January 30, 2007
Europe Resists U.S. Push to Curb Iran Ties

By STEVEN R. WEISMAN
WASHINGTON, Jan. 29 — European governments are resisting Bush administration demands that they curtail support for exports to Iran and that they block transactions and freeze assets of some Iranian companies, officials on both sides say. The resistance threatens to open a new rift between Europe and the United States over Iran.

Administration officials say a new American drive to reduce exports to Iran and cut off its financial transactions is intended to further isolate Iran commercially amid the first signs that global pressure has hurt Iran’s oil production and its economy. There are also reports of rising political dissent in Iran.

In December, Iran’s refusal to give up its nuclear program led the United Nations Security Council to impose economic sanctions. Iran’s rebuff is based on its contention that its nuclear program is civilian in nature, while the United States and other countries believe Iran plans to make weapons.

At issue now is how the resolution is to be carried out, with Europeans resisting American appeals for quick action, citing technical and political problems related to the heavy European economic ties to Iran and its oil industry.

“We are telling the Europeans that they need to go way beyond what they’ve done to maximize pressure on Iran,” said a senior administration official. “The European response on the economic side has been pretty weak.” The American demands and European responses were provided by 10 different officials, including both supporters and critics of the American approach.

One irony of the latest pressure, European and American officials say, is that on their own, many European banks have begun to cut back their transactions with Iran, partly because of a Treasury Department ban on using dollars in deals involving two leading Iranian banks.

American pressure on European governments, as opposed to banks, has been less successful, administration and European officials say.

The main targets are Italy, Germany, France, Spain, Austria, the Netherlands, Sweden and Britain, all with extensive business dealings with Iran, particularly in energy. Administration officials say, however, that Chancellor Angela Merkel of Germany, the current head of the European Union, has been responsive.

Europe has more commercial and economic ties with Iran than does the United States, which severed relations with Iran after the revolution and seizure of hostages in 1979.

The administration says that European governments provided $18 billion in government loan guarantees for Iran in 2005. The numbers have gone down in the last year, but not by much, American and European officials say.

American officials say that European governments may have facilitated illicit business and that European governments must do more to stop such transactions. Treasury Secretary Henry M. Paulson Jr. has said the United States has shared with Europeans the names of at least 30 front companies involved in terrorism or weapons programs.

“They’ve told us they don’t have the tools,” said a senior American official. “Our answer is: get them.”

“We want to squeeze the Iranians,” said a European official. “But there are varying degrees of political will in Europe about turning the thumbscrews. It’s not straightforward for the European Union to do what the United States wants.”

Another European official said: “We are going to be very cautious about what the Treasury Department wants us to do. We can see that banks are slowing their business with Iran. But because there are huge European business interests involved, we have to be very careful.”

European officials argue that beyond the political and business interests in Europe are legal problems, because European governments lack the tools used by the Treasury Department under various American statutes to freeze assets or block transactions based on secret intelligence information.

A week ago, on Jan. 22, European foreign ministers met in Brussels and adopted a measure that might lead to laws similar to the economic sanctions, laws and presidential directives used in the United States, various officials say. But it is not clear how far those laws will reach once they are adopted.

The American effort to press Iran economically is of a piece with its other forms of pressure on Iran, including the arrest of Iranian operatives in Iraq and sending American naval vessels to the Persian Gulf.

American officials refuse to rule out military action. On Monday, President Bush said in an interview with National Public Radio that the United States would “respond firmly” if Iran engages in violence in Iraq, but that he did not mean “that we’re going to invade Iran.”

Several European officials said in interviews that they believe that the United States and Saudi Arabia have an unwritten deal to keep oil production up, and prices down, to further squeeze Iran, which is dependent on oil for its economic solvency. No official has confirmed that such a deal exists.

The Bush administration has called on Europe to do more economically as part of a two-year-old trans-Atlantic agreement in which the United States agreed to support European efforts to negotiate a resolution of the crisis over Iran’s nuclear program.

Typically, American officials say, European companies that do business with Iran get loans from European banks and then get European government guarantees for the loans on the ground that such transactions are risky in nature.

According to a document used in the discussions between Europe and the United States, which cites the International Union of Credit and Investment Insurers, the largest providers of such credits in Europe in 2005 were Italy, at $6.2 billion; Germany, at $5.4 billion; France, at $1.4 billion; and Spain and Austria, at $1 billion each.

