DNI-NEWS Digest - 25 Jun 1998 to 26 Jun 1998

There are 9 messages totalling 825 lines in this issue. Topics of the day:

1. SOCCER NEWS - Iran the equal of Germany 2. SOCCER NEWS - Germany 1, Iran 1 3. SOCCER NEWS - Germany v Iran quotes 4. SOCCER NEWS - Unconvincing Germans struggle past Iran 5. Klinsmann scores - click for full image... 6. Senior Iranian cleric says normal ties with US "impossible" 7. Tehran bombings and MKO 8. U.S. Search for Rapprochement with Iran Becomes Public

SOCCER NEWS - Iran the equal of Germany

MONTPELLIER, France, June 25 (AFP) - German captain Jurgen Klinsmann was booked as his team were held to a goalless draw in a frustrating first half for the three-times world champions at the Stade de la Mosson on Thursday.

Klinsmann was shown the yellow card for dissent as Iran took the game to their highly-fancied opponents and kept alive their hopes of reaching the second stage as they matched the European champions chance for chance

The German line-up showed four changes from the side that went two goals down against Yugoslavia in Lens last week before veteran Lothar Matthaus came on to inspire a fightback for a 2-2 draw.

Coach Bertie Vogts dumped his entire midfield with Andy Moller, Christian Ziege, Jens Jeremies and Dietmar Hamann all relegated to the bench and replaced by Matthaus, Michael Tarnat, Thomas Hassler and Jorg Heinrich.

Germany came close to an early breakthrough when Jurgen Klinsmann turned the Iran defence inside the area and set up Olivier Bierhoff who struck a sweet first time half-volley that whistled just over the bar.

Iran, though, were the equal of Germany in the early exchanges and had two good efforts inside the first 15 minutes -- both from players who earn their living in Germany's Bundesliga.

First, Ali Daei, who plays for Arminia Bielefeld, brought a smart save from German goalkeeper Andreas Kopke with a powerful, low drive from 20 metres.

His club colleague Karim Bagheri went even closer moments later with a low, skidding freekick which Kopke spilled but gathered at the second attempt as the Iranians pounced for the rebound.

For all their pedigree Germany were unable to impose themselves on an Iran side, clearly boosted in confidence after their historic 2-1 win over the United States in Lyon.

And their frustration was compounded when Klinsmann was booked for dissent -- a decision which clearly appalled the Germany captain.

Bagheri went close again with another low drive from long range but on this occasion his effort was held by Kopke.

At the other end, Tarnat and Jorg Heinrich both forced saves out of Ahmad Abedzadah with long range efforts of their own.


SOCCER NEWS - Germany 1, Iran 1

MONTPELLIER, France (AP) - Germany goes on, while it was an honorable exit from the World Cup for Iran.

After a 2-0 victory over Iran on Thursday, Germany owned the Group F title and a place in the second round against Mexico.

The Iranians went home with their first Cup victory, and much pride in their performance.

A country that was widely expected to crumble in its first World Cup appearance in 20 years, Iran lost 1-0 to highly rated Yugoslavia, beat the United States 2-1 and did not crumble against the powerful Germans.

With two decades of tension between their governments, the momentous victory over the United States was all the Iranians had hoped for.

"This World Cup was a great experience for us and I hope it did a lot for the future of soccer in our country," Iran coach Jalal Talebi said.

"We played well against Germany, which is a stronger and more experienced team. After our victory against the United States, players felt that their work was finished, and they didn't have the same motivation tonight as they had against the United States."

German coach Berti Vogts admitted it was not an easy win against Iran.

"I had said before that we have to be careful with Iran, and I was proved right," he said.

After a goal-less first half that had the Germans worried, Oliver Bierhoff and Juergen Klinsmann scored on a pair of headers early in the second half.

Germany thus avoided having to play the Netherlands, which won Group E. The Dutch will meet Yugoslavia, which finished second to Germany on goal difference after beating the United States 1-0 in Nantes. Both teams finished with seven points.

