attacks as a strand in a worrisome pattern. At least one
former White House official contends that some Bush advisers secretly want an 
excuse to attack Iran. "They intend to be as provocative as possible and make 
the Iranians do something [America] would be forced to retaliate for," says 
Hillary Mann, the administration's former National Security Council director for
Iran and Persian Gulf Affairs. U.S. officials insist they have no intention of 
provoking or otherwise starting a war with Iran, and they were also quick to 
deny any link to Sharafi's kidnapping. But the fact remains that the 
longstanding war of words between Washington and Tehran is edging toward 
something more dangerous. A second Navy carrier group is steaming toward the 
Persian Gulf, and NEWSWEEK has learned that a third carrier will likely follow. 
Iran shot off a few missiles in those same tense waters last week, in a highly 
publicized test. With Americans and Iranians jousting on the chaotic 
battleground of Iraq, the chances of a small incident's spiraling into a crisis 
are higher than they've been in years.

Sometimes it seems as if a state of conflict is natural to the U.S.-Iranian 
relationship - troubled since the CIA-backed coup that restored the shah to 
power in 1953, tortured since Ayatollah Khomeini's triumph in 1979. With the 
election of George W. Bush on the one hand, and Iranian President Mahmoud 
Ahmadinejad on the other, the two countries are now led by men who deeply 
mistrust the intentions and indeed doubt the sanity of the other. Tehran insists
that U.S. policy is aimed at toppling the regime and subjugating Iran. The White
House charges that Iran is violently sabotaging U.S. efforts to stabilize the 
Middle East while not so secretly developing nuclear weapons. As the raids and 
skirmishes in Iraq underscore, a hidden war is already unfolding.

Yet a NEWSWEEK investigation has also found periods of marked cooperation and 
even tentative steps toward possible reconciliation in recent years - far more 
than is commonly realized. After September 11 in particular, relations grew 
warmer than at any time since the fall of the shah. America wanted Iran's help 
in Afghanistan, and Iran gave it, partly out of fear of an angry superpower and 
partly in order to be rid of its troublesome Taliban neighbors. In time, 
hard-liners on both sides were able to undo the efforts of diplomats to build on
that foundation. The damage only worsened as those hawks became intoxicated with
their own success. The secret history of the Bush administration's dealings with
Iran is one of arrogance, mistrust and failure. But it is also a history that 
offers some hope.

For Iran's reformists, 9/11 was a blessing in disguise. Previous attempts to 
reach out to America had been stymied by conservative mullahs. But the fear that
an enraged superpower would blindly lash out focused minds in Tehran. Mohammad 
Hossein Adeli was one of only two deputies on duty at the Foreign Ministry when 
the attacks took place, late on a sweltering summer afternoon. He immediately 
began contacting top officials, insisting that Iran respond quickly. "We wanted 
to truly condemn the attacks but we also wished to offer an olive branch to the 
United States, showing we were interested in peace," says Adeli. To his relief, 
Iran's top official, Ayatollah Ali Khameini, quickly agreed. "The Supreme Leader
was deeply suspicious of the American government," says a Khameini aide whose 
position does not allow him to be named. "But [he] was repulsed by these 
terrorist acts and was truly sad about the loss of the civilian lives in 
America." For two weeks worshipers at Friday prayers even stopped chanting 
"Death to America."

The fear dissipated after Sept. 20, when the FBI announced that Al Qaeda was 
behind the attacks. But there was new reason for cooperation: for years Tehran 
had been backing the Afghan guerrillas fighting the Taliban, Osama bin Laden's 
hosts. Suddenly, having U.S. troops next door in Afghanistan didn't seem like a 
bad idea. American and Iranian officials met repeatedly in Geneva in the days 
before the Oct. 7 U.S. invasion. The Iranians were more than supportive. "In 
fact, they were impatient," says a U.S. official involved in the talks, who 
asked not to be named speaking about topics that remain sensitive. "They'd ask, 
'When's the military action going to start? Let's get going!' "

Opinions differ wildly over how much help the Iranians actually were on the 
ground. But what is beyond doubt is how critical they were to stabilizing the 
country after the fall of Kabul. In late November 2001, the leaders of 
Afghanistan's triumphant anti-Taliban factions flew to Bonn, Germany, to map out
an interim Afghan government with the help of representatives from 18 Coalition 
countries. It was rainy and unseasonably cold, and the penitential month of 
Ramadan was in full sway, but a carnival mood prevailed. The setting was a 
splendid hotel on the Rhine, and after sunset the German hosts laid on generous 
buffet meals under a big sign promising that everything was pork-free.

