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Reuters: "President Barack Obama's pick to become the top U.S. military officer warned Iran not to underestimate U.S. resolve in responding to attacks on U.S. forces in Iraq by Iranian-backed militia. General Martin Dempsey did not outline potential U.S. responses in the Senate hearing on his nomination to become chairman of the U.S. military's Joint Chiefs of Staff, a post he is expected to assume in October. But his remarks underscored growing U.S. concern in the wake of the killing of 14 U.S. service members in hostile incidents in June, the highest monthly toll in three years. Asked what his message to Iran would be, Dempsey said: 'It would be a gross miscalculation to believe that we will simply allow that to occur without taking serious consideration or reacting to it.' Dempsey appeared to signal his fear that Tehran might go too far, both in its actions in Iraq and with its nuclear program, which the West believes is aimed at making nuclear weapons. Tehran says the program is for peaceful purposes. In his written response to questions from the Armed Services Committee, Dempsey wrote: 'With its nuclear activities and its surrogate activities in southern Iraq, there is a high potential that Iran will make a serious miscalculation of U.S. resolve.'" http://t.uani.com/oUo1zH
WSJ: "Iran's Islamist government may be public enemy No. 1 at the White House. But in the halls of the International Monetary Fund a few blocks away, President Mahmoud Ahmadinejad is being hailed as an economic reformer. In the face of mounting international sanctions, his government has embraced over the past seven months what the IMF calls one of the boldest economic makeovers ever attempted in the oil-rich Middle East. Tehran has cut price subsidies on most energy and food products since December in a bid to shave about $60 billion or more off the government's expenses annually. The move has led to a sharp drop in domestic oil and gas consumption, according to senior Iranian and IMF officials, freeing up a larger portion of Iran's vast energy assets for export. Mr. Ahmadinejad's reforms amount to a massive redistribution of his country's wealth, since his government and the IMF say the energy subsidies largely benefited Iran's wealthy ruling classes. The president is using his government's savings to transfer to most Iranian households the equivalent of $40 per month to offset higher local prices and international sanctions, while trying to stimulate the domestic economy... Still, after seven months, Mr. Ahmadinejad's reform plan is starting to show signs of cracking. Economists inside Iran say it's unclear how long the government can sustain the current plan. Iranian businessmen and politicians interviewed in recent weeks stressed that the costs born from the international sanctions and Mr. Ahmadinejad's reforms are mounting at an alarming rate. Even poor Iranians say Mr. Ahmadinejad effectively botched the wealth redistribution, since the lump monthly payments haven't offset higher energy and food prices consumers pay due to the subsidy cuts." http://t.uani.com/nbbDhv
WSJ: "Iran's President Mahmoud Ahmadinejad Wednesday proposed a sanctioned revolutionary guard as oil minister, his latest push to tighten control over the country's most strategic sector. The move may signal further reliance on Iran's domestic oil contractors and worsen tensions within the Organization of Petroleum Exporting Countries, over which the Islamic Republic currently presides. Rostam Ghasemi was submitted in a list of candidates for ministries to be approved by parliament, Iran's Parliament website said. Mr. Ghasemi is commander of Khatam ol-Anbia, a contractor controlled by the Iranian Revolutionary Guard Corps that got a string of oil and gas deals after sanctions forced international companies to pull out of Iran. The paramilitary commander is himself named in sanctions by both the U.S. and European Union for his alleged role in helping Iran's controversial nuclear program. His appointment would be unlikely to break the mounting isolation of Iran's oil and gas industry. Instead, he is likely to prop up domestic contractors instead of foreign ones." http://t.uani.com/p3iYH1
Nuclear Program & Sanctions
Reuters: "It is up to the Indian government to resolve its oil payment impasse with Iran, Daniel L. Glaser, assistant secretary for terrorist financing at the U.S. Treasury, said on Wednesday. 'That's for the Indian government to resolve. We are happy to provide advice on the way our sanctions program works,' he said on the sideline of an event organised by the Confederation of Indian Industry. Top oil exporter Saudi Arabia has struck deals to sell 3 million barrels more oil to India in August, stepping into the vacuum created by regional rival Iran after it cut supply to New Delhi." http://t.uani.com/pxX3fT Foreign Affairs
AP: "One of Egypt's ruling generals took great pains this week to reassure his American audience: the military-led caretaker government has no intention of mending ties with Iran, a longtime foe and regional rival. But once an elected government takes over from Egypt's interim rulers in coming months, it would have to be responsive to public opinion, Maj. Gen. Mohammed al-Assar said in a speech to a think tank in Washington, suggesting that a different course is then possible. Iran has been strongly courting Egypt since the February fall of Hosni Mubarak, seeking to break its isolation and extend its influence in the Middle East. The prospect has alarmed Egypt's allies - particularly Saudi Arabia and the Arab countries of the Gulf, as well as Israel, all of which fear increasing Iranian power in the Middle East. With its own suspicions of Iran and wary of alienating its allies, Egypt is unlikely to run into an embrace with Iran." http://t.uani.com/rcRTCY