"We tried hard in the first half, but it didn't work," Bierhoff said. "We were always afraid that Iran would somehow score."

Coming to the World Cup has been something of a revival for Iranian soccer, which reached its height with Iran's first World Cup appearance in Argentina in 1978. But the Islamic revolution a year later and the 1980-88 war with Iraq, virtually killed the sport.

Some of the country's best soccer talent left, or abandoned sports altogether in an effort to make a living.

In recent years, several Iranian players have made a name on some of the world's best clubs. Strikers Ali Daei, Karim Bagheri and Khodadad Azizi all play in Germany's Bundesliga, and a fourth player, Alireza Mansourian, says he also has an offer from a German club.

Mehdi Mahdavikia, Iran's rising star - especially after scoring the second goal against the United States - has an offer from Inter Milan.

More Iranian players are expected to be in demand with European clubs after showing off their talent at France 98.

"We did the best with the minimum facilities available to us back home," said Talebi.

"We played well against Yugoslavia, and performed beautifully against the United States. Germany was just too strong," said midfielder Hamid Estili, who scored a goal against the United States. "But we're going home happy. This has been a great experience for us, and for Iranian soccer."

updated at Fri Jun 26 02:19:00 1998 PT


SOCCER NEWS - Germany v Iran quotes

MONTPELLIER, June 25 (AFP) - German coach Berti Vogts revealed Thursday that his team had panicked at half-time after failing to score against Iran in their final Group F game here.

Germany won 2-0 but Vogts was clearly a worried man after the goalless first 45 minutes. The Iranians on numerous occasions looked like they could have taken the lead.

"To tell the truth we needed that goal in the first half," he said. And when it did not come, the German coach had to tell his experienced side to calm down.

"At half-time I had to calm them down, and in the second half we did better."

"As you saw the Iranians had a lot of chances in the first period so I had to reorganise my midfield. And it worked."

He paid tribute to the plucky Iranians for whom defeat spelt the end of their World Cup.

"I said a long time ago that we had to be careful about Iran and tonight I was proved right."

"We don't have any choice about who we play in the next round so whoever we play we have to play our best," he added.

The Germans play Mexico who qualified for the last 16 after a 2-2 draw against Holland.

Iran coach Jalal Talebi admitted his side were beaten by a better team but insisted that his nation's football would benefit from their experience at the World Cup.

Said Talebi: "We have had a wonderful experience at the World Cup and we did our best and we will always remember our time here and our acheivements.

"I think Iranian football will benefit from what happened here for many years to come.

"As for tonight, in the end we were beaten by a stronger team both physically and in terms of experience."

German striker Oliver Bierhoff said: "We certainly felt under a lot of pressure in the first half.

"There's always a fear at 0-0 but after the first goal we relaxed and played a lot better."

German coach Berti Vogts switched his midfield during the game and the striker commented: "I think it worked much better tonight than it has done in the last two matches."


SOCCER NEWS - Unconvincing Germans struggle past Iran

by Niall Edworthy

MONTPELLIER, France, June 25 (AFP) - Germany needed to draw on all their famous battling qualities as they ended Iran's World Cup dream with an unconvincing 2-0 win here at La Mosson stadium on Thursday.

The three-times world champions, whose fightback in the 2-2 draw against Yugoslavia distracted from a poor first-half display, were equally out of sorts in the first 45 minutes against an enterprising Iranian side.

Germany struggled to find their rhythm against the Asians and there was little to choose between the two sides at the turnaround.

But some strong words from Bertie Vogts in the dressing room sparked his team into action as goals from Olivier Bierhoff and Jurgen Klinsmann ensured Germany finished top of Group F -- on goal difference from Yugoslavia.

The Germans will now return to Montpellier for a second stage clash with Mexico, but the Central Americans will have taken heart after watching the Europrean champions struggle to impose themselves on one of the tournament's weakest sides.

"It is true that we were not very good in the first half," admitted Vogts. At half-time I had to calm the players down and in the second half I thought we played much better.

