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[Senate Hearing 109-648]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-648
 
           RESPONDING TO IRAN'S NUCLEAR AMBITIONS: NEXT STEPS

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 19, 2006

                               __________

       Printed for the use of the Committee on Foreign Relations

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota              JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio            RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee           BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
LISA MURKOWSKI, Alaska               BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)

  
?

                            C O N T E N T S

                              ----------                              
                                                                   Page

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, opening 
  statement......................................................     3
    Prepared statement...........................................     3
Burns, Hon. R. Nicholas, Under Secretary for Political Affairs, 
  Department of State, Washington, DC............................     4
    Prepared statement...........................................     9
Carter, Hon. Ashton B., Codirector, Preventive Defense Project, 
  Belfer Center for Science and International Affairs, Harvard 
  University, Cambridge, MA......................................    47
    Prepared statement...........................................    52
Dodd, Hon. Christopher J., U.S. Senator from Connecticut, 
  prepared statement.............................................    75
Indyk, Hon. Martin S., Director, the Saban Center for Middle East 
  Policy, the Brookings Institution, Washington, Dc..............    59
    Prepared statement...........................................    61
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     1
Takeyh, Dr. Ray, Senior Fellow for Middle Eastern Studies, 
  Council on Foreign Relations, Washington, DC...................    39
    Prepared statement...........................................    42

                                 (iii)

  

           RESPONDING TO IRAN'S NUCLEAR AMBITIONS: NEXT STEPS

                              ----------                              

                      TUESDAY, SEPTEMBER 19, 2006

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Richard G. 
Lugar (chairman of the committee) presiding.
    Present: Senators Lugar, Hagel, Allen, Voinovich, 
Alexander, Biden, Dodd, Feingold, and Obama.

 OPENING STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR FROM 
                            INDIANA

    The Chairman. This hearing of the Senate Foreign Relations 
Committee is called to order.
    The committee meets today to examine United States policy 
toward Iran, with particular focus on our response to Iran's 
continued pursuit of a nuclear weapons capability.
    The United States has a clear interest in preventing such 
an Iranian capability. Iran has been a destabilizing force in 
the Middle East. As former Secretary of State, Henry Kissinger, 
wrote in the Washington Post last week, ``Everything returns to 
the challenge of Iran. It trains, finances, and equips 
Hezbollah, the state within a state in Lebanon. It finances and 
supports Moqtada al-Sadr's militia, the state within a state in 
Iraq. It works on a nuclear weapons program which would drive 
nuclear proliferation out of control and provide a safety net 
for the systemic destruction of at least the regional order.''
    Diplomatic efforts to persuade Iran to halt its enrichment 
and reprocessing activities have continued in fits and starts. 
In July and August, Iran turned down a package of incentives 
offered by the five permanent members of the Security Council 
plus Germany. Iran also rejected U.N. Security Council 
Resolution 1696, which required the suspension of its 
enrichment activities. In recent days, we have seen reports of 
additional European attempts at dialog with Iran against the 
backdrop of impending U.N. sanctions.
    This committee has devoted much attention to examining 
Iran's nuclear intentions and United States policy options. 
Last May 17 and May 18, we held a two-hearing series on this 
topic. Our witnesses, experts from academia and policy 
organizations, judged that the Iranian leadership is highly 
motivated to pursue a nuclear weapons capability by national 
pride, the desire to have a potent military deterrent, and the 
goal of greatly expanding its influence in the region. Our 
experts said that Iran will not easily be dissuaded from its 
current path, but that the leadership would not be prepared to 
sacrifice everything. They also noted that there are some 
divergent views within the Iranian regime on the wisdom of 
pursuing a nuclear weapons capability in defiance of 
international will.
    The task for American diplomats must be to bolster that 
international will and construct an international consensus in 
favor of a plan that presents the Iranian regime with a stark 
choice between the benefits of accepting a verifiable cessation 
of their nuclear program and the detriments of proceeding along 
their current course.
    The United States currently has in place extensive 
unilateral economic sanctions against Iran. Some have suggested 
that the Congress should pass legislation targeting additional 
unilateral sanctions against foreign companies that invest in 
Iran. I understand the impulse to take this step. But given the 
evident priority that the Iranians assign to their nuclear 
program, I see little chance that such unilateral sanctions 
would have any effect on Iranian calculations. Such sanctions 
would, however, be a challenge to the very nations that we are 
trying to coalesce behind a more potent multilateral approach 
to Iran. We should not take steps that undermine our prospects 
for garnering international support for multilateral sanctions, 
which offer better prospects for achieving our objectives than 
unilateral measures.
    If we're able to proceed with multilateral sanctions in the 
United Nations, we should recall the lessons of the U.N. 
sanctions regime against Iraq. To the extent possible, the 
sanctions should be targeted on the Iranian regime or on 
maximizing popular discontent with the regime. Sanctions also 
must be designed to achieve the broadest international support 
over, potentially, many years. If a sanctions regime lacks the 
full commitment of the international community, it is more 
likely to be undermined by leakage and corruption.
    As the United States pursues sanctions at the United 
Nations, it is important that we continue to explore potential 
diplomatic openings with Iran, either through our own efforts 
or through those of our European negotiating partners. Even if 
such efforts ultimately are not fruitful, they may reduce risks 
of miscalculation, improve our ability to interpret what is 
going on in Iran, and strengthen our efforts to enlist the 
support of key nations to oppose Iran's nuclear weapons 
program.
    We're delighted to be joined today by two distinguished 
panels to help us assess these issues and evaluate policy 
options.
    On the first panel, we welcome back our good friend, Under 
Secretary of State for Political Affairs, Mr. Nicholas Burns, 
and we look forward to his assessment of current diplomatic 
efforts.
    On the second panel, we welcome three experts in the field. 
Dr. Ashton Carter, codirector of the Preventive Defense Project 
at the Belfer Center for Science and International Affairs at 
Harvard University, is a former senior official in the Defense 
Department, who, with former Defense Secretary William Perry, 
has recently led a blue-ribbon workshop on the Iranian nuclear 
issue. Ambassador Martin Indyk, director of the Saban Center 
for Middle East Policy at the Brookings Institution, grappled 
with the challenges posed by Iran as Assistant Secretary of 
State for Near Eastern Affairs in the 1990s. And Dr. Ray 
Takeyh, senior fellow for Middle Eastern studies at the Council 
on Foreign Relations, is an expert on Iran's complex internal 
politics.
    We welcome all of our witnesses, and we look forward to 
your testimony.
    First, I would like to call upon the distinguished ranking 
member of our committee, Senator Biden.

 OPENING STATEMENT OF HON. JOSEPH R. BIDEN, U.S. SENATOR FROM 
                            DELAWARE

    Senator Biden. Thank you, Mr. Chairman.
    I'd ask unanimous consent that my entire statement be 
placed in the record, as if read.
    The Chairman. It will be placed in the record in full.
    Senator Biden. And let me just say that, to state the 
obvious, Iran's failed to comply. This is a very important 
moment for a real test for our diplomacy, a real test for the 
U.N.'s tenacity, and for our partners' seriousness. And no easy 
answers.
    I am looking forward to the testimony today of a very, very 
distinguished panel. And I know one thing will come out of 
this, and that is--the tendency occasionally on this debate is 
to hype and exaggerate, on the one side--or completely dismiss, 
on the other--the consequences of Iran failing to change 
course. But one thing I know from the witnesses before us, 
we're going to get a balanced, reasoned number of suggestions 
from them as to how to proceed. And I am more interested in 
hearing what they have to say than essentially seconding 
everything you said in your statement, because, if you read my 
statement, you'll see it's very, very similar.
    So, I'm delighted that the Under Secretary is here. I have 
great admiration for Nick Burns, and I'm anxious to hear his 
testimony.
    [The prepared statement of Senator Biden follows:]

           Prepared Statement of Senator Joseph R. Biden, Jr.

    Thank you, Mr. Chairman. I welcome our witnesses.
    As we meet, the President is at the opening of the United Nations 
General Assembly. Iran's nuclear program will be high on his agenda.
    Since our last hearing on Iran, the administration has taken 
significant steps in the direction many of us recommended. We joined 
with other members of the P5 plus Germany in offering a package of 
incentives to Iran. It was conditioned on Tehran verifiably suspending 
its uranium enrichment and reprocessing activities. We also offered to 
join France, Germany, and Britain at the negotiating table with Iran.
    Iran, not surprisingly, delayed in responding. When it finally did, 
on August 22, it was neither a ``yes'' nor a ``no.'' Iran also failed 
to comply with the deadline set forth in U.N. Security Council 
Resolution 1696 for suspending its uranium enrichment activity by 
August 31.
    So this is an incredibly important moment--and a real test for this 
administration's diplomacy, for the U.N.'s tenacity and for our 
partners' seriousness.
    What will it take to get negotiations started, with an Iranian 
suspension of enrichment and reprocessing activities? If we get that 
far, what will it take to get Iran to suspend those activities not for 
weeks or months but for years--which is the only way it can begin to 
regain the world's trust? And if we don't get that far, what will it 
take to impose U.N. sanctions--and what good will they do?
    Simply put, what is the administration's game plan?
    I hope that we also use this hearing to consider the larger 
strategic picture. There is a pervasive sense in the Middle East that 
Iran is becoming an increasingly assertive power--and so a growing 
problem. This summer's war in Lebanon--ignited by Hezbollah but fueled 
by Iranian cash and arms, Iran's continuing support to Shi'a militias 
in Iraq, its President's outrageous statements about the Holocaust and 
Israel, and its intransigence on its nuclear program are exhibits A, B, 
C, and D.
    Two U.S. actions--a necessary war in Afghanistan and an optional 
one in Iraq--had the unintended consequence of removing Iran's greatest 
strategic threats, while tying our troops down. Add record oil prices 
to the mix--which have filled Tehran's coffers--and it is no surprise 
that Iran is feeling emboldened.
    How should the United States respond to growing Iranian 
assertiveness? Should we build a containment policy with Iran's 
neighbors who do not want Iran to dominate the region?
    How can we tap into the deep unhappiness in Iran with the current 
regime? While Iranians of all stripes support a nuclear program, they 
also differ on the price they are willing to pay for it.
    The late Zulfiqar Ali Bhutto once famously said that Pakistanis 
would ``eat grass'' in order to match India's nuclear weapon. I am not 
certain that all Iranians are ready to ``eat grass'' for nukes. Their 
number one priority is an improved economy and a better quality of 
life. We need to do a much better job appealing to those interests.
    The incentives package offered in June is a good first step. But we 
should be much more explicit--and much more direct--in communicating 
the benefits Iranians can expect if their leaders suspend enrichment 
and end support for terrorism. We should also make clear the hardships 
they would face if their leaders remain defiant.
    To that end, it is time to jettison the canard that negotiation 
equals legitimization. We've talked with North Korea, Libya, the 
U.S.S.R., and China during the cold war.
    Now, our greatest allies against the theocracy in Tehran are the 
Iranian people. They admire America. But we never get our side of the 
argument into Iran--and into the minds of the people who, over time, 
have the power to change their government's course.
    We should have confidence in the power of our ideas and ideals. 
Putting them front and center before the Iranian people is the best way 
to start a debate in Iran. Right now, they don't hear America's voice.

    The Chairman. Thank you very much, Senator Biden.
    We look now to you, Secretary Burns. Your full statement 
will be made a part of the record. And please proceed as you 
wish.

   STATEMENT OF HON. R. NICHOLAS BURNS, UNDER SECRETARY FOR 
     POLITICAL AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Burns. Mr. Chairman, thank you very much for the 
invitation to be with you. And Senator Biden, other members of 
the committee, thank you very much for this opportunity.
    I will--I have introduced my full statement for the record. 
I will not read it to you. I thought what I would do is just 
try to frame the issue of how we deal with Iran as a country, 
and then go into the nuclear and terrorism issues, both of 
which, I assume, will be of interest to the committee.
    Mr. Chairman, it was a turbulent summer in the Middle East. 
And, in the aftermath of that, there's no question that the 
United States faces a considerable challenge from the Iranian 
Government.
    Iran was offered--has been offered a historic opportunity 
to reintegrate into the international community, but its 
leadership, in our judgment, is continuing along a path of 
confrontation and isolation, because it's refusing to abandon 
its pursuit of nuclear weapons. Iran, in recent months, 
escalated its efforts to sow discord and to foment violence in 
both Iraq and in Lebanon. At home, the Iranian regime renewed 
its campaign against journalists, against intellectuals, and 
against democratic activists as President Ahmadinejad tried to 
turn back the clock and reimpose the obsolete orthodoxies of 
the Revolution of 1979. Individually, these aspects of Iran's 
foreign and domestic policy--its nuclear ambitions, its support 
for terrorism, its efforts to subvert our interests in the 
region, and internal repression--present a profound set of 
concerns for the United States. Viewed comprehensively, it is 
clear that Iran's regime poses a complex and multidimensional 
threat to an array of fundamental American interests both in 
the Middle East and globally. The United States has no higher 
priority than facing and overcoming this threat, and we look 
forward very much to working, on that basis, with both this 
committee and with the Congress.
    The challenge of dealing with Iran is further complicated 
by history, and especially of the painful events of a 
generation ago. We still remember, in the State Department, 
Iran's seizure of our Embassy in Tehran in November 1979. They 
took 52 American diplomats hostage, and held them there for 
over 400 days. And one bitter legacy of that dispute is the 
absence of formal diplomatic relations, and even any kind of 
regular diplomatic contacts between our country and Iran. And 
that's been going on for nearly 27 years.
    We have no illusions about the nature of the Iranian regime 
or about its objectives. We believe that Iran's leadership 
aspires to preserve their place in power and to extend and 
entrench their influence over their neighbors in the Middle 
East. They view their presence--they view the presence in the 
region of the United States, and of our allies, as the 
paramount obstacle to their regional ambitions.
    In many ways, the current leadership, especially President 
Ahmadinejad and his supporters, are attempting to make Iran, 
once again, a revolutionary power in the Middle East. They're 
seeking radical change inside Iran by returning to the zeal and 
purity, as they see it, of the early years of the revolution 
under the Ayatollah Khomeini. In their foreign policy, they are 
pursuing a course of aggressive behavior from their arming of 
Hezbollah with long-range rockets to strike Israel--this past 
summer, they held a million Israeli civilians hostage for 30 
days during that campaign; their efforts to create a nexus of 
terrorism as they have routinely held summit meetings and 
planning meetings with Syria, with Hamas, with Hezbollah, with 
Palestinian Islamic Jihad, and with the Popular Front for the 
Revolution--the Liberation of Palestine-General Command. This 
is a newly aggressive foreign policy. It is different from what 
we have seen in recent years, and is--it is expressed most 
ominously in what most countries conclude, around the world, to 
be a national effort by Iran to acquire a nuclear weapons 
capability. That is the challenge, as we see it.
    Now, the urgency and complexity of that challenge requires 
an equally vigorous and multifaceted response by our country 
and by our allies. And during the past 12 months we have 
worked, as you know, very hard to mobilize a strong 
international coalition designed to make clear to Iran that 
there will be an increasing cost to its behavior on the nuclear 
front, as well as to its support for terrorism, and there will 
be consequences in a variety of ways--first and foremost, at 
the U.N. Security Council, and that is in play this week. We 
have been intensifying pressure on the Iranian regime since a 
year ago, since Ahmadinejad's inauguration, and since he 
abruptly and unilaterally walked out of Iran's negotiations 
with the European-3 countries. Since then, we have worked in 
the IAEA to pass two resolutions that have found Iran not to be 
in compliance with their international obligations concerning 
nuclear power and nuclear research and their scientific 
activities. We were joined in those votes, not just by the EU3, 
but by Russia and China. And Russia and China have been a big 
part of this coalition. We were also joined by India and by 
Egypt and by Brazil in the second vote in the IAEA, on February 
4, which we believe sent a resounding message to Iran that it 
is increasingly isolated on this question.
    And then, against the predictions of the Iranian Government 
and a lot of people who didn't think we'd be able to do this, 
we were able to move this issue to the Security Council in 
March, and we have set up a series of escalating steps to 
pressure the Iranians since then.
    Now, our strategy toward Iran does not begin and end with 
the Security Council. We're also working in coordination with 
the Government of Lebanon in the aftermath of the war, and with 
our European allies, to reinforce the arms embargo provided in 
Resolution 1701, the resolution that brought out a cessation of 
hostilities. One of the causes of the war, in our judgment, was 
the fact that Iran had so heavily armed--as well as Syria--
Hezbollah, and had--that it allowed Hezbollah to undertake the 
attack across the border that it did. We want to enforce the 
U.N. Security Council arms embargo, to make sure that those 
types of shipments do not continue.
    We are also working with the Iraqi Government to mitigate 
Iran's influence there and to try to stem the assistance that 
we know Iran is giving to insurgent groups, including the 
provision of very sophisticated IED technology that has been 
injurious to our troops, as well as to British troops.
    More broadly--and I think you saw comments from Secretary 
Paulson following his meeting in Singapore the other day--we 
are working with the financial community worldwide to impress 
upon them the cost of doing business with Iran, and we're 
making the case that Iran is not a good risk for further 
investment in any field. And we're beginning to see banks 
decide that they will not continue with new lending to Iran, 
and some European and Asian banks actually curtailing their 
operations quite significantly.
    Mr. Chairman, I--we very much agree with you, the United 
States will not be successful in confronting the Iran challenge 
by unilateral measures. We have had unilateral sanctions in 
place in Iran for nearly a generation, for 25 years. What is 
more important now is to fashion this larger international 
construct of countries--on the diplomatic plane, at the United 
Nations; financially, through the efforts to Secretary Paulson 
and others--to raise the cost to Iran of its present behavior 
on both the nuclear and terrorism issues. And we intend to 
proceed on that basis. And, having established this 
international consensus, with just a few exceptions over the 
past year, we're confident that this is the best way to give 
diplomacy a chance--and we wish to give it a chance, as 
President Bush said the other day--and to make diplomacy 
effective.
    The only countries that we can find that clearly do not 
agree with this international consensus on Iran are Cuba and 
Venezuela and Belarus and Syria. The four of them have 
consistently voted to protect Iran, whether it's in the IAEA or 
in the United Nations. But Iran can't count on the Perm-5 
countries. In fact, it can count on us to impose a sanctions 
regime, should that become necessary, and we can talk about the 
specifics of that. It can no longer count on leading members of 
the nonaligned movement. And I mentioned some of them--Egypt 
and Brazil and India--all of which have voted against Iran. So, 
we think this is the best way forward.
    And I'll be very happy to answer any questions that you and 
the other members have, on that basis.
    I thought I should just--since it's so much in the news, 
Mr. Chairman, just brief you--give you an update on where we 
stand on the effort to sanction Iran in the United Nations 
Security Council. You remember that we made an offer of the P5 
countries and Germany to Iran, back on June 1, and we said, 
``There are two paths forward. If you are willing to suspend 
your enrichment-related and reprocessing programs, your nuclear 
research at the plant at Natanz, we are willing, all of us, to 
offer a package of economic and scientific and technological 
incentives.'' President Bush talked the other day about the 
willingness of the United States to see an international effort 
to try to create nuclear power for Iran's civilians. And that 
was the positive offer made on June 1.
    There was also a second choice, a negative offer, made to 
Iran then, and the second choice was, ``If you can't do this, 
if you proceed unfettered in your nuclear activities at Natanz, 
then we will proceed with a sanctions resolution.'' That was on 
June 1.
    There were then a series of meetings that Javier Solana, 
representing the P5 and Germany, had with the Iranian 
leadership, but he didn't get anywhere with them in the month 
of June, in the month of July. On July 12, our Foreign 
Ministers all met in Paris, and they said, in the statement, 
``Should Iran not meet these conditions by the 31st of August, 
we will proceed to a sanctions resolution.''
    And then, on July 31, we were able to pass, by a vote of 14 
to 1, a sanctions resolution, in essence authorizing sanctions, 
Resolution 1696, which said that we would act, under chapter 
VII, article 41, to impose a sanctions regime in Iran, should 
it not meet the conditions.
    Well, the deadline expired on August 31, and then it 
appears the Iranians got interested in putting forth serious 
views.
    So, now, Mr. Chairman, we're, in effect, in extra innings. 
At the Security Council this week, we assume that Dr. Ali 
Larijani, the Secretary of the Iranian National Security 
Council, will show up in New York. We assume that he will have 
a series of conversations with the European leadership, not 
with the United States. And we hope that, on behalf of his 
government, he will say that Iran is willing to suspend all of 
its nuclear research programs, and that will be verified by Dr. 
ElBaradei and the IAEA apparatus in Vienna. Should that be the 
case, President Bush and Secretary Rice have been very 
straightforward, the United States, will appear at the 
negotiating table with Iran for the first time in 27 years. We 
will seek to end their nuclear research programs through 
diplomacy. But should that not be the case, and since we're in 
extra innings--we can't wait for ever, and there's a very short 
timeline here--then President Bush and Secretary Rice, as 
recently as this morning, said publicly that we will seek to 
impose a sanctions regime on the Iranian Government.
    We believe, as you suggested, Mr. Chairman, that those 
sanctions, in their first phase--and there may be multiple 
phases of graduated sanctions on Iran--should be focused on 
their leadership, and should be focused on their nuclear 
program, and should be designed to curtail the kind of dual-use 
exports that we believe make it possible for the Iranians to 
conduct nuclear research by using technologies that are now 
permissible under the international trade guidelines.
    We believe we have unity among the Perm-5 countries and 
Germany to do this. And, as recently as yesterday afternoon, 
that unity was in place.
    So, the Iranians have a clear choice to make. That choice 
is in New York this week, and we very much hope that Iran will 
make the right choice so that negotiations can proceed and 
diplomacy can proceed.
    Mr. Chairman, if I could just make two more points, then 
I'll conclude these opening remarks.
    We're also concerned by Iran's support for terrorism. We've 
often said--and, I believe, in testimony before this 
committee--that, in effect, Iran is the central banker of 
Middle East terrorism. If you look at the three or four major 
terrorist groups, the ones that are designed--that have as 
their objective the destruction of the State of Israel, that 
have carried out terrorist attacks against Israel and against 
other allies of the United States, they are all being funded by 
Iran, the Iranian leadership meets with them routinely. And we 
believe there's also political control over many of these 
organizations by the intelligence services of the Iranian 
state. That is a very serious challenge to our country. We take 
it seriously. And you can believe that we're taking measures to 
confront that challenge.
    We also have a challenge of Iran in Iraq. There's no 
question that Iran is not standing up for a--for unity among 
the various groups in Iraq. Quite the contrary. And there's 
also abundant evidence, as we have said now for a solid year, 
that the Iranians have supplied sophisticated IED technology to 
Shi'a insurgent groups, and that that technology has been used 
against our soldiers and the soldiers of the United Kingdom. 
That is a very serious matter. We're also confronting that 
issue.
    We also know that after the destruction of al-Qaeda in 
Afghanistan in the autumn of 2001, in the winter of 2002 after 
they fled, some of the al-Qaeda membership fled to Iran. It is 
sometimes said that they are under house arrest there, but Iran 
has not prosecuted them, Iran has not turned them over to their 
countries of origin, and we have serious concern that these 
people may be able to operate in a somewhat free environment, 
and that is, of course, of great concern to us, as well.
    So, terrorism--going back now to the early 1980s and the 
creation of Hezbollah and Iran's sponsorship of Hezbollah, 
continuing through the attacks against us in the gulf in the 
1990s, terrorism is an abiding concern that we have with Iran. 
It's a front-order concern. And we are facing it squarely.
    Finally, I just wanted to thank the Congress--this 
committee, the Senate, and the House--for having given us, in 
supplemental fashion this year, $66 million so that we might 
proceed in our efforts to promote democracy in Iran and to help 
those inside that country who wish to have a different future.
    We're using the majority of that money to increase the 
ability of VOA Persian broadcasts to broadcast into Iran from 1 
hour a day a year ago, to 12 hours a day by January of next 
year, January 2007, also to increase the ability of Radio 
Farda, our Persian-language radio service, into Iran, because 
there ought to be a competition for ideas in Iran, and there 
ought to be a political debate informed by free ideas and free 
information; and so, we take that responsibility seriously, and 
we thank the Congress for the financing that you've given us 
that enabled us to expand these programs.
    President Bush said, the other day in his press conference, 
that he also hoped that we would be able to dramatically expand 
the people-to-people contacts between Iran and the United 
States. This is a most unusual relationship. I can't think of a 
relationship with any country in the world that is more unusual 
and more closed than that of the relationship between Iran and 
the United States. And we're now planning athletic exchanges, 
medical exchanges, professorial exchanges, people-to-people 
exchanges from people in all walks of life, so that we can 
bring Americans, in much larger--Iranians, excuse me, in much 
larger numbers to this country and hopefully have the kind of 
exchanges that, in the long term, might help us, over the 
horizon, to begin to have a more normal relationship and a more 
normal dialog, especially between Iranians outside of their 
governmental apparatus.
    And, third, we're using some of the funding that you 
provided us to try to give support, on a grassroots basis, to 
the nongovernmental community in Iran and to those who wish to 
see democracy as the future of Iran.
    There's not much that one can say in open session about 
this. We're trying to be very careful not to, in public, 
release the identity of the people with whom we're working, for 
obvious reasons, but there is a lot more we can say in closed 
session, and I'd be happy to do that, should you be interested.
    So, Mr. Chairman, that constitutes the summary of my 
opening remarks. You have the full statement that we provided 
for the record last evening. And I look forward to your 
questions.
    [The prepared statement of Under Secretary Burns follows:]

Prepared Statement of Hon. Nicholas Burns, Under Secretary of State for 
         Political Affairs, Department of State, Washington, DC