In addition to buying oil from Iran, European countries export machinery, industrial equipment and commodities, which they say have no military application. Europeans also say that courts have overturned past efforts to stop business dealings based on secret information.

At least five Iranian banks have branches in Europe that have engaged in transactions with European banks, American and European officials say.

The five include Bank Saderat, cited last year by the United States as being involved in financing terrorism by Hezbollah and others, and Bank Sepah, cited this month as involved in ballistic missile programs.

A directory of the American Bankers Association lists Bank Sepah as having $10 billion in assets and equity of $1 billion in 2004. It has branches in Frankfurt, Paris, London and Rome. The United States Embassy in Rome has called it the preferred bank of Iran’s ballistic missile program, with a record of transactions involving Italian and other banks.

Bank Saderat had assets of $18 billion and equity of $1 billion in 2004, according to the American Bankers directory. Three other Iranian banks — Bank Mellat, Bank Melli and Bank Tejarat — have not been cited as involved in any illicit activities, but many European officials say they expect the Treasury Department to move against them eventually.

European officials say that the European Commission will meet in mid-February and approve a measure paving the way for freezing assets and blocking bank transactions for the 10 Iranian companies and 12 individuals cited in an appendix of Security Council Resolution 1737, adopted in December.

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January 29, 2007
250 Are Killed in Major Iraq Battle

By DAMIEN CAVE
BAGHDAD, Jan. 28 — At least 250 militants were killed and an American helicopter was shot down in violent clashes near the southern city of Najaf on Sunday, Iraqi officials said.

For 15 hours, Iraqi forces backed by American helicopters and tanks battled hundreds of gunmen hiding in a date palm orchard near the village of Zarqaa, about 120 miles south of Baghdad, by a river and a large grain silo that is surrounded by orchards, the officials said.

It appeared to be one of the deadliest battles in Iraq since the American-led invasion four years ago, and was the first major fight for Iraqi forces in Najaf Province since they took over control of security there from the Americans in December.

That handover was trumpeted by the Iraqi government at the time as a sign of its progress in regaining more control of Iraqi territory.

The American military confirmed that the helicopter crashed around 1:30 p.m., and said that two soldiers aboard died in the crash. But American military officials said they could not confirm the total number of dead in the battle.

Col. Ali Numaas, a spokesman for the Iraqi security forces in Najaf, and an Interior Ministry official said the number of dead could rise. They said that the fighting stopped just after 10 p.m. and that most of those killed were militants. An employee at a local morgue said at least two Iraqi policemen were among the dead.

In a statement, the United States military said bodies of the two soldiers aboard the helicopter were recovered. The crash, at least the third involving an American helicopter in Iraq over the past week, is under investigation.

The precise affiliation of the militants was unclear.

Asad Abu Ghalal, the governor of Najaf Province, said the fighters in the orchard were Iraqi and foreign, some wearing the brown, white and maroon regalia of Pakistani and Afghan fighters. He said they had come to assassinate Shiite clerics and attack religious convoys that were gathering in Najaf, one of Shiite Islam’s holiest cities, and other southern cities for Ashura, a Shiite holiday that starts Monday night.

At a news conference on Sunday afternoon, Mr. Ghalal said the fighters called themselves the Soldiers of Heaven, and seemed to be part of a wider Sunni effort to disrupt Ashura, which marks the seventh-century death of the Prophet Muhammad’s grandson Hussein.

The holiday attracts hundreds of thousands of Shiite pilgrims to Karbala, where Hussein is believed to have been killed, and for days, the roads of southern Iraq have been filled with convoys of pilgrims beating drums and preparing for the day’s rituals, which include self-flagellation. In past years, Ashura has been a magnet for violent attacks from Sunnis, with at least 180 people killed on the holiday three years ago.

But two senior Shiite clerics said the gunmen were part of a Shiite splinter group that Saddam Hussein helped build in the 1990s to compete with followers of the venerated Shiite religious leader Grand Ayatollah Ali al-Sistani. They said the group, calling itself the Mehwadiya, was loyal to Ahmad bin al-Hassan al-Basri, an Iraqi cleric who had a falling out with Muhammad Bakr al-Sadr — father-in-law of the Shiite leader Moktada al-Sadr — in Hawza, a revered Shiite seminary in Najaf.

The clerics spoke on condition of anonymity because they said they had been ordered not to discuss Shiite divisions.