"The Iranians were creating a lot of chances and so I had to reorgansise the midfield and it seemede to work," said Vogts.

"We knew Iran would be a tough game. I said long before the World Cup began but no-one believed me. Tonight I was proved right."

Vogts clearly has problems in the middle of the pitch as Germany once again struggled to take control of the game.

The German coach dumped his entire midfield from the side that went two goals down against Yugoslavia in Lens last week before veteran Lothar Matthaus came on to inspire a fightback for a 2-2 draw.

Out went Andy Moller, Christian Ziege, Jens Jeremies and Dietmar Hamann to be replaced by Matthaus, Michael Tarnat, Hassler and Jorg Heinrich.

But the radical shake-up failed to work as Iran matched one of the tournament favourites chance for chance in the first half.

Udinese star Bierhoff finally calmed German nerves when he broke the deadlock five minutes after the interval with his 18th goal in 28 international appearances.

Jorg Heinrich released Thomas Hassler down the right and the veteran midfielder delivered a perfect cross for Bierhoff who rose above the challenges of two Iranian defenders to head home.

Klinsmann, who was earlier booked for dissent in a frustrating first half for the Europeans, made virtually certain of Germany's passage to the second stage seven minutes later.

Lothar Matthaus created the chance with a long ball over the top for Jorg Heinrich who had stormed forward to the edge of the box before heading the ball down into the path of Bierhoff.

He struck a ferocious shot but was denied a second goal when he saw the ball ricochet off the post -- but only as far as Klinsmann who pounced with a header for his 46th goal in 105 matches for Germany.

The goals came as a relief to the German players and fans who had been rattled by an Iranian side boosted by their historic 2-1 win over the United States.

The Asians, playing in their second World Cup, kept alive their hopes of reaching the second stage as they matched the European champions with another vibrant display.

Butmafter conceding two goals in quick succession their heads dropped while the Germans were allowed to control the pace of the game.

Coach Jalal Talebi said Iran's performance in their second ever World Cup finals will have given his country a huge boost.

"Iran will benefit in many ways from what we have achieved here in France -- and not just in football terms, but in all areas of life," said Talebi.

"It has been a wonderful experience for all the players as well as for everyone back home. We leave with very positive, happy memories," he added.


Klinsmann scores - click for full image...

by Niall Edworthy

Klinsmann scores - click for full image...

MONTPELLIER, France, June 25 (AFP) - A reshuffled Germany needed to draw on all their famous battling qualities as they ended Iran's World Cup dream with a hard-fought 2-0 win here at the Stade de la Mosson on Thursday.

Second-half goals from Olivier Bierhoff, Jurgen Klinsmann ensured Bertie Vogts's side finished top of Group F -- on goal difference from Yugoslavia -- and the Germans will now return to Montpellier for a second stage clash with Mexico.

But the European Champions were made to fight for their right to join the last 16 as Iran took the game to them in the first half before running out of steam in the second.

Udinese star Bierhoff calmed German nerves when he broke the deadlock five minutes after the interval with his 18th goal in 28 international appearances.

Jorg Heinrich released Thomas Hassler down the right and the veteran midfielder delivered a perfect cross for Bierhoff who rose above the challenges of two Iranian defenders to head home.

Klinsmann, who was earlier booked for dissent in a frustrating first half for the Europeans, made virtually certain of Germany's passage to the second stage seven minutes later.

Lothar Matthaus created the chance with a long ball over the top for Jorg Heinrich who had stormed forwad to the edge of the box before heading the ball down into the path of Bierhoff.

He struck a ferocious shot but was denied a second goal when he saw the ball ricochet off the post -- but only as far as Klinsmann who pounced with a header for his 46th goal in 105 matches for Germany.

The goals came as a relief to the German players and fans who had been rattled by an Iranian side boosted by their historic 2-1 win over the United States.

The Asians, playing in their second World Cup, kept alive their hopes of reaching the second stage as they matched the European champions chance for chance in the first half.

The Germans went into the match showing four changes from the side that went two goals down against Yugoslavia in Lens last week before veteran Matthaus came on to inspire a fightback for a 2-2 draw.

