West Talks Tough With Iran, Treads Lightly

Carla Anne Robbins, The Wall Street Journal:

As U.S. and European officials press to have Iran brought before the United Nations Security Council, they are also promising that Tehran won't face serious punishment there -- for quite a while. READ MORE

Iran has few friends left after deciding to resume efforts to enrich uranium, a process that could advance it a big step closer to being able to build a nuclear weapon. But there are reasons the move toward international penalties might not be swift. As the Organization of Petroleum Exporting Countries' second-largest producer, Iran has considerable economic leverage. It also may benefit from the "Iraq effect." There is widespread anxiety that any U.N. action -- unless carefully constrained -- could open the door for another U.S.-led war.

Even as they press for a showdown with Tehran, American officials privately acknowledge that they aren't sure how to calibrate political or economic sanctions to bring maximum pressure on Iran's leadership without alienating the country's pro-reform and pro-American public. In recent weeks, officials in Washington and London have begun thinking about an aggressive public-relations campaign, beamed into Iran, to counteract Tehran's certain efforts to incite a strong nationalist backlash.

Explicit and perceived threats have been ping-ponging across the Mideast and Europe, with the Bush administration sounding comparatively more restrained.

Iran said Friday that it is pressing OPEC to cut oil production, and its officials have offered conflicting accounts of whether they have started pulling currency from overseas banks to avoid sanctions. In a speech on France's nuclear deterrent last week, President Jacques Chirac warned that any state considering using "terrorist means against us" might face a nuclear response -- a threat some saw as directed at Tehran. And Israel's defense minister warned that his country "will not be able to accept an Iranian nuclear capability."

U.S. and European officials say they expect to win a solid majority of votes for a referral to the U.N. when the 35-member board of the International Atomic Energy Agency meets in Vienna early next month. The Russians are still arguing for postponing action at least until March, and Western diplomats say they have yet to decide whether it would be better to wait for Moscow's vote with no guarantee that it will ever materialize.

Hoping to calm anxieties, British Foreign Secretary Jack Straw has repeatedly pledged that military action against Iran is "not an option" for either Britain or the U.S.

American officials have been less definitive, but they, too, have been emphasizing that pressure on Iran will be applied "gradually" and "incrementally," and that any real discussion of sanctions is likely still months down the road.

How Iran will react is hard to predict. For two years, it has managed to sidestep a referral with a series of last-minute concessions. And the Russians are still offering -- with U.S. and European support -- a compromise that would have Iran's uranium processed into low-enriched power-plant fuel on Russian soil.

Iran says its program is peaceful. But hard-line President Mahmoud Ahmadinejad has made clear his disdain for international opinion and shown little interest in Moscow's proposal. His government, which earned billions of dollars in oil revenue last year, is also getting richer, as each defiant statement drives up prices on the international oil market. If the crisis gets hotter, Iran runs the risk of driving away other business. In a possible sign of that, a spokesman for UBS AG said the Swiss bank would cease doing business with customers in Iran.

Abbas Milani, an expert on Iran's politics at Stanford University's Hoover Institution, says Iranian government officials believe "they've already bought the Chinese and Russians" with oil and other financial deals. And "they believe if the price of oil goes high enough, the Europeans will back down."

U.S. and European officials have begun preliminary discussions about strategy once Iran's case is referred to the Security Council. The pace of any action, they say, will likely be driven by Tehran's response: whether it signals an interest in compromise, or makes good on its threats to stop cooperating with U.N. arms inspectors or to begin large-scale enrichment.

In the current environment, the likely first step would be either a presidential statement (less formal but requires the consensus of all 15 Security Council members) or a resolution (which requires nine votes and no veto). Either would call on Iran to suspend uranium enrichment, return to negotiations with the Europeans, and provide fuller access and answers to IAEA inspectors.

Given the nervousness of veto-wielding members China and Russia, this first effort is unlikely to include any, even generic, threat of punishment. But U.S. and European diplomats say they are likely to press for the first resolution to be brought under the U.N. Charter's Chapter VII, which gives the Security Council power to compel action by member states to "restore international peace and security." With memories of the Iraq debate ever present, Russia, China or other council members may resist, fearful that Chapter VII could be the first step toward an "all-necessary-means" resolution, opening the door to military action.

If Iran fails to comply, officials say, there could still be one or more resolutions warning of possible punishments, without imposing any. One senior U.S. official notes that it took eight months and two resolutions for the Security Council to threaten Syria last fall with possible "further action," if it failed to cooperate with the investigation into the assassination of former Lebanese Prime Minister Rafik Hariri. The council has yet to impose any punishments in that case.

As for what sanctions the U.S. and Europe might press for, officials say they could start with a travel ban for key government leaders and a ban on sales to Iran's nuclear and missile programs and any front companies. A difficult question, however, would be whether to prohibit further Russian involvement in Iran's nearly completed civilian nuclear-power plant at Bushehr. Beyond Moscow's likely resistance, diplomats say, the move would play into Tehran's claim that the West is trying to deprive the country of peaceful nuclear power.

The U.S. and Europe might also argue for a freeze of financial assets for key government figures, and a ban on sales of military and dual-use items. Stiffer penalties might include bans on investments in Iran's oil industry or even sales of oil and gas equipment.

Whether Russia or China would go along is unknown. Three years after the IAEA referred North Korea to the Security Council, the council has yet to act because of Chinese opposition. U.S. and European officials also acknowledge they don't know which, if any, of these pressures is likely to get Tehran to blink.

Mr. Milani from the Hoover Institution is arguing for "smart sanctions": cracking down on the government's finances, and military- and nuclear-related trade, while encouraging significantly more contact and trade with Iran's civil society, in hopes of sparking a democratic movement. He acknowledges that such a policy would be politically difficult for the U.S. to put into practice, especially amid the standoff, and it could take years to produce results.

He is skeptical that any outside pressure, short of a full ban on Iran's gasoline imports and oil and gas exports, would persuade Mr. Ahmadinejad and the clerical establishment to curtail their nuclear ambitions.

Write to Carla Anne Robbins at carla.robbins@wsj.com