AFP: "Western powers are responsible for a recent spike in crime in Iran, the state television website on Tuesday quoted police chief Esmaeel Ahmadi Moghaddam as saying. 'We are witnessing major powers present in the region organising efforts to spread crime and and a lack of security in our society,' he said after being asked by deputies to explain an increase in crime in recent months. 'Drugs, alcohol, moral decadence, satellite channels and cultural assaults, all officially organised from abroad, are the main causes of crime' in Iran, Brigadier General Ahmadi Moghaddam said. The authorities do not regularly publish statistics on crime in the Islamic republic but in recent months several cases of murder and rape have made media headlines. Ahmadi Moghaddam also implicitly blamed the reformist opposition within the regime for the rise in violence, saying that crime 'increased after the sedition' movement of 2009." http://t.uani.com/ocLGQu
Opinion & Analysis
Hossein Askari in The National Interest: "Although the longstanding links between Iran, Syria and Hezbollah are indisputable, U.S. policy makers are singularly inept at connecting the dots and putting simultaneous pressure on all sides. If the Tehran regime were to fall, Assad would be isolated and forced to compromise with his Arab brethren and as well as with the United States; if Assad were to fall, the mullahs would face insurmountable hurdles in supporting Hezbollah; and with the fall of either the mullahs or Assad, Hezbollah leader Hassan Nasrallah's days would be numbered (and with the fall of both his days would be almost over). Has Washington seized the opportunity to get the ball rolling, by simultaneously pressuring all three adversaries wherever it can? No. Let's start with Iran. While relations with Assad and Hezbollah are important for the mullahs, their future is most directly dependent on Iran's economic vulnerabilities and fortunes, a fact the United States just doesn't seem to grasp. While Washington has correctly forsaken military options against the Tehran regime and focused instead on economic sanctions, it has not pursued sanction options that could effectively back the mullahs into submission or collapse. Simply said, sanctions must impose sufficient pain on the regime to force it to change lest it be overthrown by popular domestic protests and upheaval. A little here and a little there does nothing except to cause unnecessary hardship with no meaningful payoff. Iran needs foreign exchange to finance its imports and to support its currency at what it deems the appropriate exchange rate. Thus lower oil prices, higher domestic oil consumption (leaving less available for exports) and more demands on its limited foreign-exchange earnings and reserves are the Achilles' heels of the Tehran regime.What should America be doing to exploit these vulnerabilities? The focus should be on deterring foreign investment in Iran, increasing the cost of Iran's imports and escalating the private sector's demand for foreign exchange (especially motivating them to take money out of the country). Washington has adopted some policies along these lines, resulting in a foreign-exchange squeeze (most recently attested by the inability of China and India to pay Iran in dollars for their oil imports and by the depreciation of the Iranian riyal). But it should have done better. Washington should be persuading oil exporters, especially Saudi Arabia, the UAE and Kuwait, to increase exports and exceed their OPEC quota in order to lower oil prices. As well, it was a horrible mistake for some prominent U.S. experts to call gasoline sanctions on Iran 'the mother of all sanctions.' This pronouncement was just plain silly and counterproductive. The gasoline sanctions allowed Ahmadinejad to do what two of his predecessors were afraid to, namely, dramatically reduce Iran's gasoline consumption and thus increase the availability of foreign exchange to the regime (in the process receiving accolades from the IMF). At the same time, the United States has not sanctioned the central bank of Iran; this would have helped increase Iran's import costs and put a further squeeze on its foreign-exchange earnings. Nor has Washington pursued policies to accelerate capital flight from Iran. Iran's economic collapse, prompted by a shortage of foreign exchange, would not only endanger the regime's survival, but would also eliminate its ability to support Syria and Hezbollah, thus undermining these two U.S. adversaries as well." http://t.uani.com/oH5Wjy
