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Program Brief, vol. 7, no. 14
© The Nixon Center 2001

"Iran, Israel, and U.S. Sanctions"
A Roundtable Discussion

The Nixon Center, Washington, DC
July 11, 2001

Iran’s hostility to Israel guarantees that the Iran-Libya Sanctions Act (ILSA) will be renewed by the U.S. Congress, according to a panel of experts speaking at the Nixon Center. However, some argued that ILSA is counterproductive and limits American policy options at a crucial time when we should be considering a new stance towards Iran. Geoffrey Kemp, Director of Regional Strategic Programs at the Nixon Center, moderated a discussion of these issues among Shaul Bakhash, Professor of Middle Eastern History at George Mason University; Ambassador Robert Pelletreau of Afridi, Angell & Pelletreau LLP; and Keith Weissman, from the Middle East Desk of the American Israel Public Affairs Committee (AIPAC).

Renewal Now Likely

According to Keith Weissman, ILSA’s renewal seemed unlikely just a few months ago; the potential for improved relations with Tehran in the wake of Khatami’s re-election had persuaded some that the legislation should be allowed to expire. At the same time, Geoffrey Kemp noted the U.S. and Iran have similar interests in the region, including with respect to Iraq, Pakistan and Afghanistan. Iran’s economic troubles have also made a rapprochement more desirable for Tehran, Kemp said.

But the recent Israeli-Palestinian violence has focussed attention on continued Iranian support for terrorism; according to Weissman, this is the major reason that ILSA will be renewed. Weissman specifically drew attention to increased arms shipments from Iran to Hizballah, but also noted Tehran’s renewed anti-Israel rhetoric which has accompanied the breakdown of the peace process. According to him, these developments -- concurrent with the Lockerbie trial, in which one Libyan intelligence agent was found guilty and another not guilty of the bombing of Pan Am flight 103, and Libya’s refusal to pay compensation to families of the victims -- have generated the renewed pressure to extend ILSA. Weissman also emphasized that Iran’s failure to respond to several gestures made by the United States during the Clinton Administration has inhibited any improvement in relations.

Iran, Israel, and the Peace Process

Shaul Bakhash addressed Iran’s domestic situation and the regime’s attitudes towards Israel and the Palestinians. He noted that Iran has opposed the Oslo peace process from the beginning, believing that the Islamic Republic’s interests are better served by tension than by peace in the region, particularly because of Israel’s economic and strategic advantages. Iran’s antipathy towards Israel is rooted in fears of encirclement, which would be enhanced by diplomatic relations between Israel and Syria and the Arab Gulf countries. Iran also needs to demonstrate its Islamic credentials; and to maintain its close ties to Syria, which has influenced Iran’s relationship with Hizballah.

Bakhash added that Iran could gain from a Caspian oil pipeline and economic aid by moderating its stance on the peace process and improving relations with the U.S. However, numerous European and Japanese firms are already defying ILSA -- and going unpunished -- and Iran’s oil revenues are still sufficient to make any changes less than urgent. In short, Iran’s position is unlikely to shift, he said, absent a change in the nature of the peace process.

When questioned about domestic factors behind Iran’s Israel policy, Bakhash argued that the "hard-liners" appear to be winning. Any moves towards rapprochement with Israel, such as Khatami’s previous announcement that the Palestinian Authority should be the judge of the state of the peace process, have been blocked by the Supreme Leader Khamenei and the Guardian Council, who have veto power over the Iranian Parliament.

American Policy Toward Iran and the Effectiveness of Sanctions

Ambassador Pelletreau argued that since there is no dialogue between the U.S. and Iran, and there has been no significant change in Iran’s behavior, our policy has failed and must be re-evaluated. Israel’s policy towards Iran has also failed, he said, since concerns regarding Hizballah and other Palestinian rejectionist movements, proliferation, and problematic relations with China and Russia, have all remained unresolved. Furthermore, attempts to open communication on MIAs in Lebanon, Iranian Jews, and other subjects have not succeeded.

Pelletreau argued that Iran would like improved relations with the United States if the costs are minimal; as for relations with Israel, he said, the domestic climate has so far precluded any meaningful discussion of a new policy. The renewal of ILSA will further fuel perceptions that U.S. Policy is hostile and encourage antagonistic Iranian policies, thus creating a deadlock for the foreseeable future. Pelletreau asserted that this is unfortunate, since any overthrow of the clerical regime is unlikely. He also suggested that many of our interests would be better served through dialogue with Iran such as efforts to combat terrorism and proliferation, enhance Israeli security, boost regional prosperity and integration, maintain our position in a geostrategically crucial area, aid the Central Asian republics, ensure a favorable energy situation, and advance common interests in Afghanistan (particularly in terms of narcotics trafficking). In other words, he said, cooperation would help both the U.S. and Iran; and since ILSA has proven ineffective, its renewal is doubly counterproductive.

Asked whether ILSA was effective, other than as a symbolic gesture, Weissman asserted that although it is not the reason for Iran’s economic troubles, ILSA has created problems for the regime, particularly since energy companies are factoring it in to their decisions to invest in Iran. He noted that while ILSA may go counter to some American interests, the lack of enforcement against our major allies has prevented a more detrimental outcome.

This Program Brief was prepared by Nixon Center Intern Shanna Kirschner.