Iraqi officials said the group of 100 to 600 fighters was discovered in the orchard Saturday night, leading to a midnight meeting of local authorities who hatched an attack plan.

“We agreed to carry out an operation to take them by surprise,” said Mr. Ghalal, the Najaf governor.

At dawn, the governor said, the area was surrounded and the offensive began. He said the militants had antiaircraft rockets and long-range sniper rifles, and, according to a soldier involved in the fighting, Iraqi security forces encountered heavy resistance. Commanders called for reinforcements and a brigade of soldiers from nearby Babil Province joined the fight.

Eventually, Iraqi officials said, they called on the United States military for help. American tanks and helicopter gunships arrived, and gun battles continued into the night. By 10:30 p.m., the gunfire had died down and Iraqi troops began searching the area for bodies.

Elsewhere in the heavily Shiite south, there were other signs of potential strikes on Ashura. Officials in Karbala said the police arrested three men — a Saudi, an Afghan and a Moroccan — who were found on the road between Najaf and Karbala with a suicide bomb belt and explosives in their car. The officials said the vehicle had been hollowed out so it could be used as a car bomb.

The United States military also announced the deaths of a soldier and a marine on Saturday.

The marine died from combat wounds in Anbar Province, where American troops have been battling Sunni insurgents for months. The soldier, a member of the military police, was killed when a roadside bomb exploded near his patrol north of Baghdad.

Throughout Iraq, the drumbeat of daily violence continued.

In Kirkuk, two car bombs at a Kurdish car dealership and a Kurdish market killed at least 17 people, authorities said.

In Baghdad, 54 bodies were found, many showing signs of torture. At least five girls were killed and 20 wounded when a mortar round hit a school in Adil, a Sunni neighborhood.

At 7:30 a.m., a bomb inside a minibus exploded in a Shiite area of the capital east of the Tigris River, killing one and wounding five. Two hours later, in the Sunni area of Yarmouk in western Baghdad, gunmen killed four people, including a consultant with the Ministry of Industry and his daughter, who were shot on their way to work.

After dark Sunday night, residents of the Yarmouk neighborhood reported that heavy clashes had broken out, with gun and mortar fire raining down for hours.

Also on Sunday, Saddam Hussein’s cousin Ali Hassan al-Majid acknowledged in court that he had given orders to destroy scores of villages during Iraq’s campaign against the Kurds in the 1980s.

Prosecutors introduced two dozen documents they said incriminated members of the Hussein government in the killing of tens of thousands of Kurds.

The Associated Press reported that Mr. Majid, also known as Chemical Ali because he is accused of using chemical weapons against the Kurds, said the area “was full of Iranian agents.”

“We had to isolate these saboteurs,” he said.

He added, “I am the one who gave orders to the army to demolish villages and relocate the villagers.”

Khalid al-Ansary and Qais Mizher contributed reporting from Baghdad, and an Iraqi employee of The New York Times from Najaf

CHEMICAL ALI' ADMITS HE ORDERED KURDISH VILLAGES CLEARED. During the
January 28 session of the Anfal trial, Ali Hassan al-Majid, a cousin
of former Iraqi President Saddam Hussein and the former
secretary-general of the northern bureau of the Iraqi Ba'ath Party,
told the court he ordered the Iraqi Army to clear 20 Kurdish villages
in 1988, international media reported the same day. He argued that it
was a legitimate military campaign since Kurdish guerrillas in the
north were assisting Iranian agents during the last stages of the
Iraq-Iran War. "The orders were given as the region was full of
Iranian agents. We had to isolate these saboteurs. We know that Iran
had taken a lot of our land...almost more than the size of Lebanon,"
al-Majid said. His acknowledgement came after prosecutors presented
the court with more than 20 documents detailing the Kurdish villages
that were destroyed and the people who were forced to flee from their
homes. Al-Majid insisted his decisions were correct and said had
nothing to apologize for. SS

CHEMICAL ALI' ADMITS HE ORDERED KURDISH VILLAGES CLEARED. During the
January 28 session of the Anfal trial, Ali Hassan al-Majid, a cousin
of former Iraqi President Saddam Hussein and the former
secretary-general of the northern bureau of the Iraqi Ba'ath Party,
told the court he ordered the Iraqi Army to clear 20 Kurdish villages
in 1988, international media reported the same day. He argued that it
was a legitimate military campaign since Kurdish guerrillas in the
north were assisting Iranian agents during the last stages of the
Iraq-Iran War. "The orders were given as the region was full of
Iranian agents. We had to isolate these saboteurs. We know that Iran
had taken a lot of our land...almost more than the size of Lebanon,"
al-Majid said. His acknowledgement came after prosecutors presented
the court with more than 20 documents detailing the Kurdish villages
that were destroyed and the people who were forced to flee from their
homes. Al-Majid insisted his decisions were correct and said had
nothing to apologize for. SS