    Thank you, Mr. Chairman, Ranking Member Biden, and distinguished 
members of the committee for this opportunity to discuss U.S. policy 
toward Iran, in particular, next steps in responding to Iran's nuclear 
ambitions.
    In the aftermath of a turbulent summer in the Middle East, the 
centrality of the challenge posed by Iran is ever more apparent. 
Offered a historic opportunity to reintegrate into the international 
community, Iran's leadership is continuing along a path of 
confrontation and isolation by refusing to abandon its pursuit of 
nuclear weapons. Iran escalated its efforts to foment violence and sow 
discord in both Lebanon and Iraq. At home, Tehran renewed its campaign 
against journalists, intellectuals, and democratic activists, as 
President Ahmadinejad tried to turn back the clock and reimpose the 
obsolete orthodoxies of Iran's revolution.
    Individually, these aspects of Iran's foreign and domestic policy--
its nuclear ambitions, support for terrorism, efforts to subvert our 
interests in the region, and internal repression--present a profound 
concern for U.S. policy. Viewed comprehensively, it is clear that 
Iran's regime poses a complex and multidimensional threat to an array 
of fundamental American interests in the Middle East and across the 
world. The United States has no higher priority than facing and 
overcoming this threat, and we look forward to the support of this 
committee and the Congress in that effort.
    The challenge of dealing with Iran is further complicated by 
history and especially by the painful events of a generation ago--
Iran's seizure of our Embassy and holding hostage 52 American diplomats 
and personnel for more than a year. One bitter legacy of this tragic 
episode is the absence of formal relations or regular diplomatic 
contacts between Iran and the United States for nearly 27 years.
    We have no illusions about the nature and objectives of the Iranian 
regime. Its leaders aspire to preserve their place in power and to 
extend and entrench Iran's influence over its neighbors in the Middle 
East. They view the presence in the region of the United States and our 
allies as the paramount obstacle to these regional ambitions.
    In many ways, the current Iranian leadership, especially President 
Mahmoud Ahmadinejad and his supporters, are attempting to make Iran a 
revolutionary power. They seek radical change in Iran by returning to 
the zeal and purity, as they see it, of the early years of the 
revolution under Ayatollah Khomenei. In their foreign policy, they are 
pursuing a course of aggressive behavior from their arming of Hezbollah 
with long-range rockets to strike Israel to their work to create a 
nexus of terrorism encompassing Hezbollah, Hamas, Palestinian Islamic 
Jihad, the Popular Front for the Liberation of Palestine General 
Command, and Syria. This newly aggressive foreign policy is also 
expressed most ominously in what most countries conclude is a national 
effort to acquire a nuclear weapons capability.
    The urgency and complexity of the Iranian challenge requires an 
equally vigorous and multifaceted response. Over the past several 
years, we have crafted a comprehensive approach to Iran that addresses 
the broad scope of the challenge and enhances the tools at our disposal 
for countering the Iranian threat. During the past 12 months, we have 
mobilized a strong international coalition to make clear to Iran that 
its policies at home and across the region carry political, economic, 
and diplomatic consequences. Those consequences are becoming evident to 
Iran in a variety of ways--first and foremost, at the U.N. Security 
Council, which has consistently intensified pressure on Iran since 
March to suspend all enrichment and reprocessing activities and is 
today considering sanctions in response to Iran's failure to do so as 
the Council required on July 31 in U.N. Resolution 1696.
    Our strategy toward Iran does not begin or end with the Security 
Council, however. The tragic violence in Lebanon has created new 
opportunities for intensifying pressure on Iran's support for 
terrorism, and we are working in coordination with the Government of 
Lebanon as well as allies in Europe and the region to enforce the arms 
embargo provided for in UNSCR 1701. We are working with the Iraqi 
Government to mitigate Iran's influence and assistance to groups trying 
to accentuate conflict and divide Iraqis. More broadly, we have 
deployed a range of financial instruments to raise the costs to Iran of 
its behavior in the world. In addition, we are taking steps to expand 
the information flow into Iran, support democratic activists, and boost 
people-to-people contacts between our nations. These U.S. efforts are 
backed and amplified by support and cooperation from a broad-based 
international consensus.
    The emergence of this international coalition of concern is 
important and may provide the most effective way to use diplomacy to 
convince or coerce Iran to modify the most dangerous aspects of its 
foreign policy ambitions. Clearly, if diplomacy is to succeed, we must 
preserve international unity to convey the most powerful message to 
Iran's leadership.
    The emergence of this coalition is no small achievement. Rather, it 
is the product of the leadership of President Bush and the sustained 
diplomacy of Secretary Rice, the State Department, and other U.S. 
Government agencies.
    We recognize, however, that even with a diverse set of tools at our 
disposal and solid multilateral engagement, meeting the Iranian 
challenge successfully will require patience and persistence. Beneath 
the bombast from Tehran is a determined strategy by Iran's leadership 
to undermine our efforts, and those of so many in the Middle East, to 
establish an enduring pro-Western orientation among the states in the 
region. Behind Iran's intransigence are a series of clever diplomatic 
tactics aimed at splintering the carefully crafted international 
coalition opposed to Iran's agenda.
    We are committed to ensuring that neither these ploys nor Iran's 
vision for the Middle East will prevail. I will outline our policies 
for meeting the multidimensional challenge posed by Iran and detail the 
achievements that our coordinated efforts to check the regime's 
policies at home and across the region have already begun to realize.
Iran Nuclear Proliferation/UNSCR Next Steps
    The greatest immediate threat posed by the Iranian regime is its 
desire to acquire a nuclear weapons capability. For more than 18 years, 
Iranian leaders pursued a clandestine enrichment program and other 
undeclared nuclear activities that they hid from the world, in 
violation of their international obligations. That flagrant abuse of 
the world's trust has allowed us to mobilize a strong coalition of 
countries to deny Iran nuclear weapons. While President Bush has always 
been clear that no option is off the table, the United States continues 
to support a diplomatic solution to the Iranian nuclear problem, should 
that be possible. We have worked for a solid year to form a coalition 
of the Permanent Five members of the U.N. Security Council and Germany 
to pressure Iran to open its system to IAEA inspection and suspend 
specific enrichment activities. Other leading countries such as India, 
Egypt, Brazil, Japan, and Australia have joined us in pressuring Iran 
to meet its IAEA obligations. I have traveled to Europe 12 times during 
the last 18 months to help this coalition unite around these goals.
    Our diplomacy is paying dividends. Today, the international 
community has affirmed in a strong voice that Iran cannot be permitted 
to achieve its nuclear ambitions, and that a suspension of activities 
related to enrichment and reprocessing is required in order to rebuild 
the loss of confidence in Iran's intentions.
    The goal is clear: Iran must abandon its quest for nuclear weapons 
and fully meet its obligations under the Non-Proliferation Treaty.
    We have communicated this choice clearly over 2 years of efforts in 
the IAEA Board of Governors. In the past year, the U.N. Security 
Council adopted unanimously on March 29 a Presidential statement 
calling on Iran to fully suspend all enrichment-related and 
reprocessing activities and to cooperate fully with the IAEA's ongoing 
inspections. Iran essentially ignored this U.N. statement.
    On June 6, the Governments of China, France, Germany, Russia, the 
United Kingdom, and the United States presented Iran a generous package 
of incentives that would provide for economic, political, and 
technological benefits for the Iranian people following a successful 
conclusion of negotiations with Iran. Secretary Rice announced that the 
United States would be willing to join negotiations with our European 
partners and Iran, if Iran established a verifiable suspension of 
enrichment-related and reprocessing activities. This was the first 
significant U.S. offer to negotiate a major issue with Iran in 27 
years.
    The United States and its partners presented Iran with two clear 
paths to choose: The first was to abandon its enrichment-related work 
and receive the far-reaching incentives included in the P5+1 incentive 
package, discussed with some of you individually and sent in full to 
the committee in July. To take advantage of these incentives, the 
Iranian regime has to verifiably suspend all enrichment related and 
reprocessing activities.
    As President Bush emphasized last week, the United States supports 
the right of the Iranian people to enjoy the benefits of peaceful, 
civil nuclear energy. But we and other leading countries do not support 
Iran mastering the enrichment and reprocessing and other sensitive 
aspects of the fuel cycle that would allow it to produce fissile 
material and a nuclear weapon. Russia and other European countries have 
proposed an initiative to supply nuclear fuel for civil power reactors, 
without allowing Iran to conduct these more sensitive operations.
    Alternatively, the P5+1 emphasized that the negative choice is for 
the Iranian regime to maintain its present course of defiance--
violating the conditions laid out by the international community. If 
Iran continues down this path, President Bush and the other P5 leaders 
have made it clear that there would be consequences. In Paris, on July 
12, the P5 and German Foreign Ministers, including Secretary Rice, 
affirmed their intentions to take Iran to the Security Council should 
Iran not suspend its enrichment programs. Unfortunately, Iran failed to 
take the steps needed to allow negotiations to begin. After 2 months 
without a positive, concrete response from Iranian leaders to the 
incentives package, we and our international partners in the U.N. 
Security Council adopted Resolution 1696 on July 31, 2006.
    This resolution explicitly demanded that Iran suspend all 
enrichment-related and reprocessing activities, including research and 
development. Resolution 1696 also called upon Iran to take the other 
steps deemed necessary by the IAEA Board of Governors in its February 
resolution.
    Resolution 1696 also made clear that if Iran did not comply by 
August 31, the Security Council would adopt appropriate measures under 
article 41 of chapter VII of the U.N. Charter, which provides for 
sanctions.
    Iran finally responded on August 22 with a 21-page document that 
was alternatively rambling and vague. Iran's response did not even 
clarify its stance toward our central offer posed 3 months earlier--
Iran's willingness to suspend its enrichment.
    On August 31, IAEA Director General El Baradei reported that Iran 
had not suspended its enrichment-related activities, was continuing 
construction of a heavy water research reactor at Arak, and that it 
continues to deny numerous IAEA requests for information necessary to 
resolve uncertainties surrounding its nuclear activities. Furthermore, 
the August 31 board report contained two significant findings: (1) 
Discovery of HEU particle contamination on a waste container at the 
Karaj Waste Storage Facility; and (2) the temporary loss of continuity 
of knowledge over a UF6 cylinder. These findings are further evidence 
that Iran has raised more questions rather than answers regarding its 
nuclear activities.
    Iran's refusal to suspend is disappointing and in our view, a major 
missed opportunity. The international community warned Iran's leaders 
that this course would result in further isolation and sanctions. 
Indeed, operative paragraph eight of U.N. Security Council Resolution 
1696 made abundantly clear the Council's intention to pursue sanctions, 
if Iran failed to comply with the resolution.
    We are currently engaged in discussions with our P5+1 partners on a 
sanctions resolution in the Security Council. I traveled to Berlin on 
September 7-8 to confer with my P5+1 counterparts on elements to 
include in a sanctions resolution. I have had numerous conference calls 
with my P5+1 counterparts since then to continue these discussions. 
There was an ``experts''-level meeting in London on September 14 to 
review the technical details of the elements we want to include in a 
sanctions resolution. Secretary Rice and I will pursue this discussion 
of sanctions at the U.N. General Assembly in New York this week and 
next. I must today refrain from discussing details in an open session. 
However, I would be happy to discuss these measures with you in a 
closed session.
    Iran's continued defiance is a clear challenge to the authority of 
the U.N. Security Council and the IAEA Board of Governors, and presents 
a serious threat to the nonproliferation regime. It is imperative that 
the international community send Iran a strong message that this 
defiance will not be tolerated by imposing U.N. sanctions that target 
the regime and Iran's nuclear and missile programs, not the Iranian 
people.
    Going forward, we will do everything we can to maintain the widest 
possible international consensus on the steps Iran must take, and we 
will continue to keep Iran isolated on this issue. In the meantime, the 
High Representative for the European Union Javier Solana is discussing 
with Iranian officials a last-minute attempt to convince Tehran to 
accept the conditions of suspension and agree to negotiations. We 
support his effort but we will push for the imposition of sanctions if 
these talks do not produce a satisfactory outcome. The international 
community is waiting for Iran to give an unequivocal reply to our offer 
to negotiate.
    Our message to Tehran remains clear: Abandon the quest for nuclear 
weapons, and establish a full and verifiable suspension of all 
enrichment-related and reprocessing activities. If you can do so, the 
United States and others will begin negotiations. If you cannot, you 
will face sanctions.
Terrorism
    With your permission, I would like to also discuss our efforts on 
countering Iranian terrorism.
    All of you are familiar with Iran's infamous status as the world's 
leading state sponsor of terrorism. Indeed, the Iranian regime has for 
27 years used its connections and influence with terrorist groups to 
combat U.S. interests it perceives as at odds with its own.
    In Iraq, Iranian activities aim to undermine coalition efforts. 
Iran provides guidance, weapons, and training to select groups, some of 
whom support attacks against coalition forces and are accentuating 
sectarian violence. It also provides Shi'a militants with the 
capability to build IEDs with explosively formed projectiles similar to 
those developed by Iran and by Lebanese Hezbollah. Shi'a insurgent 
groups have used this deadly technology in attacking, and in some 
cases, killing American and British soldiers.
    Iran remains unwilling to bring to justice senior al-Qaeda members 
it detained in 2003, and it has refused publicly to identify those 
senior members in its custody. Iran has also resisted numerous calls to 
transfer custody of its al-Qaeda detainees to their countries of origin 
or third countries for interrogation or trial. Iranian judiciary 
officials claimed to have tried and convicted some Iranian supporters 
of al-Qaeda in 2004, but refused to provide details. In failing to 
identify and turn over these al-Qaeda members, Iran is blatantly 
defying its UNSCR 1267 and 1373 obligations. As the Council discusses 
the need for a chapter VII sanctions resolution on Iran as a result of 
its nuclear defiance, we hope Council members will take note of Iran's 
continued intransigence on its terrorism-related obligations as well.
    We also continue to see evidence that Iran encourages anti-Israeli 
activity. Both Supreme Leader Khamenei and President Ahmadinejad often 
praise publicly Palestinian ``resistance'' operations, and we know that 
Iran provides Lebanese Hezbollah and Palestinian terrorist groups--most 
notably Hamas, Palestinian Islamic Jihad (PIJ), and the Popular Front 
for the Liberation of Palestine-General Command (PFLP-GC)--with funding 
training and weapons. Iran, Syria, and these groups form a nexus of 
terrorism that presents a major challenge to our goals of democracy and 
peace in the Middle East. President Ahmadinejad has threatened more 
than once the very existence of Israel, not only a close U.S. friend, 
but a United Nations member state.
    As Secretary Rice has said, Iran is the ``central banker'' of 
terrorism. In that regard, we have made progress in impeding the 
regime's terrorism finance efforts. It is universally accepted that 
attacking terrorist financing is an essential element to combating 
terrorism. Treasury's Under Secretary for Terrorism and Financial 
Intelligence, Stuart Levey, traveled to Europe last week, where he met 
with banking officials to enlist their support in our efforts to combat 
terrorism and isolate the Ahmadinejad regime. Treasury also announced 
on September 8 that it will prevent one of Iran's largest state-owned 
banks--Bank Saderat--from gaining access to the U.S. financial system. 
We believe Bank Saderat has been used by Iran to transfer money to 
Hezbollah, Hamas, Palestinian Islamic Jihad, and other terrorist 
organizations. The only way that Iran can reintegrate fully into the 
international community is by ceasing all support for terrorist 
activity.
ILSA Update
    Sanctions have been a consistent and valuable tool in our arsenal 
for dealing with Iran. This June, I testified before the Senate Banking 
Committee on proposed legislation to extend and amend the Iran and 
Libya Sanctions Act (ILSA). As Secretary Rice also testified earlier 
this year, we believe ILSA has proven constructive for our Iran policy. 
But as she also noted, ``We are in a different phase now,'' 10 years 
after ILSA's enactment. In confronting the challenges posed by Iran, 
the administration supports legislation that would reauthorize the 
current ILSA statute for an additional 5 years. A bill to this effect 
has been introduced in the Senate: S. 2657. We support removing 
references to Libya from the law, given that ILSA's applicability to 
Libya was removed in 2004 and given the administration's decision to 
rescind Libya's designation as a state sponsor of terror on June 30, 
2006.
    In today's context, other pending legislation on ILSA raises 
serious concerns for the administration. In particular, I would like to 
say a word about H.R. 282, which was passed by the House of 
Representatives and is pending before this committee, and S. 333, also 
before this committee. The provisions that freeze current restrictions, 
set specific deadlines for decisionmaking, that restrict certain waiver 
authorities, and--in H.R. 282--that call for divestment of assets and 
prohibitions on assistance, would narrow the President's flexibility in 
the implementation of Iran sanctions and strain relations with allies 
whose cooperation is crucial to our efforts to change Iran's behavior. 
These bills would effectively penalize most severely the very allies 
critical to maintaining our international coalition against Iran.
    Iran is still working to create divisions among the international 
community--including the P5+1. We are concerned that the proposed 
amendments would take the focus of international attention away from 
Iran's misdeeds, where it now appropriately lies, and shift it to 
potential differences between the United States and its allies over 
ILSA provisions. If so, this would play into Iran's hands and set back 
the progress that we hope to make diplomatically in stopping Iran's 
nuclear weapons programs.
    Today, there is a perception of heightened political and financial 
risk associated with Iran continues that will be further fed by Iran's 
refusal to comply with a Security Council resolution.
    Meanwhile, we should do everything possible to strengthen the 
unprecedented and expanding consensus we have in place. In this regard, 
I would urge you to support an extension of the current ILSA 
legislation and to oppose provisions which will drive a wedge between 
the United States and the P5+1.
Democracy and Human Rights
    Before I conclude, I would like to turn briefly to another 
dimension of Iran's challenge to the international community--the 
regime's reprehensible treatment of its own people. Iran's leaders are 
determined to preserve a system that endows power, privilege, and vast 
economic perks to a narrow revolutionary elite. As a result, the 
Iranian regime's record of human rights abuse is among the worst in the 
world. Like its nuclear ambitions, the record of the regime at home is 
equally clear, equally consistent, and equally negative. It is a record 
of: Lack of transparency surrounding judicial proceedings; depressed 
living standards; intolerance toward minority ethnic and religious 
groups; discrimination against women as it relates to child custody 
laws; and limitations on the extent of freedom of speech and assembly.
    The Iranian people--an ancient, proud nation of 70 million--
deserves much better. They have made clear their desire to live in a 
modern, tolerant society that is at peace with its neighbors and in 
close contact with the broader international community. And we are 
confident that, if given a genuine opportunity to choose its leaders 
freely and fairly, the Iranian people would make a very different 
choice. They would choose leaders who invest in development at home 
rather than bloodshed abroad and a system that respects all faiths, 
empowers all citizens, and resumes Iran's historic place as a regional 
leader.
    For this reason, in parallel with our efforts on the nuclear and 
terrorism issues, we have launched a set of new initiatives intended to 
achieve an equally important goal--reaching out to the Iranian people 
to promote democracy and freedom. As President Bush and the Secretary 
have clearly articulated, we stand with the Iranian people in their 
century-old struggle to advance democracy, freedom, and the basic 
rights of all citizens. Since the Department received its first Iran-
specific appropriation from Congress in FY 2004, our efforts to foster 
Iran's democratic development have expanded considerably. Congressional 
allocation of $66M in FY06 supplemental funding has allowed us to begin 
initiating a wide range of democracy, educational, and cultural 
exchange programs as well as significantly expanding the flows of free 
information that are available inside Iran.
    Support for prodemocracy activities inside Iran will consume $20M 
of this supplemental funding as well as an additional $11.5M in initial 
FY 2006 funding. These programs build on our effort initiated since 
2004 to support human rights, expand civil society, improve justice and 
accountability, and advance basic rights and freedoms. Our grantees are 
assisting independent labor activists, conducting training workshops on 
civil mobilization and activism for NGO leaders, linking reformers 
within Iran to like-minded groups outside the country, assembling 
documentation on human rights abuses in Iran, and creating Persian and 
English-language Internet portals to connect reform-minded Iranians.
    Given the nature of United States-Iran relations, however, progress 
toward our goals has predictably been difficult. Our partners on the 
ground--the brave men and women who have worked for years to advance 
democratic ideals in Iran--fear in many cases that public association 
with the United States and other governments could jeopardize their 
work and, possibly, their lives. Accordingly, we employ all possible 
safeguards--including confidentiality--to enable them to pursue their 
work.
    The FY 2006 supplemental has also enabled us to undertake another 
critical goal in reaching Iranians--enhancing the volume and the 
quality of information that is available to the people of Iran. 
Communications are a vital tool in our efforts to champion democracy in 
Iran. Toward that end, the Broadcasting Board of Governors received 
$36.1M of the $66M that Congress allocated for Iran under the FY 2006 
supplemental, an increase of more than 200 percent of the BBG's initial 
FY 2006 budget of $17.6M for Iran broadcasts. This additional funding 
will enable the BBG to dramatically upgrade its infrastructure, improve 
Radio Farda service and its Web site, and increase Voice of America--
Persian service television programming from 1 to 12 hours per day by 
January 2007.
    Ultimately, the most valuable means of reaching out to the Iranian 
people comes through direct, face-to-face contact. As President Bush 
indicated last week, we hope to bring more Iranians into our country, 
even as its regime becomes further alienated from the international 
community. To that end, we are developing programs to bring more 
Iranians to the United States in the fields of culture, medicine, 
education, and environment. Similarly, we have developed academic 
exchanges, overseas seminars, and sports exchanges that will engage 
teachers, students, athletes, and other influential Iranians. We are 
working with respected American nongovernmental organizations to 
maximize our outreach to the Iranian people. One such effort will 
engage Iranian opinion makers and professionals, including physicians, 
religious scholars and business leaders. The Department is also 
partnering with the U.S. Olympic Committee and several national sports 
leagues to conduct a sports exchange for coaches and athletes in 
wrestling, soccer, and basketball for boys, girls, and those with 
disabilities.
    Our Iranian partners want to improve life for all Iranians. Many 
Iranians share our concern about the imprisonment of political 
activists and the harassment of opposition journalists. The regime's 
harassment of Nobel Peace Prize winner Shirin Ebadi's legal office and 
the forced retirements of more than 50 Western-trained professors from 
Iranian universities are ominous signs of repression. The Iranian 
regime's unjust treatment of women, its persecution of religious and 
ethnic minorities, and its continued harassment of critics demonstrate 
that life is not getting better in Iran.
    We believe most Iranians are sympathetic to democratic values. They 
advocate for freedom and justice. Still, it may be years before the 
Iranian people achieve the changes they want and deserve. Against this 
backdrop, the United States--through these programs, and through our 
diplomatic efforts--stands with the Iranian people.
Conclusion
    As all of us are aware, Iran presents the United States with a 
critical strategic challenge in its pursuit of nuclear weapons and 
regional hegemony, support for terrorism, and repression of its own 
people. Iran's leadership has chosen the path of isolation and 
confrontation, and now it is the responsibility of the international 
community to ensure that the costs for Iran of such a course are clear. 
Our comprehensive approach will require the determined efforts of this 
administration and our friends and allies around the world. We look 
forward to the support of Congress in this historic effort.

    The Chairman. Well, thank you very much, Secretary Burns.
    The Chair notes that we have good attendance, with perhaps 
more coming; and, likewise, a distinguished panel to follow, 
and a rollcall vote at approximately noon or thereabouts. So, 
with all those constraints in mind, and doing the math, I'm 
going to suggest an 8-minute limit. I hope that members will 
adhere to that as much as possible, so that we will be able to 
hear the second panel and have a good questioning of them, too.
    Let me begin the questioning, Secretary Burns, by asking 
about your experience in dealing with Iran close up for some 
time now. Most of the accounts of Iran in the popular press, 
stress the large number of very poor people in the country. 
There are large stretches of the countryside that have not 
shared in whatever oil wealth or other wealth might have come 
from commerce. In a normal state, such a situation would be 
daunting, and maybe, in Iran, it is. But this byplay in Iran 
between those persons looking for a better life--maybe a 
majority of the people of the country--and those in control, 
does not really surface often. And so, I raise it today.
    Second, we're often told about the students, or the young 
people in Iran. The population of Iran apparently has a 
majority under age 25. These young Iranians may, or may not, 
share the strength of the theological views of the leadership, 
but on the other hand have never shown particular signs of 
resisting, either. On a generational level, maybe they are 
waiting for the old people to die out, in due course, as they 
come into their own.
    These are just two significant groups of people in a 
complex country, admittedly. As you've said, there is always 
the possibility of promoting for person-to-person exchanges 
between Iranians and Americans. Many people who have been to 
Iran have enjoyed pretty good colloquies. I've visited with 
some of the young people in our country who have gone there and 
had quite a good time, with the thought that, essentially, so 
long as they kept it private, they would not get in trouble 
with their elders and the religious folk and so forth.
    Now, on top of that, the current President of the country, 
who will be speaking to the United Nations shortly after our 
President, is something else altogether. And here, people who 
are into historical quests, say, ``Listen, Iran is a country 
that, in its tradition, in its ancient history and its 
aspirations, is destined, if not to rule the world, then to be 
a dominant force in the Middle East.'' In other words, what 
we're witnessing, they say, is the ``clash of civilizations'' 
idea. They see Iran seeking nuclear weapons as a very important 
point of, at least, having all the resources necessary to be a 
dominant power, not only in the region, but universally, in the 
minds of, at least, more grandiose scholars.
    Now, with these conflicting views coming and going, how do 
Iranian statesmen actually come to a policy? As you were 
discussing, Mr. Ahmadinejad may, in New York today, bring about 
negotiations, first with the Europeans, then maybe even with 
us. How does this come about? How? Have you witnessed the 
development of diplomatic policy in Iran?
    Mr. Burns. Mr. Chairman, thank you. I think you've asked a 
central question. What are the objectives of the Iranian 
Government? What type of world do they wish to live in? What 
type of policies do they seek to establish in the Middle East 
as they clearly flex their muscles in the Middle East region?
    We are limited somewhat, because, as you know, we have no 
diplomatic contact with them. I've been in the U.S. Foreign 
Service for nearly 25 years. I've never met an Iranian 
Government official. And that's true with nearly all of my 
colleagues. And so, we observe. And there's been a great deal 
of observation taking place. As you know, we've recently 
established, in Dubai, an--a section of American diplomats who 
are solely focused on Iran. That was something we felt we had 
to do to increase our understanding of that country. We built 
up a new Iran Desk in the State Department, at Secretary Rice's 
instruction, so that we might devote greater resources to the 
effort of understanding the Iranians.
    But I think it's clear--and I would--I know Ray Takeyh is 
the great expert on this, and he'll follow me--I think it's 
clear that we're not looking at a monolith. This is a country 
undergoing a vast transformation in the way that it views 
itself, both in its internal arrangements--there's a furious 
debate about the lack of democracy, about the repression of 
journalists and the repression of students and democrats. There 
is also a great debate in Iran about its foreign policy, about 
what kind of country it should be in the world. You saw some of 
that in the recent visit of the former Iranian President 
Khatami, who came here and spoke to many Americans. He said 
that, in his view, as I understood it--I did not--we did not 
meet with him, but I read his comments--that he didn't agree 
with President Ahmadinejad that Israel should be wiped off the 
map of the world, he didn't agree that the Holocaust, the 
historical accuracy of the Holocaust, should be put into 
question. So, there are many voices.
    What we hope will emerge is an Iranian Government that 
realizes that a policy of the type espoused by Ahmadinejad, of 
aggressive behavior in the region, which has a lot of the Arab 
countries very concerned, a clear effort to create a nuclear 
weapons capability, and a clear effort to continue the funding 
of terrorist groups, that's going to create a vast 
international coalition against Iran. And that is happening. 
And you can see that today.
    On the other hand, there are others in the Iranian 
Government and political system arguing for integration with 
the rest of the world, investment in trade, more moderate 
foreign policies that don't frighten the Sunni Arab regimes, 
that don't pit themselves against the United States or Russia 
or China or the European countries on the nuclear issue. And 
so, we'll have to see how this debate plays out. It is often 
said that the youth of the country are frustrated, that they 
want democracy in their country, they don't want to live under 
these very harsh provisions of the Islamic theocracy, the 
ruling theocracy. And so, it's going to be very important that 
we understand these challenges inside the country--that's why 
we're devoting so many more resources of our Government to do 
so--and to react to it.
    What concerns us is the policy of President Ahmadinejad and 
his supporters. We have to take seriously what they say. They 
seem to conceive of themselves as a revolutionary power, and 
they want to stir up some of the revolutionary sentiment of a 
quarter of a century ago and embark, both internally and 
externally, with the type of policies with which we have to 
profoundly disagree.
    And so, our job and our challenge is to confront those 
policies and to blunt what the Iranians are trying to do on the 
terrorist issue, the nuclear issue, and turn them back.
    As President Bush and Secretary Rice have been saying, we 
are choosing diplomacy, we are seeking a diplomatic way 
forward. We've invested a tremendous amount of our energy and 
diplomatic capital in diplomacy, and we believe that there can 
be--it's not assured, but there can be--a diplomatic way 
forward on this nuclear issue, and that's why we're working so 
hard in New York this week at the Security Council, to see if 
the Iranians can stand down their nuclear program and agree to 
negotiations. And Secretary Rice said this morning, if they do 
that, and if it's verified, Secretary Rice will appear at the 
negotiating table and engage them in a very tough way on all 
these issues.
    The Chairman. My time has concluded. I appreciate the 
thought that all of us--people in public life and Americans--
might become much better informed about Iran in a hurry. We 
really need to know the country and the people well. This is 
very serious.
    Senator Biden.
    Senator Biden. Thank you, Mr. Chairman.
    Let me say, at the outset, I don't have a question.
    Nick, I'm more encouraged by what you said today than 
anything I've heard from the administration. The President 
likes to kid--when I said to him, about a year and a half ago 
in a meeting, he asked me a question, and I said, ``Well, 
that's nuance, Mr. President.'' He kiddingly put his hands on 
my shoulder and said, ``I'm George Bush, I don't do nuance.'' 
Obviously, you're figuring out we have to do nuance here.
    The fact of the matter is, I think we are woefully 
uninformed, at least in the public forum. There is virtually no 
discussion about the nuance that exists within Iran.
    You said several very interesting things. You talked about 
moderates within Iran. You talked about the distinction among 
some of the present and former leaders in their attitude toward 
Israel, their attitude toward a number of different issues. And 
it seems to me the central question is, How do you isolate the 
extremists without killing the moderates? It seems to me--and 
I'm anxious to hear the panel talk about this a little bit--
we've actually underestimated--and I don't purport to be an 
expert on Iran--we vastly underestimate recent history and its 
impact upon the attitude of Iranians generally and how it has 
affected all the strata of the political leadership.
    You look at Saddam's use of chemical weapons against the 
Iranians years ago, with, apparently, the blessing of the West 
and the rest of the world, everyone remaining silent. You have 
to ask the question, which is not popular to ask among all of 
us in public life--you know, sometimes paranoia is well-
founded--if you were sitting in Iran, and you had a democratic 
government, would you want a nuclear capability? If the answer 
to that question would be ``Yes,'' then, it seems to me, that 
indicates there's got to be other kinds of incentives. It's not 
just the way we make it out to be is, there's just a bunch of 
these crazies--and some of 'em are crazy--and Ahmadinejad out 
there as if he's one in line with the clerics. I'm going to ask 
the panel.
    That's not my information. My information, there's an 
internal struggle, an internal struggle between Ahmadinejad and 
the theocracy. The question is, How long are they going to let 
him--how long is the leash going to be? The discussions I have 
with Iranian experts relates to the conflict that exists at 
that level, yet we talk about it--and until you spoke today--
I'm sure the administration has said what you've said before. I 
haven't heard it. What I heard mostly is absolutes, that we 
seem to know that--exactly what's happening.
    I find--it seems to me one of the most hopeful prospects 
for us is--in order for us to succeed in dissuading Iran from 
making this next leap--the Iranian people. If I'm not mistaken, 
we are at least as well off, if not better off, in terms of 
public opinion, in Iran than we are in other countries who are 
supposedly our allies, like France. And it seems to me, that is 
a heck of a pool there to deal with it. It always--it always 
surprises me, our unwillingness to publicly engage on a world 
stage, even the bad guys in Iran, in order to give some 
sustenance or some argumentation, some support for those 
moderate voices inside Iran.
    You pointed out that there's a need to significantly expand 
exchange programs. What's the purpose of that? Well, the 
purpose of that is to expose Iranians to our point of view. 
Yet, Iranians don't get exposed to our point of view. All they 
really get exposed to is our bellicose response to generally 
bellicose initiatives by the Iranians. There's hardly anything 
else that I see that comes forward.
    And so, the fact that, you know, we talk and we use terms 
like, ``This is really a religiously motivated attempt to 
dominate the Muslim world with a nuclear weapon.'' If I'm not 
mistaken, only 15 percent of the entire Muslim world is Shi'a. 
And if I'm not mistaken, they aren't very well suited to lead 
the 85 percent of the Muslim world that is Sunni. Yet we 
conflate the two all the time. We talk about it as if there is 
only one concern we have, and it's all--they're all basically 
jihadists who sup from the same cup. I don't see it that way.
    And I hope that you continue to--and the Secretary, 
assuming it's the Secretary--have influence to get a much more 
nuanced picture of what's going on inside this country.
    It seems to me that nationalism plays a pretty significant 
part. For example--and I'll end with this--you hear, 
constantly, calls for the need for us to go ``take out'' the 
Iranian nuclear facilities, as best we can, ``Take 'em out now. 
Don't wait to do that.'' First of all, we can't take 'em all 
out, but we could take some out and slow things up. I may be 
mistaken--and I'm going to ask this question--but my concern 
is, that may be the single most unifying act we could engage 
in, the thing that would most unify Iranians across the 
ideological spectrum.
    So, I hope we are much more sophisticated than we were when 
we went into Iraq. I hope we're much more sophisticated than we 
have been since we've gone into Iraq. And I look forward to--
and I mean this sincerely--your influence on the 
administration, or your representation of the administration, 
that seems to be moving in the direction that understands that 
there may not be any single answer and we may be leaving some 
of our best assets on the table, in terms of this issue.
    Conclusion. I find it difficult--my dad used to say--when I 
was a kid, I'd say something, and he'd say, ``Champ, if 
everything's equally important to you, nothing is important to 
you.''
    What's most important to us, stopping their nuclear program 
or stopping their support of terror? They're both very bad 
things. Very bad things. If we could get a verifiable deal on 
enrichment, verifiable deal on missiles, would we make a deal 
with them, and recognize them, and then fight them on a 
different front, in terms of their supporting terror? Or do we 
have to have a total deal to change the relationship?
    The policy of regime change makes it difficult to 
negotiate. It's a little like my sitting down and saying, ``You 
know, I want to work out an agreement with you about how we're 
going to deal with that property next door that we both have an 
interest in. And then after we do that, work that out, then I'm 
going to eliminate you. And then I'm going to take out your 
property. I'm going to deprive you of ownership.'' I find that 
kind of fascinating, why we think someone's going to sit down 
and actually make a deal when they know, at the end of the 
deal, we still say they should be gone.
    But--sometime, maybe, we can talk about that, but my time's 
up.
    The Chairman. Thank you very much, Senator Biden.
    Senator Hagel.
    Senator Hagel. Mr. Chairman, thank you. Secretary Burns, 
welcome.
    I would like to follow along the comments of Chairman Lugar 
and Senator Biden, Mr. Secretary, and just reemphasize that we 
are dealing, as you have noted--and we will hear more 
specifically from the second panel on this issue--with a 
country that, as--we all have some sense of this--has deep 
internal complications, and--as you have suggested, using a 
current example of former President Khatami's days here in the 
United States, and what he said, and the disagreements that he 
expressed with the current leadership--and we should not 
undervalue or underestimate those deep internal complications--
I think, contradictions. I think we are dealing with a 
country--and I am no expert on Iran or any other country, but I 
do listen to experts carefully, and I think we are dealing with 
a country at a time in its history that is, in fact, full of 
contradictions. And if there's anything that I hope we have 
learned from our invasion of Iraq, in not planning carefully 
about who was going to govern after we disposed of Saddam 
Hussein, it is surely that those next sets of questions--that 
are always difficult to answer, but need to be answered, and 
certainly challenged as we work our way through these great 
diplomatic challenges of our time--Iran presents for us and the 
world the consummate example of what we didn't do right in 
Iraq, in my opinion.
    We are in a mess in Iraq and in the Middle East, partly 
because we didn't do enough to understand those complications--
religious, tribal, historical--a lot of differences, just as 
Senator Biden has noted, between Persian Shi'as and Arab 
Shi'as. And I think what is most important, at least in my 
opinion here, Mr. Secretary, is that we carefully examine all 
those--these pieces before we put ourselves, our country, and 
the world in a very dangerous position, that we have worked 
ourselves into a corner and we can't get out.
    In fact, if--as you have noted regarding influence that 
Iran has in Iraq--and that's, I suspect, debatable, and we will 
hear more about that from the second panel. I happen to believe 
that Iran probably has more influence in Iraq today than any 
other country, for a lot of reasons. And I say that partly 
because if you look at the current Iraqi leadership--as you 
know, we have just had a visit in Iran with the Iranian 
leadership from the Prime Minister, the Iraqi President has 
been there. We also know that the Iraqi and Iranian oil 
companies are doing business. As a matter of fact, we know that 
because Iraq does not have the kind of refining capacity that 
it needs, that it is shipping crude to Iran, Iran is exchanging 
that crude with refined products. There is a very significant 
amount of not only commerce going on, but diplomacy, as well as 
other exchanges. That says to me, Mr. Secretary, that, aside 
from the fact that Iran is, in some way, involved in--as we 
know from some limited intelligence--other activities in Iraq. 
I have believed, for some time, that we will see no peace, no 
stability, no security in the Middle East until Iran is part of 
that. I don't see how it can happen, whether it's the Israeli-
Arab issue or whatever dimension that you apply to security in 
the Middle East.
    Now, I would ask you this question. You say that we are--
the United States--leading a coalition that is becoming, I 
think, in your words, a vast international coalition against 
Iran, to isolate Iran. But how can you say that, when we have, 
for example, one of the permanent members of the Security 
Council's comments, President Chirac, today, on the front pages 
of all the papers, talking about sanctions, that sanctions is 
not the responsible way to go? We know there are two other 
members of that permanent Security Council, Russia and China, 
who have difficulties with our approach. I'm not so certain 
that--because I believe that Middle East is the most--is in the 
most combustible, dangerous situation we've seen since 1948--
I'm not so sure, the way this is going, Mr. Secretary, that the 
United States is not isolating itself in the Middle East.
    Now, when we also hear of tough talk from some in this 
administration, about, ``Well, we'll use a military option''--
let's start with that question. Under what conditions would 
this administration use military force against Iran? That's a 
question to you.
    Mr. Burns. Thank you very much. Thanks, Senator Hagel.
    And responding to your two questions gives me an 
opportunity just to also respond to some of the thoughts put 
out by Senator Biden. I'll try to do that together.
    First of all, let me say that President Bush and Secretary 
Rice have been very clear, nearly every time they talk about 
Iran, that we haven't taken, and will not take, any of our 
options off the table. And that is commonsensical. And that is 
supported, by the way, by the great majority of our allies, 
that position--the thought, that is, you never take--you never 
want to limit your power and options ahead of time.
    Second, the President has made it very clear--and he spoke 
on Thursday and Friday about Iran, quite extensively--that we 
are on a diplomatic course. We've been on that diplomatic 
course since March 2005. That's when we decided that we would 
support the EU3 diplomatic efforts. And for the past 18 months, 
we have been vigorously trying to put together this diplomatic 
coalition as a way to use diplomacy to resolve this nuclear 
crisis. That's our first choice. That's where the great 
percentage of the energy of our Government is going right now, 
to make diplomacy succeed. That's what the President and 
Secretary Rice are doing this week in New York. And I think 
we've proven our commitment to diplomacy by standing by the EU3 
for the last 18 months, by bringing Russia and China into that 
coalition, by passing Resolution 1696--by the way, to answer 
your first question, does commit the French Government, the 
Russian Government, the United States Government to a course of 
sanctions under article 41, chapter VII of the U.N. Charter, 
should Iran not meet this basic condition, ``Suspend your 
enrichment-related and reprocessing activities.''
    And so, we assume, and we believe, that all the governments 
that voted for that resolution back on July 31 will honor it. 
And I can tell you that over the last 10 days I've been to 
Berlin to discuss a sanctions regime with the French, British, 
Germans, Russians, and Chinese. Last week we had two very long 
conference calls. We had specific discussions on which 
sanctions we would like to employ in the first round. We 
haven't come to an agreement yet, but we are actively 
discussing the sanctions. And Secretary Rice will pursue that 
this evening when she meets Foreign Ministers of all these 
countries, in New York.
    And so, I can assure you we are on a diplomatic path. 
That's the focus of our energies. We believe diplomacy could 
possibly succeed, may succeed. And we hope it will, because 
it's a vast--it's a vast preference over all the other options.
    I would also say this. I agree with both you and Senator 
Biden that--and the chairman, he made this point, as well--that 
it's very important that we understand this country. And we're 
limited. We're limited, because we haven't had a single 
diplomat--a single--representing us in that country for 27 
years. And so, we're making an enormous effort to do that.
    And it's important to distinguish about these moderates, 
too. Iran is not a monolith. There are lots of different voices 
in the governmental structure, as well as in the society, but 
it's also important to note that the moderates, the so-called 
moderates, when they were in power, between 1997 and 2005, they 
continued the war on terrorism against us, they continued and 
accelerated the nuclear research program. So, they may be 
called ``moderates'' in that country's political spectrum, but 
we had profound disagreements with people like former President 
Khatami. And it was good to see--we chose not to meet with him 
when he came to Washington and New York and Boston, but we know 
that a lot of Americans put those issues to him, ``Why did you 
continue to support the terrorism when you were in power? Why 
did you continue the nuclear programs?'' And it's important 
that we continue to understand that even the moderates are 
espousing policies that are directly contrary to American 
national interests.
    And I'll just say, further--to your final question, 
Senator, about Iraq, the Iranians are not acting in a way that 
would argue in favor of a unitary state in Iraq. They're not 
supporting a political compromise among the three major groups 
in Iraq. They clearly have their preferences, and they're open 
about it. And they're also arming insurgent groups that are 
contributing to the problem of terrorism and violence.
    So, the Iranians have a lot to answer for in their policies 
in Iraq. They may be influential. I don't agree, respectfully, 
that they're the most influential country, vis-a-vis Iraq. I 
think we have more influence. And we will exercise that 
influence. And we'll do it in a very aggressive way, designed 
to protect our national interests, because that's our job.
    I hope I've answered your question. If I haven't----
    Senator Hagel. Well, actually, you've not. If I--I know you 
wanted to keep a tight rein on this, Mr. Chairman, but I asked 
the question, Under what condition will the United States use 
military force in Iran?
    Mr. Burns. And I would answer that question, respectfully 
and specifically, by saying, Mr. Chairman, we haven't taken any 
option off the table, but we are focused on diplomacy. I don't 
believe any senior member of our Government has ever answered 
that question specifically, nor should we. But I can assure you 
that, while we're always prepared to defend ourselves, we are 
seeking a diplomatic solution to the nuclear problem.
    And Senator Biden asked a related question, which I should 
answer. He said, ``You can't have it--too many priorities. 
You've got to distinguish among those priorities.'' I think we 
signaled that, back on May 31, when Secretary Rice made her 
very long public statement about Iran, in which she said that 
we're willing to negotiate, for the first time in 27 years--no 
prior administration, Republican or Democrat, had made that 
offer in 27 years--that we're willing to do it on the nuclear 
issue, because we see the nuclear issue as uniquely dangerous 
to our country and to our allies in the Middle East. And she 
said, in that statement, ``Should we ever get to the 
negotiating table on the nuclear issue, we also feel so 
strongly about the terrorism issue that we'd raise it there.'' 
But we're obviously willing to enter into a course of 
negotiations with Iran on the nuclear issue, because that has 
to be the place we stop the Iranians first. We can't imagine 
this particular Iranian Government, of President Ahmadinejad, 
in possession of nuclear weapons, and nor can our allies in the 
Middle East, the Arab countries, or the members of the Perm-5.
    The last thing I'll say in answer to both of your questions 
is, I've made, I don't know, 15 or more trips to the Middle 
East and Europe over the last 18 months on this Iran issue. I 
have not encountered a single senior official of any of the 
serious governments in play who believes that Iran is not 
trying to develop a nuclear weapons capability. Everyone 
believes they're doing it. The 18\1/2\ years of lying to the 
IAEA has all of our suspicions aroused, and we want to use the 
concern that Russia and China and the Europeans have to 
mobilize an international effort to isolate the Iranians.
    And, Senator, I would disagree, I think Iran is being 
isolated, not the United States. I think the story of the last 
12 months is that the United States has been engaged in 
multilateral diplomacy. We've helped to build a big coalition. 
We're not isolated. It's Iran that's isolated on this 
particular issue, in my judgment.
    Senator Hagel. Thank you.
    Senator Biden. I'd like to ask unanimous consent that--on 
this point, that the testimony in response to a question by me 
when Secretary Rice was here, in her first appearance, on the 
very question of priorities and if there was a verifiable 
agreement on missiles and on nuclear enrichment--Would we then 
build a relationship?--and I want her answer to be part of the 
record, if I might.
    The Chairman. It will be made a part of the record.
    [The information previously referred to follows:]

