The report, by the government-funded but independent United States Institute of Peace, said the outcome of the standoff would depend on whether Washington and its allies could remain united, including on the issue of possible sanctions.
The report said, “Iran’s leaders appear to have calculated that they can withstand the diplomatic pressure they are likely to face in the coming months from the United States, the Europeans and many members of the IAEA (International Atomic Energy Agency), and that even if sanctions are imposed, Iran has the will and financial resources to ride them out.”
The study, written by Middle East expert Geoffrey Kemp who was on former President Ronald Reagan’s National Security Council staff, said the United States and Iran could both gain by ending hostilities but that was unlikely anytime soon.
The report, released over the weekend, said Iran had widespread influence in neighbouring Iraq, where U.S. forces are grappling with a major insurgency, through its connections with Muslim Shi’ite communities and insurgency groups. But it said Iran’s impact there was ambiguous.
Tehran denies Western charges it is developing nuclear weapons under cover of a civilian energy program. However, it has acknowledged concealing a uranium enrichment program — crucial for weapons — from U.N. inspectors for two decades.
Britain, France and Germany are spearheading diplomatic efforts to defuse the crisis by persuading Iran to abandon its nuclear ambitions. But differences over the agenda appear to be holding up a new round of negotiations.
Kemp said that “despite Iran’s undoubted success in embedding itself deeply into Iraqi politics and its continued, almost gleeful defiance of the United States, EU (European Union) and the IAEA on the nuclear issue, it would be unwise for Iran’s leaders to take their current good luck for granted.”
Iran “faces significant social and economic challenges that can only be made more difficult by alienating the West,” he said.
Kemp said rising oil profits were critical for Iraq’s ability to ride out disputes with the West but if oil prices abruptly fell, Tehran could face massive unrest and would find it harder to attract much-needed foreign investment.
