EYE ON IRAN 7/12/11

Top Stories

Reuters: "The United States will take unilateral action when needed to deal with the threat to American troops in Iraq from Shi'ite militias armed by Iran, Secretary of Defense Leon Panetta said Monday. Panetta's comments came during his first trip as defense secretary to Iraq, where he also vented frustration over Baghdad's failure to decide whether it wanted to keep some of the remaining 46,000 U.S. troops in the country beyond an end-year deadline for their withdrawal. U.S. forces officially ended combat operations in Iraq last August but have come under increasing fire in recent weeks. A senior U.S. defense official described it as part of a campaign by militants to 'bloody our noses on the way out.' Fourteen U.S. service members were killed in hostile incidents in June, the highest monthly toll in three years. At least three more have been killed in July, including one Sunday, the day Panetta arrived in Baghdad. 'We are very concerned about Iran and the weapons they are providing to extremists here in Iraq,' the former CIA director said in an address to U.S. troops in Baghdad. 'In June we lost a hell of a lot of Americans as a result of those attacks. And we cannot just simply stand back and allow this to continue to happen...'" http://t.uani.com/o793P7

Daily Telegraph: "The 98 barrels containing an estimated 2,000 tonnes of high explosive had been stored for two years in the open, in temperatures of up to 102F (40C), despite concerns of officers from the Cypriot National Guard. The explosion at the Evangelos Florakis Naval Base, on the southern coast of the island near the town of Zygi, happened shortly before 6am local time. Fire services had been called to a blaze at the base, apparently in the brush, at 4.24, but the flames enveloped two of the barrels, setting off the blast... The arms were seized when local authorities, under pressure from the United States, impounded a Cypriot-flagged, Russian-owned ship, MV Monchegorsk, which had been hired by a state-owned Iranian shipping line to deliver a shipment to Latakia in Syria. It had been noticed by the US navy shortly after leaving the Iranian port of Bandar Abbas, and searched in the Red Sea by US warships. On board were 3,300 pallets containing high explosive, bullet casings and primers. The US and Israel believed they were supplies for Hamas, the militant group in control of Gaza which is close to both Syria and Iran. The shipment was seen to be in violation of 2007 UN sanctions banning the export of weapons from Iran Britain has about 3,500 military personnel based in Cyprus, most at the RAF Akrotiri air base about 25 miles away from Zygi and at Dhekelia in the east of the island. There were no initial reports of British casualties." http://t.uani.com/pUHNyy

AP: "Iran's foreign minister said Tuesday his country is ready to work more closely with International Atomic Energy Agency but only if it cancels its probe into allegations that Iran has secretly worked on a nuclear weapons program -- a condition rejected by the head of the U.N. nuclear watchdog. The agency already has accused Iran of stalling the investigation and that has become a major source of international tension over Iran's nuclear program. Foreign Minister Ali Akbar Salehi said that Iran is ready to work 'closer than ever before' with U.N. nuclear agency, if it first ends the investigation. He spoke after meeting with IAEA Director General Yukiya Amano, who has been accused by Tehran of pro-U.S. bias in his pursuit of allegations that Tehran appears to have worked on secret experiments designed to be components of a nuclear weapons program. The agency says its investigation is part of a work plan agreed to by Iran four years ago and complains that it has been stonewalled for nearly three years." http://t.uani.com/pS7kwk






Nuclear Program & Sanctions

Reuters: "Essar Oil owes US$2 billion to Iran for oil imports since late December 2010 when the Indian central bank ended a long-standing payments mechanism for refiners, and it is ready to tap other sources of supplies if needed. Privately-owned Essar and four state-run refiners together import about 400,000 barrels per day of crude from Iran, India's second-biggest supplier after Saudi Arabia, in trade worth some US$12 billion a year. The two sides have been trying to find alternative ways to pay since the Reserve Bank of India halted use of the Asian Clearing Union for payments to the sanctions-hit Islamic Republic under US pressure. 'The total outstanding to Iran as on 30 June 2011, was about US$2 billion,' Essar's Head of Finance Suresh Jain said on a conference call for quarterly results. Essar itself imports about 3 million barrels from Iran every month and signed up for extra barrels from Saudi Arabia, India's biggest oil supplier, in July. Iran is exporting oil to India, despite receiving no payments, to protect market share from price-cutting competitors such as Saudi Arabia, its OPEC Governor Mohammad-Ali Khatibi said last week." http://t.uani.com/rfUYkA

