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TOP STORIES
At least 12 people were killed and 42 others wounded
Wednesday morning in a pair of devastating attacks on two of Iran's
most potent symbols: the national Parliament and the mausoleum of the
Islamic Republic's founder, Ayatollah Ruhollah Khomeini. The Islamic
State immediately claimed responsibility; if that is found to be
true, the attacks would be the terrorist group's first major assault
within Iran's borders. Suspicions in Tehran were also directed at
Saudi Arabia, Iran's nemesis in the region, which has been newly
emboldened by a supportive visit from President Trump last month. In
the view of many in Iran, the Islamic State, also known as ISIS or
ISIL, is inextricably linked to Saudi Arabia. Hamidreza Taraghi, a
hard-line analyst with ties to Iran's supreme leader, Ayatollah Ali
Khamenei, said, "ISIS ideologically, financially and
logistically is fully supported and sponsored by Saudi Arabia."
Gunmen and suicide bombers struck Iran's Parliament and
the shrine of Ayatollah Ruhollah Khomeini on Wednesday, killing at
least seven people in what officials called a rare terrorist attack
in the country. Islamic State claimed responsibility for the attacks
via a statement posted to its official Amaq news agency. But the
extent of its involvement-if any-couldn't be immediately verified. If
confirmed, it would be the Sunni Muslim extremist group's first
attack in Shiite-majority Iran. Tensions between Sunnis and
Shiites-who are regarded by Islamic State as apostates-are currently
high in the Middle East, as Iran and Sunni-led Saudi Arabia vie for
regional influence.
U.S. and Iran-backed forces are locked in a race to take
Islamic State strongholds in southeastern Syria and seize a stretch
of land that will either cement Tehran's regional ambitions, or
stifle them. The scramble for pole position in Deir al-Zour
province is likely to be one of the most consequential fights against
the extremist group in Syria, posing a regional test for President
Trump as his administration turns up the rhetoric against Iran. While
the battle for the Islamic State's most famous Syrian stronghold of
Raqqa is heating up, there are signs that an offensive to seize Deir
al-Zour will be tougher, and have greater consequences for the
group's long-term survival as a force holding significant territory.
NUCLEAR & BALLISTIC MISSILE PROGRAM
Iran told the U.N. nuclear watchdog on Tuesday it would
ship 20 tonnes of heavy water abroad to avoid breaching a limit on
its stock of that substance under a landmark deal with six world
powers, officials said. Heavy water, a moderator used in a type of reactor
that can produce plutonium, is not the most sensitive part of Iran's
nuclear program. But Tehran's stock of it is restricted to 130 tonnes
under its 2015 deal with the major powers. Iran has already breached
that limit twice since the deal imposed restrictions on its nuclear
activities in January last year, when sanctions against Tehran were
also lifted under the agreement. U.S. President Donald Trump has
called the agreement "the worst deal ever negotiated" and
Washington strongly criticized Iran when it breached its heavy water
limit last year.
U.S.-IRAN RELATIONS
State Department officials determined that Iran hacked
their emails and social media accounts during a particularly
sensitive week for the nuclear deal in the fall of 2015, according to
multiple sources familiar with the details of the cyber attack. The
attack took place within days of the deal overcoming opposition in
Congress in late September that year. That same week, Iranian
officials and negotiators for the United States and other world
powers were beginning the process of hashing out a series of
agreements allowing Tehran to meet previously determined
implementation deadlines. Critics regard these agreements as
"secret side deals" and "loopholes" initially
disclosed only to Congress. Sources familiar with the details of the
attack said it sent shockwaves through the State Department and the
private-contractor community working on Iran-related issues.
CONGRESSIONAL ACTION
A group of leading senators, including Majority Leader
Mitch McConnell (R-Ky.), have been negotiating a way to pass more
stringent sanctions against Russia in the coming week, by
piggybacking on an upcoming a measure cracking down on ballistic
missile tests in Iran. The talks, which according to senior Senate
aides involve the heads of at least the Banking and Senate Foreign
Relations committees, plus Senate leaders and a handful of Congress'
most outspoken Russia critics, are geared toward attaching Russia
sanctions by amendment to a popular Iran sanctions bill the Senate is
expected to take up Wednesday - just as intelligence and Justice
Department officials head to Capitol Hill to testify about alleged
Russian meddling in the presidential election. Former FBI director
James B. Comey is expected to testify Thursday.
BUSINESS RISK
In its latest Global Economic Prospects report, the
World Bank has slightly lowered its forecast for Iran's real GDP
growth up until 2019, while putting the inflation rate at double
digits for the current fiscal year that started on March 21.
According to the most recent flagship report released by the
international financial institution, Iran's GDP will grow 4% in 2017
while the country will register a respective growth of 4.1% and 4.2%
for the following two years. That is while in its previous report in
January, WB had predicted a slightly better growth picture. The
numbers in the June report indicate that the Washington-based
institution has revised down its growth forecast for Iran in 2017 by
1.2%. The downward revision is attributed to a limited spare capacity
in oil production and "difficulty in accessing finance which
weigh on the country's growth".
SYRIA CONFLICT
American warplanes bombed an Iranian-backed militia that
entered a supposed no-go zone near a U.S garrison in southern Syria
on Tuesday, U.S. officials said. The strike marked the second by a
U.S. aircraft in less than a month and signals a growing risk of
direct conflict between American and Iranian forces and their
partners in Syria. The air raid came after the militia aligned with
the Syrian regime and Iran failed to heed a warning to leave the
area. U.S. officials said that the force of about 60 fighters armed
with tanks and anti-aircraft weapons entered an exclusion zone around
the base at al Tanf, where American Special Operations Forces train
Syrian rebels. Before unleashing their bombs, American military
officials first contacted their Russian counterparts who are allied
with the Iranian-backed force. But when the new column refused to
leave, the Americans struck. It is unclear how many casualties
resulted.