The Iranian team's leader, Javad Zarif, was a good-humored University of Denver 
alumnus with a deep, measured voice, who would later become U.N. ambassador. Jim
Dobbins, Bush's first envoy to the Afghans, recalls sharing coffee with Zarif in
one of the sitting rooms, poring over a draft of the agreement laying out the 
new Afghan government. "Zarif asked me, 'Have you looked at it?' I said, 'Yes, I
read it over once'," Dobbins recalls. "Then he said, with a certain twinkle in 
his eye: 'I don't think there's anything in it that mentions democracy. Don't 
you think there could be some commitment to democratization?' This was before 
the Bush administration had discovered democracy as a panacea for the Middle 
East. I said that's a good idea."

Toward the end of the Bonn talks, Dobbins says, "we reached a pivotal moment." 
The various parties had decided that the suave, American-backed Hamid Karzai 
would lead the new Afghan government. But he was a Pashtun tribal leader from 
the south, and rivals from the north had actually won the capital. In the brutal
world of Afghan power politics, that was a recipe for conflict. At 2 a.m. on the
night before the deal was meant to be signed, the Northern Alliance delegate 
Yunus Qanooni was stubbornly demanding 18 out of 24 new ministries. Frantic 
negotiators gathered in the suite of United Nations envoy Lakhdar Brahimi. A 
sleepy Zarif translated for Qanooni. Finally, at close to 4 a.m., he leaned over
to whisper in the Afghan's ear: "This is the best deal you're going to get." 
Qanooni said, "OK."

That moment, Dobbins says now, was critical. "The Russians and the Indians had 
been making similar points," he says. "But it wasn't until Zarif took him aside 
that it was settled ... We might have had a situation like we had in Iraq, where
we were never able to settle on a single leader and government." A month later 
Tehran backed up the political support with financial muscle: at a donor's 
conference in Tokyo, Iran pledged $500 million (at the time, more than double 
the Americans') to help rebuild Afghanistan.

In a pattern that would become familiar, however, a chill quickly followed the 
warming in relations. Barely a week after the Tokyo meeting, Iran was included 
with Iraq and North Korea in the "Axis of Evil." Michael Gerson, now a NEWSWEEK 
contributor, headed the White House speechwriting shop at the time. He says Iran
and North Korea were inserted into Bush's controversial State of the Union 
address in order to avoid focusing solely on Iraq. At the time, Bush was already
making plans to topple Saddam Hussein, but he wasn't ready to say so. Gerson 
says it was Condoleezza Rice, then national-security adviser, who told him which
two countries to include along with Iraq. But the phrase also appealed to a 
president who felt himself thrust into a grand struggle. Senior aides say it 
reminded him of Ronald Reagan's ringing denunciations of the "evil empire."

Once again, Iran's reformists were knocked back on their heels. "Those who were 
in favor of a rapprochement with the United States were marginalized," says 
Adeli. "The speech somehow exonerated those who had always doubted America's 
intentions." The Khameini aide concurs: "The Axis of Evil speech did not 
surprise the Supreme Leader. He never trusted the Americans."

It would be another war that nudged the two countries together again. At the 
beginning of 2003, as the Pentagon readied for battle against Iraq, the 
Americans wanted Tehran's help in case a flood of refugees headed for the 
border, or if U.S. pilots were downed inside Iran. After U.S. tanks thundered 
into Baghdad, those worries eased. "We had the strong hand at that point," 
recalls Colin Powell, who was secretary of State at the time. If anything, 
though, America's lightning campaign made the Iranians even more eager to deal. 
Low-level meetings between the two sides had continued even after the Axis of 
Evil speech. At one of them that spring, Zarif raised the question of the 
Mujahedin-e Khalq (MEK), a rabidly anti-Iranian militant group based in Iraq. 
Iran had detained a number of senior Qaeda operatives after 9/11. Zarif floated 
the possibility of "reciprocity" - your terrorists for ours.

