Global Policy Forum

By Gareth Porter*

Iran offered in 2003 to accept peace with Israel and cut off material assistance to Palestinian armed groups and to pressure them to halt terrorist attacks within Israel's 1967 borders, according to the secret Iranian proposal to the United States.

The two-page proposal for a broad Iran-U.S. agreement covering all the issues separating the two countries, a copy of which was obtained by IPS, was conveyed to the United States in late April or early May 2003. Trita Parsi, a specialist on Iranian foreign policy at Johns Hopkins University School of Advanced International Studies who provided the document to IPS, says he got it from an Iranian official earlier this year but is not at liberty to reveal the source.

The two-page document contradicts the official line of the George W. Bush administration that Iran is committed to the destruction of Israel and the sponsorship of terrorism in the region. Parsi says the document is a summary of an even more detailed Iranian negotiating proposal which he learned about in 2003 from the U.S. intermediary who carried it to the State Department on behalf of the Swiss Embassy in late April or early May 2003. The intermediary has not yet agreed to be identified, according to Parsi.

The Iranian negotiating proposal indicated clearly that Iran was prepared to give up its role as a supporter of armed groups in the region in return for a larger bargain with the United States. What the Iranians wanted in return, as suggested by the document itself as well as expert observers of Iranian policy, was an end to U.S. hostility and recognition of Iran as a legitimate power in the region.

Before the 2003 proposal, Iran had attacked Arab governments which had supported the Israeli-Palestinian peace process. The negotiating document, however, offered "acceptance of the Arab League Beirut declaration", which it also referred to as the "Saudi initiative, two-states approach." The March 2002 Beirut declaration represented the Arab League's first official acceptance of the land-for-peace principle as well as a comprehensive peace with Israel in return for Israel's withdrawal to the territory it had controlled before the 1967 war.. Iran's proposed concession on the issue would have aligned its policy with that of Egypt and Saudi Arabia, among others with whom the United States enjoyed intimate relations.

Another concession in the document was a "stop of any material support to Palestinian opposition groups (Hamas, Jihad, etc.) from Iranian territory" along with "pressure on these organizations to stop violent actions against civilians within borders of 1967". Even more surprising, given the extremely close relationship between Iran and the Lebanon-based Hizbollah Shiite organisation, the proposal offered to take "action on Hizbollah to become a mere political organization within Lebanon".

The Iranian proposal also offered to accept much tighter controls by the International Atomic Energy Agency (IAEA) in exchange for "full access to peaceful nuclear technology". It offered "full cooperation with IAEA based on Iranian adoption of all relevant instruments (93+2 and all further IAEA protocols)". That was a reference to protocols which would require Iran to provide IAEA monitors with access to any facility they might request, whether it had been declared by Iran or not. That would have made it much more difficult for Iran to carry out any secret nuclear activities without being detected.

In return for these concessions, which contradicted Iran's public rhetoric about Israel and anti-Israeli forces, the secret Iranian proposal sought U.S. agreement to a list of Iranian aims. The list included a "Halt in U.S. hostile behavior and rectification of status of Iran in the U.S.", as well as the "abolishment of all sanctions".

Also included among Iran's aims was "recognition of Iran's legitimate security interests in the region with according defense capacity". According to a number of Iran specialists, the aim of security and an official acknowledgment of Iran's status as a regional power were central to the Iranian interest in a broad agreement with the United States.

Negotiation of a deal with the United States that would advance Iran's security and fundamental geopolitical political interests in the Persian Gulf region in return for accepting the existence of Israel and other Iranian concessions has long been discussed among senior Iranian national security officials, according to Parsi and other analysts of Iranian national security policy.

An Iranian threat to destroy Israel has been a major propaganda theme of the Bush administration for months. On Mar. 10, Bush said, "The Iranian president has stated his desire to destroy our ally, Israel. So when you start listening to what he has said to their desire to develop a nuclear weapon, then you begin to see an issue of grave national security concern." But in 2003, Bush refused to allow any response to the Iranian offer to negotiate an agreement that would have accepted the existence of Israel. Flynt Leverett, then the senior specialist on the Middle East on the National Security Council staff, recalled in an interview with IPS that it was "literally a few days" between the receipt of the Iranian proposal and the dispatch of a message to the Swiss ambassador expressing displeasure that he had forwarded it to Washington.

Interest in such a deal is still very much alive in Tehran, despite the U.S. refusal to respond to the 2003 proposal. Turkish international relations professor Mustafa Kibaroglu of Bilkent University writes in the latest issue of Middle East Journal that "senior analysts" from Iran told him in July 2005 that "the formal recognition of Israel by Iran may also be possible if essentially a 'grand bargain' can be achieved between the U.S. and Iran". The proposal's offer to dismantle the main thrust of Iran's Islamic and anti-Israel policy would be strongly opposed by some of the extreme conservatives among the mullahs who engineered the repression of the reformist movement in 2004 and who backed President Mahmoud Ahmadinejad in last year's election.

However, many conservative opponents of the reform movement in Iran have also supported a negotiated deal with the United States that would benefit Iran, according to Paul Pillar, the former national intelligence officer on Iran. "Even some of the hardliners accepted the idea that if you could strike a deal with the devil, you would do it," he said in an interview with IPS last month.

The conservatives were unhappy not with the idea of a deal with the United States but with the fact that it was a supporter of the reform movement of Pres. Mohammad Khatami, who would get the credit for the breakthrough, Pillar said.