Coach Bertie Vogts dumped his entire midfield with Andy Moller, Christian Ziege, Jens Jeremies and Dietmar Hamann all relegated to the bench and replaced by Matthaus, Michael Tarnat, Hassler and Jorg Heinrich.

Germany came close to an early breakthrough when Klinsmann turned the Iranian defence inside the area and set up Olivier Bierhoff who struck a sweet first time half-volley that whistled just over the bar.

Iran were the equal of the three-times world champions and had two good efforts inside the first 15 minutes -- both from players who earn their living in Germany's Bundesliga.

First, Ali Daei, who plays for Arminia Bielefeld, brought a smart save from German goalkeeper Andreas Kopke with a powerful, low drive from 20 yards.

His club colleague Karim Bagheri went even closer moments later with a low, skidding freekick which Kopke spilled but gathered at the second attempt as the Iranians pounced for the rebound.

For all their pedigree Germany were unable to impose themselves on an Iranian side and their frustration was compounded when Klinsmann was booked for dissent.

Bagheri went close again with another low drive from long range but on this occasion his effort was held by Kopke.

At the other end, Tarnat and Jorg Heinrich both forced saves out of Ahmad Abedzadah with long range efforts of their own.

The second half had promised an upset but that was quickly averted by Bierhoff and Klinsmann's double act which deflated the Iranians and allowed Germany to control the pace of the game.


Senior Iranian cleric says normal ties with US "impossible"

TEHRAN, June 26 (AFP) - An influential member of Iran's conservative clergy said Friday a resumption of ties with the United States was impossible, and denounced the US offer to work towards normalisation as hypocritical. "American officials have proposed, hypocritically, that we normalise relations, but that is impossible and makes no sense under current circumstances," Ayatollah Ahmad Janati said during Friday prayers at Tehran university. "(The Americans) propose normalisation while they allow Israel to 'judaise' Jerusalem and prevent gas pipelines from crossing our territory while still accusing us of terrorism and seeking weapons of mass destruction," said Janati, secretary of the Iranian consitutional council. He is the latest Iranian official to give a hostile response to US Secretary of State Madeleine Albright's offer of a road map for normalization after 20 years of emnity. The leader of Iran's conservatives, parliamentary speaker Ali Akbar Nateq-Nuri, on Wednesday dubbed the offer "psychological warfare" and insisted that "all officials" of the Iranian government "resist and reject normalization." Former Iranian president Akbar Hashemi-Rafsanjani said Monday he did not believe the United States was sincere. But US officials have continued to make public statements pressing for a thawing of ties.


Tehran bombings and MKO

> THIS MESSAGE IS IN MIME FORMAT. Since your mail reader does not understand this format, some or all of this message may not be legible.

--MS_Mac_OE_2981757094_2334000_MIME_Part Content-type: text/plain; charset="US-ASCII" Content-transfer-encoding: 7bit

Dear friends,

The IRI authorities and The Armani organisation have blamed MKO for the bombing, and I think that MKO's claim for bombing should be accepted as a fact. Jonbesh Mosalmanan-e-Mobarez and Nehzat Azadi Iran did not name MKO or NCRI in their statement against armed struggle and violence.

MKO claimed responsibility for three operations against "Dadsetani Enqelab, Setad-e-Moshtarak-e-Sepah, Sazeman-Sanayeh Defa'" Mojahed, Issue 392, 19/03/1377 (Iraq)

Nehzat-e-Azadi-eIran lead by Dr Ibrahim Yazdi released a statement on 13/03/1377 condemned armed struggle against the oppression foundations of the IRI. "Name" weekly, Issue 3, 26/03/1377. (Tehran)

Jonbesh Mosalmanan-e-Mobarez in a statement issued on 15/03/1377 criticised armed struggle against the IRI and stated that advocators of armed struggle have separated their path from democratic struggle of our nation. "Name" weekly, Issue 3, 26/03/1377. (Tehran)

"Sazeman-e-Mojahedin-e-Enqelab_E-Islami" issued a statement on 20/03/1377 and blamed MKO for three recent armed attacks against the above named centres in Tehran. "Asr-e-Ma" biweekly, Issue 97, 27 Khordad 1377. (Tehran).