 Nomination Hearing of Dr. Condoleezza Rice to be Secretary of State, 
                            January 18, 2005

    Senator Biden. Iran. Seymour Hersch wrote, in The New Yorker, that 
the ``Hawks in the Pentagon, in private discussions, have been urging a 
limited attack on Iran because they believe it could lead to a toppling 
of the religious leadership.''
    I'm not asking you about whether there's any discussion about an 
attack, but do you believe that it is possible to ``topple,'' the 
religious leadership in Iran? And--by any short-term military action--
is that a goal--not militarily--is it a goal of the United States to 
change the regime in Iran?
    Dr. Rice. The goal of the administration is to have a regime in 
Iran that is responsive to concerns that we have about Iran's policies, 
which are 180 degrees antithetical to our own interests at this point. 
That means that the--a regime, ``the'' regime, would have to deal with 
its nuclear-weapons obligations, deal with the fact that there are al-
Qaeda leaders who have been there, deal with the fact that they're 
supporting Hezbollah and terrorism against--and Palestinian 
rejectionists against the Middle East peace process. That's what we're 
seeking.
    I do want to say that the Iranian people, who are among some of the 
most worldly, in a good sense, that we know, do suffer under a regime 
that has been completely unwilling to deal with their aspirations, and 
that has an appalling human-rights record----
    Senator Biden. One of the things that--if I can stick on the 
nuclear side of this equation for a minute, one of the things that I've 
found--I may be mistaken, but I think Senator Hagel also might have 
found, there were a lot of feelers coming out, we talked to you about 
it in detail, from the Majlis and members who were viewed as at least 
modern and not clerical, not necessarily pro-Western--was, I didn't 
find a lot of distinction between ``Iranian democrats,'' with a small 
``d,'' and the Ayatollahs on the issue of whether Iran ``was entitled 
to be a nuclear power.''
    The arguments I would get would be--even from people we would not 
consider hard-liners--was that, ``We're in a dangerous neighborhood. We 
believe Israel has nuclear weapons, Russia has nuclear weapons, 
Pakistan has nuclear weapons, India has nuclear weapons, others are 
seeking nuclear weapons. Why are we not entitled to nuclear weapons? 
And there's no umbrella or guarantee coming from any nuclear power for 
us.''
    Do you think, if there was a regime change--that is, assume that 
the reform movement had been successful, assume that instead of 
toppling those elected officials in genuinely held democratic 
elections, assume that instead of them being thrown out, assume that 
they had prevailed and the religious leadership had been defeated, 
politically, in Iran. Do you think Iran would forego its nuclear 
aspirations?
    Dr. Rice. Well, it's hard to--I really don't want to speculate. I 
think it's the kind of thing that we've--we don't know. I do think that 
we're sending a message--the world is sending a message to Iran that 
Iran cannot be a legitimate participant in international--the 
international system, international politics, and pursue a nuclear 
weapon. And I would hope that that would have an effect on----
    Senator Biden. Well, we did----
    Dr. Rice [continuing]. Whatever regime there is in----
    Senator Biden [continuing]. That, and----
    Dr. Rice [continuing]. Iran.
    Senator Biden [continuing]. And you did it very successfully, along 
with our European friends, who had initiated it, with regard to 
Qaddafi. But, as I said earlier, there were significant carrots in the 
Qaddafi ``deal.'' And I fully supported what you did, and I think it 
was a great success.
    Now, the EU3, the European community, has approached this in a 
slightly different way than we have, with a slightly different 
emphasis. And I asked you about that in my questions to you, written 
ahead of time, and you said, in answer to the question about our 
participation with the EU3, you said, among other things, ``The United 
States Government is not a party to the EU3's ongoing dialog with Iran. 
We believe that additional bilateral and multilateral pressure, 
including reporting Iran's noncompliance to the U.N. Security Council, 
will be required to persuade Iran's leadership to end its sensitive 
nuclear fuel cycle pursuits. We will continue to consult with our 
friends and allies toward this end.''
    Now, my question is, Why do you think it is not--or is it that we 
are not welcome, or is it not profitable to be actually engaged with 
the EU3 as they proceed now? Because the likelihood of the U.N. 
Security Council--maybe you have more faith in the U.N. Security 
Council than I do--but the likelihood of them concluding that Iran is 
in noncompliance and imposing broad sanctions--we're already 
sanctioning the heck out of them--I wouldn't want to bet anything on 
that.
    So I'm confused. Why are we not prepared to engage in the process 
and talk about what carrots we may be willing to offer in return for a 
cessation of their nuclear program and their missile program? Is there 
some philosophic reason for that, or is it a practical reason or what's 
the reason?
    Dr. Rice. Well, we do have a number of other problems with Iran, 
not just the nuclear problem. And I think that the future of Iranian 
relations--United States/Iranian relations--rests, not only on the 
nuclear issue, but at other--a number of other issues, too--terrorism, 
our past--their human-rights record.
    The way that we've chosen to do this is that Europeans work very 
closely with us, and they--we are trying to see if, indeed, the process 
that they're engaged in is going to bear any fruit.
    Senator Biden. I understand that. And I think you've given me a 
straightforward answer, and I want to make sure I don't misunderstand 
you. When I talk to our European friends, who are the three, their 
Foreign Ministers and/or their parliamentarians who are engaged in 
this, what they say to me is essentially what you just said. I think 
the Europeans would be willing to cut a deal with the Iranians now, 
relating to economic help, if there was a verifiable foreswearing of 
production of nuclear weapons and a missile program. But the truth is--
and I'm not being critical, I just want to make sure I understand it--
even if they did that, as long as they were continuing to support 
Hezbollah, as long as they were exporting the efforts to destabilize 
Israel, and as long as they were engaged in human-rights abuses, then 
the administration's position would be--even if the Lord Almighty came 
down and said, ``We guarantee you we can verify this, guarantee we can 
verify a compliance with no nuclear weapons and no missile 
technology,''--we still wouldn't go for that deal, would we?
    Dr. Rice. Well, I think we would have to say that the relationship 
with Iran has more components than the nuclear side, but let's see how 
far the Europeans get, and----
    Senator Biden. Well----
    Dr. Rice [continuing]. Take a look at----
    Senator Biden [continuing]. I appreciate----
    Dr. Rice [continuing]. Where we are.
    Senator Biden [continuing]. That. I would just suggest that we have 
a real relationship with China, and their human-rights abuses are 
terrible. The watch group looking at Russia has now put Russia in the 
category--I can't find the exact quote, my staff has it--of being 
nondemocratic. We continue to have a relationship with them. And my 
worry is--I'll be very blunt with you, with regard to both Iran and 
Korea--is that I'm not sure we're ready to take yes for an answer. I 
don't know whether they would go forward. But I do believe one thing 
firmly, that there is no possibility of any fundamental change in the 
nuclear program in Korea or Iran, absent the United States actively, 
deeply engaged in the negotiation. We're the 800-pound gorilla. We're 
the outfit, they want to know where they are, where we are. And it 
concerns me that we say the single most dangerous thing--as my friend 
from Illinois said--and that both candidates agree, the most single-
most dangerous thing in the world is the spread of nuclear weapons and 
their possible access by the bad guys beyond the nation-states.
    We seem to be able to delineate when we deal with Russia. We seem 
to be able to delineate when we deal with China. I would argue the 
human-rights abuses in China are not fundamentally different than 
human-rights abuses in Iran. By the way, it was Freedom House who 
categorized--I know you guys know this, I couldn't remember the 
outfit--that now labels Russia as ``not free.''
    As my grandpop used to say, the horse may not be able to carry the 
sleigh that you all are insisting on, but at any rate, thank you very 
much.

    The Chairman. Thank you, Senator Hagel.
    Senator Feingold.
    Senator Feingold. Thank you, Mr. Chairman, for holding this 
very important hearing. And, Secretary Burns, as always, it's 
good to see you, and to listen to you, and I appreciate your 
candor today.
    I know it is difficult to answer some of the questions, 
given the sensitive nature of the day-to-day diplomacy that's 
occurring. But, that said, and like the rest of my colleagues, 
I feel it is important to recognize the grave nature of the 
threat that Iran poses to our national security, specifically, 
and to the security of the Middle East and the international 
community, in general.
    While far from over--and I recognize that--current 
diplomatic efforts don't seem to be working. The role that 
China and Russia are playing in this standoff is troubling, and 
I remain skeptical about this administration's democracy 
promotion programs within Iran.
    If we learned anything from the United States intervention 
in Iraq, it's--it was that disjointed or shortsighted efforts 
to change regimes don't work. It's also frustrating to me that 
this administration appears to be rejecting outright the notion 
of engaging one-on-one with Iran's leadership. While I 
acknowledge the work being done by our diplomats and the EU3, 
it is clear to me that diplomatic engagement should not be 
ruled out. In my opinion--and you have stated this, and I agree 
with you--no option should be ruled out.
    That said--and, again, I want to thank you for coming 
today, I'm hopeful that we can work together on this issue, and 
I want to ask you a couple of questions--I'd like to move into 
the issue of Iran's relationship with India.
    As we all know, these are two countries that have a long 
and complicated relationship and a history of close ties. 
According to a news report from the Islamic Republic News 
Agency yesterday, the Iranian President and the Indian Prime 
Minister had a meeting in the sidelines of the nonaligned 
movement summit taking place in Cuba. Following the meeting, 
Prime Minister Singh stated that, ``India is determined to 
consolidate cultural, economic, and political ties with Iran,'' 
and expressed regret over the, ``misunderstanding caused about 
India's stance on Iran's peaceful nuclear program,'' stressing 
that India, ``would never join any efforts against Iran.''
    What do you think India's reaction will be if we pursue 
sanctions against Iran? And, assuming that we can take the 
Prime Minister of India at his word here in saying that India 
would never join in any efforts against Iran, how effective 
will our efforts be without India's support?
    Mr. Burns. Senator, I'm happy to answer that question, if 
you'd like me to.
    The Indians--India was the first of the nonaligned 
countries to vote against Iran at the IAEA, back on--in 
September--late September of last year, and also in February 
2006 of this year. So, India led the effort, that others 
subsequently joined, to say that the Iranians were not meeting 
their IAEA requirements and that they were--that they ought to 
come in line with those requirements. And we have found that 
Indian support to be essential in building the wider coalition 
that included countries like Egypt and Sri Lanka and Brazil. 
And the construction of this large coalition, I think, was made 
possible, in part, because, frankly, of the courage of the 
Indian Government in taking that decision last September.
    Senator Feingold. So, you just assume that the Prime 
Minister's words don't mean what they say?
    Mr. Burns. Well, you know, lots of countries have different 
relations with Iran. Some of our best allies in NATO--the 
European countries--have multibillion-dollar trade and 
commercial relations with Iran. And so, I don't think it would 
be fair, if you're asking about India, to hold India to a 
standard that we're not asking Italy or Spain or France to 
raise--to meet.
    I will say this, that we put forward the sanctions--the 
Resolution 1696, on July 31, that will set up a sanctions 
resolution, with the idea that if the Security Council does 
agree to sanctions should Iran not meet the requirements of our 
offer, then all countries of the United Nations would be bound 
to follow those sanctions, and we'd include every country, 
obviously including India, to follow the wishes of the U.N. 
Security Council.
    Senator Feingold. Well, I assume obtaining India's support 
for such sanctions would be one of our highest priorities with 
our relationship with India, just as it should be with other 
countries, such as Indonesia and others. This is, I think we 
all agree, just a major priority for us, on a list of many 
important priorities.
    According to another report, India and Iran are moving 
forward on plans for an Iran-Pakistan-India gas pipeline. If 
this project is completed, what effect do you think it will 
have on the regional political balance? It seems somewhat 
likely to me that India may be even less inclined to support 
any efforts against Iran if a large portion of its energy comes 
from an Iranian pipeline.
    Mr. Burns. Yeah.
    Senator Feingold. If you could react to that.
    Mr. Burns. There have been stories for the past year and a 
half that that pipeline is under consideration. In our 
conversations with the Pakistani and Indian Governments, we 
have encouraged them not to invest with Iran in a pipeline. 
We've told them that we think Iran would be a bad insurance 
risk and a bad risk politically, and that Iran can't be counted 
on.
    I can check this for you, and I'll be happy to give you a 
written response, because I want to give you a full answer.
    [The written response of Under Secretary Burns for the 
requested information follows:]

    As you may know, proposals to bring Iranian gas to India via a 
pipeline through Pakistan have been under discussion for some years, 
but no firm agreement has been reached. India and Pakistan remain 
interested in the idea of such a pipeline, and the project is a 
frequent subject of meetings, public comments, and announcements. But 
basic issues--including structure, financing, and pricing--have yet to 
be determined.
    The administration has stressed to both India and Pakistan that 
relying on gas piped from Iran would not enhance their energy security. 
The United States remains concerned about the Iran-Pakistan-India 
pipeline project, which raises issues under U.S. law and policy. The 
pipeline project and other actual or potential energy links with Iran 
have figured regularly in our diplomatic dialog with Pakistan and 
India. Both countries are also looking at other possibilities for 
meeting their gas needs. For example, India recently joined discussions 
on developing a TAPI (Turkmenistan-Afghanistan-Pakistan-India) 
pipeline.
    We will continue to address energy issues in a constructive context 
with both Pakistan and India, encouraging both countries to look to 
non-Iranian sources of supply.

