Plan B for Iran: Sanctions that Bite

Thomas Omestad, U.S. News:

The Americans were stunned. Moments after adjournment of closed talks at the United Nations Security Council, Russian diplomats strode over to their counterparts from Iran, waiting in a hallway to be briefed on the negotiations over Iran's secret nuclear program. To the American officials, there was no clearer illustration of their uphill struggle to prod the U.N. to squeeze Iran. "There was no hiding it," recalls a U.S. official. "The Russians were acting as liaison to the Iranians--physically and intellectually." READ MORE

President Bush denies that the Pentagon is intensifying plans for possible airstrikes on Iran--and vows to stick with diplomacy--but Russia and China have erected seemingly immovable barriers to the imposition of sanctions. Two of the five veto holders on the Security Council, both Russia and China reject calls to punish Tehran for flouting U.N. demands that it stop enriching uranium and open all of its nuclear facilities to inspection. Against an April 28 deadline for Iran to meet those demands, one European diplomat fears that a solution looks lost "in the long grass of Security Council politics."

So it is that western nations are now talking about a "Plan B": a non-U.N. "coalition of the willing" that would slap "smart sanctions" on the Iranian leadership. If the Security Council fails its "test" of rebuking Iran, says John Bolton, the U.S. ambassador to the U.N., "we have to look at other alternatives." Those include banning travel by Iranian officials, freezing overseas accounts, restricting Iranian trade credits, and stepping up probes of questionable financial deals.

Doing deals. The looming impasse at the U.N. is feeding fears that the dispute over Iran is headed for more dangerous terrain. Iran's hard-line president, Mahmoud Ahmadinejad, has answered the council's call to halt its nuclear work by announcing that Iran had enriched uranium to a level usable for nuclear power plants and that it had plans to accelerate its enrichment. In trademark fashion, Ahmadinejad also declared that Iran's nemesis, Israel, was heading toward "annihilation." Now, officials in Washington, along with allies in London and Paris, hope the next step will be a resolution that insists Iran comply under the U.N.'s Chapter VII, which invokes the council's role in protecting international security. In practice, that could mean sanctions--or worse.

But Moscow and Beijing object to this strategy. Both have struck large energy and trade deals with Iran, and both fear a replay of the U.S. confrontation with Iraq. China, remarked Deputy Foreign Minister Dai Bingguo, "feels that there has already been enough turmoil in the Middle East." A Russian official agrees: "Unfortunately, this looks familiar to us."

Russia has a considerable stake in Iran, including the $800 million nuclear reactor project at Bushehr, future construction contracts worth $5 billion, and arms contracts of up to $1.5 billion. But the politics may be just as important. Moscow does not view Iran as an adversary to be contained. In fact, Russia gives Iran high marks for not interfering in Russia's mostly Muslim southern tier and in the former Soviet Central Asian republics. Aides to President Vladimir Putin also fault the Bush administration for its criticism of Putin's consolidation of power, as well as for the U.S. presence in Central Asia. "This has had a considerable impact on Russian willingness to accommodate U.S. interests," says Dimitri Simes of the Nixon Center.

The Chinese, likewise, tread carefully with Iran, largely because of its clout as a supplier of oil and natural gas. China has a 25-year deal with Iran, worth up to $100 billion, to help develop a key oil field at Yadavaran and to buy oil and gas. In addition to being a major trade partner, China is a supplier of weapons to Iran. China also credits Iran for not abetting separatist activities by China's Muslim Uighurs.

Though his frustration with Russia and China is building, Bush is unlikely to abandon the Security Council route in the short run. If other governments see that a consensus was tried but not achieved, U.S. officials reason, they will be better positioned to act without U.N. cover.

Behind the scenes, diplomats from other key countries have urged the administration to drop its refusal to talk with Iran directly. They believe that Tehran might limit its nuclear goals if it gets a comprehensive security deal with Washington. "We will need, in the end," says one official, "to have the United States at the negotiating table with Iran."

The diplomats welcome Bush's approval for Zalmay Khalilzad, the U.S. ambassador in Baghdad, to hold talks--now delayed--with Iran solely on Iraq. Khalilzad won Bush's authorization by arguing that to help stabilize Iraq, he had to deal with Iran, a U.S. official tells U.S. News. But broader negotiations, the official says, have been blocked by hawks who see them as haggling with a terrorist regime. Such an approach "has been identified," this official says, "as capitulation."