Sazeman-e-Fadaeyan-e-Khalq Iran-Akthareyat" issued a statement on 13/03/1377 and criticised MKO for the operations. "Kar" Biweekly, Majority, Issue 184, 20/03/1377.

Akbar Hashemi Rafsanjani (15/03/1377), Mohammadi from the Foreign Ministry (14/03/1377), Rahbar Pour, Rayis Dadghahhay-E- Enghelab (14/03/1377 blamed MKO for the operations.

Amir Taheri, Journalist and author (14/03/1377). Mashruteh Khahan-e-Khat-e-Moghaddam, Sazeman-eFadayan-e-Khalq Minority, Hushang Vaziri, Rah-e-Kargar Organisation, Ettehad-e-Fadayan Organisation, Hezb-e-Comunist Iran, Alireza Nuri Zadeh, Ali Keshtgar, Human Right Watch and some more organisations and politicians crticised recent Tehran bombings.

Asghar


U.S. Search for Rapprochement with Iran Becomes Public

Weekly Analysis -- June 22, 1998 Global Intelligence Update Red Alert June 22, 1998

U.S. Search for Rapprochement with Iran Becomes Public

We have been tracking what we have called the realignment of the Middle East for about a year. Last September, following an Iranian air strike on Mujahadin bases inside the no-fly zone in Iraq, we came to the conclusion that intense, back-channel discussions were taking place between Washington and Tehran. During the recent U.S.-Iraqi confrontation, it was our view that the critical subtext of that crisis was an emerging entente between the United States and Iran. It has been obvious to us for quite a while that the United States has been increasingly interested in improving relations with Tehran and that Tehran has been using U.S. desires to enhance its political and strategic position in the region. Iran has been carrying out a brilliant foreign policy, manipulating U.S. fears of losing influence to increase its own regional influence.

Last week, the obvious became official. First, Madeleine Albright publicly declared that the United States was interested in improving relations with Iran. Then, President Clinton confirmed this policy shift, changing tentative explorations of possibilities into a firm and public foreign policy initiative. Tehran, as one might expect, responded coolly, thereby maintaining maximum flexibility in order to extract maximum concessions from the United States. In order to understand the unfolding story, it is essential to pause and consider American motives in this reversal of twenty years of policy toward Iran.

We need to begin by considering the fairly dramatic shifts that have taken place in the region since the liberation of Kuwait from Iraq. Ever since the oil embargo of 1973, Saudi Arabia has been one of the main pillars of U.S. policy in the region. Saudi wealth served as a powerful counterweight to Arab radicalism. Saudi money helped stabilize the region at a time when it appeared that radical, secular forces were going to sweep away both conservative regimes and American influence. Saudi money helped contain Arab radicals with a stream of cash, which ultimately served to marginalize the most radical and intractable elements. In addition, Saudi Arabia helped secure the western littoral of the Persian Gulf after the Iranian revolution. Later, Saudi Arabia served as the strategic base for the U.S. invasion of Iraqi-occupied Kuwait. Indeed, it was Saudi Arabia that made the U.S. policy of dual containment of both Iraq and Iran a practical option.

It is increasingly apparent that Saudi Arabia is no longer a reliable partner for the United States. This was driven home during the Iraqi crisis when the Saudis not only were not prepared to allow the U.S. to use Saudi bases for strikes against Iraq, but also seemed more open to Iranian representations on the Iraqi question than to American initiatives. This division between the U.S. and Saudi Arabia is visible in issues large and small. This week, for example, the United States, in a very public show of irritation with Saudi Arabia, ended the investigation of the bombing of Khobar Towers, making it clear that the Saudis were being held responsible for failing to pursue the investigation appropriately. The Saudis responded by charging that the United States was not taking their findings seriously. From strategy to atmospherics, the U.S.-Saudi relationship has deteriorated to a level inconceivable just a few years ago.