The idea was brought up at a mid-May meeting between Bush and his chief advisers
in the wood-paneled Situation Room in the White House basement. Riding high, 
Bush seemed to like the idea of a swap, says a participant who asked to remain 
anonymous because the meeting was classified. Some in the room argued that 
designating the militants as terrorists had been a mistake, others that they 
might prove useful against Iran someday. Powell opposed the handover for a 
different reason: he worried that the captives might be tortured. The vice 
president, silent through most of the meeting as was his wont, muttered 
something about "preserving all our options." (Cheney declined to comment.) The 
MEK's status remains unresolved.

Around this time what struck some in the U.S. government as an even more 
dramatic offer arrived in Washington - a faxed two-page proposal for 
comprehensive bilateral talks. To the NSC's Mann, among others, the Iranians 
seemed willing to discuss, at least, cracking down on Hizbullah and Hamas (or 
turning them into peaceful political organizations) and "full transparency" on 
Iran's nuclear program. In return, the Iranian "aims" in the document called for
a "halt in U.S. hostile behavior and rectification of the status of Iran in the 
U.S. and abolishing sanctions," as well as pursuit of the MEK.

An Iranian diplomat admits to NEWSWEEK that he had a hand in preparing the 
proposal, but denies that he was its original author. Asking not to be named 
because the topic is politically sensitive, he says he got the rough draft from 
an intermediary with connections at the White House and the State Department. He
suggested some relatively minor revisions in ballpoint pen and dispatched the 
working draft to Tehran, where it was shown to only the top ranks of the regime.
"We didn't want to have an 'Irangate 2'," the diplomat says, referring to the 
secret negotiations to trade weapons for hostages that ended in scandal during 
Reagan's administration. After Iran's National Security Council approved the 
document (under orders from Khameini), a final copy was produced and sent to 
Washington, according to the diplomat.

The letter received a mixed reception. Powell and his deputy Richard Armitage 
were suspicious. Armitage says he thinks the letter represented creative 
diplomacy by the Swiss ambassador, Tim Guldimann, who was serving as a 
go-between. "We couldn't determine what [in the proposal] was the Iranians' and 
what was the Swiss ambassador's," he says. He added that his impression at the 
time was that the Iranians "were trying to put too much on the table." Quizzed 
about the letter in front of Congress last week, Rice denied ever seeing it. "I 
don't care if it originally came from Mars," Mann says now. "If the Iranians 
said it was fully vetted and cleared, then it could have been as important as 
the two-page document" that Richard Nixon and Henry Kissinger received from 
Beijing in 1971, indicating Mao Zedong's interest in opening China.

A few days later bombs tore through three housing complexes in Saudi Arabia and 
killed 29 people, including seven Americans. Furious administration hard-liners 
blamed Tehran. Citing telephone intercepts, they claimed the bombings had been 
ordered by Saif al-Adel, a senior Qaeda leader supposedly imprisoned in Iran. 
"There's no question but that there have been and are today senior Al Qaeda 
leaders in Iran, and they are busy," Defense Secretary Donald Rumsfeld growled. 
Although there was no evidence the Iranian government knew of Adel's activities,
his presence in the country was enough to undermine those who wanted to reach 

Powell, for one, thinks Bush simply wasn't prepared to deal with a regime he 
thought should not be in power. As secretary of State he met fierce resistance 
to any diplomatic overtures to Iran and its ally Syria. "My position in the 
remaining year and a half was that we ought to find ways to restart talks with 
Iran," he says of the end of his term. "But there was a reluctance on the part 
of the president to do that." The former secretary of State angrily rejects the 
administration's characterization of efforts by him and his top aides to deal 
with Tehran and Damascus as failures. "I don't like the administration saying, 
'Powell went, Armitage went ... and [they] got nothing.' We got plenty," he 
says. "You can't negotiate when you tell the other side, 'Give us what a 
negotiation would produce before the negotiations start'."