Reuters: "Cyprus had attempted several times to offload a dangerous cargo of confiscated Iranian munitions that blew up on Monday killing 12, but was rebuffed by the United Nations, a senior official said on Tuesday. Attempting to fend off mounting criticism over Cyprus's worst peace-time disaster, authorities said they had tried in vain to get rid of the 98 containers of munitions they confiscated in 2009 from a ship sailing from Iran to Syria. The entire cargo exploded on Monday, destroying the island's largest power facility and prompting the resignation of the defence minister and army chief. 'Our government's position in this difficult diplomatic issue was that the material not be held in Cyprus,' said Stefanos Stefanou, the government spokesman. He said, however, Cyprus had no choice but take the arms cargo in after its suggestions it went to the U.N. peacekeeping force in Lebanon was rejected, and it received no answer from the Security Council that the material be sent to Germany or Malta." http://t.uani.com/qxkgmc

Commerce

UPI: "Iran aims to deliver natural gas to Oman through a pipeline through the Persian Gulf by the start of the Iranian New Year in March, an energy official said. Iranian energy officials said they were optimistic that gas exports to Oman were forthcoming following a series of negotiations last year. Oman is in need of natural gas and liquefied natural gas for its industries. Natural gas from Iran is slated for delivery to markets in Oman through a 124-mile pipeline along the floor of the Persian Gulf planned for 2012, the country's Petroenergy Information Network reports. Javad Oji, the deputy oil minister in Iran and managing director of the National Iranian Gas Co., said parts of the pipeline were already built in southern Iran. The project could be completed by March, the start of the Iranian year." http://t.uani.com/mPjXJ4

Domestic Politics

AFP: "Iran has made several arrests in connection with the 'current of deviation', a term used to refer to President Mahmoud Ahmadinejad's chief of staff and entourage, ISNA news agency said Monday. 'Those arrested, in addition to economic and moral issues, have security problems,' said the spokesman for the Iranian judiciary, Gholamhossein Mohseni Ejeie, adding the charges were yet to be 'proven'. 'Some staff at the Organisation of Tourism and Cultural Heritage and one person working at the national museum have been arrested,' he said, without identifying those apprehended. Hamid Baghaie, vice president for executive affairs, is under judicial investigation for administrative irregularities during his tenure as head of the tourism board. Several lower-ranking officials within government and the presidential entourage have been arrested on various grounds in recent weeks, while a political crisis has pitted Ahmadinejad against conservatives in the run-up to 2012 parliamentary elections." http://t.uani.com/nXxsks

Bloomberg: "Iran's cabinet approved a plan to re-denominate the rial by slashing four zeros from the national currency, Donya-e-Eqtesad reported, citing Central Bank Governor Mahmoud Bahmani. The plan needs to be approved by parliament and the Guardian Council, the country's top legal authority, and will take about three years to implement, the newspaper said. Officials said the initiative to re-denominate the rial, originally requested by the government in 2007, was delayed to first ensure price stability. One dollar exchanges for 10,715 rials. Iran's inflation accelerated to 14.2 percent in the 12 months through the Iranian month of Ordibehesht, which ended May 21st, from 13.2 percent the previous month." http://t.uani.com/pdy7gt

Foreign Affairs

AFP: "Iranian President Mahmoud Ahmadinejad urged Arab governments to heed popular demands for reform at a meeting with Turkish Foreign Minister Ahmet Davutoglu, the presidential website said on Tuesday. 'Today, the people of the region must enjoy equal rights, the right to vote, security and dignity, and no government can deprive them of freedom and justice or refuse their peoples' demands,' Ahmadinejad was quoted as saying. 'The Islamic Republic of Iran believes that all regional governments can run their countries by introducing reforms and realising their peoples' demands,' he added in the Monday evening talks. Ahmadinejad did not explicitly mention Iran's closest Arab ally, Syrian President Bashar al-Assad, who has faced unprecedented protests against his iron-fisted rule since mid-March. But Iranian media had reported that the persistent clashes between security forces and demonstrators in Syria would top the agenda of the meeting. At a joint press conference with Davutoglu on Sunday, Foreign Minister Ali Akbar Salehi said that Syria's problems can be solved within 'the family.' 'Iran, Syria and Turkey are members of a family and, if one faces a problem, the family as whole should solve it,' Salehi said." http://t.uani.com/opySSb

AFP: "Tehran 'reserves the right' to attack the bases of an Iranian Kurdish separatist group across the Iraq border, the official IRNA news agency quoted an army official as saying on Monday. 'We reserve the right to attack and destroy terrorist bases in border areas' near the autonomous Iraqi region of Kurdistan, the agency quoted the unnamed senior official as saying. 'The terrorists will not be allowed to take sanctuary in Iraq's territory and attack Iran with the support of America and the Zionist regime,' the official said. 'Action will be taken against these terrorists.' Iran regularly shells the border regions of the autonomous Kurdish region of northern Iraq, home to members of the separatist Iranian-Kurdish rebel group PJAK, or the Party of Free Life of Kurdistan. On Thursday, Iranian forces shelled Haj Omran, a border crossing 70 kilometres (45 miles) northeast of the regional capital of Arbil. The shelling came despite a warning on July 3 by the president of Iraq's autonomous Kurdistan region, Massud Barzani, over the cross-border operations." http://t.uani.com/nsGco5