The root cause of all of this is the collapse in oil prices. After two attempts to raise the price of oil through multilateral production cuts, the price of oil has not only failed to rise, but has actually fallen. Saudi Arabian banks, which handle both public and private financing in the Kingdom, are strained to the limit. The extent of the problem cannot be judged with absolute precision, since precise financial figures from Saudi Arabia are hard to come by. However, with oil prices down more than one- third from projected levels this year, and with aggressive development plans requiring major financing, it is our view that the financial base of the Saudi Kingdom is in severe jeopardy. Projects are already being slashed. Refinancings at unfavorable rates are taking place as the end of the quarter approaches. We do not know how bad the situation is going to get, save that unless oil prices rise dramatically in the near term, we expect Saudi Arabia's financial situation to become very bad indeed.

This situation has had a serious political impact on Saudi Arabia. While money flowed into the Kingdom, the various factions within the royal family could be satisfied and controlled. With money drying up, the royal family, along with the rest of the Kingdom, is encountering a very different world than what they have become used to. Without plenty of cash to spread around, the fundamental solvent of Saudi political tension is gone. Gone with it is the political consensus within Saudi Arabia that held that alignment with the United States was the wisest policy for the Kingdom. Of course, the United States still has good friends in Saudi Arabia, but it also has enemies. The pro-American faction could argue in the past that a close relationship with the United States provided the security that made Saudi prosperity possible. However, with that prosperity dissolving, the usefulness of the U.S. security blanket is dubious. Indeed, without prosperity, U.S. policy is likely to entangle Saudi Arabia in adventures that increase risk without securing prosperity. Thus, the Saudis declined the American invitation to go to war with Iraq.

There is a powerful faction inside of Saudi Arabia that argues that both prosperity and security are to be found in a regional bloc. They see this bloc as including Iran and perhaps even Iraq. The reasoning goes this way. The central issue is the price of oil. At the present time, Venezuela and other Latin American producers are setting the price of oil. These countries, closely aligned with the United States politically and economically, are less harmed by low prices than Saudi Arabia. Saudi Arabia has less downstream integration than these Latin American countries, and what integration they have is focused on Asia, a strategic error with enormous consequences. So long as the Persian Gulf producers are fragmented, the Latin American bloc will set the price. It follows from this that a Persian Gulf regional bloc, including Iran, is essential.

The Iranians, of course, are interested in higher prices, but they also have several strategic issues on the table as well. The Iranians wish to ensure their security by becoming the dominant power in the Persian Gulf. In order for this to happen, the United States must leave the Persian Gulf. But if the United States leaves the Gulf, the Iranians must deal with the Iraqis, whom they neither trust nor are completely confident they can defeat. Thus, their ideal scenario would be a U.S. engineered collapse of the Baghdad regime, replacing it with a regime more to their liking, followed by U.S. withdrawal from the region. If Saddam fell, they would expect the Saudis to heavily influence the successor regime. Thus, they are extremely interested in close relations with the Saudis both on the oil price issue and the strategic issue. Thus, the desperate Saudi interest in higher oil prices and the Iranian interest in a regional politico-military bloc have served to dissolve tensions between the two countries, leaving the United States increasingly out in the cold.

The question of Iraq is, of course, on everyone's mind. The Iranians will not forget Iraqi aggression against Iran during their long war. The Saudis will not forget that Iraqi oil could destroy whatever chances there are for higher prices. It is therefore interesting that right after the U.S. opening to Iran this week, an Iranian Ayatollah, Mirza Ali Gharavi, was shot and killed along with his son-in-law and a driver inside of Iraq, on the road to a Shiite holy place south of Baghdad. This is the second recent killing of a Shiite cleric from Iran in Iraq, the first having taken place on April 21. It is not clear who killed Gharavi, but the Iranian government protested to Baghdad immediately, and Iraqi Shiites charged the Iraqi government with the crime. Thus, tensions are rising with Iraq at the same moment that the U.S. is reaching out to Iran. Regardless of who shot Gharavi, the Iranians now have an option for creating a crisis with Iraq should they choose to, at the same time that they are considering their response to the United States.