    Mr. Burns. But my sense is, in talking to both Pakistani 
and Indian officials, that that project hasn't gone anywhere, 
that----
    Senator Feingold. I'd appreciate----
    Mr. Burns [continuing]. It may be currently being 
discussed, but I'm not sure there have been any significant 
agreements that would, you know, put it into motion. But I can 
give you a written answer, because I want to give you a 
complete answer.
    Senator Feingold. Appreciate that answer, look forward to 
the written answer, Mr. Secretary.
    Can you give me an update on the administration's democracy 
promotion efforts in Iran? You talked about this in your 
statement. I'd like to know if you're confident that current 
efforts to engage the diaspora and to support opposition groups 
within Iran are not in any way undermining efforts to find a 
diplomatic solution to the nuclear standoff.
    Mr. Burns. Senator, we're grateful for the funding by the 
Congress for our democracy programs. Our democracy programs 
have no other purpose than to support those who wish to be 
free, and who wish to speak freely, and who wish to build on 
governmental organizations, and who wish to have freer 
elections. There's no other purpose than that. And we've never 
said--we've never ascribed any other purpose to them. I want to 
reassure you on that basis.
    These are difficult programs to conceptualize and to run, 
because in the political environment that currently exists in 
Iran, people who openly work with Britain or France or the 
United States are sometimes jailed and sometimes have other 
liberties taken away. And so, what I said in my opening 
statement was that these programs are designed, very simply, to 
support organizations to grow and to increase contacts between 
Europe and----
    Senator Feingold. How effective----
    Mr. Burns [continuing]. North America----
    Senator Feingold [continuing]. Is this being, though? You 
know, I understand that the intentions probably were equally 
appropriate with regard to Iraq, but there are serious 
questions about the effectiveness of it. Is----
    Mr. Burns. I think it's----
    Senator Feingold [continuing]. It working?
    Mr. Burns. To be honest, I think it's too early to answer 
that question. You've--you asked a good question, because you 
gave us the money; we now have to come back to you at some 
point and say, ``Here's how we spent the money, and here's how 
effective we think it was--the program was.'' We're just 
starting. We're just----
    Senator Feingold. Are we taking----
    Mr. Burns [continuing]. Starting those efforts over the 
last----
    Senator Feingold [continuing]. Into account lessons----
    Mr. Burns [continuing]. Couple of----
    Senator Feingold [continuing]. Learned from problems with 
this kind of attempt in Iraq?
    Mr. Burns. In everything we do, we try to learn from past 
experience. We try to be good at what we do, and effective. 
And, obviously, if we--if there have been limitations in the 
past, or mistakes in the past, we try to learn from them. 
Whether it's--in any situation around the world, not just 
limited to the Middle East.
    So, we're just starting. We're doing it in a way that we're 
trying not to expose publicly the people with whom we're 
working. And the only purpose here is to support them and to 
see grassroots organizations grow. And, by the way, we're 
joined in that by many of the European countries, by the 
European Union. All of us have the same--and I think we're 
working well with them--all of us have the same motivation 
here, and that is to simply--because we say--because we're 
democrats in our countries, we wish to support those in Iran 
who argue that there should be a democratic future there.
    Senator Feingold. I thank you for all of that, and I just 
want to say--obviously, of course, you always want to be 
mindful of lessons learned, but the Iraq situation is such a 
clear example, in my view, of things going awry, that I would 
hope that this is heavily and carefully reviewed as this effort 
goes forward. And I think that Congress is going to be very 
interested in making sure that the same mistakes are not made 
again. But I do--I do thank you.
    Go ahead, if you'd like to respond.
    Mr. Burns. I just wanted to say, I think we have an 
obligation to come forward, maybe after a few more months have 
passed, and give you an accounting of how the democracy 
programs are going. We'd be happy to brief you in full in 
closed session. I--before you arrived, I also said that we're 
using most of the money to expand our television and radio 
broadcasting in Farsi into Iran, because, as you know, there's 
a great deal of repression and restrictions on free 
information. And we're also--President Bush said, the other 
day, he wants to vastly expand our exchange programs, because 
if our two governments can't work together--and right now, we 
can't, directly--over the long term, we have a national 
interest in getting to know that country better, and having 
Iranians get to know our country better, so we're looking into 
ways to do that in a quite ambitious----
    Senator Feingold. I strongly agree with you on that point, 
and I thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Feingold.
    Senator Allen.
    Senator Allen. Thank you, Mr. Chairman.
    This is obviously a very good time to hold this hearing, as 
the United Nations, at the same podium, will hear from 
President Bush and they'll hear from the leader of Iran. They 
may share the same podium, but they certainly share different 
philosophies, our President representing a country where we are 
an open society, with freedoms, and the other a repressive 
country, and one that sponsors terrorism.
    It is also important to recognize that the path that our 
administration and the United States is taking is not 
unilateral, it's actually working with our allies as best we 
can. They're taking a path of negotiations, of diplomacy.
    Now we see--and Senator Hagel kind of mentioned the--one of 
the European Presidents making a comment. Well, you know, it 
seems like Iran doesn't care to negotiate. They don't care to 
look at the incentives. And, in fact, appeasement of Iran, and 
letting Iran decide when they want to start negotiations after 
they continue development, is not an approach that I think is 
going to get to the result we desire.
    The point was made about India, for example. I've, 
Secretary Burns, enjoyed working with you on the United States-
India Civilian Nuclear pact. It's outstanding work in cementing 
a marriage with a country, India, that shares our views of 
tolerance, and has the same mission for Asia and the world, 
which is peace.
    It also indicates, I hope, to all of us here, of how 
overdependent we are, and other countries, on foreign oil--and, 
in particular, oil from the Middle East and other hostile 
countries around the world. It seems to me, as you see Iran 
joining up with Venezuela, which has joined up with Cuba, and 
somehow North Korea gets dragged into it, and China, that 
they're setting up these coalitions, making an oil cartel of 
their own. We need to do that same sort of thing, in my view, 
and strategic alliances, with countries to make sure that we do 
not have oil used as blackmail. And that is part of the problem 
we have with other countries, that if there were sanctions 
imposed because of the recalcitrants of Iran, that that's going 
to hurt their economies, hurt their people.
    And so, energy's a national security issue, and we ought to 
have more oil and natural gas developed in our country, rather 
than sending out hundreds of billions of dollars every year to 
other countries. We ought to have more clean coal technology in 
this country. We're the Saudi Arabia of the world in coal, and 
we ought to be using coal--advanced clean coal processes--not 
just for electricity, but made into a fuel and gasified. Same 
with advanced nuclear, we ought to be moving toward, Mr. 
Chairman, to every available economically logical alternative 
approach, whether those are biofuels, whether that's solar, 
whether it's nanotechnology-enable batteries. And we also need 
more young people actually interested in using their minds and 
American creativity for this energy independence.
    Now, this situation with Iran, and why we care about Iran 
having nuclear weapons--we would care about any country having 
nuclear weapons. We particularly care about 'em, because they 
are clearly state sponsors of terror. And, while it was very 
nice, I suppose, to listen to Khatami--I was glad to hear you 
say, Secretary Burns, that he was--when he was in power, the 
so-called ``moderate'' started a nuclear program. The rockets 
that were in southern Lebanon, in Hezbollah's hands, that were 
raining in on Israel, did not just come in since Ahmadinejad 
has been in power. Those were going in there for many, many 
years, those thousands of rockets.
    Now, the question before us is a multifaceted one, but I 
think the administration is being patient, they're negotiating. 
We're trying to build a consensus to let Iran know that, ``If 
you want peaceful nuclear power''--they can work with us and 
work with the rest of the world to come up with a credible 
regime.
    The Europeans, heretofore, have been with us, although it 
seems like one of them is, maybe, getting a bit--well, I'll not 
make any comments til he clarifies his remarks. China and 
Russia, though, are crucial to this, because they are going to 
be important.
    And I would like to ask Secretary Burns a couple of things, 
based on Russia, China, where we're going to go from here, and 
also the comments you've made about how Iran is sending and 
supplying advanced weapons and advanced IEDs to kill United 
States and British troops and Iraqis there. So many questions.
    Let me just ask you this. In the efforts that we're making 
to stand up a free and secure country in Iraq, to what extent 
is Iran interfering in Iraqi politics? And how are Iran's 
policies in Iraq affecting the level of violence there, if at 
all?
    Mr. Burns. Senator Allen, thank you very much. And may I 
just take this moment--forgive me for doing it--by thanking all 
of you for your support for the United States-India Civil 
Nuclear Agreement. We're looking forward, we hope, to a vote in 
the full Senate shortly. That's a major priority for President 
Bush and for our administration and, I think, for our country. 
And thank you, Senator, for the--all the help, all of you, on 
that issue.
    We don't believe that Iran is playing a productive or 
constructive role in Iraq. It seeks influence. Obviously, many 
Iranians believe that perhaps their national interests have 
improved because of the downfall of Saddam Hussein, their 
enemy. But it--but if the challenge in Iraq is to help the 
Sunni and Shi'a and Kurd to form one government, one society 
that works well, to reduce the level of terrorism, we don't see 
the Iranians contributing to that, not in their public 
comments, which have not been fair to some of the other groups, 
not in where their attention is as a government, and certainly 
not in the way that they are arming some of the Shi'a insurgent 
and terrorist groups. And so, we have a beef with Iran on the 
subject of Iraq, and we've made it clear that we're unhappy. 
And it's not just us, it's many of our allies that also have 
troops in Iraq that are very unhappy with the fact that Iran 
has missed an opportunity. They're not, at all, playing a role 
anything close to being statesmanlike. In fact, it's the 
reverse.
    So, we have those concerns. While we don't have diplomatic 
relations, of course we have ways of communicating unhappiness 
and ways of communicating with that government. The Swiss have 
been acting as our protecting power for the last 27 years. We 
are able to pass written messages through the Swiss--and we 
do--on this issue of Iraq. And, of course, a lot of our friends 
around the world, that speak to the Iranians directly, amplify 
our concerns.
    And so, the Iranian policy in Iraq, and Iran's policy in 
Lebanon over the past summer, reveal something very 
interesting. They have a concept that Iran's a revolutionary 
power, and all of their efforts seem to be directed toward 
destabilizing the Middle East, not to bring peace or stability. 
They arm Hezbollah, they helped to arm Hamas, Palestinian 
Islamic Jihad, PFLP-General Command. They play a major role in 
the war in Lebanon by providing the long-range rockets that 
held those million Israeli civilians hostage all the way from 
Haifa to the northern border of Israel. This is a government 
that, on the leading issues in the Middle East--the peace 
process between Israel and the Palestinians, Lebanon, the war 
in Iraq--has consistently taken the opposite view from all the 
rest of us--the moderate Arab countries, the European 
countries, Russia, and the United States. And so, it's a 
country that's very much out of step.
    And the challenge for us is, over the long term, to 
convince the Iranians that the only productive relationship we 
could possibly have would be if they help to construct a stable 
and peaceful Middle East, not the reverse. But, unfortunately, 
they are an agent of negative change and of violence. And 
that's the only way I can describe what they're doing in 
Lebanon, in Israel--or toward Israel, and certainly in Iraq 
itself.
    Senator Allen. Thank you, Secretary Burns.
    Mr. Burns. Thank you, Senator.
    Senator Allen. Appreciate your great leadership, knowledge, 
and experience.
    Mr. Burns. Thank you.
    The Chairman. Thank you, Senator Allen.
    Senator Voinovich.
    Senator Voinovich. Mr. Chairman, thank you for having this 
meeting today. And welcome, Secretary Burns.
    First of all, I congratulate the administration on their 
patience, in terms of working with the International Atomic 
Energy Agency (IAEA). I think there were many people in this 
country who thought we would never be able to pass a resolution 
in the Security Council that would deal with the challenge of 
Iran. I'm glad that you are continuing to work with the 
``Permanent 5 plus 1'' to see if we can make a difference.
    The real issue here is that Iranian President Ahmadinejad 
is a Hitler type of person. He has made it clear that he wants 
to destroy Israel. He has made it clear that he doesn't believe 
in the Holocaust. He is--well, we all know what he is. And I am 
concerned that as long as he is the President of Iran, we are 
not going to be able to solve Iraq, because the Iranian regime 
does not want Iraq to be a multireligious democracy. You just 
have to look at the relationship that Mr. Sadr has had with 
Iran, and the history of that relationship. I believe that Mr. 
Sadr wants to be the next Ayatollah of Iraq so that Iraq will 
have a theocracy like the one that exists in Iran. Iran wants 
to meddle in Iraq, Syria, and the Lebanon-Israel conflict. 
There seems to be a very deliberate, premeditated effort on 
their part to expand their influence in that area. And their 
ambitions for a nuclear weapons program is just part of it.
    This is the way I perceive it, and I suspect it's the way 
that you perceive it, but my question is, How do our allies 
perceive it? In other words, we may be extremely concerned by 
Iran's actions and long-term goals in the region, but how do 
the Russians feel? How do the Chinese feel? How do the other 
countries feel about this issue? Are they as concerned about 
Iran as we are? Because it would seem to me that if we do not 
have the full support of our allies and the members of the 
Security Council, the overall objective of stopping nuclear 
proliferation, imposing sanctions, and making sure the 
sanctions have a significant impact in Iran, will not be 
successful.
    Mr. Burns. Senator Voinovich, thank you.
    I think you're right to start with President Ahmadinejad. 
He's addressing the U.N. General Assembly later today. We've 
found, over the past year or so, that he provides some of the 
glue that holds this international coalition together. When he 
spoke, on September 17 of last year at the United Nations, and 
made those extraordinarily vicious comments about Israel, a 
member state of the United Nations, that helped us to from the 
larger coalition, which we were just then beginning to bring 
about with Russia and China, and to bring it together. And 
every time he makes an outrageous statement, you find that 
there's more and more concern around the world about him.
    Senator Voinovich. What about the Sunnis and their 
relationship toward Iran? Are the Sunnis concerned about Iran's 
policies and their President?
    Mr. Burns. Senator, I--I'm not in a position to speak for 
each of the Arab governments, but I can say, in general, there 
is a great deal of concern--in the gulf, in the Levant, in 
North Africa--about what President Ahmadinejad is saying and 
where he's taking----
    Senator Voinovich. Are the Sunni countries helping us on 
this issue?
    Mr. Burns [continuing]. The Iranian Government. In many 
ways, yes. In many ways, yes.
    And you asked a very important question about the coalition 
that we have formed, in the nuclear issue. It's a coalition of 
countries with sometimes different interests. I can't say that 
Russia and China see the Iranian nuclear issue exactly as we 
do. But we held together at the key junctures over the last 12 
months. We brought Iran to the IAEA Board of Governors and 
rebuked them on February 4; March 29, Presidential statement to 
the Security Council; July 31, resolution; and we're now all 
committed to sanctions. So, obviously, if you put all the 
leaders up on a stage--of our coalition--they will speak 
differently, they'll have different points of emphasis. Some 
will be tougher, and some will not be as tough.
    Senator Voinovich. Will they support sanctions that are 
significant enough to have an impact on the citizens of Iran so 
that people would start to question whether or not they can 
afford to have a President like this man? What's the 
relationship between the mullahs and this man? Is there any 
kind of feeling that maybe he's going too far? Because the real 
issue is convincing the Iranian people that Ahmadinejad's 
policies are not in the best interest of their country and its 
citizens.
    Mr. Burns. Right. I believe that the coalition against Iran 
will stay together. And, should the Iranians, within the next 
week or so, not suspend--agree to suspend their nuclear 
programs, as we have requested, I do believe the coalition will 
stay together and pass a sanctions resolution that will be 
focused not on the Iranian people, but on the Iranian 
Government and its nuclear industry. And despite----
    Senator Voinovich. You're confident that the sanctions 
really will make a difference?
    Mr. Burns. That's a different question. We hope the 
sanctions will make a difference. The agreement we have in the 
Perm-5, among all the countries, is that the sanctions will be 
graduated, so you--it would not start with comprehensive 
economic sanctions against Iran; we'd start with targeted 
sanctions. And we'd escalate the severity of the sanctions, 
should Iran not comply, down the road.
    You know, the history of sanctions over the last generation 
or so all around the world is one of some success and some 
failure. And so, we hope that sanctions will be effective. We 
believe, in this case, they can be, for one reason----
    Senator Voinovich. You're hopeful, but you're not 
confident.
    Mr. Burns. I can't--I can't testify to you that I'm 100 
percent sure that any sanctions regime will have an absolute 
effect that you want on the Iranian Government. We hope that it 
will.
    And the point I was going to make is, Iran's very different 
than North Korea. North Korea is a country that seems to thrive 
in isolation. Iran is a country that wants economic 
integration, it wants investment. It's got a multibillion-
dollar trade relationship with the countries of Western Europe 
and some of the major countries in Asia, China, and Japan.
    What Secretary Paulson has been talking about over the last 
few days is an effort to--working in the private sector, to see 
if banks will begin to restrict their lending to Iran. We're 
beginning to see that happen. And if you get commitment--with 
that--economic or--excuse me--nuclear sanctions focused on 
their industry, which I believe we can get in the next few 
weeks, should they not comply, then that's going to be a 
powerful message to Iran----
    Senator Voinovich. I hate to----
    Mr. Burns [continuing]. If what happened----
    Senator Voinovich [continuing]. Interrupt you, but will 
sanctions have any influence on Iran's behavior toward Iraq or 
Iran's policy of meddling in the Lebanon-Israeli situation and 
with Syria?
    Mr. Burns. First and foremost, these sanctions would be 
designed to have an impact on their nuclear policy and on their 
present disinclination to abide by the terms of the IAEA 
resolutions, and to stop their enrichment programs. But we also 
hope that the increased cost to Iran of its increased isolation 
would have a modifying impact on their behavior in Iraq, as 
well, yes.
    Senator Voinovich. Well, I hope you're right. I think the 
real question must be: What influence will sanctions have on 
the Iranian people and what they believe to be in their best 
interests in the long run? How do you convince the people of 
Iran that it is better for their nation in the long run to 
abandon the course they are on now and become a responsible and 
reliable member of the international community?
    Mr. Burns. If I could just say--I don't know if time is up, 
Mr. Chairman--but I think you've asked, you know, a central 
question, Senator, and that's why, 3 months ago--or 3\1/2\ 
months ago, what we didn't say--we didn't say to Iran, ``We've 
only got one negative card to show you.'' We offered a set of 
positive incentives--that we've not made public, but we've made 
available to the members of this committee--which would have 
entailed very significant technological, scientific, and 
business exchanges with the Iranian Government, benefits to 
them, should they give up their nuclear weapons program and 
just focus on civil nuclear power.
    One of the things that President Ahmadinejad is fond of 
saying--and he's absolutely untruthful in saying it--is that 
we, in the West, are trying to deprive the Iranian people of 
civil nuclear energy. President Bush has been saying, for 10 
months now, we would support a Russian- or a European-led 
consortium to provide nuclear fuel to--or nuclear powerplants 
in Iran, but we want to deny them the sensitive aspects of the 
fuel program, because, frankly, we don't trust them, and 
neither do our partners in the P5. The Russian Government 
position is, Iran should not enrich, should not reprocess, 
should not have fissile material. That's what unifies this 
coalition.
    So, we're saying yes to nuclear energy, but no to nuclear 
weapons. And we gave Iran this choice, and they've been 
fumbling it. They essentially haven't responded for 3\1/2\ 
months. We're now in extra innings. We're in the last possible 
moment. They're going to have to make a decision--and it's 
going to have to be soon--as to what they're going to do. And 
if they can't say yes to the positive offer, then, as Secretary 
Rice said this morning, for our credibility in the P5, we're 
going to have to pass a sanctions resolution, because that's 
what we said we'd do.
    So, that, in a nutshell, is where the diplomacy is, as of 
today.
    Senator Voinovich. Thank you.
    Mr. Burns. Thank you.
    The Chairman. Thank you very much, Senator Voinovich.
    Now, I'm going to recognize Senator Obama for his 8 
minutes, and then this will conclude our questioning of you, 
Secretary Burns, because we do wish to move on to the other 
distinguished panel.
    Senator Obama.
    Senator Obama. Thank you, Mr. Chairman. I apologize for 
being late. I had a conflict.
    Secretary Burns, I missed much of your testimony, so 
forgive me if I end up being repetitive, and I'll try to avoid 
overlap.
    I'm interested in the role of Russia in this whole process, 
because it strikes me that they can play a very constructive 
role. My sense is that a nuclear-armed Iran would pose, fairly 
serious security issues at Russia's own doorstep. And, given 
that they have their own problems of Islamic separatism and 
fundamentalism in southern Russia and parts of the former 
Soviet Republic, it just strikes me that this would be an 
additional complication for them. And, as a consequence, I'm 
curious as to what the Russian thinking is right now, and their 
rationale for an apparent go-slow approach on sanctions and 
other punitive measures. And if you could discuss your best 
understanding of how the Russians are thinking about the 
problem, and also what the United States is doing to help shape 
the Russian attitudes and approach?
    Mr. Burns. Senator Obama, thank you very much.
    Obviously, I can't speak for the Russian Government. I'll 
just try to----
    Senator Obama. I recognize that.
    Mr. Burns [continuing]. In this session, answer your 
question as best I can by saying that Russia and the United 
States have very different views about Iran, in general, 
because of our different geographic proximity to Iran and 
because of our different history. Nonetheless, the Russians 
have been a key part of this coalition that we've built over 
the last 12 months.
    A year ago today, there really wasn't a coalition. The EU3 
had been trying to negotiate with the new Ahmadinejad 
government, and Ahmadinejad walked out, unilaterally, suspended 
the negotiations, and then proceeded with this tremendous 
increase in centrifuge research at the plant at Natanz that 
we've seen.
    President Bush and President Putin talked, in October and 
November last year, and they fashioned a union on this, where 
the Russian Government said, ``Look, we shouldn't deny nuclear 
energy to the Iranian people, because their energy--despite the 
fact that they're an oil producer, they need more energy 
domestically, and that we ought to make an offer to set up a 
consortium of countries that would supply nuclear fuel and take 
away the nuclear waste from a nuclear powerplant system in 
Iran, but we would deny Iran the sensitive aspects of a nuclear 
fuel cycle--enrichment, reprocessing--so they couldn't produce 
fissile material and couldn't produce a nuclear weapon.'' And 
President Bush publicly agreed with President Putin, in late 
October of last year.
    And, since then, we've been pretty much locked up with the 
Russians. We've found them to be a good partner. They have kept 
to their agreement with us, in most respects. And I think 
Russia and China entering this coalition with the three 
European countries and the United States strengthened it, and 
it really caught the attention of the Iranians. We knew what 
the Iranians were trying to do diplomatically. From 2003 until 
summer 2005, they were trying to separate the United States 
from Europe. That didn't work. Then they tried to prevent 
Russia and China from joining this coalition. And I think my 
interpretation would be, frankly, out of frustration--the 
Russians and Chinese were not getting anywhere with Iran--they 
joined the coalition, and we passed this series of IAEA and 
U.N. Security Council resolutions.
    So, we're at a key moment now, where, if Iran accepts the 
condition of suspension of enrichment, we're going to have 
negotiations. As Secretary Rice said this morning, she will be 
at those negotiations, should that happen; the United States, 
the first time in 27 years. But if that doesn't happen, then 
we're going to have to pass sanctions. And I have heard nothing 
from the Russian Government--and I've spoken to them every day 
for the last 2 weeks--that would indicate that they will not 
uphold their commitment under Resolution 1696 for sanctions. 
So, we're working well with the Russians. We don't have 
identical interests and views, but we're working well.
    Senator Obama. But you feel confident that--should the 
Iranians not take advantage of the opportunity to work 
something out here in the final hours--you feel confident that 
we can persuade Russia to follow through on some sort of 
sanctions for Iran?
    Mr. Burns. I do. As well as China--the key question will 
be, what type of sanctions? I don't think there's any argument 
among the P-5. If Iran doesn't meet this condition of 
suspension, we must pass a sanctions resolution, or else the 
credibility of the U.N. Security Council on the leading issue 
of our day--and we consider this to be the leading security 
issue--is going to be called into question. So the question is, 
How tough will that first sanctions resolution be? And, can we 
then agree to a series of graduated sanctions measures to 
increase the cost to Iran should, down the line, they not come 
forward with suspension of enrichment and agree to 
negotiations?
    Senator Obama. Give me a sense of the differences in terms 
of how--without getting into every last detail--United States 
and Russian and Chinese perceptions might differ in terms of 
what that sanctions regime might look like?
    Mr. Burns. Here's where we agree, and I'll tell you where 
we disagree, or where I think we may disagree. We all agree 
that you won't put everything into the kitchen sink in the 
first sanctions resolution. You're not going to put oil and gas 
sanctions or comprehensive economic sanctions because we agreed 
when we made the offer back on June 1, these should be 
graduated, incremental sanctions, and so we'll start there.
    I think all of us agree that there are some sanctions that 
have to be directed at the core of the problem: Dual-use 
exports that currently can go from any country in the world--
except those already into sanctions, like ours--to Iran that 
the Iranians can use for their nuclear research programs.
    Can we, the United States we say, shouldn't we restrict the 
ability of Iranian scientists to study at MIT? Nuclear 
physicists, for instance, from studying there? Shouldn't we 
restrict the ability of officials who work in a nuclear 
industry to be taken, to be invited to other countries to 
conferences? So, to close off some avenues of support, or 
loopholes that the Iranians are currently taking advantage of, 
frankly, as they seek--in our judgment--to build, behind the 
guise of this civil nuclear program that they say they're 
constructing, a nuclear weapons system.
    So, I think there's a core of agreement, that's probably 
the area, but there is no present agreement on the exact 
sanctions. I was in Berlin 2 weeks ago, I spent 2 days talking 
to the Russians and Chinese about this. I was with them twice 
last week, and we still don't have an agreement on the specific 
sanctions, but I think we do have an agreement that the 
sanctions should go forward, should Iran not step forward with 
its suspension.
    Senator Obama. Last question, I'm running short on time 
here, and this goes to a broader issue. And that is, our 
posture toward Iran regarding their own security concerns. In 
this month's edition of Foreign Affairs magazine, Professor 
Scott Sagan of Stanford argues that the United States should be 
pursuing a deal along the lines of the 1994 Agreed Framework 
with North Korea. And part of the argument he makes is that the 
most important factor in changing Iranian behavior is reducing 
the security threat to Iran that they see from the United 
States. Sagan recognizes that there are other issues for Iran--
satisfying parochial domestic interests or acquiring status in 
the Islamic world and being able to reassert Iran's self-
perceived role as the major regional power--but the single 
biggest factor is their concern that the United States is going 
to pose a security threat to Iran.
    And I'm curious as to whether you agree with that 
analysis--you worked in senior levels of the State Department 
during the Clinton administration--do you think there are any 
lessons to be learned from the Agreed Framework especially in 
light of the fact that the current offer from the 
administration with economics and energy incentives looks very 
similar that are applicable to Iran, and do you think external 
security concerns are at the heart of the Iranian nuclear 
problem, in which case, would it make sense for us to try to 
figure out a more effective way to address those security 
concerns? Or, to put differently, is there any way that they 
are going to actually come to the table and negotiate, if they 
believe that--regardless of negotiations--the prospect of the 
United States attempting regime change is still on the table?
    Mr. Burns. Senator, thank you for that question.
    First, we are not modeling the present solution for the 
Iran nuclear crisis on the Agreed Framework of 1994--very 
different countries, different times--I think all of us have 
learned a lot from how the North Koreans failed to implement 
that Agreed Framework. So we're trying to build into what we do 
in Iran, and we talked to the Russians and Chinese and 
Europeans about this--verification, and also positive and 
negative incentives that would encourage the Iranians to adhere 
to an agreement, if they make it.
    The Iranians may feel insecure, based on their last 27 
years, but they've really done nothing to relieve the source of 
that insecurity. They're supporting terrorist groups that 
strike at Israel and at us. There's a lot of evidence that the 
Iranians were involved in terrorist attacks against the United 
States, not just in the 1980s--the Marine barracks bombing, the 
bombing of our Embassy in Beirut--but Khobar Towers in the mid-
1990s, during the Clinton administration. And our concerns 
about that haven't been relieved, and they haven't relieved 
them. In fact, I would say that Iranian support for terrorist 
groups has accelerated under President Ahmadinejad's direction 
as they've worked with Syria, Hamas, Hezbollah, and the other 
groups over the last year.
    They also haven't done anything to alleviate our concerns 
about the fact that everybody in the world believes they're 
trying to build a nuclear weapons capability, and they're 
steaming ahead with this research that they say--Ahmadinejad 
said--they wanted to have 3,000 centrifuges in a cascade in a 
tons in their scientific research by December of this year, and 
they were experimenting with P2 centrifuge technology--no one 
else in the Iranian Government ever said it--he said it 
publicly.
    So he's revealing quite a lot about their intentions, and 
the best way for me to answer your question would be to say 
this: The most significant offer in my judgment that the United 
States has made to Iran since the end of the hostage crisis in 
January 1981 was the offer we made with the P5 on June 1 of 
this year. There's a positive package of incentives waiting for 
you--scientific, technological, economic--if you would just 
agree to suspend your nuclear programs and work with us and 
negotiate. There is nothing in that positive package that 
entails security assurances. We have not given them, no 
American President has since 1991, and in the interest in 
furthering our diplomacy in general with Iran, I think we're 
quite right to say that the President of the United States 
should have all options at his disposal, depending on what 
happens in the future. At the same time, we are clearly on a 
diplomatic path--we can't say it enough. We're focused on 
diplomacy, we really, we want to make that work. We would much 
prefer a diplomatic solution to this problem, and a 
multilateral diplomatic solution to this problem. That's where 
our attitudes our.
    The Chairman. Thank you very much, Senator Obama. Senator 
Dodd has asked to raise one question, and of course we will 
assent to the Senator.
    Senator Dodd.
    Senator Dodd. Thank you very much, Mr. Chairman. I 
apologize to my colleagues here and the witnesses and Under 
Secretary, to you, for being late getting in here this 
morning--but I just wanted to raise with you, very quickly if I 
could--there was a report the other day from a David Fickling 
regarding a U.N. response to a House Intelligence Committee 
report regarding the level of advanced activity by the Iranians 
in regard to their nuclear programs. And many of us here 
obviously recall how flawed intelligence led to some pretty 
rough decisions with regard to Iraq, and I'm very concerned 
that we may be heading down a similar road here with Iran if 
we're not careful.
    And I'd like you to comment, if you could, just briefly on 
this House Intelligence report that I think has been responded 
to by the Intelligence Community here, as well as the United 
Nations--the United Nations, the other day, the IAEA took very 
strong exception to it. They called it ``erroneous, misleading, 
unsubstantiated information'' and took strong--and I'm quoting 
them--``strong exception to the incorrect and misleading claims 
in the report'' by the House Intelligence Committee. And went 
on further to particularly criticize the captions and the 
reports claiming that the Natanz Plant in central Iran was 
enriching uranium to weapons grade.
    What is the Department's response to the House Intelligence 
Committee report?
    Mr. Burns. Senator Dodd, we have tried to be very careful 
and prudent in putting forward information to you, and to the 
public, that we believe is absolutely verifiable and accurate. 
And that's our standard. And we're not going to put forward 
facts that we can't verify. And we think it's important in this 
debate that we have in this country, how do we deal with the 
Iranian nuclear threat, that we be measured and prudent, and I 
believe we've been that over the course of the last year or two 
as this has intensified.
    And I make that commitment, just personally, that if I'm--
any of us testifying here--we're going to testify on what we 
know, and that's the only way to present facts publicly. I have 
not had the pleasure of reading the House report, I guess I 
should do that, and I will do that. I did see the press 
reports, and I--of course, we were informed by the IAEA that 
they took great exception to certain aspects of it--and of 
course, our advice would be that we should now have a dialog 
between the IAEA and the administration, as well as those in 
the Congress that are interested, to see if we could all agree 
on a common set of facts.
    Senator Dodd. Well, it would be very, very helpful to all 
of us here, because we rely--we like to rely--we get that much 
contradiction from responsible committees or, hopefully 
responsible committees, then it's exactly the kind of trouble 
we can get ourselves into that many of us feel we did in the 
past, so I would hope we can get a response fairly soon as to 
whether or not the administration agrees with this report, or 
if they disagree with this report, that we get some clarity on 
that.
    Mr. Burns. Well I would just like to say, we have no reason 
to question the intentions of the framers of the House report, 
we just haven't--I haven't read it--and some of my associates 
haven't read it in full to give you the answer that you need, 
but obviously, if the IAEA is concerned--and the IAEA has great 
credibility on this issue of Iran's nuclear industry because 
they've been on site--then we'd like to establish a dialog to 
see if we can all agree on one set of facts.
    Senator Dodd. Well, the language was pretty strong, so if 
you'd get back to us on that, I'd appreciate it very much.
    The Chairman. Thank you, Senator Dodd. A very sincere 
thanks to you, Secretary Burns, for your testimony today, your 
forthcoming responses to our questions, and your representation 
of our country in some very difficult areas. Thank you for 
sharing this time with us.
    Mr. Burns. Thank you, Mr. Chairman. Thank you.
    The Chairman. The Chair would like to call now our second 
panel today, Dr. Ray Takeyh, senior fellow for Middle Eastern 
Studies, Council on Foreign Relations; the Honorable Ashton B. 
Carter, codirector of the Preventive Defense Project, Belfer 
Center for Science and International Affairs at Harvard 
University; and the Honorable Martin S. Indyk, director of 
Saban Center for Middle East Policy, the Brookings Institution.
    Gentlemen, thank you very much for coming to the hearing 
today. All of your opening statements will be made a part of 
the record. I'll ask that you proceed in the order that I 
introduced you. That would be--first of all--Dr. Takeyh, then 
Secretary Carter, and then Ambassador Indyk. We'll ask that you 
summarize your remarks. We look forward to hearing from you and 
then we'll raise questions of you around our panel.
    Dr. Takeyh.

 STATEMENT OF DR. RAY TAKEYH, SENIOR FELLOW FOR MIDDLE EASTERN 
     STUDIES, COUNCIL ON FOREIGN RELATIONS, WASHINGTON, DC

    Dr. Takeyh. Thank you, Mr. Chairman, for inviting me back 
to the committee, I'll stay well within my 10-minute 
limitation, I have submitted my full testimony for the record.
    Since I was here last, I tried to bring up the subject 
matter that today, the United States confronts a fundamentally 
different Iranian leadership. It's not unnatural, after 27 
years in power, that the complexion of the Iranian regime is 
changing, and the elders of the revolution are gradually being 
displaced by a younger cadre.
    The debates are no longer, frankly, between pragmatists 
such as Ayatollah Rafsanjani and the more austere 
reactionaries, and Iran no longer views its international 
relation through the prism of strategic or economic 
vulnerability. Rising oil prices, America's entanglement in 
Iraq have led the new generation of leaders to perceive unique 
opportunities for their country. Iran views itself now as an 
indispensable nation in the Middle East, with its own claims of 
hegemony and dominance.
    It is tempting to view Iran's new leaders, of the New 
Right, as a sort of monolithic, united clique of ideologues 
driven by the same impulses and objectives, but as with most 
political movements in modern Iran, there are obviously 
divisions and factions and power centers, even in the New 
Right. The current divide in the theocratic regime is between 
those who seek a revolutionary foreign policy, and more 
temperate realists, emphasizing nationals and Iran's national 
rights. This delineation is perhaps best exemplified by 
examining the global views of President Ahmadinejad, and the 
current head of the National Security Council, Ali Larijani.
    I would say a combination of sort of a bitter experience 
and Islamic ideology tends to animate Iran's new President. If 
you look at President Ahmadinejad's speeches--particularly 
those focusing on international relations--he often suggests 
the notion of Iran's Islamic state as a model for the region to 
be emulated. Beyond such Islamists aspirations, it is Iran's 
own war with Iraq--that I think was mentioned by Senator 
Biden--that continues to condition Ahmadinejad's strategic 
assumptions. A pronounced suspicion of the United States and 
the international community that tolerated Iraq's war crimes 
against Iran characterizes the perspective of those who fought 
on the frontlines, and those veterans have now, in large 
measure, entered politics. The lessons that these veterans-
turned-politicians drew from the war was that Iran's 
independence and territorial integrity cannot rest on 
international legal compacts or, for that matter, international 
opinion.
    After decades of tension with America, Iran's reactionaries 
perceive that conflict with the United States is inevitable, 
and perhaps the only manner that America can be deterred is 
through the possession of the strategic weapon. However, I 
think it is too facile to suggest that it is the fear of 
America that is driving this faction toward acquisition of the 
bomb. As with some in the theocratic regime, Ahmadinejad and 
his allies perceive that nuclear weapons capability is critical 
for consolidation of Iranian hegemony in the Persian Gulf. It 
is only through the attainment of the bomb that Iran can negate 
the nefarious American plots to undermine its stature and 
power.
    President Ahmadinejad's rhetorical fulminations and 
presence on the international stage, including today at the 
United Nations should not obscure the fact that he is not in 
complete command of Iran's foreign relations. One of the more 
important actors to emerge is, of course, Ali Larijani, and he 
brings to this his own allies. As a leader of a generation of 
realists that evolved, actually, in the intelligence 
communities in Iran in the 1990s, this cohort has significant 
influence over the direction of Iran's international relations. 
Through their presence in the key institutions, the link with 
the traditional clerical community, intimate ties to the 
Supreme Leader, they chart a course of Iran's foreign policy 
that is somewhat different.
    For the realists, the Islamic Republic is offered a rare 
and unique opportunity to establish a sphere of influence in 
the Persian Gulf. For centuries, really, Iran's monarchs and, 
later, mullahs perceived that given their history, given their 
civilizational standing, given their geographic location, it 
should emerge as a preeminent state of the region. However, 
those ambitions were unjustly thwarted by global empires--
British, American, and local hegemonic powers.
    Today as Iran's leaders gaze across the Middle East, they 
see a more humble America, frankly seeking an exit strategy out 
of this predicament, and Iraq preoccupied with its simmering 
sectarian conflicts, and a gulf princely class that, in my 
view, is eager to accommodate rather than confront Iranian 
power. Therefore, a judicious and a reasonable Iran can go a 
long way toward achieving its long-cherished aspiration of 
domination of the critical waterways of the Middle East. It is 
important to stress that for this camp, they are driven not so 
much by Islamist ideology, but by Persia's historic 
aspirations.
    Again, an examination of Larijani's speeches reveals in, 
sort of a peculiar insistence on India as a model for an 
aspiring regional power. India's detente with America has 
allowed it to both maintain its nuclear capability, and 
dominate its neighborhood. In contrast, a Russian Federation 
that at times finds itself at odds with the United States has 
seen its ability to influence its ``near abroad'' checked by a 
skeptical Washington. Although the United States presence is 
bound to diminish in the Middle East, for Iran's realists, 
American power can still present a barrier to projection of 
their influence, and Tehran's resurgence. For this cohort, a 
less contentious relationship with the United States--hardly an 
alliance, and hardly even a normalization--but a less 
contentious relationship with the United States may ease 
America's distrust, paving the way for projection of Iran's 
influence.
    For the realists, the nuclear program, therefore, has to be 
viewed in the larger context of Iran's international relations. 
Once more, Larijani points to the example of India, namely a 
country that wants improved relations with the United States, 
may obtain American approbation of its nuclear ambitions. Iran 
and India are not the same countries, obviously, but 
nevertheless that is a perception that is emerging.
    Thus, they don't seek to dismantle the nuclear program, but 
offer confidence-building measures and improved relations with 
the United States as a means of alleviating international 
concerns.
    Hovering over this debate--as with all debates in Iran--
stands the Supreme Leader Ali Khamenei and his relationship 
with these competing power centers. In my view, Khamenei's 
instincts would be to support the reactionary elements and 
their call for defiance and pursuit of the nuclear option.
    However, in his role as the guardian of the state, he must 
consider the nuclear program in the context of Iran's national 
priorities. Thus far, despite his ideological compunction, 
Khamenei has pressed the state toward some degree of restraint. 
The fact that Iran continues to call for negotiations and even 
has expressed a willingness to suspend potentially critical 
components of its nuclear program for a brief duration, should 
meaningful discussions begin, reflects a willingness to 
tentatively and grudgingly subordinate ideology to pragmatism.
    So, where that leaves us is that we're essentially dealing 
with a country today as a result of what has happened in Iraq 
and the changes in geopolitical alignments of the Middle East, 
a country that is assertive, determined and is essentially 
insisting on maintaining what it views as its national 
priorities, and national prerogatives.
    I'll stay at this point and defer to my other colleagues.
    [The prepared statement of Dr. Takeyh follows:]

   Prepared Statement of Dr. Ray Takeyh, Senior Fellow, Middle East 
         Studies, Council on Foreign Relations, Washington, DC

    As the cycle of negotiations and United Nations conclaves begins, 
Iran's nuclear ambitions seem to be surging without restraint--no 
longer subject to easy diplomatic mediation or coercive resolution. A 
unique confluence of events ensures that Iran will sustain a nuclear 
program increasingly perceived as a national imperative. Today, Iran's 
internal political alignments and a changing regional landscape have 
produced an Islamic Republic that is confident, assertive, and 
empowered.
                         IRAN AND ITS FACTIONS