Matthew Cole & Mark Schone in ABC News: "The Americans deny everything. The Israelis also deny everything -- but with a smile, according to a senior U.S. official. Regardless of who is killing Iran's nuclear scientists -- the Israelis, the Americans or the Iranians themselves -- there's no question that researchers and officials linked to Iran's alleged nuclear weapons program keep turning up dead. Since 2007, four different scientists allegedly associated with the nation's nuclear weapons program have died via bomb, gunshot or poisoning, while a fifth barely survived a car bombing. The most recent victim, 35-year-old Darioush Rezaeinejad, was shot in the neck outside his daughter's Tehran kindergarten on Saturday by two gunmen on a motorcycle. According to an unconfirmed report in an Israeli intelligence publication, Rezaeinejad was working on a nuclear detonator, and was seen daily at a nuclear lab in northern Tehran. Rezaeinejad's murder sparked official outrage in Iran. State media published an online report Sunday evening in which a leader of the nation's parliament said the killing showed the 'desperation' of the U.S. and Israel. 'When the Americans and the Zionist regime realized that they cannot stand against the resolve of the Iranian nation and [after they] witnessed our nuclear achievements they resorted to assassinating our scientists,' said Kazem Jalali, head of the parliament's national security committee, according to the report. In most cases, Iranian officials blame the deaths and disappearances on the West without equivocation. In November 2010, Fereydoon Abbasi, the head of Iran's Atomic Energy Organization was wounded when a motorcyclist detonated a magnetic bomb under their car by remote control. Abbasi was on a U.N. list of people sanctioned for suspected links to nuclear activities. The same day, a magnetic bomb placed by a motorcyclist killed nuclear physicist Majid Shahriari in his car. President Mahmoud Ahmadinejad quickly blamed 'Western governments and the Zionist regime' for the twin bombings." http://t.uani.com/nuxktJ
Mark Katz in The Iran Primer: "During a visit to the United States in mid-July, Russian Foreign Minister Sergei Lavrov presented the Obama administration with a plan for 'step by step' nuclear talks with Iran. What is new about the Russian initiative? Foreign Minister SergeiLavrov's 'step by step' approach to nuclear talks with Iran is a more lenient initiative than the one that the 5+1 (the five permanent members of the U.N. Security Council plus Germany) has pursued so far. Basically, Lavrov has called for Iran to separately address each concern of the International Atomic Energy Agency concerns, starting with the easier ones and moving on to the harder ones. Each step Iran takes to resolve a specific concern will be rewarded by some existing sanctions being frozen and/or their application curtailed. | How does the new 'step by step' plan differ from previous diplomatic offers? The 5+1 approach has been to call upon Tehran to take the steps set forth by the IAEA for Iran to reassure the international community that its atomic energy program is not aimed at acquiring nuclear weapons, and to impose progressively stronger sanctions on Tehran for not doing so. The Russian 'step by step' approach, by contrast, does not call for increased sanctions against Iran for non-cooperation with the IAEA, but reduced sanctions for Iranian cooperation with it instead. In terms of the familiar carrot-and-stick metaphor, Lavrov's approach reduces the stick. | Why is Russia pushing for renewed negotiations now? Lavrov made clear in early 2011 that Moscow no longer sees the policy of increasing sanctions on Iran for non-compliance on the nuclear issue as productive--and that Russia would no longer support it. Moscow's position may be partly motivated by the Russian perception that increased U.N. sanctions against Iran would also hurt Russian economic interests, since Russia (unlike the United States) now has a significant economic relationship with Iran. At the same time, however, Moscow wants to preserve the improved Russian-American relationship that has grown since the Obama Administration took office and 'reset' its policy toward Russia." http://t.uani.com/odmeKm
WT Editorial Board: "Americans Joshua Fattal and Shane Bauer are scheduled to face trial Sunday in Iran on charges of illegal entry and espionage. They and Sarah Shourd, who was later released, were detained by Iranian forces two years ago while hiking in the mountains of Iraqi Kurdistan. Whether they strayed over a poorly marked border or were seized on Iraqi territory is unclear. Either way, these Berkeley-educated social activists don't fit the profile of clandestine operatives sent to infiltrate the Islamic republic. The charges are farcical, and the hikers should be freed. The two Americans are being held in Evin Prison, Tehran's central clearing house for dissidents, political prisoners and others who fall afoul of the Islamic regime. Miss Shourd was released in September 2010 after enduring 410 days of solitary confinement and after Iran was paid half a million dollars, which Tehran called bail money but was more akin to ransom. After her release, she told of beatings, isolation, threats of summary execution and other mistreatment at the hands of Iranian authorities. The Obama administration protested the hikers' detention but hasn't made their release a priority. Raising this case to the level of a 'hostage crisis' with Iran wouldn't sit well with a president who already smarts under unflattering comparisons to failed President Jimmy Carter. On June 21, when the upcoming trial was announced, State Department spokesperson Victoria Nuland said Iran should 'do the right thing and allow them to come home.' Thanks, but basing U.S. policy on the hope the mullahs will do the right thing hasn't worked on other critical issues and won't work here." http://t.uani.com/rldcHY
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