News On Iran & Its NeighboursIraqCurbing Iran in Iraq gets trickier

Curbing Iran in Iraq gets trickier


Wall Street Journal: Senior Bush administration officials said the U.S. won’t block Iran’s efforts to establish financial institutions in Iraq, a decision that sets up a delicate balance in U.S. efforts to limit Iranian influence there. The Wall Street Journal

U.S. Accepts Tehran Has Economic Role, Rejects Military Tie

February 2, 2007; Page A8

WASHINGTON — Senior Bush administration officials said the U.S. won’t block Iran’s efforts to establish financial institutions in Iraq, a decision that sets up a delicate balance in U.S. efforts to limit Iranian influence there.

U.S. approval of Iran’s economic engagement with Iraq is complicated by allegations by some White House and Pentagon officials that Tehran is training and arming Shiite militias and may be directly targeting American soldiers inside Iraq.

U.S. officials said they are investigating some American and Iraqi claims that Tehran may have played a role in the killings last month of five U.S. soldiers in the Iraqi city of Karbala.

The administration’s tough new posture toward Iran is alarming many lawmakers, intelligence officials and military officers, who worry that the White House is exaggerating Iran’s connection to attacks inside Iraq in order to justify a future military assault against Iran.

Senior U.S. officials acknowledged yesterday that they had no direct evidence to support this claim, and Iran has long denied accusations that it is supplying weapons to Shiite groups in Iraq or that it has expanded its paramilitary operations inside the country.

The Bush administration has made such charges before but has never been able to provide clear evidence substantiating the allegations. Pentagon and State Department officials this week said they would make public some information proving the connection between Tehran and Iraqi militias, but they have yet to do so.

These officials said the complexity and brazenness of the Karbala attack, in which the assailants disguised themselves in U.S. uniforms in order to enter a compound and abduct American soldiers, is raising suspicions of Iranian involvement.

“It looked like five Americans were taken [in exchange for”> for five Iranians,” said one U.S. intelligence official working on Iran. Last month, American troops arrested five Iranian diplomats in Irbil, Iraq, on charges they were supplying explosives to Shiite militias — a charge Tehran denies.

On the economic front, however, U.S. officials said yesterday they aren’t going to attempt to prevent Iran from expanding its trade and financial ties with Iraq.

In late January, Iran’s ambassador to Iraq surprised U.S. officials by telling the New York Times that Tehran was preparing to significantly increase its financial and trade ties to Iraq. This would include the establishment of at least one branch of Iran’s national bank in Iraq, the diplomat said.

U.S. officials had initially reacted coolly to the Iranian plans, but in interviews yesterday, senior Bush administration officials said the U.S. accepted the Iranian economic moves and would make no effort to block them.

Expanded Iranian trade and finance ties with Iraq could help spur economic development and growth in Iraq, the officials said. They also noted that the two countries have the potential to become significant trading partners.

“We want the Iraqis to have cooperative, fruitful relations with their neighbors,” one official said. “We have no problem with a bank and economic relations. That’s fine.”

The willingness to allow Iranian banks to operate in Iraq comes as the U.S. is trying to shut down Iranian financial activity elsewhere in an effort to pressure Tehran to abandon its alleged nuclear-weapons program.

This senior official cautioned, however, that the administration would oppose any effort by Iran to expand its military assistance to Iraq’s government and security forces. Iranian officials in Baghdad in recent days have discussed sending weapons, equipment and military trainers to Iraq in an effort to underpin the government of Prime Minister Nouri al-Maliki, a Shiite.

U.S. charges of Iranian involvement in the Karbala attack come as the administration tries to rally public support behind its increasingly aggressive military posture toward Iran. In recent weeks, the U.S. has deployed a second aircraft-carrier battle group to the Persian Gulf and erected Patriot antiballistic-missile batteries in the region, both as warnings to Tehran.

U.S. officials said the two largest Shiite militias in Iraq — the Badr Brigades, linked to the Supreme Council for Islamic Revolution in Iraq, and the Mahdi Army of radical cleric Moqtada al-Sadr — were receiving sophisticated, late-model rocket-propelled-grenade launchers and roadside bombs from Iran. These weapons have been used in lethal attacks on U.S. and British forces in southern Iraq, U.S. officials said.

“What we’re finding in terms of stockpiles and weapons — you can connect the dots back to Iran,” one official said.

The Pentagon and U.S. intelligence agencies are particularly focused on the movement of representatives of the Iranian Revolutionary Guard Corps’ elite Qods Force, which focuses on operations outside Iran’s borders. Many U.S. intelligence officials believe that it is the Qods Force specifically that has been providing arms and funding to Shiite militias in Iraq. Some intelligence officials also believe the Qods Force has established paramilitary camps inside Iraq to teach Shiite militants how to use advanced weaponry and how to conduct sophisticated types of ambushes, kidnappings and assassinations.

The arrests of Iranian officials in Irbil last month and in Baghdad in December directly targeted the Revolutionary Guards and Qods Force, said U.S. officials. The Pentagon continues to hold the five Iranians detained in Irbil, though the four others detained in Baghdad have been returned to Tehran.

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