    Since the Presidential election of 2005, the United States 
confronts a fundamentally different Iranian leadership. The complexion 
of the Islamic Republic is changing, as the clerical oligarchs who 
ushered in the revolution are gradually receding from the scene, 
replaced by a younger cadre. The debates are no longer between the 
pragmatists such as Ayatollah Hashemi Rafsanjani and the more austere 
reactionary clerics, and Iran no longer views its international 
relations through the prism of its economic and strategic weakness. 
Rising oil prices and America's entanglement in Iraq have led the new 
generation of leaders to perceive unique opportunities for their 
country's ascendance. Iran views itself as the indispensable nation in 
the Middle East, with its claims of hegemony and dominance.
    It is tempting to presume that Iran's new hard-line leaders are a 
united clique of ideologues, driven by the same impulses and 
objectives. As with most political movements in modern Iran, however, 
the New Right features its own factions and power centers. The current 
divide in the theocratic regime is between those who press for a 
revolutionary foreign policy and more tempered realists emphasizing 
Persian nationalism. This delineation is best exemplified by examining 
the worldviews of Ahmadinejad and the current head of the Supreme 
National Security Council, Ali Larijani.
    Ideologues: A combination of bitter experience and Islamist 
ideology animates Iran's new President. A persistent theme of 
Ahmadinejad's speeches is the notion that Iran's Islamic polity is a 
worthy model of emulation for the region. However, beyond such Islamist 
aspirations, it is Iran's own war with Iraq that continues to condition 
Ahmadinejad and his allies' strategic assumptions. A pronounced 
suspicion of the United States and the international community that 
tolerated Saddam Hussein's war crimes against Iran characterizes the 
perspective of those who fought in the front lines. The lessons that 
the veterans drew from the war was that Iran's independence and 
territorial integrity cannot be safeguarded by international legal 
compacts and Western benevolence.
    After decades of tensions with America, Iran's reactionaries 
perceive that conflict with the United States is inevitable and that 
the only manner by which America can be deterred is the possession of 
the ``strategic weapon.'' However, it is too facile to suggest that the 
fear of America is driving this faction toward the acquisition of the 
bomb. As with many in the theocratic regime, Ahmadinejad and his allies 
perceive that a nuclear weapons capability is critical for the 
consolidation of Iranian hegemony in the gulf. It is only through the 
attainment of the bomb that Iran can negate nefarious American plots to 
undermine its stature and power.
    Beyond such perceptions, the American demands that Iran relinquish 
its fuel cycle rights granted to it by the Nuclear Non-Proliferation 
Treaty has aroused the leadership's nationalistic impulses. As a 
country that has historically been the subject of foreign intervention 
and imposition of various capitulation treaties, Iran is inordinately 
sensitive of its national prerogatives and sovereign rights. For the 
new rulers of Iran, they are being challenged not because of their 
provocations and previous treaty violations, but because of superpower 
bullying. In a peculiar manner, the nuclear program and Iran's national 
identity have become fused in the imagination of the hard-liners. To 
stand against an impudent America is to validate one's revolutionary 
ardor and sense of nationalism. Thus, the notion of compromise and 
acquiescence has limited utility to Iran's aggrieved nationalists.
    Despite their bitterness and cynicism, the theocratic hard-liners 
are eternal optimists when it comes to the international community's 
reception of Iran's nuclear breakout. Many influential conservative 
voices insist that Iran would follow the model of India and Pakistan, 
namely the initial international outcry would soon be followed by 
acceptance of Iran's new status. Thus, Tehran would regain its 
commercial contracts and keep its nuclear weapons. The former Iranian 
Foreign Minister, Akbar Velayati, noted this theme when stressing, 
``Whenever we stand firm and defend our righteous stands resolutely, 
they are forced to retreat and have no alternatives.'' The notion of 
Iran's mischievous past and its tense relations with the United States 
militating against the acceptance of its nuclear status by the 
international community is rejected by the right. However, should their 
anticipations fail, and Iran become subject of sanctions, it is a price 
that the hard-liners are willing to pay for an important national 
prerogative. Ahmadinejad has pointedly noted that even sanctions were 
to be imposed, ``The Iranian nation would still have its rights.'' In a 
similar vein, Ayatollah Jannati, the head of the Guardian Council, has 
noted, ``We do not welcome sanctions, but if we are threatened by 
sanctions, we will not give in.'' The notion of the need to sacrifice 
and struggle on behalf of the revolution and resist imperious 
international demands is an essential tent of the hard-liners' 
ideological perspective.
    Realists: President Ahmadinejad's rhetorical fulminations and 
presence on the international stage should not obscure the fact that he 
is not in complete command of Iran's foreign relations. One of the most 
important actors in Iran today is the powerful Secretary of the Supreme 
National Security Council, Ali Larijani. As the leader of a new 
generation of realists that evolved in the intelligence community in 
the 1990s, this cohort's has predominant influence over the direction 
of Iran's international relations. Through their presence in key 
institutions, links with traditional clerical community and intimate 
ties to the Supreme Leader, the realists chart the course of Iran's 
foreign policy.
    For the realists, the Islamic Republic is offered a rare 
opportunity to establish its sphere of influence in the Persian Gulf. 
For centuries, Iran's monarchs and mullahs perceived that given their 
country's history, civilizational achievements, and geographic 
location, it should emerge as the preeminent state of the region. 
However, those ambitions were unjustly thwarted by global empires and 
local hegemonic powers. Today, as Iran's leaders gaze across the Middle 
East, they see a crestfallen American imperium eager for an exit 
strategy out of its Arab predicament, an Iraq preoccupied with its 
simmering sectarian conflicts and a gulf princely class eager to 
accommodate rather then confront Iranian power. A judicious and 
reasonable Iran can go a long way toward achieving its long cherished 
aspiration of dominating the critical waterways of the Middle East. It 
is important to stress that the Larijani camp is driven not so much by 
Islamist imperatives, but Persia's historic aspirations.
    A careful examination of Larijani's speeches reveals an insistence 
on India as a model for aspiring regional powers. India's detente with 
America has allowed it to both maintain its nuclear arsenal and 
dominate its immediate neighborhood. In contrast, a Russian Federation, 
that at times finds itself at odds with America, has seen its ability 
to influence its ``near abroad'' checked by a skeptical Washington. 
Although the U.S. presence is bound to diminish in the Middle East, for 
Iran's realists American power can still present a barrier to Tehran's 
resurgence. For this cohort a less contentious relationship with the 
United States may ease America's distrust, paving the way for the 
projection of Iran's influence in the gulf.
    For the realists, the nuclear program has to be viewed in the 
larger context of Iran's international relations. Once more, Larijani 
points to the example of India, namely a country that improves 
relations with the United States may obtain American approbation of its 
nuclear ambitions. Thus, they don't necessarily seek to dismantle the 
program, but offer confidence-building measures and improved relations 
with the United States as a means of alleviating international 
concerns.
    Hovering over this debate, once more, stands the Supreme Leader Ali 
Khamenei. Khamenei's instincts would be to support the reactionary 
elements in their call for defiance and pursuit of the nuclear option. 
However, in his role as the guardian of the state, he must consider the 
nuclear program in the context of Iran's overall policies. Thus far, 
despite his ideological compunctions, Khamenei has pressed the state 
toward restraint. The fact that Iran continues to call for negotiations 
and has even expressed a willingness to suspend critical components of 
its program for a brief duration should meaningful discussions resume, 
reflects his willingness to subordinate ideology to pragmatism. Indeed, 
President Ahmadinejad's acceptance of the negotiations, despite his 
campaign rhetoric, denotes his willingness to accede to the direction 
set out by Khamenei.
    Such internal changes cannot by themselves explain Iran's new found 
confidence. A careful look at two regional hotspots--Iraq and Lebanon--
reflects the Islamic Republic's deepening influence in the Middle East.

                     SOURCES OF IRAN'S POWER: IRAQ

    On September 12, a momentous event took place in Tehran. Iraq's new 
Premier, Nouri al-Maliki arrived in Iran eager to mend ties with the 
Islamic Republic. The atmospherics of the trip reflected the changed 
relationship, as Iranian and Iraqi officials easily intermingled, 
signing various cooperative and trade agreements and pledging a new 
dawn in their relations. It must seem as cold comfort to the hawkish 
Bush administration with its well-honed antagonism toward the Islamic 
Republic that it was its own conduct that finally alleviated one of 
Iran's most pressing strategic quandaries. In essence, the American 
invasion of Iraq has made the resolution of Iran's nuclear issue even 
more difficult.
    Iran's model of ensuring its influence in Iraq is drawn from its 
experiences in Lebanon, another multiconfessional society with a Shiite 
population that was traditionally left out of the spoils of power. 
Iran's strategy in Lebanon was to dispatch economic and financial 
assistance to win Shiite hearts and minds, while making certain that 
its Shiite allies had sufficient military hardware for a potential 
clash with their rivals. As such, Iran's presence was more subtle and 
indirect, and sought to avoid a confrontation with the United States. 
Not unlike its approach to Lebanon, Iran today is seeking to mobilize 
and organize the diverse Shiite forces in Iraq, while not necessarily 
getting entangled in an altercation with the more powerful United 
States.
    Although Iraq's Shiite political society is hardly homogeneous, the 
two parties that have emerged as the best organized and most 
competitive in the electoral process are the Supreme Council of the 
Islamic Revolution in Iraq (SCIRI) and the Dawa Party. Both parties 
have intimate relations with Tehran and allied themselves with the 
Islamic Republic during the Iran-Iraq war. SCIRI was essentially 
created by Iran, and its militia, the Badr Brigade, was trained and 
equipped by the Revolutionary Guards. For its part, Dawa is Iraq's 
longest surviving Shiite political party, with a courageous record of 
resisting Saddam's repression. Under tremendous pressure, Dawa did take 
refuge in Iran, but it also established a presence in Syria, Lebanon, 
and eventually Britain. However, despite their long-lasting ties with 
the Islamic Republic, both parties appreciate that in order to remain 
influential actors in the post-Saddam Iraq they must place some 
distance between themselves and Tehran. The members of SCIRI and Dawa 
insist that they have no interest in emulating Iran's theocratic model, 
and that Iraq's divisions and fragmentations mandate a different 
governing structure. Former Prime Minister Ibrahim al-Jaafari, the head 
of the Dawa Party, insisted, ``Not all the Shiites are Islamists and 
not all Islamists believe in velayat-e faqhi. Cloning any experience is 
inconsistent with the human rights of that country.'' In a similar 
vein, Adel Abdul-Mahdi, the leading figure within SCIRI, emphasized, 
``We don't want either a Shiite government or an Islamic government.'' 
Their persistent electoral triumphs reflect not just superior 
organization, but a successful assertion of their own identity. Still, 
Dawa and SCIRI do retain close bonds with Iran, and have defended the 
Islamic Republic against American charges of interference and 
infiltration. In the end, although both parties have no inclination to 
act as Iran's surrogates, they are likely to provide Tehran with a 
sympathetic audience, and even an alliance that, like all such 
arrangements, will not be free of tension and difficulty.
    Although less well-publicized by Tehran, it does appear that Iran 
has established tacit ties with Moqtada al-Sadr and has even supplied 
his Mahdi army. In a sense, unlike their relations with SCIRI and Dawa, 
Iran's ties to Sadr are more opportunistic, as they find his sporadic 
Arab nationalist rhetoric and erratic behavior problematic. 
Nonetheless, given his emerging power-base, strident opposition to the 
American occupation and his well-organized militia group, Tehran has 
found it advantageous to, at least, maintain some links with Sadr. 
Among the characteristic of Iran's foreign policy is to leave as many 
options open as possible. At a time when Sadr is being granted an 
audience by the Arab leaders and dignitaries across the region, it 
would be astonishing if Iran did not seek some kind of a relationship 
with the Shiite firebrand.
    Finally, there is Iran's relation with Iraq's most esteemed and 
influential Shiite cleric, Grand Ayatollah Ali al-Sistani. The Grand 
Ayatollah stands with traditional Shiite mullahs in rejecting Ayatollah 
Ruhollah Khomeini's notion that proper Islamic governance mandates 
direct clerical assumption of power. As we have noted, Khomeini's 
innovation contravened normative Shiite political traditions, making 
its export problematic, if not impossible. Thus far, both parties have 
been courteous and deferential to one another, with Sistani refusing to 
criticize Iran, while Tehran has been generous with crediting him for 
the Shiite populace's increasing empowerment. The powerful former 
President, Hashemi Rafsanjani made a point of emphasizing Sistani's 
role after the elections of the interim government, noting, ``The fact 
that the people of Iraq have gone to the ballet box to decide their own 
fate is the result of efforts by the Iraqi clergy and sources of 
emulation, led by Ayatollah Ali al-Sistani.'' For his part, Sistani 
maintains close ties to Iran's clerical community and routinely meets 
with visiting Iranian officials--a privilege not yet granted to U.S. 
representatives. Moreover, even though Sistani has not pressed for a 
theocracy, he still insists that religion must inform political and 
social arrangements. Once more, Iran's reigning clerics have forged 
correct relations with the Grand Ayatollah, and do not harbor illusions 
that he would serve as an agent for imposition of their theocratic 
template on Iraq.
    Today, the essential estrangement of the Iraqi Shiites from the 
larger Arab world, and the Sunni dynasties unease with their 
empowerment makes the community more attractive to Iran. The ascendance 
of the Shiites may be acceptable to the Bush administration with its 
democratic imperatives, but the Sunni monarchs of Saudi Arabia and 
Jordan and the Presidential dictatorships of Egypt and Syria are 
extremely anxious about the emergence of a new ``arch of Shiism.'' At a 
time when the leading pan-Arab newspapers routinely decry the invasion 
of Iraq as a United States-Iranian plot to undermine the cohesion of 
the Sunni bloc, the prospects of an elected Shiite government in Iraq 
being warmly embraced by the Arab world seems remote. Iraq's new Shiite 
parties, conservative or moderate, are drawn to Iran, as they look for 
natural allies. It is unlikely that this will change, as the political 
alignments of the Middle East are increasingly being defined by 
sectarian identities.
    Given Iran's interest in the stability and success of a Shiite-
dominated Iraq, how does one account for the credible reports 
indicating that Tehran has been infiltrating men and supplies into 
Iraq? To be sure, since the removal of Saddam, the Islamic Republic has 
been busy establishing an infrastructure of influence next door that 
includes funding political parties and dispatching arms to Shiite 
militias. For the United States, with its perennial suspicions of Iran, 
such activism necessarily implies a propensity toward mischief and 
terror. Iran's presence in Iraq, however, can best be seen within the 
context of its tense relations with the United States, if not the 
larger international community. Such influence and presence provides 
Iran with important leverage in dealing with the Western powers. The 
fact that America and its allies may believe that Iran will retaliate 
in Iraq for any military strikes against its nuclear facilities 
implicitly strengthens Tehran's deterrence against such a move. At a 
time when Iran's nuclear ambitions are at issue, it is not in the 
theocracy's interest to unduly disabuse the United States of that 
impression.
    Should the Islamic Republic's implied deterrence fail, and the 
United States does strike its nuclear installations, then Iran's 
extensive presence in Iraq will give it a credible retaliatory 
capacity. Yahya Rahim Safavi, the commander of the Revolutionary 
Guards, has plainly outlined Iran's options, stressing, ``The Americans 
know well that their military centers in Afghanistan, the Gulf of Oman, 
the Persian Gulf and Iraq will come under threat and they may be 
vulnerable because they are in Iran's neighborhood.'' The fact remains 
that Iran's network in Iraq is not necessarily designed for attacks 
against America, but it does offer the theocracy a variety of choices 
should its relations with the United States significantly deteriorate.
    The Islamic Republic of Iran today stands as one of the few 
beneficiaries of American invasion of Iraq. As America becomes mired in 
its ever-deepening quagmire in Iraq, its ability to confront Iran has 
diminished. In the meantime, given Iran's assets in Iraq, its close 
ties to the reigning Shiite political actors and its ability to inflame 
the sectarian conflict, it possesses ample leverage in tempering 
American designs. The United States and its allies that may seek to 
confront Iran over its nuclear ambitions must wrestle with the reality 
of Tehran's power and its capacity to destabilize Iraq and the 
international petroleum market.

                   SOURCES OF IRAN'S POWER: HEZBOLLAH

    The hapless country of Lebanon has always been the hotbed of 
conflict between sectarian forces, culminating in a bitter civil war in 
the 1970s and 1980s. Following the Israeli invasion of 1982 to evict 
the Palestinians, who were using Lebanon as a sanctuary to launch 
terror attacks, Iran became more directly involved in Lebanese affairs. 
In conjunction with its Syrian ally, Iran began to mobilize the Shiite 
community, offering financial and military assistance to its militant 
allies. The Shiites constituted the largest communal group in Lebanon 
but were traditionally excluded from positions of political and 
economic power. Iran's Revolutionary Guards and diplomats energetically 
organized the various fledgling Shiite organizations and essentially 
created Hezbollah. Through provision of social services, an impressive 
fundraising capability and an increasingly sophisticated paramilitary 
apparatus, Hezbollah gradually spread its influence subsuming many of 
the remaining Shiite associations and assuming a commanding position in 
Lebanon's politics.
    Hezbollah first came into the American consciousness when its 
suicide bombers attacked the Marine barracks in Beirut in 1983, killing 
241 U.S. soldiers. At Iran's behest, Hezbollah went on a string of 
kidnappings and hostage taking, some of whom were eventually bartered 
away for U.S. arms during the Iran-Contra affair. In the 1990s, 
Hezbollah's operatives were also implicated in the killing of Iranian 
dissidents in Europe and an attack against a Jewish community center in 
Argentina. A grim record of suicide bombings, assassinations and 
kidnappings soon made Hezbollah a terrorist organization with an 
impressive global reach. Even before the rise of al-Qaeda, Hezbollah 
had assumed a prominent place in the world of fundamentalism, as it not 
only introduced new tactics to Islamist resistance such as suicide 
bombings, but also ingeniously utilized religion to justify its use of 
indiscriminate violence.
    Despite its multiplicity of attacks around the globe, Israel has 
been Hezbollah's favorite target. Hezbollah's forces waged a long and 
costly guerrilla war against Israel, eventually compelling its 
withdrawal from southern Lebanon in 2000. Israel's departure has not 
lessened Hezbollah's animosity; the Lebanese group trained Hamas 
activists and periodically shelled Israeli settlements across the 
border. In the July 2006, Hezbollah took the defiant step of abducting 
and killing Israeli soldiers, provoking the massive Israeli invasion 
that nearly destroyed Lebanon. Nevertheless, the Hezbollah paradigm of 
confronting superior power with suicide bombings and a low-intensity 
guerrilla campaign has now been embraced by the region's militants as 
their preferred model of waging war. The case of Iraq demonstrates that 
even its Sunni insurgents are willing to learn from their Shiite 
counterparts, as U.S. troops are now subject to the same deadly tactics 
that Hezbollah has long employed against the Jewish state.
    Iran's motivations for supporting Hezbollah thus stem from an 
interlocking set of ideological and strategic calculations. The Islamic 
Republic had always stressed its determination to refashion regional 
norms and spread its message throughout the Middle East. In practice, 
Iran's appeal proved limited to beleaguered Shiite minorities in states 
such as Saudi Arabia, Bahrain, and Lebanon. The fact that most of these 
Shiite communities eventually traded in Iranian support for 
accommodation with the ruling elite limited the Islamic Republic's 
reach to perennially fractious Lebanon. Prior to rise of its Shiite 
allies to positions of power in Iraq, Hezbollah remained the only 
palpable success of Iran's largely self-defeating attempt to export its 
revolution. On the strategic front, Hezbollah allowed Iran to project 
its influence to the Arab world at minimal cost.
    The recent conflict between Israel and Hezbollah only reinforces 
its ideological and strategic value for the Islamic Republic. After 
weeks of battling Israeli armor, Hezbollah's mere survival constituted 
a political victory that had eluded larger Arab armies confronting the 
Jewish state. As Hezbollah captures the imagination of the Arab street, 
its Iranian patron is bound to derive political benefits. Nor was 
Hezbollah's war without strategic advantage for Tehran. At a time when 
Iran's nuclear portfolio is subject to international scrutiny, the 
conflagration in Lebanon is a pointed reminder to European states of 
the cost of confrontation in the Middle East. As Iraq and the Levant 
continue to burn, the Europeans and the larger international community 
must consider whether they really want yet another conflict in the 
region.

                          WHAT IS TO BE DONE?

    Despite its incendiary rhetoric and flamboyant claims, Iran is not 
Nazi Germany, an ideological regime with a limitless appetite. The 
Islamic Republic is seeking to emulate China and India, regional powers 
whose interests and claims have to be taken into consideration in their 
immediate neighborhood. A successful model of engagement has to 
appreciate that Iran is a rising power and the purpose of the talks is 
to craft a framework for regulation of its influence. In essence, this 
model of engagement does not seek reconciliation between the two 
antagonists, but a means of channeling Iran's power in the right 
direction.
    The proposed engagement strategy appreciates Iran's resurgence and 
seeks to create a framework for limiting the expressions of its power. 
The purpose of engagement is not to resolve all outstanding issues or 
usher in an alliance with the Islamic Republic, but to craft an 
arrangement whereby Iran adheres to basic norms of international 
relations. In essence, America accepts Iran as a regional power with 
legitimate interests. In this context, the negotiations are designed to 
alter the structure of United States-Iran relations as opposed to 
merely addressing specific areas of disagreement, such as Iran's 
nuclear program. For Iran's realists, America finally offers an 
opportunity to press their state in a manner consistent with their 
nationalistic aspirations. As such engagement becomes a subtle and a 
more effective means of containment.
    The practical operational aspect of such diplomacy should envision 
three separate negotiating tracks, whereby all issues of concern are 
examined by both sides. However, dispensing with linkage, progress on 
any one track should not be necessarily contingent on the others. For 
instance, if the United States and Iran are making important strides on 
the nuclear issue, negotiations should not be discontinued for lack of 
progress on terrorism or Iraq. Having stipulated the essential autonomy 
of each individual track, it is important to stress that in actual 
practice progress on any one of these issues is bound to have positive 
reverberations for others. An Iran that finds its relations with 
America to its advantage is bound to be a country open to tempering its 
radical tendencies regarding terrorism.

    The Chairman. Well, thank you very much, Dr. Takeyh.
    Will you please proceed, Secretary Carter?

  STATEMENT OF HON. ASHTON B. CARTER, CODIRECTOR, PREVENTIVE 
 DEFENSE PROJECT, BELFER CENTER FOR SCIENCE AND INTERNATIONAL 
           AFFAIRS, HARVARD UNIVERSITY, CAMBRIDGE, MA

    Mr. Carter. Mr. Chairman and members, thank you for 
inviting me to be here today to discuss the alternative courses 
of action if the diplomatic course that the United States and 
its European partners have been on for the last 3 years or so, 
fails to stop Iran's progress toward developing the wherewithal 
to make nuclear weapons.
    These alternatives I will call ``Plan B.'' What is Plan B, 
in short, if Plan A fails? There are three broad varieties of 
Plan B, all of which were discussed at a workshop that former 
Secretary of Defense and my academic partner, William Perry, 
and I convened here in Washington. The conference was an off 
the record workshop of distinguished experts--civilian and 
military--of both parties, all Americans. I draw now upon the 
report of that conference, which Bill Perry and I coauthored, 
and with your leave I will make my written statement, and ask 
that you insert the report for the record.
    That being said, I would like to clarify that I'm 
responsible, and not the participants of that workshop, for 
everything I say before this committee today. Let me begin by 
saying, while I--and everyone in our workshop--thought it was 
important for the United States and its partners to design all 
three versions of Plan B now, I believe it would be premature 
to move to Plan B at this time, that is, to abandon the 
diplomatic path, particularly to move to a coercive path. And 
before I get to the paths, let me say why.
    First, and importantly, Iran's known nuclear program is 
several years away from being able to produce its first bomb's 
worth of highly enriched uranium. The unknown program is by 
definition, unknown, but everybody that I talk to believes that 
the unknown program is on a still slower schedule than the 
known program, and therefore Iran as a whole is several years 
away from being able to produce its first bomb's worth of 
fissile material. Therefore, unlike the case of North Korea--
which has already obtained fissile material and is producing 
more--there is time, purely from the point of view of the 
technical development of the threat, to let diplomacy play out, 
in the case of Iran.
    Second, and again unlike North Korea, the Iranian 
Government has exhibited at least a smidgen of sensitivity to 
international opinion, and to the possibility of further 
isolation and punishment if it persists and acceptance and 
trade if it stops, i.e., to diplomatic to carrots and sticks. 
You see less of that, as Secretary Burns pointed out, in the 
case of North Korea. And so, there's a chance that if this fish 
is played for longer, it can be landed.
    Third, if the United States brings this matter to a head at 
this moment, I'm concerned that we will find Iran playing a 
comparatively strong hand, and the United States a 
comparatively weak hand, at this time. Iran's influence--as Ray 
Takeyh has indicated, and others in this discussion this 
morning have indicated--in the Middle East is at a recent 
historic high, its unstinting backing of Hezbollah and the 
latter's clash with Israel this past summer has added to its 
perceived luster, and its boldness. It has about as much sway--
and here I would agree with Senator Hagel--within the borders 
of its historic enemy, Iraq, as do we at this time. And to top 
it off, Iran's President, Ahmadinejad, is enjoying what I would 
call a sort of ``rock star'' faddishness in much of the Muslim 
world.
    We, by contrast, are weighted down by important ongoing and 
unresolved conflicts in Iraq and Afghanistan, a runaway North 
Korean nuclear program, as I mentioned earlier, our need to 
adjust cautiously and prudently to China's political and 
military rise, and above all, to the sprouting of post-9/11 
versions of al-Qaeda--we have a lot on our strategic plate.
    The United States has only, in recent months, seemed to get 
in the game on the Iranian problem. Also, our erstwhile 
partners in helping us combat Iran's nuclear ambitions--Europe, 
Russia, and China--are not always inclined, at this time, to 
follow where we lead.
    All these circumstances could change, and the United States 
could find itself in a less adverse strategic position sometime 
in the future, but now may not be the moment to bring things to 
a head. And that would be a third reason not to move to, at 
least, a coercive version of Plan B at the moment.
    And, fourth and finally, before you change horses, you need 
to saddle the new horse, and that would mean preparing the way 
for the three alternatives I'm about to describe, and as you'll 
see when I describe them, I don't believe we've done that yet.
    So for all of these reasons, it's not yet time to switch to 
Plan B, but it is time to consider and devise Plan B, and the 
time that is available for diplomacy is only valuable if we use 
it effectively.
    We addressed, as I said, three distinct versions of Plan B. 
The first would add direct United States-Iran contact to the 
EU3-led diplomacy that the United States has supported from the 
sidelines for several years. The idea of this plan was broached 
by a number of influential observers and leaders, Republican, 
Democratic, and foreign, to include Senators Lugar, Biden, and 
Hagel. In the very weeks before our workshop and shortly 
thereafter, the Bush administration adopted a version of this 
plan, which has not been implemented because Iran, as we all 
know, has refused to satisfy the condition that it suspend 
enrichment before we do so.
    The second version of Plan B would use coercion to obtain 
the outcome that diplomacy seeks--a nonnuclear Iran. Coercion 
is the political, economic, or military pressure that the 
United States and other nations could bring to bear on Iran in 
an attempt to discourage or physically delay it from acquiring 
nuclear weapons.
    And the third version of Plan B prescribes what the United 
States should do if Iran succeeds in going nuclear and the 
United States needs to make strategic adjustments to protect 
itself and its friends from a nuclear Iran. Strategic 
adjustment requires the United States to develop a long-term 
strategy to respond to Iranian possession of nuclear weapons if 
diplomacy and coercion fail.
    Mr. Chairman, with your leave, I'd like to make one or two 
points about each of these options, and then I'm prepared to 
discuss all of them in more detail as does the report I 
referenced earlier.
    First, regarding direct contact between the United States 
and Iran--there were at least four different views by 
knowledgeable people at our workshop--and let me just tell you 
what they were, they all head in somewhat different directions. 
One view was that direct talks are the only way to test whether 
a breakthrough in United States-Iranian relations, including 
the nuclear issue, is possible.
    A second view is that a breakthrough is unlikely, but 
direct talks conditioned on a freeze will buy further time. And 
that in itself is valuable.
    A third view is that direct talks won't succeed, but they 
will effectively prepare the way for coercion. Since coercion 
can only be effective with international support, and the 
United States can only win that support after it has shown that 
its best efforts at diplomacy have been tried and failed.
    And a fourth view was that direct talks will only play into 
Iranian hands. Since the Iraq war and other developments have 
strengthened Iranian influence in the Middle East, direct talks 
will legitimize the Iranian Government. The U.S. administration 
is divided within itself and cannot negotiate shrewdly, or the 
Iranian Government has so many factions that it cannot deliver 
on a real deal anyway.
    So, these were the views that participants had of the 
prospects for direct talks. Direct talks, second, come in 
several flavors. You have to ask yourself how you want to 
conduct the direct talks--are they purely bilateral? Are they 
with the EU? Are they in some form of six-party talks, 
including Russia, China, the EU3+, and Iran?
    The second decision is: What do we talk about? Do we 
confine the talks to the nuclear program, or is anything on the 
table? If anything's on the table, to include other concerns, 
like terrorism, then some participants warned us--you will 
have, on the Iranian side, other factions in the leadership 
participating from their side in the talks. And that may make 
it more difficult to get agreement on the nuclear front. 
Moreover, if we're going to discuss other issues besides the 
nuclear issue in this larger setting, we're going to have to 
deal with Russia, China, and the Europeans on those other 
issues, and it's been hard enough to corral them into a common 
view on the nuclear issue.
    So there are pros and cons to a broad agenda versus a 
narrow agenda. And then finally, there are the conditions under 
which direct talks are held, and those conditions have to do 
with the Iranians and with our allies. The conditions with the 
Iranians we've imposed so far, and I support this, is that they 
suspend enrichment. The condition that we imposed on our 
friends and partners was that if the talks didn't work, they'd 
be prepared to go down the path of sanctions. And both of those 
conditions are in doubt as we sit here today.
    Let me say something about coercion. Coercion can be 
political, economic, or military. I have just a few points to 
raise on this matter. The first is--and this has been addressed 
several times in the course of this hearing already--that 
economic coercion is not within the power of the United States 
to effect unilaterally, for the simple reason that we don't 
trade with Iran now anyway; there's nothing for us to take 
away. And so economic pressure is only possible if somebody 
else goes with us in doing so.
    The second point to make about economic pressure is that 
the general view of people who study sanctions has varied as 
far as their assessment of the effectiveness, but the issue of 
time scale does not seem to be controversial. The time scale 
issue goes like this: The political effect of the imposition of 
sanctions would be immediate. The Iranian people would feel 
their horizons constricted by this act, and that might have 
some effect on them. But it takes years for the economic 
effects of sanctions to bubble up. We may not have that kind of 
time.
    With respect to political pressure, I would note only the 
$66 million or so of assistance that the United States 
Government is going to give to the cause of splitting the 
Iranian Government from its people. It will be--in my 
judgment--more than offset by the $55 billion of oil money that 
goes into the coffers of the Iranian regime this year, in this 
calendar year 2006, which will have 1,000 times the effect of 
drawing the Iranian Government and their people together. I 
think we need to be realistic; whatever you think of our 
effort, it's small in comparison to that.
    Military coercion: Military coercion has been much 
discussed in the press and was much analyzed by our workshop. 
The proposition is very straightforward, it's about air strikes 
on the main facilities of Bushehr, at Arak, at Esfahan, and of 
course, especially, at Natanz. I'm not going to add to what, 
I'm sure, members of this committee know perfectly well, which 
is that the consequences of an act of this sort would be very 
grave, both in terms of unifying the Iranian people behind 
their government and giving the Iranians opportunities to 
retaliate. That still may be worth the risk at some point, but 
the risk is very substantial.
    The point I'd like to make that I think is also important 
is that a strike of this kind does not eliminate, would not 
eliminate the Iranian nuclear program. It only buys time, and 
you need to do the math to see how much time it would buy.
    So let us do a hypothetical here. Let's suppose that our 
intelligence judgment--at the time a strike like this was 
mounted--was that if we broke off talks and Iran was 
unconstrained and just raced to the bomb, it would take the 
Iranians 4 years. Let me suppose that that's our assessment. 
And that we further assessed that if we continue to pretend we 
think the talks are going to succeed--but we know they're not--
we can add 2 years to that, for a total of 6. But, we believe 
that talks are a losing game.
    Let's suppose further that we were to eliminate, in an air 
strike, the known facilities that I enumerated earlier; it 
would take Iran 2 years to restore them to their current state. 
These numbers are not entirely made up; each one of them is 
arguable.
    In the end of the assumptions I just gave you, the attack 
wouldn't buy any time relative to continuing the negotiations. 
So one needs to do the math and ask how many years one's 
gaining. Obviously, if you're prepared to go back again and 
again and again, and attack facilities as they're 
reconstituted, you can continue to buy time. A single strike, 
which is so much discussed, buys a certain amount of time, but 
one needs to calculate how much that is. And depending upon the 
assumptions, it can be a short period of delay.
    A final point on coercion. Coercion is properly seen not as 
an alternative, in my judgment, to diplomacy, but as a 
complement to diplomacy. That is, you show the Iranians what 
you're prepared to do if they're not prepared to agree. Plan A 
and Plan B reinforce each other. The specter of Plan B 
strengthens your hand in Plan A, and likewise you can't be 
effective at Plan B unless you have tried Plan A and were shown 
to have failed.
    Finally, the third option is what do we do if Iran succeeds 
in getting the bomb. Our recommendations--for the scenario 
which is, obviously, a circumstance none of us want to be in--
divide into three categories according to the three reasons why 
Iranians having the bomb is such a disaster. First, they might 
use it. Therefore, we need to figure out how to protect 
ourselves and our friends in the region against a profound new 
threat, and that takes you to deterrence, to defenses, to 
counterforce. All of the familiar military tools.
    Second, an Iranian bomb might be diverted to other parties, 
via direct transfer to groups like Hezbollah, a black market 
sale by a corrupt scientist like an Iranian version of A.Q. 
Khan, seizure by extremist factions of a future Iranian 
Government, or loss of control in a new Iranian revolution. All 
of these are eminently plausible and fearsome dangers, and one 
needs to consider what one will do to protect oneself in that 
circumstance. And again, I could say more, I won't now.
    But the third point, and the point on which I'll close, is 
that even if they don't use them and even if they don't divert 
them, the simple possession of the bomb by Iran creates a new 
fact in the region. It gives Iran a shield behind which it can 
be emboldened to try to extend its sway in the Middle East, 
export extremism, support terrorism and strike out at friends 
and allies of the United States.
    Iran's success at getting the bomb with impunity might also 
give encouragement to others seeking the bomb, or cause others 
in the region to feel compelled to follow suit. We need to 
discuss--and it's in the report--the countermeasures that the 
United States could possibly take to try to limit the damage to 
nonproliferation from this unfortunate development, and to 
contain and encircle a nuclear-armed and emboldened Iran.
    Mr. Chairman and members, this then constitutes the look 
ahead at the alternatives if diplomacy fails. Obviously none of 
them is terribly attractive, and to repeat myself and close, in 
my personal judgment--now, I'm not speaking for the workshop 
participants--it would be premature at this time to move to 
coercion from diplomacy. Thank you.
    [The prepared statement of Mr. Carter follows:]