Iraq is the point on which the U.S. and Iranians both agree. Both want to see Saddam gone, and each is intrigued by the idea of dismembering Iraq. But that is where the agreement ends. Iran genuinely wants the U.S. out of the Gulf and the U.S. has no intention of obliging. Nevertheless, with the Saudis increasingly responding to Iran rather than the United States, the U.S. has little choice but to reach out to Iran. The question is this: What does the United States have to offer Iran, if it is not prepared to withdraw from the Gulf?

One answer, investment, is possible. The Iranians listed 20 new projects available for funding this weekend. But with energy prices where they are, investing in Iranian energy related projects is not an exciting prospect. Moreover, there are plenty of French and other European firms ready to invest in Iran. The Iranians don't really need the United States for that. So again the question: What does the United States have to offer Iran?

Another possible answer lies to the north, with Iran's traditional nemesis, Russia. Russian foreign policy is awakening. One of the first items on the Russian agenda is reasserting hegemony over the Central Asian republics that broke off from the Soviet Union. These republics also happen to be full of oil, oil that no current producer wants to see flooding the market uncontrolled. American oil companies have billions of dollars invested in these Asian oil fields. They dread the return of Russian power. The last thing that Iran wants is the Russian Army back in force on its frontier. They also don't want uncontrolled pumping from those fields.

Thus a glimmer of a deal appears to exist. The United States would accept Iranian preeminence in the Gulf. With the world awash with oil and Venezuela and Mexico setting the price, the Gulf's strategic significance declines anyway. Iran and the United States work together to contain or depose Saddam. Iran works with the United States to keep Russia out of Central Asia, thereby protecting U.S. investment in the region. The United States works with Iran to make certain that the flow of oil from Central Asia doesn't swamp the world oil market in coming years.

We are not clear that this is what Albright had in mind. She must certainly understand that any deal with Iran must include a solution to the Iraqi problem. She must also be aware that a satisfactory solution will leave Iran in an extremely powerful position in the region. In part, it may simply be a matter of the U.S. accommodating itself to the inevitable, since the Saudi condition facilitates Iranian ascendance. But with Iranian ascendence increasingly inevitable, it is not clear that Tehran needs Washington's help. That is, until Iran looks north. None of this is obvious, but alliances have been based on weaker reeds.

The point is that Washington is trying very hard to find a solution to a strategic problem that has largely been Washington's doing. In studied indifference to the consequences of lower oil prices on the regional balance, the Clinton administration has acted as if strategy was independent of economics, assuming that a relatively poor Saudi Arabia will have the same foreign policy as a wealthy Saudi Arabia. In casting about for an alternative pillar in the region, Washington turns once again to a historic ally, Iran, hoping that the same fear that moved the Shah, Russia, would move the Iranians to make peace with the United States and accept American presence in the Persian Gulf. We are not confident that this will happen. We are not even confident that the U.S. is playing this card. We are confident that, without this card, Iran has little if any reason to work with the United States.

Iran will undoubtedly respond to Washington's opening this week. Iran is, of course, in the middle of a massive internal power struggle between the Ayatollah Khamenei and President Khatami. It is not clear whether the American opening will strengthen Khatami's hand, as Albright undoubtedly hopes it will, or will undermine his position, making him appear a collaborator with the Great Satan. Indeed, the offer might just bring the struggle to a cataclysmic culmination. Whatever happens, and the shape of that answer is truly unclear, and this process that has now broken into the open will have a dramatic effect on the region and the international system. The focus of attention should be on Iran this week, which is, of course, exactly how the Iranians like it. Once again, we marvel at the diplomatic skill shown by Iran, constantly maneuvering the United States into difficult and vulnerable positions.

End of DNI-NEWS Digest - 25 Jun 1998 to 26 Jun 1998
***************************************************