THE GROWING IRANIAN THREAT -- (BY DOUGLAS JEHL) (Extension of Remarks - May 28, 1993)

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in the House of Representatives

THURSDAY, MAY 27, 1993

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Washington, May 26: The Clinton Administration is preparing a broad new effort to weaken Iran by persuading reluctant allies to cut off loans, investment and arms sales to what American officials regard as a permanently hostile Government.

The plan, drafted as part of an intensive policy review, reflects a conclusion that Iran must be isolated if it is to be prevented from emerging as a substantial threat to Western interest. Thus, the plan rejects Reagan and Bush Administration policies that offered to reward Teheran for good behavior.

Administration officials said the new approach aimed at denying Iran access to the money and weapons needed to complete a military resurgence. They said it was based on a decision that the United States and its allies should now treat Iran as harshly as it treats Iraq.

For much of the 1980's, the United States sought to play Iran and Iraq against one another. But with United Nations sanctions imposed on Iraq since the end of the Persian Gulf war, the Administration has concluded that the wiser policy is `dual containment.'

Secretary of State Warren Christopher hinted at the emerging shift earlier this year by denouncing Iran as an `international outlaw' and a `dangerous country' for its support of terrorism and its pursuit of nuclear weapons. But the new policy is far more sweeping than Mr. Christopher indicated when he said the United States would seek to block loans to Iran by international organizations.

Administration officials say the isolation of Iran should end only if Teheran halts its support for terrorism, curtails its military buildup, stops its subversion of other governments and ends its quest for nuclear weapons.

Among the antagonistic activities that United States officials attribute to Iran is active support for efforts by the Hamas and Party of God organizations to use violence to disrupt the Mideast peace talks. The officials say Iran has also helped establish terrorist training camps in Lebanon and the Sudan, and has assisted groups trying to overthrow the Governments of Egypt, Algeria, and Tunisia.

The United States already subjects Iran to stiff sanctions that prohibit military and most commercial ties. Administration officials said their new policy could succeed only if other countries could be persuaded to change course.

Among the top priorities, Administration officials said, are efforts to convince Russia and China to cancel deals to provide Iran with weapons and nuclear reactors, and to persuade Japan, Germany and Britain to cut off loans.

None of those countries have shown any willingness to sever such lucrative ties, and Japan in particular has argued that commercial links can encourage moderate elements inside Iran. But while the United States once harbored similar hopes, Administration officials now regard all factions in the current leadership as bound to remain hostile toward the West.

While many deals between United States companies and Iran are already prohibited, the new policy would almost certainly lead the Administration to reject a request by the Boeing Company to sell 20 Boeing 737 jetliners to Iran, a deal worth more than $750 million, officials say.

The broad outlines of the new approach were described in a speech last week by Martin S. Indyk, the senior director for Middle East policy for the National Security Council, to the Washington Institute for Near East Policy, a research group.

Mr. Indyk said bluntly, `If we fail in our efforts to modify Iranian behavior, five years from now Iran will be much more capable of posing a real threat to Israel and to Western interests in the Middle East.'

The review of United States policy toward Iran was one of several dozen such studies requested by President Clinton shortly after he took office.

But the atmosphere surrounding it has been intensified by suspicions that Iran might have had a role in the World Trade Center bombing, Government officials say. Investigators have found that tens of thousands of dollars were wired from Iran to bank accounts held by suspects in the bombing.

Final details of the plan await White House approval, Administration officials say. But while Mr. Clinton made overtures to the main Iranian opposition group before he took office, his advisers said there was no chance that the new policy would involve closer ties with the group, the People's Mujahedeen.

The Administration has concluded that the Mujahedeen's ties to Iraq and its terrorist attacks against Americans in the 1970's makes it an unacceptable partner.

The officials also expressed little optimism that the organized resistance or other domestic unrest could force a significant change in the Iranian Government. They said they expected President Hashemi Rafsanjani to win re-election to a second four-year term in elections on June 11.

Administration officials also said the United States had rejected seeking an embargo on sales of Iranian oil. the rebels have called for such a ban, but the policy review concluded that it could not be enforced without imposing a military blockade, a step Mr. Clinton's advisers are unwilling to take.

In outlining the effort to isolate Iran, Administration officials acknowledged that the task would be more difficult than the containment of Iraq, which carries the weight of United Nations sanctions.

In March, an initial United States attempt to isolate Teheran failed when the World Bank overrode Washington's objections and approved a $165 million loan to upgrade Iran's electrical power system. But officials who outlined the new policy said the United States intended to amount an aggressive effort to persuade other countries of the dangers Iran poses.

Administration officials have begun to argue that Iran, which has borrowed $25 billion in the last four years, is not a good investment. Teheran has already fallen $5 billion behind on its payments, and the Administration intends to warn countries that go ahead with sales of weapons and nuclear goods that they run the risk of not being paid.

Because of high inflation and unemployment, a senior Administration official said, Iran was `more vulnerable than it has been in the past or is likely to be in the future.' But he repeated Mr. Indyk's warning that `this moment will not last long.'

The Central Intelligence Agency has warned that Iran may acquire a nuclear weapon by the end of the decade. Its deals with Russia and China for nuclear reactors are regarded with uneasiness by some American analysts, who say the plants may be being used as a cover to acquire sensitive technology.

A simultaneous Iranian buildup of conventional military forces has prompted similar concern. While officials at the Defense Intelligence Agency have said Teheran's $2 billion military spending spree may be merely an effort to rebuild forces depleted during its eight-year war with Iraq, purchases of Russian submarines and a bid to buy top-of-the-line tanks have persuaded other officials that Iran seeks to become the dominant power in the Mideast.