  Prepared Statement of Hon. Ashton B. Carter, Codirector, Preventive 
 Defense Project, Belfer Center for Science and International Affairs, 
                   Harvard University, Cambridge, MA

``Plan B for Iran: What If Nuclear Diplomacy Fails?'' by Ashton B. 
Carter and William J. Perry--A Report Based on a Workshop Hosted by the 
Preventive Defense Project, Harvard and Stanford Universities

                                SUMMARY

    The Preventive Defense Project conducted the latest in its series 
of Washington WMD Workshops entitled ``Iran Plan B Design'' on May 22, 
2006. The purpose of the workshop was to collect the best thinking on 
the design of a plan for dealing with Iran's nuclear program should 
diplomacy fail and the Iranians continue on the path to nuclear 
capability. (At the time of the workshop, diplomacy centered on the 
EU3-led process with the United States in the background; the United 
States has since agreed to join the talks directly, though Iran has 
rejected the condition that it cease uranium enrichment in advance of 
the talks.)
    While it is important for the United States and its international 
partners to design Plan B now, it is premature to abandon the current 
diplomatic course, Plan A. For one thing, Iran's known nuclear program 
is several years away from being able to produce its first bomb's worth 
of fissile material. Unlike the case of North Korea which has already 
obtained fissile material and is producing more, there is time to let 
diplomacy with Iran play out. Second, and again unlike North Korea, the 
Iranian Government has exhibited at least a smidgen of sensitivity to 
international opinion and to the possibility of further isolation and 
punishment if it persists, and acceptance and trade if it stops--i.e., 
to diplomatic carrots and sticks. Third, while the cat-and-mouse 
diplomacy led by the EU3 has not led to conclusive results, it has 
caused Iran to slow the progress of its uranium enrichment program 
through intermittent suspensions. It is not yet time to switch to Plan 
B. But it is time to devise Plan B. And the time available for 
diplomacy is only valuable if it is used effectively.
    The workshop addressed three distinct versions of Plan B.
    Plan B1 would add direct United States-Iran contact to the EU3-led 
diplomacy the United States has supported from the sidelines for 
several years. Plan B1 was suggested by a number of influential 
observers and leaders--Republican, Democratic, and foreign--in the 
weeks before the workshop. Shortly after the workshop, the Bush 
administration adopted a version of Plan B1.
    Plan B2 would use coercion to obtain the outcome that Plan A and 
Plan B1 seek--a nonnuclear Iran. Coercion is the political, economic, 
and military pressure that the United States and other nations can 
bring to bear on Iran in an attempt to discourage or physically delay 
it from acquiring nuclear weapons.
    Plan B3 prescribes what the United States should do if Iran 
succeeds in going nuclear and the United States needs to make strategic 
adjustments to protect itself and its friends from a nuclear Iran. 
Strategic adjustment requires the United States to develop a long-term 
strategy to respond to Iranian possession of nuclear weapons if 
diplomacy and coercion fail.
    The workshop participants were a select group of leading, 
experienced American thinkers and strategists on national security, 
Middle Eastern affairs, and nuclear weapons. All of the participants 
have been working actively on either Plan A, Plan B (in various 
versions), or both. The workshop was off the record, and this report 
accordingly attributes no statement to a particular participant. Given 
the sensitivity of the subject--explicit exploration of alternatives to 
current U.S. policy--the Preventive Defense Project did not urge 
current U.S. Government policymakers to join directly in the Design 
Workshop discussions. Briefings of this report are being held for key 
members of the administration and Congress--who will need a Plan B if 
and when that moment comes. The Iran Plan B Design Workshop is the 
fifth in a series of WMD-related activities of the Preventive Defense 
Project. Other workshops and related publications and congressional 
testimony in this series have concerned

--Improving U.S. WMD Intelligence;
--Updating the NPT Regime;
--Plan B for North Korea; and
--The U.S.-India Nuclear Deal.

    The workshops are supported by the Carnegie Corporation of New 
York, the John D. and Catherine T. MacArthur Foundation, the Richard 
Lounsbery Foundation, and the Herbert S. Winokur Fund, to which the 
Preventive Defense Project is grateful for their support.
Plan B1: Direct United States-Iran Contact
    The idea of direct United States-Iran talks (bilateral or 
multilateral) over the nuclear issue and other matters of concern to 
both sides was broached by a growing number of influential U.S. and 
non-U.S. figures in the spring of 2006: Senators Richard Lugar, Chuck 
Hagel, Christopher Dodd, and John McCain, as well as Henry Kissinger, 
Madeleine Albright, Samuel Berger, former Middle East negotiator, 
Dennis Ross, U.N. Secretary General Kofi Annan, and reportedly German 
Chancellor Angela Merkel.\1\ In May, Iranian President Ahmadinejad sent 
a lengthy letter to President Bush making clear his willingness to 
enter such talks, and soon after Supreme Leader Ali Khamenei added his 
decisive voice in support.
---------------------------------------------------------------------------
    \1\ Senator Lugar: ``I think that [holding direct talks with Iran] 
would be useful . . . The Iranians are a part of the energy picture . . 
. We need to talk about that . . . Furthermore we have an agenda with 
Iran to talk about as far as their interference in Iraq.''
    --Comments on ABC News ``This Week,'' 16 April 2006.

    Senator Hagel: ``Allies of the U.S. will support tough action 
against Iran only if they are confident America is serious about 
achieving a negotiated, diplomatic solution. The continued 
unwillingness of the U.S. to engage Iran will make other states 
hesitate to support, and possibly oppose, these tougher measures . . . 
The U.S. should engage Iran directly with an agenda open to all areas 
of agreement and disagreement. It is only through this difficult 
diplomatic process that a pathway towards resolution and accommodation 
can be built, putting the U.S. and Iran, the Middle East and our allies 
in a position to defuse a potential Middle East conflagration and world 
calamity . . . The U.S., in partnership with our allies, should work 
towards a package of issues for discussion with Iran. This is not 
negotiation. That comes later. Ultimately, any resolution will most 
likely require security assurances for Iran.''
    -- Chuck Hagel, ``America Must Use a Wide Lens for Its Strategy on 
Iran,'' Financial Times, 8 May 2004, 11.

    Senator Dodd: ``I happen to believe you need direct talks. It 
doesn't mean you agree with [the Iranians]. . . . But there's an 
option.''
    --Comments on ``Fox News Sunday'' with Chris Wallace, 17 April 
2006.

    Senator McCain: ``There has to be some kind of glimmer of hope or 
optimism before we sit down and give them that kind of legitimacy/it's 
an option that you probably have to consider.''
    --Comments on CBS ``Face the Nation,'' 7 May 2006.

    Henry Kissinger: ``On a matter so directly involving its security, 
the United States should not negotiate through proxies, however closely 
allied. If America is prepared to negotiate with North Korea over 
proliferation in the six-party forum, and with Iran in Baghdad over 
Iraqi security, it must be possible to devise a multilateral venue for 
nuclear talks with Tehran that would permit the United States to 
participate--especially in light of what is at stake.''
    --Henry Kissinger, ``A Nuclear Test for Diplomacy,'' Washington 
Post, 16 May 2006, A17.

    Madeleine Albright et al: ``We believe that the Bush administration 
should pursue a policy it has shunned for many years: attempt to 
negotiate directly with Iranian leaders about their nuclear program . . 
. Government leaders in Europe, Russia and Asia also believe that 
direct talks between Washington and Tehran could prove more fruitful 
now that the European and Russian-Iranian engagements on Iran's nuclear 
program have made some progress in communicating mutual positions and 
concerns. Accordingly, we call on the U.S. administration, hopefully 
with the support of the trans-Atlantic community, to take the bold step 
of opening a direct dialogue with the Iranian government on the issue 
of Iran's nuclear program.''
    -- Madeleine Albright, Joschka Fischer, Jozias van Aartsen, 
Bronislaw Geremek, Hubert Vedrine and Lydia Polfer, ``Talk to Iran, 
President Bush,'' International Herald Tribune, 26 April 2006.

    Samuel Berger: ``Another course is possible, one that is more 
likely to prevent a military confrontation or, if it nonetheless 
becomes unavoidable, less likely to produce such dangerous aftershocks. 
The U.S. should sit down with those who share a sense of danger--
including, first and foremost, the European Union, Russia, and China--
and explain that we are prepared for a bold diplomatic move toward 
Tehran if our allies are ready in exchange to impose tough sanctions on 
Iran should it reject a reasonable offer. Once that agreement has been 
secured, we should probably announce our readiness to negotiate with 
Iran on all issues of mutual concern: Its nuclear program, to be sure, 
but also its support for militant groups, its posture towards the 
Middle East peace process, the future of Iraq and, on their side, the 
removal of our sanctions, Iran's integration into the global community 
and U.S. assurances of noninterference and security guarantees.''
    --Samuel Berger, ``Talk to Iran,'' The Wall Street Journal, 8 May 
2004, A19.

    Dennis Ross: ``Why not have the President go to his British, French 
and German counterparts and say: We will join you at the table with the 
Iranians, but first let us agree on an extensive set of meaningful--not 
marginal--economic and political sanctions that we will impose if the 
negotiations fail. Any such agreement would also need to entail an 
understanding of what would constitute failure in the talks and the 
trigger for the sanctions.''
    --Dennis Ross, ``A New Strategy on Iran,'' Washington Post, 1 May 
2006, A19.

    U.N. Secretary General Annan: ``I think it would be good if the 
U.S. were to be at the table with the Europeans, the Iranians, the 
Russians to try and work this out. If everybody, all the stakeholders 
and the key players, were around the table, I think it would be 
possible to work out a package that will satisfy the concerns of 
everybody.''
    --Comments on PBS ``The News Hour with Jim Lehrer,'' 4 May 2006.

    U.N. Secretary General Annan: ``I really believe that as long as 
the Iranians have the sense they are negotiating with the Europeans . . 
. and what they discuss with them will have to be discussed with the 
Americans and then [brought] back again to them . . ., they will not 
put everything on the table''
    --Comments at Vienna Summit, 12 May 2006.

    Angela Merkel asked the U.S. to consider joining negotiations in 
private talks with Bush.
    -- According to Ruprecht Polenz, chairman of the Foreign Relations 
Committee of the German Parliament, usatoday.com (cited 11 May 2006).
---------------------------------------------------------------------------
    In the wake of these calls (and the week after the Preventive 
Defense Workshop), President Bush decided to pursue one version of Plan 
B1: To have the United States join but not supplant the EU3 talks, with 
the condition that Iran restore its freeze on uranium enrichment, and 
with an agenda apparently confined to Iran's nuclear program but 
encompassing other issues of mutual concern.
    The policy change to direct talks is controversial, since widely 
different views of the ultimate outcome of such talks are held by 
different observers, all with some logic to support them:
    View 1: Direct talks are the only way to test whether there can be 
a breakthrough in United States-Iran relations including the nuclear 
issue--if such a breakthrough is possible.
    View 2: Direct talks conditioned on a freeze in Iran's uranium 
enrichment will buy further time before Iran can produce the bomb, 
which is valuable in itself.
    View 3: Direct talks will effectively prepare the way for coercion, 
since coercion can only be effective with international support and the 
United States can only win that support after it has shown that its 
best efforts at diplomacy have been tried and failed. (A contrary view 
is that direct talks legitimize the Iranian regime in international 
opinion, which will make resort to coercion more difficult even if the 
talks fail due to Iranian intransigence.)
    View 4: Direct talks play into Iranian hands, since the Iraq war 
has strengthened Iranian-Shiite influence in the Middle East, the U.S. 
administration is divided within itself and cannot negotiate shrewdly, 
and the Iranian Government has so many factions that it cannot deliver 
on a real deal anyway.
    A strategy for direct talks must answer the following questions:
    How? Possibilities discussed were to hold bilateral United States-
Iran talks, to have the United States join the EU3 talks (the choice of 
the Bush administration), or to convene an Iran version of the North 
Korea Six-Party Talks (United States, EU3, Russia, China, Iran).
    About what? The Bush administration needs to decide whether all 
issues of concern to the United States and Iran will be on the table 
when it sits down with Iran for direct talks, including Iranian support 
for terrorism, bilateral relations, regional and global security, and 
economic and diplomatic relations. At the other extreme would be an 
agenda focused solely on Iran's nuclear program. An in-between option 
would be a theme of ``the future of nuclear power worldwide,'' in which 
Iran's case would be treated as an example of the wider problem of 
avoiding a future in which proliferation of uranium enrichment and 
plutonium reprocessing does not occur in tandem with the needed spread 
of civil nuclear powerplants. Some argue that no U.S. administration 
can make a deal with Iran that covers only the nuclear issue and omits 
Iranian support for terrorism. But others warn that putting terrorism 
on the agenda will cause an entirely new faction to be added to the 
Iranian negotiating team--proterrorism constituencies in the Iranian 
leadership--that will only make it more difficult to get a deal 
stopping the nuclear program. And broadening the agenda will bring in 
the views of Europe, Russia, and China on all those other issues. 
Consensus among the U.S. negotiating partners is difficult enough to 
achieve with an agenda restricted to the nuclear issue.
    With whom? A faction-ridden, protean government like Iran's raises 
the question of whom the United States can make a deal with. While 
Supreme Leader Khamenei supports direct talks, and President 
Ahmadinejad's letter to President Bush clearly expressed a wish for 
direct contact, factionalism will probably be evident whenever specific 
commitments need to be made by Iran in the negotiations.
    Under what conditions? Two types of conditions for the United 
States to join in direct talks must be addressed: American conditions 
on Iran, and American conditions on the EU3, Russia, and China. Many 
workshop participants believed that the U.S. administration cannot be 
seen to be holding talks with Iran while the centrifuges are spinning 
at Natanz: A suspension of enrichment and return to inspections are 
necessary prerequisites (the Bush administration has imposed these 
conditions). The condition on the other negotiating parties is just as 
important and can be summarized as ``together on the downward path as 
well as the upward path''--i.e., the EU3, Russia, and China must be 
committed in advance to penalize Iran if the direct talks fail as well 
as being committed to reward Iran if it agrees to curb its nuclear 
program.
Plan B2: Coercion
    Coercion can be political, economic, or military. One workshop 
participant suggested that since Shiism celebrates self-inflicted pain, 
coercion of any sort will be ineffective in dealing with Iran. But 
presumably any Iranian Government must weigh penalties and gains that 
result from its policies, and eventually be held to account by the 
Iranian people.
    Diplomacy and coercion should be mutually reinforcing. A vivid 
depiction of a coercive Plan B2 in the event of failed diplomacy is 
part of the ``stick'' that might persuade the Iranian regime to accept 
a diplomatic outcome, and thus a credible Plan B2 is necessary to 
diplomacy. Conversely, credible diplomacy is a necessary prelude to any 
coercive Plan B2, since political and economic coercion (if not 
military) cannot be fully effective without some measure of support 
from the EU3, Russia, China, and Iran's neighbors, and these other 
nations will not give their support unless diplomacy has been tried and 
been shown to have failed. A complete U.S. policy at this time should, 
therefore, logically consist of multiple plans being developed at the 
same time, with diplomacy implemented first and coercion (or strategic 
adjustment) resorted to, if and when diplomacy fails.
    The U.S. administration has been divided between proponents of 
diplomacy (Plan A or B1) and proponents of coercion (Plan B2)--with 
some apparently fatalistically resigned to making strategic adjustments 
to an Iranian bomb (Plan B3). These factions seem not to recognize that 
diplomacy and coercion need to be seen as a sequence unfolding over 
time, not a choice to be made at this time. This artificial division 
has paralyzed the U.S. administration.
    When should we move from diplomacy to coercion? What are the 
triggers for coercion? That is, at what point should the United States 
withdraw from talks and seek the same result it seeks from diplomacy--a 
nonnuclear Iran--through other means? Iran has already crossed a 
``redline'' of commencing enrichment with impunity. Participants 
discussed various triggers for a move to Plan B2:

--Commencement of ``large-scale'' enrichment,
--Withdrawal from the NPT and its inspection regime,
--Failure to suspend enrichment and begin direct talks after a 
    specified period of time,
--Failure of the talks to produce agreement after a specified period of 
    time, or
--Failure of Europe, Russia, and China to support sufficiently strong 
    action against Iran in the U.N. Security Council after the talks 
    have reached an impasse.

    Political pressure would be intended to isolate, downgrade, and 
expel Iran's Government from all manner of international fora and 
contacts, while simultaneously extending an open hand to the Iranian 
people. In theory, this pressure would either change the mind of the 
Iranian regime about nuclear weapons, or at the extreme, change the 
regime itself. On the one hand, the Iranian people seem currently to 
dislike their government and to be open to Western influence, which 
weighs in favor of the application of political pressure. On the other 
hand, Iranians have experienced one revolution in their recent history 
and don't relish another; and the nuclear program is broadly popular as 
a reflection of Iran's new role in the region and its proud Persian 
heritage. Workshop participants were accordingly uncertain whether 
political pressure would actually ``split the government from the 
people'' or, on the contrary, would provide a rallying point for the 
government.
    In the face of this fundamental uncertainty, the State Department's 
$85 million effort to promote democracy, aid Iranian dissidents, and 
provide Western information sources in Iran could either be helpful or 
backfire dangerously. And whether the effect of this program to 
undermine the mullahs is positive or negative, its magnitude is tiny in 
comparison to the $55 billion being paid by world consumers of oil at 
high prices into the coffers of the Iranian leadership in 2006.
    At the international level, possible measures to apply political 
pressure include reduction in bilateral diplomatic contacts, visa/
travel bans on Iranian officials and persons associated with the 
nuclear program, freezing of assets of these same categories of 
individuals, restriction of air travel in and out of Iran, withdrawal 
of support for Iran's WTO membership, and disqualification of Iranian 
teams from international sporting events.
    Economic pressure would have the same objective as political 
pressure--to change the regime or its mind dramatically by curtailing 
Iran's economic relations with the rest of the world and frustrating 
its people's wish for a better life. Iran's economic vulnerability is 
great: Unemployment is running at more than 12 percent (higher among 
the young, a million of whom compete each year for half that number of 
jobs when they come of workforce age), inflation is 13 percent, 
interest rates are 25-30 percent, 40 percent of the population is 
classified by international standards as living in poverty, and an 
estimated 6 percent of the population is addicted to heroin.
    The United States cannot by itself add much to Iran's economic 
pressures. Current U.S. law (the Iran-Libya Sanctions Act and other 
laws) essentially forbids trade and investment in Iran. The only 
exceptions are imports from Iran of nuts, caviar, carpets, and Iranian 
oil refined in third countries; and exports to Iran of agricultural and 
medical supplies (which are given interagency review). Iran may not 
receive U.S. loans or credit, or obtain assistance from multilateral 
development banks using U.S. contributions. U.S. law also penalizes 
foreign companies that invest in Iran's energy sector. The United 
States also continues to hold Iranian assets frozen since the 
revolution. In other words, the United States has long been doing 
almost everything it can do to pressure Iran's economy.
    Economic coercion must therefore be backed by Europe (which 
provides 40 percent of Iran's imports), Russia, China, and Japan to be 
effective. U.N. sanctions would encompass all nations trading with 
Iran. In theory other nations could impose blanket sanctions like the 
United States already has, but this is unlikely. Instead, the parties 
have discussed lesser measures like restrictions on trade with entities 
involved in the Iranian nuclear program or other selected sectors, an 
arms embargo, and an embargo on sales of refined oil products (Iran 
imports 33 percent of its gasoline). Probably the most consequential 
form of economic coercion would be a general freeze on the assets of 
Iranian financial institutions.
    An embargo on Iranian oil sales has not been threatened. A cutoff 
of Iranian oil exports would be a two-edged sword. On the one hand, 
Iran's production of 2.5 million barrels of oil per day exceeds the 
excess capacity of other suppliers, so stopping its exports would 
result in a global shortage of oil in the near term, with resultant 
price spike. On the other hand, Iran's oil earnings of $55 billion this 
year account for 85 percent of the country's exports and 65 percent of 
the government's income, so a cutoff would cripple the regime and the 
country's economy.
    According to workshop participants, economic pressure of the kinds 
foreseen in current negotiations would have two effects, an immediate 
psychological impact and a longer term economic impact. 
Psychologically, the Iranian people would immediately feel their future 
prospects constricted through the actions of their government in the 
matter of the nuclear program. But the actual economic effects of 
international sanctions would build more slowly--several years in the 
views of some workshop participants. Several years of delay would be 
too long if uranium enrichment were underway during this period. This 
difference between the timescale on which an Iranian bomb becomes 
inevitable and the time scale on which economic sanctions have their 
full effect suggests that economic pressure is an uncertain tool of a 
coercive policy.
    Military pressure has been much debated in public. The simplest 
concept is for the United States to mount air strikes on the known 
facilities that make up the Iranian nuclear power infrastructure: The 
centrifuge facility at Natanz, centrifuge production plants, uranium 
conversion facilities at Esfahan, heavy water reactor activities at 
Arak and elsewhere, the Bushehr power reactors, and other parts of the 
known program. (In addition, there would probably need to be some 
suppression of air defenses.) Obviously elements of the unknown, or 
covert, program could not be bombed or assaulted by special forces. 
Such unknown facilities probably exist; after all, facilities that are 
now ``known,'' like Natanz, were not known until 2001.
    Destroying the known program would be effective in delaying the 
Iranian bomb if the known program is on a faster track to the bomb than 
the unknown program. If, on the other hand, the unknown facilities are 
closer to producing fissile materials and bombs than the known 
facilities, eliminating the known facilities would not delay Iranian 
achievement of nuclear capability. Most workshop participants judged 
that the known program was ahead of, and not behind, the unknown 
program. Thus attacking the known facilities would delay an Iranian 
bomb.
    Delay, but not prevent. In the aftermath of the destruction of its 
known facilities, Iran would probably try to hide or deeply bury its 
entire program, throw out international inspectors, and press ahead at 
full speed. A single airstrike would, therefore, have an important 
delaying effect, but to continue to prevent Iran from obtaining the 
bomb, the United States would need to make repeated attacks whenever it 
discovered hidden facilities.
    How much time would a single attack buy? Suppose that the decision 
to break off talks and attack the known Iranian nuclear program was 
based on an intelligence assessment that after talks ended the Iranians 
would go full-bore at the known facilities and would have a bomb in 4 
years; that dragging out the doomed talks would only delay achievement 
of a bomb by an additional 2 years (for a total of 6); and that after 
destruction of the known facilities Iran could rebuild its nuclear 
program to its preattack status within 2 years in the absence of 
follow-on strikes. In this case, mounting a single airstrike would 
offer no advantage over prolonging talks--even with the knowledge that 
the talks would eventually fail. As another example, if rebuilding its 
facilities to the preattack level took Iran 4 years, the attack would 
result in a net delay of 2 years. In reality no such precision in 
intelligence is likely. Advocates of a single airstrike would still 
need to do the arithmetic on the benefit of such an isolated action. 
Unless the delaying effect of a single strike can be shown to be 
significant, repeated strikes over years would be required to keep 
pushing back the date when Iran could obtain the bomb. Even repeated 
strikes might prove ineffective if Iran buries, hides, disperses, and 
defends its rebuilt program. It is difficult to see how a single attack 
mounted on Natanz at this time, when the enrichment ``pilot plant'' is 
only beginning operation, could buy more than 3 or 4 years at most.
    The repercussions of a U.S. attack on Iran's known nuclear 
facilities under current circumstances would be severe. If military 
coercion were not preceded by a robust diplomacy that demonstrably 
failed through Iran's fault and not in any way U.S. fault, the United 
States will be isolated internationally. The Iranian people would 
likely rally behind their government in the aftermath of an attack on 
their country, whatever the U.S. justification or level of 
international support. Additionally, Iran could react in several ways:

--Direct retaliation against U.S. targets in the region (including 
    forces deployed in Iraq, Afghanistan, and elsewhere).
--Attack on Israel, directly via Iranian medium-range missiles like the 
    Shahab 3, or indirectly via shorter range rockets launched from 
    southern Lebanon.
--Terrorism via Hezbollah and other Iranian-trained groups that have 
    not targeted the United States directly in recent years.
--Interruption of Iranian oil supplies. This reaction would be a two-
    edged sword for Iran, however, as noted above.
--Interruption of gulf oil shipping. Iran's military could also attempt 
    to harass shipping with submarines, mines, small surface vessels, 
    and land-based antiship missiles.

    To deter retaliation, the United States would, therefore, need to 
withhold attack on some categories of targets not associated with the 
nuclear program (military and leadership headquarters and command and 
control, naval and missile facilities that could participate in 
retaliatory actions, etc.), threatening to attack them if Iran 
retaliated. An important escalatory step by the United States would be 
to destroy Iran's oil infrastructure, ending the regime's $55 billion 
revenue stream. Controlling escalation implies restricting the strikes 
in the first place: The most parsimonious approach would be to announce 
to Iran and its people that the strikes were strictly limited to the 
nuclear program (and needed air defense suppression), that the program 
and not the country as a whole was under attack, and that no further 
strikes would follow if Iran did not retaliate and the nuclear program 
did not reappear. On the other hand, having borne the risk of one 
strike, the United States should make clear its intention to return 
again and again whenever it found evidence of continuing nuclear 
activities.
    Some workshop participants noted the importance of targeting 
Iranian nuclear scientists as well as facilities, implying strikes 
during working hours or on residential complexes known to house such 
scientists. At Bushehr and other locations, Russian and other foreign 
workers would likely be victims of such strikes. Others suggested that 
the best time to attack Natanz would be several years from now, when 
more centrifuges were assembled and more could, therefore, be 
destroyed.
Plan B3: Strategic adjustments
    What if all else fails and Iran goes nuclear? In that case the 
United States will need to make profound adjustments to its security 
policy--adjustments that are truly strategic in scope. Like the specter 
of coercive actions by the United States, the specter of these 
strategic adjustments should be made visible to Iran, and also to 
Europe, Russia, China, and the entire Middle East since all will feel 
these adjustments.
    The strategic adjustments that will be needed if Iran goes nuclear 
follow from the three strategic problems an Iranian bomb will pose: 
Use, diversion, and possession.
    First, the possibility of Iran's use of the bomb against the United 
States, U.S. forces in the region, or its neighbors including Israel, 
poses a new and profound threat that must be countered.
    Second, diversion of Iran's bomb to other parties via direct 
transfer to terrorist groups like Hezbollah, black market sale by 
corrupt scientists like an Iranian A.Q. Khan, seizure by extremist 
factions of the Iranian Government, or loss of control in a new Iranian 
revolution are all eminently plausible and totally fearsome dangers.
    Third, possession of nukes will, as a simple fact, give Iran a 
shield behind which it will be emboldened to try to extend its sway in 
the Middle East, export extremism, and support terrorism. Iran's 
success in getting the bomb with impunity might also give encouragement 
to others seeking the bomb, and its possession of the bomb could compel 
its neighbors (Saudi Arabia, Egypt, Syria, even Iraq in the future) to 
conclude that they must have the bomb.
    Use. With respect to use, the United States and its friends will 
need to resort to the classic remedies of deterrence, defense, and 
counterforce.
    The United States has a strong deterrent in its general military 
supremacy and its strategic nuclear force. It could take the additional 
psychological step to strengthen deterrence of introducing tactical 
nuclear weapons into the region (on land in the form of bombs on 
tactical aircraft, if neighboring countries will permit; or at sea in 
the form of nuclear cruise missiles on submarines and bombs on carrier-
based aircraft). It can extend deterrence by promising Israel and Sunni 
Arab States threatened by the Iranian bomb that the United States will 
protect them from attack.
    Defense against most forms of delivery of an Iranian bomb is a 
daunting task, but against long-range intercontinental ballistic 
missile (ICBM) delivery the United States can add missile defense 
interceptor sites in Eastern Europe (which lies along the great circle 
flight trajectory from Iran to U.S. targets) to those it already has 
deployed in California and Alaska to protect against North Korean 
missile attack. Within the region, sea-based short-range missile 
defenses could be deployed, although the geography of the region does 
not lend itself to effective protection from such defenses.
    Counterforce means programming U.S. ICBMs and submarine-launched 
ballistic missiles (SLBMs) to be capable of attacking known Iranian 
nuclear forces promptly if attack by them appears imminent.
    Diversion. Against the threat of diversion of an Iranian bomb to 
terrorists, extremist factions, or an even more radical government than 
the current one, there is little protection. Constant surveillance and 
interdiction where possible would be necessary but not likely to be 
effective. Iran should be made aware, however, that if radiochemical 
forensic evidence proves that its arsenal was the source of an attack 
on the United States or American interests, the United States will 
retaliate directly against Iran.
    Possession. The adverse repercussions of Iranian possession of the 
bomb--even if it doesn't use it or divert it to others--are profound 
and difficult to counter. Much depends on the character of the Iranian 
regime that possesses the bomb. At one extreme, success with its 
nuclear program might herald the triumph of extremism in Iran, 
strengthening the hand of hard-liners and even ushering in regimes that 
are worse. At the other extreme, a moderate successor regime intent on 
integration with the rest of the world might not brandish its arsenal 
threateningly nor inspire concern in its neighbors--or in the United 
States. But assuming the regime that got the bomb was more or less like 
the ones that have led Iran since the revolution, one should expect 
Iranian-Shiite assertiveness, greater scope for state-supported 
terrorism, more anti-Israeli activity, and periodic oil price shocks. 
Against this onslaught the United States will need to try to forge a 
counterweight among Sunni countries, who will need in turn to choose 
between appeasement and alignment with Washington. U.S. forces 
associated with such a policy of encirclement and containment of Iran 
could be ``over the horizon'' or based in the gulf (including in Iraq 
on a continuing basis).
    The nonproliferation regime will suffer a serious setback if the 
once ``unacceptable'' Iranian bomb is, in fact, accepted. Israel will 
probably abandon its practice of nuclear ``ambiguity'' and openly 
brandish its arsenal as a deterrent. Egypt, Turkey, and Saudi Arabia 
(the latter perhaps aided by Pakistan) will feel the pressure to match 
the Shiite bomb in Iran with another Sunni bomb. Any chance of avoiding 
such a domino effect of proliferation would lie in a strong U.S.-led 
encirclement and containment.