Parsi says that the ultimate authority on Iran's foreign policy, Iran's Supreme Leader Ayatollah Ali Khamenei, was "directly involved" in the Iranian proposal, according to the senior Iranian national security officials he interviewed in 2004. Kamenei has aligned himself with the conservatives in opposing the pro-democratic movement.

A campaign to promote democracy and fund dissidents prompts speculation that the administration's goal is to change the regime. The Bush administration, shunning pressure from allies for direct dialogue with Iran, is shifting toward a more confrontational stance and intensifying efforts to undercut the country's ruling clerics.

U.S. officials have taken a series of steps to increase pressure on Iran, most recently creating new offices in the State Department and Pentagon specifically to bolster opposition to the Tehran government. In February, Secretary of State Condoleezza Rice asked Congress for $75 million to supplement $10 million in funds to promote democracy, aid Iranian dissidents and expand the Voice of America's Persian-language broadcasts beamed across the Persian Gulf from Dubai, in the United Arab Emirates.

"We are more out of sync now with Iran than at any time since 1979," said a State Department official, who spoke on condition of anonymity. "I don't think the time is right now for a dialogue. We seem to be moving closer toward a confrontational stance, versus a compromise stance."

Although some observers note similarities in the Iran policy to the stance on Iraq in the lead-up to the war in that nation, officials emphasize that this time around, State Department diplomats rather than Pentagon war planners are in charge. Still, the campaign illustrates the administration's hostility toward Iran's rulers and raises the question of whether its ultimate goal is to curb Iran's nuclear program or change the regime. "The administration is trying to make regime change through democratization the policy, instead of making confrontation by military means the policy," said Trita Parsi, a Middle East specialist at Johns Hopkins University who advocates direct U.S. talks with Tehran.

The administration's efforts are taking shape on the second floor of the State Department, where a new Office of Iranian Affairs has been charged with leading the push to back Iranian dissidents more aggressively, boost support to democracy broadcasters and strengthen ties with exiles. Nearby at the Pentagon, an Iranian directorate will work with the State Department office to undercut the government in Tehran.

Rice and other officials have publicly advocated steps to pressure the Iranian government. But by setting up the new offices, staffs and programs, the administration is institutionalizing its long-held antipathy toward Iran's government.

The new offices are modest in size — the Pentagon's directorate began with six full-time staff members. But they can draw on expertise throughout the government, providing access to potentially hundreds of specialists. The State Department's new Iranian Affairs office is headed by David Denehy, a longtime democracy specialist at the International Republican Institute, who will work under Assistant Secretary of State for Near Eastern Affairs Elizabeth Cheney, daughter of the vice president.

Recently, Denehy and other officials went to Los Angeles for meetings with Iranian exiles and the Persian-language media. The purpose was to inform them of the government's plans, get feedback and — perhaps not a secondary consideration — create a buzz within the Iranian American diaspora and its satellite media outlets, which are beamed into Tehran. Afterward, some Iranian Americans were left disappointed by their first look at the new campaign and by the fact that officials had not begun distributing money to exile groups.

"They came here — we didn't know why they came — asking: 'What do you think about Iran? Do you have any connections to people inside?' " recounted Zia Atabay, the founder of Los Angeles-based NITV, a Persian-language broadcaster. "We said, 'The reason you are here is you know we have a connection.' "

Assistance to dissidents in Iran is complicated by the Iranian regime's demonstrated brutality toward its critics — writers, bloggers, trade union members and human rights activists — much less anyone perceived to be receiving U.S. aid. For that reason, the State Department does not publicly disclose whom it funds.

Even private U.S. groups receiving money to support democracy efforts in Iran are reluctant to discuss their programs for fear they will put their Iranian partners in harm's way.

As much as $50 million of the funds requested will go to the Voice of America for Persian-language broadcasts. The State Department also is planning to send 15 foreign service officers to countries neighboring Iran and to capitals with large Iranian exile populations to serve as "Iran watchers."

At the Pentagon, the new Iranian directorate has been set up inside its policy shop, which previously housed the Office of Special Plans. The controversial intelligence analysis unit, established before the Iraq war, championed some of the claims of Ahmad Chalabi. A number of assertions made by the former Iraqi exile and onetime Pentagon favorite were later discredited.

Pentagon spokesman Lt. Col. Barry Venable declined to name the acting director of the new Iran office and would say only that the appointee was a "career civil servant." Among those staffing or advising the Iranian directorate are three veterans of the Office of Special Plans: Abram N. Shulsky, its former director; John Trigilio, a Defense Intelligence Agency analyst; and Ladan Archin, an Iran specialist.

Even if the chief U.S. goal is arresting Iran's nuclear program — and not overthrowing the government — the democratization effort could be a useful part of the strategy, some experts said. "The State Department policy of isolating the regime diplomatically is the main policy so far," said Daniel Byman, a professor at Georgetown University School of Foreign Service and a former CIA analyst who also worked for the Sept. 11 commission.

"But there are all these different ways you could game this. Supporting opposition groups could also be a way of raising the stakes, in effect saying, 'Here's what we are going to do if you won't comply,' " he said.

The new focus also may be contradictory, Richard N. Haass, a State Department official during President Bush's first term and now president of the Council on Foreign Relations, said at a conference in Washington this month. . "We are telling Iran, 'We want regime change, but while you're still here, we'd like to negotiate with you to stop your nuclear program,' " Haass said.

About the Author: Gareth Porter is an historian and national security policy analyst. His latest book, "Perils of Dominance: Imbalance of Power and the Road to War in Vietnam," was published in June 2005.