Barnett: When America threatens war with Iran
By THOMAS P.M. BARNETT, tom@thomaspmbarnett.com
January 28, 2007

In international affairs, the best threats are often left unpublicized. In his State of the Union speech this week, President Bush signaled to the Iranians in no uncertain terms that America will not let it develop nuclear arms.
Behind the scenes, the White House reportedly tells Tehran's leaders that, unless they stop messing around in Iraq, we will take the fight directly to Iran.



Rumor mongering or legitimate diplomatic demarche?

Even if there's no intention on following through, this threat - if actually delivered - can be a smart play on Bush's part.

First, the Iranians expect it. Not to do so signals we're more nervous about the surge strategy than we're letting on.

Hard, I know.

Second, when you've got it, flaunt it. We can strike Iran at will, given our air superiority. Plus, we Americans in general and Bush-Cheney in particular are known as the bomb-happy sort. So the Iranians must seriously consider our threat.

Third, when they're unsure, make 'em really uncertain. Bush and Cheney have gone out of their way to state that neither is willing to leave office with Iran grasping nuclear weapons - the second bird they'd hope to kill with this stone.

On nukes, Iranian president Mahmoud Ahmadinejad, who just suffered a worse mid-term election than Bush, is being publicly chastised by mullahs clearly worried that he's writing checks with his mouth that their regime can't cash.

So why not turn the tables on him now? Richard Nixon employed this tactic during the Vietnam War: letting your enemies wonder just how crazy you might be.

In the Mideast, where conspiracy theories reign supreme, everyone hears what they believe and believes what they hear.

So with chief neocon Richard Perle boasting this week at Israel's pre-eminent security conference that the Bush administration is committed to going to war against Iran to derail its nuclear program, consider that chain good and yanked.

Bush and Cheney have entertained all these arguments by now because they've been building the public case for military action against Iran for well over a year.

Hill Republicans are already pushing Iran as a litmus test for 2008 to make the Democrats seem weak on something other than Iraq, where that charge now fails with voters.

The downside?

If it doesn't make sense to sit down with the Iranians to talk about Iraq because they sense our vulnerability there, then why should threats work?

The Iranians realize the surge is mostly about covering our tracks politically before the long drawdown begins.

The Bush administration surged similar sums of personnel in the recent past to no effect, so threatening escalation this time comes off as hollow, especially given the American public's overwhelming opposition to the latest surge.

I suspect Ahmadinejad couldn't be happier with this possible turn of events, because nothing would reawaken his dream to reignite revolutionary fervor among the masses better than a nasty air strike from the Great Satan. I can just see Al-Jazeera's video.

The mullahs, who believe the bomb will offer them protection from an all-out invasion (go figure), have got to be fairly confident on the outcome, having already dispersed Iran's nuclear effort across numerous, deep-underground sites.

Sure, we could set the program back some time, but we'd never be quite sure exactly what our bombing accomplished.

That's the rub for Bush and every president who follows: Iran's far enough along in its well-bunkered nuclear program that the only way America can confidently take it out - absent the all-out invasion - is to employ nuclear weapons.

That means Tehran has already achieved - however asymmetrically - a form of nuclear deterrence against us.

For Tehran's leaders, the risk here would seem acceptable, especially since, no matter which way it ends (bluff called or threat executed), Iran can later argue that its standing up to the Americans was the big reason why we pulled back from Iraq.

When we don't follow up with any ground troops, the mullahs will claim their bomb kept Iranians safe.

If Bush decides to bomb Iran conventionally, all we end up accomplishing is to: (1) strengthen the regime domestically; (2) encourage the mullahs to ramp up their proxies' violence in Iraq and elsewhere; and (3) confirm the worldview that having nukes is crucial to scaring off America's military interventions.

Too risky? Depends on how much you trust Bush's judgment now.

Thomas P.M. Barnett is a visiting scholar at the University of Tennessee's Howard Baker Center and the senior managing director of Enterra Solutions LLC. Contact him at tom@thomaspmbarnett.com.