                               CONCLUSION

    The Preventive Defense Project is committed to seeking solutions to 
national and international security problems before they can grow into 
A-List threats. The Iranian nuclear program is certainly one of the 
era's greatest challenges to Preventive Defense. While it is, 
therefore, important to analyze the full range of alternatives to 
diplomacy to prevent an Iranian nuclear breakout or adjust to the 
reality of a nuclear-armed Iran--as our workshop and this report do--it 
would be premature for U.S. policy to move to alternative plans. 
Diplomacy with Iran over its nuclear program has been slow and fitful, 
its results meager, and its prospects for ultimate success arguable. 
But there is time. Iran is years away from producing its first uranium 
bomb. These conditions are very different from the case of North Korea, 
which is actively producing nuclear weapons and delivery systems. 
Additionally, the U.S. Government has only recently decided to move 
from the background to the forefront of the diplomatic stage. Unless 
and until the diplomatic path has been exhausted, alternatives to 
diplomacy to stop the Iranian nuclear program should not be attempted, 
and are unlikely to succeed. Time is available, but this time is only 
valuable if the United States uses it effectively.

    The Chairman. Thank you very much, Mr. Carter.
    Ambassador Indyk.

 STATEMENT OF HON. MARTIN S. INDYK, DIRECTOR, THE SABAN CENTER 
FOR MIDDLE EAST POLICY, THE BROOKINGS INSTITUTION, WASHINGTON, 
                               DC

    Mr. Indyk. I will try to summarize it very quickly.
    Mr. Chairman, you pointed out that I had tried to deal with 
the Iranian issues when I was Assistant Secretary of State for 
Near East Affairs in the Clinton administration. There were two 
lessons that I drew from that experience that I'll reference 
now, and a third later. The first is that I agree with you 
completely on the point that you made in your opening remarks, 
that multilateral sanctions are the way to go if we're going to 
use sanctions, unilateral sanctions are very destructive of any 
effective effort. In the ILSO legislation that we had to deal 
with in those days, it was proof in point that it divided us 
from our allies, as you pointed out.
    The second point is that we did try to engage with the 
Government of Iran during the Clinton years. And it's not true 
as Secretary Burns mentioned--and as newspapers from the New 
York Times to the Washington Post on, continue to assert--that 
the United States, since the revolution, has never offered to 
negotiate with Iran. It has, in fact, been the policy of 
Republican and Democratic administrations before this 
administration that we would negotiate with the Government of 
Iran, provided that they understood that we were going to put 
on the table all of the issues that were of concern to us--
which included, the sponsorship of terrorism, pursuit of 
weapons of mass destruction, and opposition to the Middle East 
Peace Process. That was true in the previous Bush 
administration, and it was certainly true in the Clinton 
administration.
    What was also true is that the Iranians would not talk to 
us, so the shoe was on the other foot. But the experience in 
the Clinton administration when President Khatami--a clear 
moderate and reformer, had been elected with a large mandate--
was that, nevertheless, we were unable to achieve any form of 
negotiation with that government. And that leads me to be quite 
pessimistic about the chances that we will succeed in the 
effort to try to negotiate a way out of this nuclear situation, 
with the current regime in Iran.
    I want to run through, quickly, the reasons for that 
pessimism. Some have been mentioned already. First, and I think 
most important, is Iran has a very strong incentive--whether 
you're a radical President or the realist nuclear negotiator--
both of them, as Ray Takeyh has pointed out, and a very strong 
desire to acquire nuclear weapons. Either for security reasons 
or reasons of prestige, or for the furthering of their regional 
ambitions. And so, it's going to be extremely difficult to head 
them off from that.
    Second, distrust permeates the relationship between the 
United States and Iran. They think that the United States wants 
to overthrow them--they have good reason to feel that way. We 
think they want to dominate the region, subvert our friends, 
block the Middle East peace process, promote terrorism and 
destroy Israel, and we have good reason to believe that that's 
their intention.
    And on top of that, as Secretary Burns pointed out, we 
don't have a feel for them, because we haven't dealt with them 
for 27 years, and they don't have a feel for us for the same 
reason. So, our ability to actually overcome this distrust and 
find a way to communicate is going to be very problematic.
    I'm sure you noted that Secretary Burns underscored that 
Secretary Rice has indicated that she's prepared to sit at the 
table with the Iranians. I think that's an interesting idea, 
but the idea that we should have direct bilateral engagement 
with the Iranians if we actually get to the table is going to 
be critical in terms of overcoming this distrust. In other 
words, rather than a multilateral format, I think it's very 
important that we shrink that down to a bilateral engagement.
    The third reason for pessimism lies with dysfunctionalism 
on their side, and impatience on our side. We've seen in the 3 
months that it took to respond, and the response that actually 
came that there was a good deal of confusion and conflict 
within their own system. Larijani, their negotiator, has 
suggested that perhaps they suspend enrichment for 2 months. 
That's now being repudiated by Ahmadinejad's spokesman. And so 
we have to understand that things don't function very well on 
their side, and it's going to be very hard to establish what 
the real position is on our side. I think there are many within 
the administration, and within its supporters--particularly in 
the neoconservative camp--that see the whole idea of 
negotiations as a real trap for us, opening up the possibility 
of the Iranians dragging out the engagement process so as to 
further their nuclear ambitions under the cover of 
negotiations.
    And then there is the simple problem that we also 
confronted in previous efforts: We seem to be ships passing in 
the night. When they're ready, we're not. When we're ready, 
they're not. And in this particular case, given the sense that 
they feel that the wind is at their backs, that they are on a 
roll and that we are short of breath in the Middle East, their 
willingness to compromise on the critical demands that affect 
their national security and their concept of their role in the 
region has gone down considerably because of those 
circumstances.
    And finally, there's the question of whether there is an 
acceptable outcome to these negotiations. Beyond the question 
of whether they would really be prepared to give up anything, 
is the question of what they will demand in return. We talk 
about economic incentives--what they're talking about is 
getting the United States to recognize their regional hegemony. 
And that is something that I don't believe we could agree to, 
and even if we do, I don't think that our regional allies would 
accept it, to be under the domination of Iran. And, therefore, 
if we actually get down to negotiations themselves, I think 
it's highly problematic as to whether we could find some common 
ground here. The simple assumption that, ``Oh, we'll buy them 
off'' is one that I would caution you against.
    That said, I do think that it's extremely important that we 
give it our best shot. I think that Secretary of State Rice and 
Under Secretary Burns deserve a good deal of praise for their 
perseverance and their patience with this effort, but we are 
playing a weak hand in this situation. Threatening sanctions 
that our allies don't really want to go along with, putting 
ourselves in a situation where the hint of negotiations seems 
to be enough for many of our allies to talk about jumping ship 
from this agreed strategy means that, I think, it's going to be 
very difficult to hold them together as well and maintain our 
position of leverage over them.
    Finally, I would just like to point out that, having said 
all of that, I do think that there is a broader strategic 
opportunity that emerges from the recent war in Lebanon that we 
should not ignore as we go forward in this effort to engage the 
Iranians. As I said before, one of the problems is that they 
feel that they are now on a roll in the region, and what that 
has done is produce a reaction which I think we can develop. 
The reaction comes from the Sunni-Arab leaders in the region 
who fear Iranian dominance now, and there is potential in the 
threat that they perceive, and the threat that Israel 
perceives, for these Sunni-Arab leaders to come together and 
work with Israel in an arena that we pay very little attention 
to when we focus on Iran, but it affects Iran's calculations. 
If we can make progress in the Arab-Israeli arena and build a 
virtual alliance of interests with our allies there, we will 
find ourselves in a better position to pressure and deal with 
Iran. This is not a simplistic argument that--if you solve the 
Palestinian problem, everything else will follow. But it is to 
point out that everything in the Middle East is connected, and 
as the Iranians become more dominant, that sets up a reaction--
an equal and opposite reaction--amongst the Arab countries 
there that we can use to increase our leverage on Iran. And 
that's the final lesson of the Clinton years: When we were 
making great progress in the Arab-Israeli arena, the Iranians 
were isolated, and felt much more pressured to take our 
interests into account.
    Thank you.
    [The prepared statement of Ambassador Indyk follows:]

Prepared Statement of Hon. Martin Indyk, Director, The Saban Center for 
     Middle East Policy, The Brookings Institution, Washington, DC

    Mr. Chairman, distinguished members of the Senate Foreign Relations 
Committee, thank you for the opportunity to address you on what is 
probably the most vexing and complicated diplomatic challenge that the 
United States currently confronts. The stakes could hardly be higher. 
If the United States fails to achieve a diplomatic outcome that 
provides the international community with sufficient confidence that 
Iran is no longer pursuing a nuclear weapons capability, the results 
are likely to be dire. In the already volatile Middle East, the logical 
consequences of diplomatic failure are either an extended military 
conflict or a nuclear arms race, or both.
    Secretary of State Rice's offer to engage in direct negotiations 
with the Government of Iran, if it suspends uranium enrichment, and 
recent hints from chief negotiator Ali Larijani that Iran might be 
prepared to do so, create a faint ray of hope for diplomacy. But I fear 
that it is an illusion.
    The reasons for pessimism are clear enough by now:

   Notwithstanding protestations to the contrary, the Iranian 
        regime has a clear and intense interest in acquiring nuclear 
        weapons. Nuclear powers are located to its north, east, and 
        west, and the U.S. military is positioned on all its land and 
        sea borders. The lesson of the Iraqi and North Korean 
        experience is that countries that pursue antagonistic policies 
        toward the United States are much less likely to face military 
        intervention if they possess nuclear weapons. Moreover, Iran's 
        hegemonic ambitions in the Persian Gulf and wider Middle East 
        fuel a desire to possess the ultimate weapon. At a minimum, 
        this leads the Iranian regime to want to keep the door open to 
        a nuclear capability and maintain ambiguity about its nuclear 
        program.
   The Iranian regime is highly mistrustful of Western 
        especially U.S. intentions, even though it has earned American 
        antagonism by casting the United States as the ``Great Satan'' 
        and by using hostage-taking, terrorism, and subversion as its 
        stock-in-trade. The Bush administration's declared policy of 
        regime change and preventive war against state sponsors of 
        terrorism that pursue WMD has exacerbated this mistrust. 
        Reports of U.S. covert and overt programs to undermine the 
        Iranian regime only heighten the paranoia of an already 
        insecure Iranian leadership. Although this leadership has 
        expressed a desire for negotiations with Washington, the 
        abiding mistrust of the United States also breeds a 
        schizophrenia: Parts of the leadership view negotiations as a 
        trap designed, at best, to rob them of their minimum objective 
        of nuclear ambiguity; at worst, to justify sanctions or a 
        military strike on Iran.
   This concern adds to the dysfunctionalism of the Iranian 
        decisionmaking process. Advocates of negotiations with the 
        United States within the highly fractionated Iranian power 
        structure run the risk of being accused of jeopardizing the 
        revolution or the national interest. President Ahmadinejad's 
        confrontational approach has paid dividends both domestically 
        and in the wider Arab and Muslim arenas, marginalizing those 
        who advocate a diplomatic compromise. In this environment, 
        Larijani clearly feels capable only of inching forward. The 
        confusing and rambling Iranian response to the P5+1 offer of a 
        negotiating package underscores just how difficult it will be 
        to achieve clarity or consistency in the Iranian position.
   Added to this is the danger of Iranian miscalculation borne 
        of a cockiness that manifests itself in the outrageous behavior 
        of President Ahmadinejad. After a decade of being on the 
        defensive, the regime now feels that its moment has arrived--a 
        product of American success in toppling the Saddam Hussein and 
        Taliban regimes in neighboring Iraq and Afghanistan while 
        failing to consolidate its position in either country. 
        Ahmadinejad, in particular, senses that the United States is 
        out of breath in the Middle East while his message of defiance 
        and ``resistance'' is met with growing support across a 
        normally adversarial Arab world. This sense that the wind is at 
        Iran's back in the region, coupled with the fact that the 
        regime has paid no discernible price for proceeding with its 
        nuclear program despite international criticism, reduces its 
        need or interest in a compromise solution.
   Further complicating any negotiation will be the Iranian 
        penchant for engaging in bazaar tactics, asking an astronomical 
        price for faulty goods, and dragging out the negotiations to 
        wear down the naive Americans.
   In the final analysis, there is also good reason to doubt 
        even the possibility of bridging the gap between Iran's 
        ambitions and American interests. For even if Iran were to 
        forego its nuclear weapons ambitions for economic incentives 
        and nuclear power guarantees, it would still demand U.S. 
        recognition of its regional hegemony, which we cannot do 
        without betraying our Israeli and Arab allies (and which they 
        will not abide in any case).

    On the U.S. side of this putative negotiation, reasons for 
pessimism also abound:

   Within the Bush administration and among its more strident 
        supporters, negotiations tend to be viewed with deep suspicion 
        too. Many fear that the Iranians are engaged in a game of 
        ``rope-a-dope,'' absorbing our best efforts to stop their 
        nuclear program while buying time to get themselves over the 
        nuclear know-how threshold. For these people, many of them in 
        influential positions, the offer of negotiations is a necessary 
        evil to demonstrate that the United States has exhausted 
        diplomacy before it resorts to a military strike on Iran's 
        nuclear facilities.
   The U.S. hand in these negotiations is weak. Sanctions 
        leverage is reduced by the lack of unity and resolve on the 
        part of our allies in the endeavor. Russia and China have made 
        it clear that they are reluctant to impose any kind of 
        sanctions, let alone meaningful ones. Even the minimal 
        sanctions on nuclear trade and travel that U.S. diplomats are 
        now promoting are unlikely to be supported by Moscow and 
        Beijing. (There is a suspicion that China may have already told 
        Iran that it will block these sanctions and Russia has made 
        clear it will insist on an exception for its completion of 
        Iran's Bushehr nuclear reactor.)
   Although the Europeans talk a good game about applying 
        sanctions even without a UNSC resolution, their behavior raises 
        serious doubts. UNSC Resolution 1696 specified that if Iran did 
        not suspend uranium enrichment by August 31, sanctions would be 
        imposed. Yet our allies are now clinging to a confusing and 
        ambiguous Iranian response to avoid living up to the commitment 
        they made. What was supposed to be a clear choice for Iran 
        between suspending enrichment by a date certain and sanctions 
        has now morphed into negotiations about suspending enrichment 
        instead of sanctions. The Iranians have surely concluded that 
        if they play the game right, they can divide the United States 
        from its partners. By holding out the prospect of negotiations 
        while never actually seriously engaging in them, it looks 
        likely that Iran may both continue enrichment while avoiding 
        sanctions. This will strain U.S. diplomacy, leaving the Bush 
        administration with the invidious choice of wielding the bigger 
        stick of a military threat or offering bigger carrots that will 
        not be domestically sustainable.
   European solidarity with the United States has also been 
        weakened by developments in Lebanon. Ironically, the insertion 
        of French and Italian troops in a revamped UNIFIL force has 
        rendered them vulnerable to attacks by Iran's Hezbollah proxy. 
        This will make the Europeans hesitant to press Iran either 
        through imposing sanctions or in the negotiations that EU High 
        Representative Javier Solana is conducting with Iran's 
        Larijani, for fear that Iran will retaliate by unleashing 
        Hezbollah in southern Lebanon.
   Beyond all that, almost 30 years have passed since the 
        United States had official contact with the Government of Iran. 
        Consequently, the United States has very limited understanding 
        of Iran and apparently even less knowledge of what is actually 
        going on in its nuclear program or its decisionmaking 
        processes. Without a direct feel for the dynamics in Teheran, 
        it becomes extremely difficult to calibrate U.S. diplomatic 
        initiatives or responses. And with the accumulated mutual 
        mistrust, it will be difficult to build confidence between the 
        negotiators should direct talks ever get under way.

    Nevertheless, because sanctions are likely to be ineffective, and 
military strikes are likely to generate costly retaliation, it is still 
essential to try for a diplomatic way out of the current crisis.\1\ 
Moreover, there is still time to give diplomacy a chance: The Israeli 
official estimate is that it will take a year for Iran to cross the 
nuclear know-how threshold. Now that the Iranians appear to be 
experiencing difficulty running their enrichment cascades that deadline 
will likely be extended again. The intelligence communities seem to 
agree that Iran is still 5 years from actually developing a nuclear 
weapon.
---------------------------------------------------------------------------
    \1\ Iran has a number of options that it can implement to retaliate 
for U.S. or Israeli military strikes on its nuclear facilities: Strike 
shipping in the Straits of Hormus, forcing the price of oil to 
skyrocket; unleash attacks on U.S. forces by its surrogates in Iraq; 
use Hezbollah to topple the Lebanese Government or launch strikes on 
Israel; encourage its Palestinian proxies (Palestine Islamic Jihad, the 
Hezbollah-financed Al-Aqsa brigades and the Damascus-controlled Hamas 
militants) to destroy the nascent Palestinian national unity government 
and attack Israel; and trigger terror attacks on U.S. and Jewish 
civilian targets across the globe.
---------------------------------------------------------------------------
    Secretary of State Rice and her team of diplomats deserve praise 
for their patience in herding the international community's sheep and 
their perseverance in overcoming administration opponents of diplomatic 
engagement with Iran. If Iran indeed agrees to suspend its enrichment 
program, then the first step of direct engagement can be achieved. It 
will be important for the American negotiators then to find discrete 
ways to engage bilaterally with their Iranian counterparts. In this 
way, it will be possible to begin to explore the outlines of a package 
deal. The Iranians will clearly insist on acknowledgement of their 
right to enrich uranium. It would be preferable for this to be handled 
through access to internationally controlled facilities outside Iran. 
But it may be necessary to explore international monitoring of Iran's 
enrichment facilities inside Iran to ensure that the process produces 
only limited quantities of nuclear fuel rather than larger quantities 
of nuclear weapons-grade material.
    Beyond the structure of the nuclear deal, however, there are two 
components that should now be added to Rice's diplomatic strategy, one 
that might improve her leverage with Iran, the other that will help to 
provide a safety net should the diplomatic option fail.
    We found during the Clinton administration that when the United 
States was promoting effective policies in dealing with other regional 
challenges--in particular Iraq and the Arab-Israeli conflict--it was 
easier to contain and pressure Iran. Indeed, it is no coincidence that 
Teheran sought to negotiate a ``grand bargain'' with the Bush 
administration in the immediate aftermath of the toppling of Saddam 
Hussein's regime (an offer that the Bush administration spurned at the 
time).
    Although the Bush administration's inability to make progress in 
Iraq makes this approach more difficult now, the recent Israeli-
Lebanese conflict may have opened up an opportunity to improve our 
leverage on Iran in the Arab-Israeli arena. That conflict highlighted a 
concern that Sunni Arab leaders across the region were already 
expressing about Iranian interference in Arab affairs. Egypt's 
President Mubarak, Saudi Arabia's King Abdullah, Jordan's King 
Abdullah, Palestinian President Mahmoud Abbas, and Lebanese Prime 
Minister Fouad Siniora all feel threatened by an Iranian-Syrian-
Hezbollah axis that is challenging their efforts to stabilize the Arab-
Israeli conflict. This common concern may even extend to Hamas Prime 
Minister Ismail Haniyah who finds his efforts to establish a viable 
government undermined by Palestinian militants under the influence of 
Teheran, Damascus, and Hezbollah.\2\
---------------------------------------------------------------------------
    \2\ Although Haniyah has promoted the idea of an informal cease-
fire with Israel (the tahdiyeh), Hamas militants under the direction of 
Damascus-based Khaled Mashal, Al-Aqsa militants in the pay of 
Hezbollah, and Palestine Islamic Jihad militants who take their 
instructions from Teheran, continue to attack Israel.
---------------------------------------------------------------------------
    If American diplomacy can turn this Arab fear of Iran into a common 
interest with Israel in developing sustainable cease-fires and interim 
agreements on the Lebanese and Palestinian fronts, the Iranian 
``moment'' in the Middle East may prove to be short-lived. But this 
will require the kind of sustained American diplomatic engagement in 
the Arab-Israeli arena that members of this distinguished committee 
have long called for. With it, the problems that Iran is exploiting in 
the Arab-Israeli arena will diminish and the Arabs and Europeans will 
feel more confident about standing up to Teheran in any diplomatic 
engagement. Without it, the United States will likely find itself more 
isolated in its efforts to deal with Teheran's nuclear ambitions and 
Iran's hegemonic ambitions may grow.
    The second approach goes hand in hand with a more active and 
effective Arab-Israeli diplomacy. It would focus on laying the 
foundations for a security structure that would help Israel and the 
Sunni Arab leaders of Egypt, Jordan, and the GCC prepare for the 
potential emergence of Iranian nuclear weapons, or cope with the 
ambiguity of Iran's nuclear intentions. Indeed, the common threat that 
Israel and these Arab States face from a nuclear Iran creates a 
potential tacit alliance (whose glue could be progress on resolving 
Arab-Israeli issues).
    The United States should actively consider the idea of extending a 
``nuclear umbrella'' to these states should diplomacy fail to divert 
Iran's nuclear ambitions. At the appropriate time, such an American 
nuclear guarantee would go a long way toward bolstering their ability 
to deter an emerging Iranian nuclear threat. Whether, in the end, an 
Iranian regime with nuclear weapons is actually deterrable will be 
hotly debated. But an American nuclear guarantee cannot hurt. At a 
minimum, it would reduce the need for these Arab States to seek their 
own nuclear weapons, reducing the potential for a Middle East nuclear 
arms race. It might also reduce Israel's need to take its bomb out of 
the basement or pursue a preemptive military strategy that could short-
circuit American diplomatic efforts to end Iran's nuclear program.\3\
---------------------------------------------------------------------------
    \3\ Israel's Prime Minister Ehud Barak sought such a nuclear 
guarantee from President Clinton during the Camp David negotiations. 
See Bruce Riedel.
---------------------------------------------------------------------------
    Mr. Chairman, as you and members of the Senate Foreign Relations 
Committee know very well, in the Middle East everything is connected. 
For U.S. diplomacy to succeed in attenuating Iran's nuclear ambitions, 
a comprehensive strategy is
needed, one that weds patience and creativity in the effort to secure a 
freeze on Iran's enrichment program with a sustained effort to build 
the case for sanctions if the freeze does not eventuate. But the effort 
will surely fall short if it is not also combined with a broader effort 
to encourage a community of interests between Israel, the Arab States, 
and the EU in a more stable, peaceful, and secure Middle East.
    Thank you.