Terrorism wasn't the only concern when it came to Iran. For decades, 
Washington's abiding fear has been that Iran might pick up where the shah's 
nuclear program (initially U.S.-backed) left off, and make the Great Satan the 
target of its atomic weapons. The Iranians, who were signatories to the Nuclear 
Non-Proliferation Treaty, insisted they had nothing to hide. They lied. In 
August 2002, a group affiliated with the MEK revealed the extent of nuclear 
activities at a facility in Isfahan, where the Iranians had been converting 
yellowcake to uranium gas, and in Natanz, where the infrastructure needed to 
enrich that material to weapons-grade uranium was being built. A year later 
Pakistani scientist AQ Khan's covert nuclear-technology network unraveled, 
bringing further embarrassments and investigations.

For months, European negotiators worked to get Tehran to formalize a temporary 
and tenuous deal to freeze its nuclear fuel-development program. In May 2005, 
they met with Iran's chief nuclear negotiator, Hassan Rowhani, at the Iranian 
ambassador's opulent Geneva residence. There was some reason to be optimistic: 
in Washington, Rice had announced that the United States would not block Iran's 
bid to join the World Trade Organization. Yet a sense of enormous tension filled
the room, according to a diplomat who was there but asked not to be identified 
revealing official discussions. The Europeans told Rowhani they hadn't nailed 
down exactly what they could offer in return for a freeze, and the Americans 
still weren't fully onboard. Iran would have to wait for the details for a few 
more months. But in the meantime, the program had to remain suspended.

Rowhani, in full clerical robes and turban, obviously was not authorized to make
any such deal. "The man was in front of us sweating," says the European 
diplomat. "He was trapped: he couldn't go further ... I realized very clearly 
that he couldn't deliver, that he was not allowed to deliver. Psychologically he
was broken. Physically he was almost broken."

Part of the problem was that elections in Iran were only a few days away. They 
brought to power a man who satisfied the darkest stereotypes of Iran's fervid 
leaders. Mahmoud Ahmadinejad publicly renounced the freeze on Iran's nuclear 
fuel-development program, broke the seals the International Atomic Energy Agency
had placed on Iran's conversion facilities at Isfahan and pushed ahead with work
at Natanz. In the span of no more than a month or two, nuclear enrichment had 
become a symbol of national pride for a much wider spectrum of Iranian society 
than the voters who elected Ahmadinejad. In a warped parallel to Bush, who found
his voice after 9/11 rallying Americans to the struggle against a vast and 
unforgiving enemy, the Iranian president rose in stature throughout the Middle 
East as he railed against America. The one problem U.S. negotiators had always 
had with Iran was determining who in the Byzantine regime to talk to, and 
whether they could deliver anything. Now they faced another: the Iranians had 
almost no incentive to talk. With the United States bogged down in Iraq, Iran 
now had the leverage - roles had reversed.

In its second term the Bush administration, despite Powell's sour memories, has 
supported European efforts to resolve the nuclear impasse diplomatically. Rice 
has offered to meet her Iranian counterpart "any time, anywhere." "What has 
blocked such contact is the refusal of Iran to meet the demands of the entire 
international community," says a White House official, who could not be named 
discussing Iran. The official expressed deep frustration with critics. He argued
they were naive about Tehran's intentions, and "parroting Iranian propaganda."

By last summer Iran seemed ascendant. Hizbullah's performance in the Lebanon war
had rallied support for Ahmadinejad, one of the group's loudest proponents, 
across the Arab world. In a series of meetings in New York in September the 
Iranian president was defiant, almost giddy. (A senior British official who 
would only speak anonymously about deliberations with the Americans describes 
Tehran's mood around this time as "cock-a-hoop.") He would not back down when 
grilled about his dismissals of the Holocaust, and scoffed at the threat of U.N.
sanctions over Iran's nuclear defiance.