Opinion & Analysis

Richard Land in NRO: "The more resolutely the civilized world has stood against the threat of militant Islamic terrorism, the more defiantly Iran's ruling ayatollahs have responded with dangerous and menacing behavior. It is time for President Obama, Congress, and world leaders to awaken fully to the threat posed by a nuclear-armed Iran and address the problem with the focused seriousness it demands. The International Atomic Energy Agency recently reported that 'the agency remains concerned about the possible existence in Iran of past or current undisclosed nuclear related activities, including activities related to the development of a nuclear payload for a missile.' Iranian president Mahmoud Ahmadinejad has defiantly appointed Abbasi Davani - whom the UN Security Council has blacklisted for his involvement in the developing Iran's nuclear capabilities - as his vice president and as head of Iran's Atomic Energy Organization, making him a representative to the IAEA. With a shepherd like Davani, who needs wolves? Davani recently told an IAEA gathering in Vienna that 'Iran has developed an advanced centrifuge model whose rotors spin at greater speed, thus enabling the enrichment of a larger amount of uranium in a shorter time,' according to a recent article in Haaretz, Israel's oldest daily newspaper. Investigative reporter Yossi Melman goes on to say that Davani told the gathering of IAEA ministers that such centrifuges 'will be constructed at the second uranium enrichment site that Iran built secretly near the Revolutionary Guards base just outside of Qom.' Melman reports that western intelligence experts believe 'the Qom facility contains only 3,000 centrifuges, [which] can only have one goal - enriching uranium for the production of a nuclear weapon.' The Iranian regime is moving aggressively to draw neighboring countries and political organizations into its sinister web of influence, aimed at menacing not just the West, but also the emerging indigenous forces of peaceful democratic change. As the Iranian regime is taking advantage of the 'Arab Spring' to expand its threatening reach, we need the help of all thoughtful nations to stand together against this threat. While continuing to develop nuclear weapons, support terrorism and repress its own people, the Iranian government is also backing the brutal suppression of pro-democracy forces in Syria and backing a unilateral declaration of independence of Palestine at the United Nations as a way to sabotage real negotiations between Israel and the Palestinians... These are just some of the defiant, menacing actions Iran is undertaking that have led me, along with a coalition of Christian leaders representing 25 million Americans of faith, to send letters to President Obama, Congress, and foreign ambassadors and heads of state, requesting that they take the immediate diplomatic steps necessary to keep Iran from repressing its citizens, developing nuclear weapons, and supporting terrorism through its proxies. We believe the threat Iran poses to the peace and stability of the region is real, lethal, and imminent, but we still believe and pray that it can be countered with prompt and proper action by the civilized world." http://t.uani.com/rjFk1h

Alireza Nader in The Iran Primer: "President Mahmoud Ahmadinejad is in hot water these days. His challenge to Supreme Leader Ayatollah Ali Khamenei, which began after he fired the minister of intelligence in April, has provoked the deepening wrath of Iran's political and military elite. There is even talk of impeaching the president. In the past, Ahmadinejad proved he is a survivor. He masterfully manipulated his way into Iran's second most powerful position. Yet he now faces a challenge he may not be able to overcome. Khamenei has given the Revolutionary Guards the task of reining him in--and perhaps even helping select his replacement as president. In a recent interview, Revolutionary Guards chief Gen. Ali Jafari said that his force is now in charge of dealing with the 'deviant current' - the latest lingo used to describe Ahmadinejad, his controversial chief of staff Esfandiar Rahim Mashaei and others in his inner circle. Jafari also indicated that the Guards would help set the conditions for next year's parliamentary elections as well as future elections. Addressing the opposition, Jafari also said reformists who had not crossed the regime's 'red lines' would be allowed to run. This may include former President Mohammad Khatami, who recently asked the regime to 'forgive' Iranians who protested after the disputed 2009 presidential election. Jafari's comments reflected the growing power of the Guards as Iran's political enforcer. But Ahmadinejad is unlikely to go down without a fight. He shot back at Jafari by criticizing 'illegal' border crossings used by government agencies to smuggle goods in and out of Iran, which is estimated to generate billions of dollars in illicit profits. Ahmadinejad implied that the smugglers were 'brothers' with security and intelligence interests. His remarks have been widely interpreted in Iran as referring to the Guards, who are known to operate many jetties, crossings, and ports throughout the country. Jafari subsequently condemned these claims as 'deviant.'" http://t.uani.com/nkcv8z