The United States counts on its regular communications
with Russia to help avoid a conflict with Iranian-backed forces
threatening U.S. and U.S.-backed forces in southern Syria, a U.S.
envoy in Baghdad said on Wednesday. Brett McGurk, the American envoy
to the international coalition against Islamic State, said a U.S. air
strike on Tuesday against Iranian-backed fighters in Syria supporting
Syrian President Bashar al-Assad was meant to defend American forces
there. "We really do depend upon the Russians through our
de-confliction military channels ... to help work these things out,
and so we hope obviously that will not happen again," he said,
referring to the strikes on the Iranian-backed forces. The U.S.
military launched a similar air strike on Iranian-backed forces in
Syria on May 18.
FOREIGN AFFAIRS
Qatar is in talks with Iran and Turkey to secure food
and water supplies amid concerns of possible shortages two days after
its biggest suppliers, the United Arab Emirates and Saudi Arabia, cut
trade and diplomatic ties with the import-dependent country. "We
are in talks with Turkey and Iran and other countries," said the
official, who spoke on condition of anonymity due to the sensitivity
of the subject, adding that the supplies would be brought in through
Qatar Airways cargo flights. The official said there were enough
grain supplies in the market in Qatar to last four weeks and that the
government also had large strategic food reserves in Doha.
Iranian Foreign Minister Mohammad Javad Zarif is to
visit Turkey on Wednesday at his own request, Turkish foreign
ministry sources said, as a dispute between Gulf powers and Qatar
escalates. The sources said Zarif would discuss bilateral and
regional matters. Efforts to defuse the Qatar crisis -- prompted on
Monday when the UAE, Saudi Arabia, Egypt and others severed
diplomatic ties with it over alleged support for Islamist groups and
Iran -- have showed no immediate signs of success. Turkish President
Tayyip Erdogan, who has been on a push to resolve the crisis, has
said that isolating Qatar, including by the use of sanctions, would
not resolve the rift. "It will not contribute to solving any
problem to try and isolate in this way Qatar, which we know for sure
has fought very effectively against terrorist groups," he said
following a fast-breaking dinner for the Muslim holy month of Ramadan
on Tuesday.
SAUDI-IRAN TENSIONS
The Saudi-led rupture with Qatar is backfiring where
Iran is concerned -- at least for now. If the severing of ties was
intended to force the Gulf nation back into Saudi Arabia's fold and
further isolate its key rival, Shiite Iran, then the opposite is
happening. Qatar responded to the blockade by Saudi Arabia, the
United Arab Emirates, Bahrain and Egypt by rerouting flights to
Africa and Europe via Iran, which has rallied to its ally's defense.
"In terms of Realpolitik, this is good for Iran," said Foad
Izadi, a member of the Faculty of World Studies at the University of
Tehran. Qatar is "blocked from all sides except the side that
looks at Iran."
Saudi Foreign Minister Adel Jubeir said Iran must be
punished for its interference in the region and support for terrorist
organizations such as Al-Qaeda, Al Arabiya News Channel reported him
as saying early Wednesday. Jubeir, who is in Paris since Tuesday,
said that Iran is a host for some Al-Qaeda leaders as well as other
commanders from other terrorist organizations. The minister further
urged Iran not to interfere, describing Tehran as the number one
supporter for terrorism in the world. For Iran to be a "normal
state," it must respect international law, he said. Jubeir also
said that the Iranian regime's "political ideas" are
completely rejected. The minister said the Iranian regime for the
past 37 years attacked more than 12 embassies. Saudi Arabia alongside
seven other countries, including Egypt, UAE, Bahrain, Egypt, Yemen,
Maldives, Mauritius and Mauritania, have recently severed its ties
with Qatar.
DOMESTIC POLITICS
After Iranian President Hassan Rouhani's electoral
victory Saturday, what's next for the Islamic Republic? Here's some
things to watch for: Those backing Ebrahim Raisi will accept the
results. However, hard-liners within Iran's judiciary and security
services will continue to pressure Rouhani in different ways. Even
before the vote, hard-line elements routinely detained dual
nationals, likely seeking concessions from the West. Artists,
journalists, models and others have been targeted in crackdowns on
expression. Hard-liners probably will challenge Rouhani in the
country's parliament, especially over social issues or any measure
that appears to be accepting or promoting Western culture. The
paramilitary Revolutionary Guard, which answers to Supreme Leader
Ayatollah Ali Khamenei, will continue to launch ballistic missiles
and have close encounters with U.S. Navy vessels in the Persian Gulf.
OPINION & ANALYSIS
Given his past statements regarding Islam, his
administration's mishandled rollout of the travel moratorium on
certain Muslim-majority countries, and his general penchant for undiplomatic
statements, President Donald Trump's first trip to the Middle East
last month was a surprising success. Saudi Arabia rolled out the red
carpet for him as it never had for his predecessor, he inked a $110
billion arms agreement with Saudi Arabia, and his speech in Riyadh to
more than 50 leaders and representatives from across the Muslim
world, calling for them to unite to resist Iranian aggression and
fight the sources of extremism that have metastasized in the threat
posed by the Islamic State, was generally well-received.
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