The West's patience was running out. In Baghdad, American troops seemed 
powerless to stop a wave of gruesome sectarian killings that they claimed were 
fueled by Iran. In Amman and Riyadh, Arab leaders warned darkly of a rising 
"Shia crescent." After Bush's defeat in the midterm elections, Israeli officials
began wondering aloud if they would have to deal with the Iranian threat on 
their own. Partly in consultation with the British, U.S. officials began to map 
out a broader strategy to fight back. "We felt we needed to have a much more 
knitted-together policy, with a number of different strands working, to hit 
different parts of the Iranian system," says the senior British official.

Critics have questioned how much of that plan is military - whether the 
administration is secretly setting a course for war as it did back in 2002. Last
week officials were at great pains to deny that scenario. "We are not planning 
offensive military operations against Iran," said Under Secretary of State 
Nicholas Burns. The Pentagon does have contingency plans for all-out war with 
Iran, on which Bush was briefed last summer. The targets would include Iran's 
air-defense systems, its nuclear- and chemical-weapons facilities, ballistic 
missile sites, naval and Revolutionary Guard bases in the gulf, and intelligence
headquarters. But generals are convinced that no amount of firepower could do 
more than delay Tehran's nuclear program. U.S. military analysts have concluded 
that nothing short of regime change would completely eliminate the threat - and 
America simply doesn't have the troops needed.

Iraq is another story. American military officials and politicians accuse the 
Iranian government of providing Iraqis with an new arsenal of advanced 
rocket-propelled-grenade launchers, heavy-duty mortars and the newest 
armor-piercing technology for roadside bombs - explosively formed projectiles 
(EFPs), said to have been developed by Hizbullah. Military security experts are 
especially worried by "passive infrared sensors," readily available devices that
are often used for burglar alarms or automatic light switches but increasingly 
seen as triggers for improvised explosive devices (IEDs). Unlike cell phones, 
remote-control systems and garage-door openers, the sensors emit no signal, 
making them that much tougher to spot before they detonate.

What's scant is hard evidence that the weapons are provided by the Iranian 
government, rather than arms dealers or rogue Revolutionary Guard elements. 
"Iranian lethal support for select groups of Iraqi Shia militants clearly 
intensifies the conflict in Iraq," says the latest National Intelligence 
Estimate on Iraq. But the most that can be said with certainty is that Tehran is
failing to stop the traffic. The Iranians themselves admit they're not trying as
hard as they could. "I can give you my word that we don't give IEDs to the Mahdi
Army," says an Iranian intelligence official who asked not to be named because 
secrecy is his business. "But if you asked me if we could control our borders 
better if we wanted to, I would say: 'Yes, if we knew that the Americans would 
not use Iraq as a base to attack Iran'."

The real thrust of Washington's multipronged attack is political. Banking 
restrictions levied by the U.S. Treasury have begun to pinch the Iranian 
economy. Voters angry about rising prices dealt Ahmadinejad an embarrassing blow
in municipal elections in December, when his supporters were trounced. That 
wouldn't much matter if he still retained Khameini's support. But that may no 
longer be the case. The Khameini aide says the Supreme Leader blames 
Ahmadinejad's overheated rhetoric about Israel and the Holocaust for the 
unanimous Security Council resolution that passed in late December, demanding 
that Tehran suspend its nuclear program.

Every time America or Iran has gained an advantage over the other in the last 
five years, however, they've overplayed their hand. More pressure on Ahmadinejad
could well make him popular again - the chief martyr in a martyr culture. Sunni 
insurgents in Iraq need only kill some Americans and plant Iranian IDs nearby to
start a full-scale war. Like so many times in this complicated relationship, 
this is a moment of opportunity. And one of equally great danger.

With reporting by Babak Dehghanpisheh in Baghdad and John Barry, Mark Hosenball,
Richard Wolffe in Washington, Christopher Dickey in Paris, Stryker McGuire in 
London, and Christian Caryl, Owen Matthews, Scott Johnson, Kevin Peraino, Ron 
Moreau and Dan Ephron.

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