    The Chairman. Well, thank you very much, Ambassador Indyk.
    Let me just say that, procedurally now, we are about 3 or 4 
minutes away from a rollcall vote. What I would like to 
suggest, if he's amenable, is that Senator Hagel might chair 
the committee and raise his questions, and then recognize 
Senator Biden, because he will probably return. Absent Senator 
Biden, recognize Senator Dodd. And I will be back to try to 
conclude the hearing and raise my questions at that point. So, 
if you will proceed, Senator Hagel, I would appreciate it, and 
perhaps we should adopt a 5-minute rule, for questions for 
these witnesses.
    Senator Hagel [presiding]. That's a risky proposition, 
leaving me in charge, but we will proceed in spite of that. It 
will not be voted on. Thank you, Senator Dodd. Gentlemen, thank 
you. You have made significant contributions as you have done 
over the years to--not just this issue--but to others as well, 
and we appreciate it, very much.
    I would like to pose this question to each of you. You all 
touched upon the sanctions issue and examined it with some 
clarity. If I would have had another opportunity to address 
Secretary Burns in response to a question that Senator Obama 
asked--if you recall, at the end of his testimony at the 
question and answer period--he went into some detail about the 
graduated sanction regime and I think he said it would not 
include oil and gas in the first try at that regime, but if I 
recall correctly, he said it would involve exchange programs, 
specifically, I think he mentioned professorships at MIT. I 
mean, nothing personal, Secretary Carter, but he used MIT as I 
recall.
    What struck me about that was--at least I thought--was a 
bit of an inconsistentcy when on one hand, Secretary Burns was 
talking earlier about great strides in progress we were making 
on the diplomatic exchange front, and he spoke specifically 
about education exchanges, students, and professorships. But 
yet, that would be included--according to the Secretary--in the 
first round of sanctions.
    I'd like each of you to respond to that because, again, 
it's a bit unfair for Secretary Burns because he's not here and 
I didn't have a chance to follow up. But I'm puzzled by that, 
at least again, my perception of an inconsistency there. You 
can have it--I don't believe--both ways, especially if we're 
trying to develop some trust and confidence among our allies, 
and if we are trying to lay down--if, in fact, that's the point 
here--a legitimacy for some engagement, finding some forum for 
that engagement. So, I would appreciate each of you responding 
to that, and any other element of Secretary Burns' testimony 
and his responses to those questions, specifically on 
sanctions.
    Ray, we'll begin with you, thank you.
    Dr. Takeyh. The congruity of having exchange programs while 
imposing a travel ban, I think that's what we're talking about. 
I don't know how that works. You know, I can't explain that 
contradiction, other than acknowledging it.
    In terms of having the United Nations being used, and the 
Security Council as a venue for progressively more coercive 
sanctions on Iran--I think that's far-fetched. It wasn't so 
much what the French President said, is on that very day France 
signed a $2.7 billion oil and gas deal with Iran. On the day 
that you begin the discussion of sanctions. And throughout the 
EU3 negotiations with Iran, the French were among the more 
resolute--it was the Germans that were suspect of actually not 
wanting the resolution of coercion of Iran. So, there's a lot 
of reasons to believe that international solidarity--in terms 
of imposition of rigorous multilateral sanctions on Iran--is a 
nonexistent one. Nonexistent among our allies, and certainly I 
would say the same thing about the Chinese and the Russians.
    So, the idea of having escalating coercive measures enacted 
to the United Nations is far-fetched. Now whether exchange 
programs are going to be suspended or not, that's neither here 
nor there. Some of the measures that are contemplated that can 
be enacted are not necessarily punitive, you know, travel ban 
on Iranian officials dealing with the nuclear issue--that's 
about four people. And whether that's going to be adhered to, 
I'm not sure.
    Prohibition of cooperation between international, between 
other countries and Iran's nuclear industry--that's every bank 
in Russia. And frankly, the Treasury Department did have that 
provision before, it just never enacted it because it knew that 
it would be difficult to enforce. So these measures are, in my 
judgment, are not likely to succeed.
    Senator Hagel. Thank you.
    Ash.
    Mr. Carter. Senator, I can only put the following 
interpretation on what Under Secretary Burns said, because I 
agree with you that getting an education in the United States 
is an aspiration of many Iranians. It is in our long-term 
interest to satisfy that appetite, for them to come here and 
study and take back what they see and learn. And I believe the 
restrictions referred to by Secretary Burns are on engineering 
education that could result in the kind of training that would 
provide assistance to the nuclear program. That would be hived 
off from other forms of educational exchange.
    On the general question of sanctions, I'll just note 
something that people frequently ask me, and members of the 
committee surely know full well, which is that the most 
effective sanction, theoretically against Iran, of course would 
be to refuse to buy their oil. Which is $55 billion in 2006 and 
certainly bonds the government to its people, because that $55 
billion is, I think, 85 percent of Iran's exports, and it is 65 
percent of the federal government's budget in Iran. So, it 
would absolutely cripple Iran.
    On the other hand, Iran's production, which is 2.5 million 
barrels a day, exceeds the slack in the international 
production system. So, interrupting Iranian supply, that supply 
could not easily be made up by--even with effort--by Saudi 
Arabia and other suppliers that have some excess supply, and so 
there would be a price spike, and so this falls in the category 
of a sort of mutually assured destruction. It would certainly 
destroy the Iranian regime, but it would have repercussions in 
the rest of the world as well, and that's why one takes that 
off the table and cascades down to these much lesser measures 
which, as Ray suggests, aren't--short of comprehensive 
sanctions imposed, especially by Japan and Europe--likely to 
have much effect on the Iranian people, and, therefore, on its 
government.
    Senator Hagel. Thank you.
    Martin.
    Mr. Indyk. Well, Senator Hagel, I think you really put your 
finger on a larger problem, which is the contradiction in the 
administration's approach when it comes to sanctions, because 
there is a belief--I think a justified belief--that the Iranian 
people are actually friendly toward the United States, much 
friendlier than many others in the Muslim world these days, and 
that we want to try to reach out to them. President Bush 
broadcast this message through an interview with David Ignatius 
which was published in the Washington Post.
    But on the other hand, we want to punish the regime. But 
how do we punish the regime and still reach out to the people? 
Because sanctions are going to affect the people, and so 
sanctions don't work very well, so we talk about targeted 
sanctions--you remember the administration started off with 
targeted sanctions toward Iraq, and that didn't get anywhere, 
either. What we discovered in the case of sanctions in Iraq was 
that they hurt the people a great deal, in fact, a great deal 
more than we had understood, and didn't hurt the regime that 
much at all. And so you try to find targeted sanctions, and you 
end up with these kinds of contradictions and tensions.
    Of course, Ray didn't mention, but when you focus on 
nuclear sanctions, it's not just the Russian banks that are 
going to want an exception, but the Russian Government is not 
going to want to affect the Bushehr Reactor, which they're 
building. So, even in the case of these targeted sanctions 
you're going to have a problem, because, as I understand it, 
the Russians are asking for an exception, in the case of 
Bushehr, which then guts that particular sanction. And it goes 
to the broader problem that sanctions are really not an 
effective weapon to achieve this objective.
    What is effective, what I do think managed to concentrate 
the minds of the Iranians, was the way in which the 
administration very effectively managed to concert 
international opinion against Iran's nuclear program. And it's 
that isolation of Iran that is, I think, the key. And the 
problem when you get into sanctions is that you tend to divide 
your coalition, and the Iranians are able to play on this 
divide. So, I really think that that's the key that your 
question is addressing: How do we find a way to isolate Iran, 
politically and diplomatically, while not allowing them to 
divide us from our allies?
    Senator Hagel. Thank you.
    Senator Biden.
    Senator Biden. Do you both agree with that last statement? 
That the most effective thing is to isolate them 
diplomatically, and that almost any configuration of sanctions 
is likely to split that consensus to isolate diplomatically? 
Did I accurately----
    Dr. Takeyh. I think we're all in agreement that there is 
sort of a sanctions regime that is contemplated. For it to be 
effective multilateral is unlikely to be enacted through the 
United Nations, because of the divisions and so forth.
    Whether Iran can be diplomatically isolated; I suspect it 
can be, from the Western Block. But increasingly, the Iranian 
leadership are talking about an Eastern orientation. Namely, 
having a relationship with countries where the human rights 
records and proliferation tendencies are not that bothersome--
the Chinese, the Russians--and those who, that they have a 
commercial relationship with, particularly in the oil and gas 
industry.
    Can Iran be isolated regionally? Well, not long ago, the 
Deputy National Security Advisor of Iraq went to Iran and said 
there is absolutely no evidence that Iran is interfering in 
that country.
    And the last July resolution, when 15 Security Council 
members voted against Iran, Qatar was not one of them. 
Ahmadinejad is very popular on the Arab street, Martin is 
absolutely right--there's concerns and palaces and Ministries, 
but that doesn't read down to the street. And even in 
nonrepresentative regimes, public opinion counts as you saw in 
the case of Lebanon when, initially, Egypt and Saudi Arabian 
officials came out in criticism of Israel, they quickly 
retreated when the popularity of Hezbollah became known.
    Iran today is the second-most important country in 
Afghanistan, the second-most important country in Iraq--perhaps 
destined to be the most important in each. It has, the Gulf 
Cooperation Council is not likely to congeal against Iran, that 
is not its temperament, that is not its behavior. It has 
relationship with Syria of long standing, and it is 
increasingly becoming an important player, even more important 
in the emerging Lebanese civil war.
    So, can a diplomatic arrangement be made to isolate Iran? I 
think privately most Arab officials would complain about Iran's 
behavior, just because they board the plane to Iran and shake 
hands with the Iranian officials. I don't see diplomatic 
isolation within the region, I think it's possible to sever 
Iran, to some extent, from Western Europe, in terms of 
diplomatic presence, but not necessarily from the Eastern bloc 
that Iran is beginning to appeal to, and not necessarily about 
the nonaligned community, which actually is supporting Iran's 
stance as a country that has nuclear rights within the confines 
of the MPT and the traditional north-south talks.
    Senator Biden. Thank you.
    Ash.
    Mr. Carter. I just, very briefly, I agree with your 
contention, Senator Biden, with my two colleagues. There is a 
sense, however, and I noted this earlier, in which economic 
sanctions have a political effect. They do express universal or 
some degree of consensus. And, as I mentioned earlier, the 
experts on sanctions will tell you that the political effects 
kick in immediately, and the economic effects actually kick in 
over a long period of time, so sanctions do have a political 
effect.
    The other thing I would say is I completely----
    Senator Biden. Excuse me, I'm not asking whether they have 
a political effect; I'm asking whether or not it's possible to 
get the sanctions. In other words, this notion was we 
diplomatically isolate, but there's a degree to which we seek 
sanctions that are not unilateral that splits that diplomatic 
consensus.
    Mr. Carter. I'm sorry, then, that I also agree with the 
sanctions we can get will not be effective, and the sanctions 
you can imagine being effective, we will not get.
    Ray is absolutely right, the expression Martin used was 
``Iran's on a roll'' and I think we all recognize that. We're 
looking in a kind of fun-house mirror in the Middle East at the 
moment, and places that are smaller than they really are, look 
bigger at the moment, and I think Iran's bubble is destined 
to--I don't know, burst--but certainly reduce in size. There 
are fundamental things that go against the Iranian Government. 
The people are uncertain about its ability to deliver what they 
want. The rest of the region might be in appeasement mode at 
the moment, but fundamentally they're looking for an 
opportunity to put Iran back where it belongs, so these are 
things that--over time--will play out in our favor. And that's 
one of the reasons why I said that the moment isn't quite right 
for us now, because they're doing so well and we're so 
preoccupied elsewhere, and that's why I take some solace in the 
fact that they're not about to build the bomb.
    Senator Biden. That's--without ruining your reputation--I 
agree with you completely. That's been the thesis on which I've 
been operating, that (a) there is more time than is asserted by 
the administration before there's an eminent threat; (b) that 
time really plays to us, not to them; and (c) that if you could 
divine a way to do it, the place to play is internally in Iran. 
If you could, I don't know how to do that, I don't know how to 
do that.
    But, you know, if you take a look at Syria--if you look 
down the road and you assumed that Iran was destined to become 
the hegemic power in the region and the dominant power, and you 
were sitting in Damascus, I don't think that would bode too 
well for you. Especially if you buy the argument of our right 
that it is a radically Islamic-driven bunch of crazies who are 
in the position that they are attempting to extend the 
influence of Shi'a power in this internal revolution that's 
going on, clash of cultures within Islam, et cetera--all of 
these sort of nightmarish scenarios that are set up. If you're 
sitting in Syria, you're kind of making a Faustian bargain with 
an outfit that doesn't like you very much. With which you don't 
have a whole hell of a lot of future, it seems to me.
    Martin, I apologize, I had to take a call--but I'm told by 
staff that you indicated the possibility of a Sunni-Arab-State 
fear combined with an Israeli fear that maybe this is the time 
to try to jump-start the Arab-Israeli peace process. Wouldn't 
that require them and us, as interlocutors, to engage Syria 
relatively soon in that process, if there was going to be an 
attempt to do that?
    Mr. Indyk. Well, first of all, on the timeline, Senator 
Biden, I think it's important to bear in mind that while you 
and Ash are correct at this time that the Iranians appear to 
be--as far as we can tell, you have to always say that--5 years 
away at a minimum, Israel keeps on making the point that what 
matters is the time it takes them to cross the nuclear know-how 
threshold. Meaning, when they actually know how to enrich the 
uranium, know how to build the bomb and put it on the missiles, 
which they've already developed. And their estimate is that 
Iran crosses that ``nuclear know-how'' threshold within a year.
    Senator Biden. Well, let's assume that's true. There aren't 
many options anybody has laid out to do anything about that. In 
other words, I mean, we have all of these projections, but I 
don't know anybody--I don't hear any of you recommending--that 
there is military action taking place, we've all acknowledged 
that the likelihood of getting coherent and cohesive economic 
sanctions that would make a difference by the world community 
is not in the cards, we acknowledge that Iran's on the 
ascendancy momentarily and that we are--to say the least--
bogged down in Iraq and in Afghanistan. There don't seem to be 
a whole lot of options available, other than trying to figure 
out how we get straightened out in Iraq and Afghanistan as 
quick as we can--we have no plan, in my view; and try to figure 
out as well how to put strange bedfellows together who have a 
common concern--even though it may only be the leadership--a 
common concern with regard to Iran. Because, you know, we kind 
of--anyway----
    Mr. Indyk. Well, we're left with the choice between bad 
options.
    Senator Biden. Well, I haven't even heard any option that 
is not bad, we're left with a choice between disastrous 
options.
    Mr. Indyk. Well, no, I wouldn't go that far, I mean----
    Senator Biden. Well, military force, use of military force 
in the near term--is that an option that does anything to 
generate or benefit our short-term interests?
    Mr. Indyk. Ash should answer that, but I mean, we should 
not abandon the diplomatic option just at the moment when it's 
going to be really tested, so, obviously, we have to----
    Senator Biden. I'm not suggesting that.
    Mr. Indyk [continuing]. We have to pursue that first and 
foremost. And there is a military option. Ash has laid out a 
lot of problems with that, but I think, ultimately, we are 
going to be left in the situation--the reason for my 
pessimism--where we're going to have to end up deciding whether 
we can live with Iranian nukes, like we live with Pakistani 
nukes and North Korean nukes, or not. And Israel, of course, is 
going to make its own decision about whether it can. But, 
ultimately, Senator Biden, that's where I think we end up.
    Senator Biden. Well, I would argue that there is an interim 
step in there within the timeframe we're talking about, but 
that's a different issue. Let me conclude by asking the 
question--and I should know the answer--how much oil do we 
import from Iran? And would it make a difference if, in fact, 
we unilaterally cease and desist from importing Iranian oil? I 
assume it would just be picked up by other countries 
immediately.
    Mr. Carter. I'm not an expert, Senator, on oil markets, but 
my understanding is that we would just end up buying oil from 
Venezuela, and somebody whose now buying oil from Venezuela 
would buy it from Iran--it's a fungible commodity, and the 
world supply----
    Senator Biden. I think it's important for the record that 
that be stated.
    Mr. Carter. It would have no effect on Iran or on us, for 
that matter. May I touch on this question of the Israelis and 
the knowledge? I've heard Israelis say that and I want to say 
as a scientist that I really think that that is a misleading 
metric. You can have all the knowledge you want of how to build 
a bomb, and if you don't have highly enriched uranium or 
plutonium, you're not going to have a bomb. Now, that's the 
important threshold.
    The second thing I would say is that, particularly with 
highly enriched uranium, but less so with plutonium, anyone who 
is knowledgeable about bomb design will tell you that 
terrorists can make a bomb if they get the material. It's sadly 
not difficult. You know that the United States had no doubt 
that ours would work, our very first one. It's trickier with 
plutonium--these people are using highly enriched uranium and 
any knucklehead who has enough highly enriched uranium can make 
it go off. The pacing item here is getting the metal, and if 
they're going to make it, they have to make it in those 
centrifuges, we know how many there are, we know how effective 
each one of them is at enriching uranium--even if they get to 
the thousand centrifuge pilot plant level, that pilot plant 
running full time with nonenriched fuel, I think the number is 
2.7 years to the first bomb. That's once they get the pilot 
plant going in the thousand centrifuges.
    So these are the numbers that people can work out. And why 
the Israelis are saying this, I don't know, but I say from a 
technical point of view, it's just not true.
    Senator Biden. Well, I noticed that the new Israeli 
Ministry of Intelligence has stopped using the phrase ``point 
of no return.'' And I'm at the point of no return to vote on 
the floor is up and I've got to flee. Thank you, gentlemen.
    The Chairman [presiding]. Thanks, Senator Biden. Senator 
Dodd, I'll raise questions after you have.
    Senator Dodd. Well, thank you, Mr. Chairman, and thank all 
three of you for your continuing help and support and trying to 
shed some light on a very, very difficult and complex foreign 
policy challenge, about as serious of one as I can think we've 
had.
    One of you might just--instead of trying to decide what 
options are here--I wonder if you might, each of you, take a 
moment out and describe, if you could, what a successful 
endgame would look like to you in a process here which would 
leave all of the principal parties satisfied. I mean, satisfied 
is a vague enough word, but envision if you will, or share with 
us your thoughts on an endgame here that would leave everybody 
here saying, ``Well, that's a pretty good result.'' And is it 
possible, in your view, that such an endgame would allow us to, 
would allow Iran to attain its enrichment capabilities.
    Dr. Takeyh. I'll just begin. In terms of negotiating 
options with Iran, I think what Senator Biden was referring to 
that, what are the options to negotiate.
    First of all, this is not a unique historical moment for 
the United States. We've been in this position before. If you 
look back in the late 1960s, early 1970s, we were in a position 
in East Asia where our power was declining because of the 
Vietnam war and the Chinese power was increasing, because of 
China's own capability and declining American power, and there 
was certainly antagonism between the two countries. They had 
gone to war with each other in Korea and, obviously, the 
Chinese were very much involved in the Vietnam war.
    The negotiations with Iran, I think, as being contemplated 
today, suffer from a conceptual divergence. Iranians are going 
into these negotiations--as Martin was saying--in order to 
offer confidence-building measures that will allow them to 
continue their nuclear program. The Europeans and now, I 
gather, the Americans, are going into these negotiations in 
order to arrive at an arrangement that will cease those nuclear 
activities. These are conceptually divergent perceptions of 
what the negotiations are for. And ultimately it was this 
conceptual divide that undermined the EU3-Iran negotiations 
after 2\1/2\ years.
    How do you negotiate with Iran? I think you have to accept 
certain basic realities. Iran is an important power with 
influence in the region, and the purpose of negotiation would 
be how to establish a framework for regulation of this 
influence. Therefore, in a perverse sense, negotiations is a 
form of containment. We're negotiating as a means of containing 
Iran's influence, as surely as we negotiated with the Chinese 
in the 1970s as a means of coming to some arrangements to 
rationalize United States-Sino-American relations as a means of 
regulating Chinese power. So, what you can do, and I think I 
alluded to it in my written testimony, is actually having 
negotiations with Iran as I think Martin was saying--a 
comprehensive negotiations on all of Iranian concerns, and all 
of our concerns. Our concerns are human rights, terrorism, they 
have their own grievances and so forth--and these negotiations 
will take place, ultimately, without precondition.
    In 1970 when the United States negotiated with the Chinese, 
there was no precondition to those negotiations. We didn't say 
we wanted 250,000 Chinese troops that were active in North 
Vietnam to be withdrawn. But the purpose of those negotiations 
was essentially to establish a framework where Beijing's 
relationship with Washington was more important to it than its 
relationship with Hanoi.
    The purpose of these negotiations would be to foster an 
arrangement where Tehran's relationship with Washington is more 
meaningful to it than various gradation of uranium, or 
potentially its ties with Hezbollah. So, therefore, although 
suspension of nuclear activities is not the beginning point, 
you hope to get to that at the end point--by creating a new 
framework and a new basis for United States-Iran relations. But 
in all of these discussions and negotiations, we have to 
appreciate that, in a sense, we are legitimizing Iran's--at 
least Persian Gulf--if not larger regional aspirations.
    Mr. Carter. It's an excellent question--it's the key 
question--what would we be satisfied with? Ray's given a 
version of it that I think is quite cogent, but I'm going to 
take a different cut at it.
    When it comes to proliferation, you never really win, 
ultimately. Because people never renounce forever. Whether it's 
Taiwan, South Korea, South Africa, Ukraine, Kazakhstan, they 
can all reverse course. So there's a buffer in time between 
where they stand now, and them having a bomb. And what you want 
in the case of Iran is a sizeable buffer. But you'll never make 
that buffer infinitely long.
    We judge that if they are making their own fuel--even for a 
civil nuclear program--that buffer is too narrow. And that is 
why we have opposed Iran having the capacity to enrich itself--
even if that enrichment capability was inspected. That has been 
the American view. I share that view. I don't share the view 
that them having nuclear power of any kind is too dangerous, 
nor, evidently, does President Bush. For the reason that, that 
buffer can be made longer if the fuel comes from outside of the 
country--the enriched fuel, the enrichment is not done there--
and then the spent fuel goes outside of the country. But what 
we need from Iran is a buffer that's long enough, so that we 
don't feel that we're up against an Iranian bomb that's only 1 
or 2 years away, or some uncertainty about whether there is an 
Iranian bomb at all. And that's what we're looking for--a 
buffer of some years.
    And there are various ways that that can be worked out and 
that's one of the reasons why I think that from a technical 
point of view, these negotiations could succeed. The Iranians 
could be satisfied that they were close enough, that they 
hadn't renounced for all time a Persian bomb, and they could 
have a civil nuclear power program, but the buffer could be 
long enough that we're satisfied, and our allies are satisfied 
that they're not on the cusp of proliferation. That's the end 
state, I think, that both sides could be looking for in this 
negotiation that would satisfy them both.
    Senator Dodd. Do you think that satisfies Iran? I was 
intrigued by Martin's point earlier, and I was telling the 
chairman on our way over to vote, without a forum like this, 
sharing with you who specifically said this, but I was in the 
region in April and had a long meeting with a very high-ranking 
Arab official from a very strong ally of ours who expressed to 
me great reservations and fears about an Iranian-United States 
diplomatic conclusion that would exclude them in some way, it 
would in some way leave them out of the equation. And Martin 
made the point earlier that you think there's going to be an 
ask coming back from the Iranians to us, assuming we could be 
satisfied with the result that Ashton has talked about here, 
that may include a very significant and dominant role in the 
region. And so I--could you give me some idea, before I turn to 
Martin--what you think the Iranian ask is going to be, other 
than the satisfaction here that they've somehow been able to 
maintain their nuclear options here without taking the position 
that they would forebear forever from acquiring that weapon.
    Mr. Carter. The result I described, which was purely a 
nuclear result, is unlikely--in my judgment--to be attained in 
isolation. It will be part of some larger package.
    Senator Dodd. Right.
    Mr. Carter. And the larger package will cut both ways for 
the Iranian leadership. To some extent it will legitimize them 
and reward the roll they're on; on the other hand, it will 
constrain their behavior in the future and the other response 
I'd give, I guess, Senator Dodd, to your excellent question is 
that when one says, ``Well, will the Iranians accept it?'' the 
answer is, there are several different flavors of Iranians.
    Senator Dodd. That's right.
    Mr. Carter. And, I'm sure there's some who want to have the 
bomb, and nothing can turn them around, others who want to have 
nuclear power, and others who don't care about one or the 
other. We do know that the nuclear power program is what they 
say they want, and we know that that is popular with their 
people. And so it's possible that they could be satisfied with 
some version of that, and not the bomb, but who knows.
    Senator Dodd. Ambassador, do you want to add anything to 
this?
    Mr. Indyk. I don't think I spoke to that same high-level 
leader, but I did hear one of them here just recently speak in 
what I would assume would be the same terms, in which he said 
there should be no negotiations with Iran because if you 
negotiate with Iran, you are allowing it to become the arbiter 
of Arab interests, and that is unacceptable to us.
    Senator Dodd. In fact, that was the same message.
    Mr. Indyk. And that's a very real fear that they have in 
the region. But I just want to come back to what I thought was 
very useful explanation on Ashton's part of what the nuclear 
deal would need to be. Because I think what I heard him say was 
that Iranian independent enrichment is not something that would 
give us sufficient confidence that the buffer will be long 
enough, correct? And that's precisely what the Iranians are 
saying is a redline for them. That they insist on their right 
to enrich. If you just focus it down to the nuclear issue, 
that's where the rub will be, that's where the real problem 
will be. And I suspect that the scientists are going to have to 
work out a way--if we really think we could get a nuclear 
deal--the scientists are going to have to work out a way to 
allow Iran to do low-level enrichment under strict controls, 
and we're going to have to decide whether that's acceptable or 
whether that one's too high a risk. I don't think we're going 
to get to that point anyway, but if we do get to that point--to 
answer your question, that's where it would have to be worked 
out. Can we live with low-level Iranian uranium enrichment? 
That's the focus if the deal would have to be done.
    But on the much broader question of what their ask would 
be, I think it's very clear that what they're looking for is 
recognition by us of their regional role. And that is their 
minimum and we can't accept that. The question is, What do they 
really mean by that? How do we parse it? We can only figure 
that out in a negotiation, a direct negotiation in which we 
are, obviously, going to have to be talking about a security 
structure in the region that takes care of their security 
concerns, as well, and takes care of our security concerns, and 
the concerns of our allies.
    So, it's possible to work out compromises for all of these 
things. But, it's very difficult to see how we're going to get 
there. Theoretically, we can do it; practically, it's very 
difficult to see.
    Senator Dodd. Someone suggested that we take some sort of a 
bold action here to break through and start the process. I 
like, by the way, the analogy going back in the late sixties 
with President Nixon and Henry Kissinger's opening toward China 
which has been articulated. Peter Beinhart has talked about 
this conversation in just doing the unexpected and changing the 
game. Changed the game dramatically, that very clever defensive 
move, I thought, in that time. But just even opening up an 
intersection, offering Iran to just open up an intersection 
here, in return for one being opened up in Tehran. Is that 
something that you could imagine?
    Mr. Indyk. We would love to do that, the Bush 
administration would love to do that, the Iranians have never 
been prepared to allow us.
    They have an interests section, sorry, we would like to 
have American diplomats on the ground in Tehran, they are not 
prepared.
    Senator Dodd. Have we made a public offering? I don't 
recall ever seeing that kind of a public expression of offering 
that exchange of intersections being made. Do you know if 
that's been done?
    Mr. Indyk. Well, our interests are represented by the 
Swiss--I forget who represents their interests, Pakistan--but 
in terms of actually being able to, I think the real benefit to 
us would be if we could actually get in on the ground there in 
a diplomatic capacity, and that's not something they're 
prepared to do.
    Senator Dodd. They've been resistant to this.
    Mr. Chairman, I've got a dozen more questions, but I can 
see the look on your face and the look on these--I have an 
opening statement which I obviously was not here for, I'd ask 
if I can put that in the record.
    The Chairman. It will be placed in the record.
    [The prepared statement of Senator Dodd follows:]

 Prepared Statement of Senator Christopher J. Dodd, U.S. Senator From 
                              Connecticut

    Thank you, Mr. Chairman. I commend you for your continued attention 
to the Iran nuclear crisis and for holding this hearing. Addressing 
Iran's nuclear ambitions is one of the most complex foreign policy 
challenges confronting our country. I look forward to our distinguished 
witnesses shedding light on recent developments and on how to proceed 
in resolving this crisis.
    For my part, the facts on the table give me little reason for 
optimism. In fact, they suggest that we are stuck in a diplomatic 
logjam. Tehran continues to refuse to suspend uranium enrichment having 
ignoring the August 31 U.N. Security Council deadline. The Bush 
administration continues to push for sanctions while the Chinese and 
Russians remain averse to a harder approach. And now the President of 
France, one of the EU3 negotiating with Iran, has clearly stated that 
sanctions are not the way forward. The cracks are deepening.
    While the United States and much of the international community are 
unified in their opposition to a nuclear Iran, the United States seems 
to be increasingly walking a lonely road in its approach to preventing 
this outcome. The Bush administration has labeled Iran a member of the 
``axis of evil.'' It subscribes to regime change and it obstinately 
shuns direct talks.
    Of course, there is more than ample reason to refuse dealing with 
Iran. The Iranian regime has sponsored terrorist groups in the Middle 
East such as Hezbollah, including during the recent conflict with 
Israel. It continually violates the basic rights of its own people. And 
it has shown its true colors through malignant statements denying the 
Holocaust and calling for the destruction of Israel.
    But let's face the facts. The administration's demonizing Iran and 
its refusal to talk has not solved anything. It has created fissures 
between the United States and its allies. It has fueled the perception 
that the United States is not serious about diplomacy with Iran and is 
once again itching for a military solution. United States actions have 
alienated the most important player in the ongoing struggle with 
Tehran: The Iranian people. Today, United States support for groups 
within Iran is the kiss of death.
    But it doesn't stop there. By refusing to convert any of the 
Iranian President's outlandish overtures for talks into an opportunity 
for substantive negotiations, the Bush administration has partially 
ceded the higher ground to Tehran. Irresponsible and poor diplomacy are 
the words that come to mind. For me it's a simple calculation. What 
have we gained by not talking to Iran? Absolutely nothing. What do we 
lose by talking to Iran? Absolutely nothing.
    Now I understand that we have offered to talk with Iran if it first 
suspends uranium enrichment but this is only going to lead to more 
stonewalling. It is high time that we changed tack in dealing with 
Iran.
    What we need to do is sit down with our allies and chart a course 
forward taking into account the interests of all stakeholders. There is 
no denying that convincing states like China, Russia, and India to take 
a hard approach on Iran is an uphill battle because of their robust 
commercial and energy relationships with Iran. In 2005, China signed a 
$70 billion oil and gas deal with Iran while India signed a $22 billion 
gas deal to meet their growing energy needs.
    Bringing these states on board for any eventual punitive measures, 
if need be, will not be easy. At a minimum it requires addressing their 
interests and a collective exhaustion of all diplomatic options 
including direct talks. Similarly, the United States ought to consider 
relaxing its precondition of uranium suspension prior to talks with 
Iran. The EU foreign policy chief Javier Solana has suggested such a 
more nuanced and productive approach with talks resuming at the same 
time as Iran suspends its enrichments activities.
    The stakes for regional and global stability are high enough to 
merit a flexible and fresh approach. We cannot keep on spinning in our 
tracks. Yet some in this administration prefer the demonizing, cold 
shoulder approach.
    And if it wasn't bad enough that the executive branch led this 
country into Iraq on spinned and faulty intelligence, it may have 
become a contagious disease. Earlier this month, the House Intelligence 
Committee Republican staff released a report that came to questionable 
conclusions about Iran's nuclear capabilities.
    That report brought a wave of criticism from the IAEA and other 
experts. The IAEA went so far as to call parts of the report 
``outrageous and dishonest'' and that it contained ``erroneous, 
misleading and unsubstantiated information.'' If these allegations are 
true, they do not reflect well on the House leadership or on the United 
States. And needless to say, they only widen the critical credibility 
gap that has emerged between this country and much of the world today.
    I have said this before and I'll say it again. All options may well 
be on the table but we need to talk to Iran first. This administration 
has been bandying Presidential talks with the Sudanese President, the 
head of a regime that the United States has declared guilty of 
genocide. And yet we can't sit down with Iran to discuss its nuclear 
ambitions. It makes no sense whatsoever. Quite simply, it seems to me 
that this administration just doesn't know when to talk and when to 
brandish the stick.
    Our Iran policy is deeply troubling to me because it seems to have 
just led us in circles. Circles that have only further squandered our 
political and moral authority. I look forward to hearing the witnesses 
before us on where we stand today, how to break this cycle, and how to 
proceed toward a resolution of this crisis.
    Thank you.

    The Chairman. Thank you. We appreciate the panel responding 
to the Senator, for the record.
    Let me just conclude with a couple of questions. One, just 
theoretically, why would it not be a good idea--aside from the 
fact that it seems to be a grave change in course, but leaving 
that aside--if we indicated that we want to have, as a country, 
a very open relationship with Iran? For 27 years, as you 
pointed out, we haven't had very much of a relationship at all. 
Suppose that we immediately announce scholarship exchanges? 
Sports teams have been mentioned. What about business people, 
tourists, curious people, whoever? What if we ask the Iranians 
to admit all of these people to their country, and at the same 
time, we admit all sorts of Iranians here? When a distinguished 
Iranian comes to Washington nowadays, there are editorials as 
to whether anybody ought to meet with the person or not. I can 
understand the reasons, but we would point to past precedents 
for such people-to-people exchanges with the former Soviet 
Union and China. You could say, ``Well, as a matter of fact, we 
suspect that this is probably a better course, all things 
considered, and we'd like the Congress to consider it.'' Throw 
some of the burden over to us, so all of the contradictory 
factions in American society come in here and say ``Don't touch 
those Iranians,'' but others say, ``Well, we ought to have 
direct talks.'' We also need to understand Iran better. One of 
the questions often raised about Iraq, including in this 
committee, long before we got into hostilities, was that 
frankly, we didn't know very much about Iraq. It's very painful 
to have so much discovery about for years after we got into 
hostilities. I believe that it is of the essence, presently 
that we understand Iran.
    We do have, obviously, a very large United States military 
presence in the area, in Iraq and in Afghanistan. Much larger 
in Iraq than in Afghanistan these days. Is this likely to be 
helpful or harmful, as we deal with Iran? We haven't discussed, 
today, the implications for possible United States negotiations 
with Iran regarding its nuclear program if, for example, we 
were to withdraw a substantial number of forces fairly rapidly 
from Iraq, or, on the other hand, we simply said, ``Well, as a 
matter of fact, in order to get that situation under control, 
we need to send another division to Iraq,'' as some suggest.
    How does the United States military presence in Iraq affect 
negotiations with Iran over its nuclear program? Does an 
American military presence offer credibility?
    So, can any of you comment on these ideas?
    Dr. Takeyh. Ash can talk about his buffer plan. I'll 
briefly say something that has been alluded to in this hearing 
and others--is to, I always view studying Iran as comparable to 
studying China in the 1950s. We just have to access to that 
country, we have no real way to understand it, it is a country 
that is very difficult to work in, given the fact that they 
often equate research with espionage, so it's an enclosed 
country in many ways in terms of trying to decipher the 
internal deliberations within the regime. In all countries 
there's a gap between public declaration of officials and their 
private perception, and in the case of Iran, that gulf is at 
the Atlantic Ocean, and many Iranian officials say yes, he 
could mean yes, he could mean no, he could mean maybe--there's 
just no way of assessing it, so I think a greater degree of 
American interaction with Iran, going there and talking to 
people--particularly at an official level, and even a 
nonofficial level would be extremely salutary. But the problem, 
frankly, hasn't been from our side. There are lots of Iranians 
that are willing to go, lots of Americans are willing to go, I 
was supposed to go this summer, I was denied a reentry permit. 
Deputy to Ken Pollack, Martin's Deputy, had tried to go many 
times, he was denied a visa, so not every problem in United 
States-Iranian relations is the fault of the United States. 
Part of the reason that we fail to understand their country is 
they're not providing us with an ability to do so. And there 
has to be a change of mind on the other side. If all three of 
us applied for a visa to go to Iran, I doubt if any of us would 
get it. Certainly not Martin. [Laughter.]
    Mr. Carter. Before my Security Officer has a stroke, I 
would say that I would have to ask, and I would probably not be 
allowed to go.
    The Chairman. But it might be important to publicize the 
fact that you are attempting to do that.
    Dr. Takeyh. Simon and I went through months of negotiations 
to go and they never, ultimately their final response was a no 
response. Which we took as a no. The role of Iraq, 
increasingly, I think, the presence or absence of American 
troops in Iraq does not affect Iran's negotiating posture, 
because I think they arrive at a position that they're 
confident that those troops are not going to be used against 
them. And it's important to recognize when Iranians are talking 
about security issues, we often misinterpret that as them 
asking for security guarantees. Increasingly they're asking for 
negotiations with the United States over the security 
environment of the Persian Gulf, which is in some way 
recognition of their rights and prerogatives in that particular 
region. So, they're coming at this with some degree of 
vulnerability.
    Should American forces begin to leave Iraq? I think Iranian 
influence in Iraq is intact, it's operational not just through 
the Shi'a allies that Iran has, but also has close relationship 
with the Kurdish population and Kurdish leaders and so forth.
    The Chairman. Ash, do you have a thought?
    Mr. Carter. Just two observations here, both excellent 
questions, and Ray has given excellent answers to them.
    On the question of the troops in the region, it hasn't 
turned out, at all, the way the Iranians probably expected. It 
certainly didn't, of course, turn out the way we expected. At 
the time the war began, many people were telling me that if 
things went well, this would strengthen our hand with respect 
to Iran, we would have a military presence in the region that 
could, maybe, be semipermanent, right on their border, and 
notwithstanding the fact that we had eliminated their historic 
enemy and balancer in the region, we would be able to assume 
that role. The Iranians, I think, now--certainly the Iranians 
I've spoken to--have said to me that they're pretty happy with 
the current situation. They have a big hand in what happens, 
but we're keeping the lid on, they don't want the lid to blow 
off entirely.
    Even if it were the optimal thing to do, to put more U.S. 
troops in Iraq, the reality is that it's unfortunately not 
physically possible for us--given the size of our current 
military, the Army and the Marine Corps and the rotation we've 
already put them through, now on their third rotations--
materially to increase our presence there. Even if we felt that 
another 50 or 100,000 troops would spell the difference, we 
couldn't do it.
    Mr. Indyk. I would just say, first of all, on the issue of 
exchanges, I think, in principle, it's a very good idea, and we 
should encourage it, but we shouldn't have any illusions that 
it's going to make a major difference. We did have experience 
with this in the 1990s. We had all sorts of exchanges going on, 
but what was happening in Tehran was that the hard-liners were 
effectively establishing their control, undermining and 
thwarting the reformers, and in the end all of the exchanges 
didn't change that dynamic and we are where we are. But I still 
think we should do it, if only because it would give us a 
better understanding of what's going on. I think one of the 
things that everybody has agreed on in this hearing is that we 
don't have that feel, and that's very problematic.
    As far as Iraq is concerned, I mean, I think to put it 
crudely, Iran is on the ascendancy in the region, not because 
of anything they've done, in particular, but because of what 
happened in Iraq. We've, in effect, taken Iraq out of the 
balance of power equation now, and it's going to be a long time 
before it's back in the equation, and that makes Iran dominant 
in the gulf, because the Iraq-Iran balance doesn't exist 
anymore.
    Were we to put another division in, I think the Iranians 
would be very concerned. Were we to pull out our forces, 
they'll also be concerned, because descent into chaos on their 
borders--with their involvement there with the Shiites--could 
easily drag them in. So, the ideal situation for the Iranians 
is the one that exists now--we're bogged down, but we're 
keeping enough of a lid on it that it just enables them to 
build their influence--including in Iraq, and in the border 
region--gratis, courtesy of the U.S. Army.
    The Chairman. Well, there is lots of optimism. That's a lot 
of wisdom, and we appreciate it very much--your thoughtfulness, 
your patience, your stamina, but we feel we've had a good 
hearing for ourselves and for the people who have shared this 
hearing over C-SPAN.
    So thank you for coming, and we look forward to seeing you 
again soon. The hearing is adjourned.
    [Whereupon, at 12:47 p.m., the hearing was adjourned.]

                                  
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