MFA ON IRANIAN NUCLEAR PROGRAM, POLITICS,

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 001648 SIPDIS E.O. 12958: DECL: 06/10/2018 TAGS: PGOV PREL ENRG KNNP IR LE SY RS SUBJECT: MFA ON IRANIAN NUCLEAR PROGRAM, POLITICS, ECONOMICS AND HIZBOLLAH REF: A. MOSCOW 1340 ¶B. MOSCOW 1478 Classified By: Political M/C Alice G. Wells for reasons 1.4 (b/d). ¶1. (C) Summary: At the working-level, the MFA remains hopeful the latest P5 1 proposals will lead to progress on the Iranian nuclear issue, but believes Tehran is likely to use elements of the package Solana will deliver to delay negotiations. The MFA dismissed the IAEA DG's latest report, which accomplished little baefering something to each side. Russian officials are aware of reports that Saeed Jalili might be replaced as Iran's chief nuclear negotiator by Ali Larijani, who may be positioning himself to run for President of Iran. The MFA described Russia-Iran economic relations as "pragmatic," with the two countries cooperating on expanding transportation links and on energy issues, including the Nabucco gas pipeline that is typically seen as a competitor to Russia's South Stream pipeline. Officials characterized the EU, which seeks Iranian gas at the same time it presses Tehran on the nuclear issue, as taking a more pragmatic approach than the security-focused U.S. The MFA confirmed that Russia asked Iran to use its influence with Hizbollah to help end the political crisis in Lebanon, but warned against assuming that Hizbollah was a "puppet" controlled by its foreign patrons. End summary. Iranian Nuclear Program -------------- ¶2. (C) MFA Iran Desk Chief Maxim Baranov told us on June 9 that while he was hopeful that delivery of the latest P5 1 package to Tehran would produce progress towards a settlement of the Iranian nuclear issue, MFA officials working the Iran account thought it likely that the Iranians would grasp certain elements of the package as a means to continue dragging out the process. Baranov observed that Iranian tactics changed regularly in order to delay conclusive results, and reminded us that in 2006 the Iranians told then GOR National Security Council Secretary Ivanov that Iran would sign the NPT Additional Protocol but wanted to be allowed a limited number of centrifuges to continue pursuing uranium enrichment, issues that remained unresolved. Baranov thought Iran might still sign the Additional Protocol, then use this act as a propaganda tool to demonstrate to the Islamic world that it was a responsible country. He dismissed the characterization of the IAEA Director General's May 26 report as having been the most detailed on Iranian non-compliance and pursuance of military technology, explaining that El-Baredi was "a master of writing," whose reports tended to give each side something they were after. Ali Larijani's Future -------------- ¶3. (C) Baranov said that he was aware of reports that Saeed Jalili might be replaced as Iran's chief nuclear negotiator, possibly by parliamentary speaker Ali Larijani. He cautioned against jumping to the conclusion that such a move indicated the ascendency of those favoring a more conciliatory approach on the Iranian nuclear program, noting that Larijani recently made some tough statements in advance of Solana's arrival in Tehran, while Ahmadinejad's remarks were softer than usual. Baranov thought it possible that Larijani was playing to a domestic audience and sought to give Solana the idea that despite their reported good personal relationship, the EU representative should not expect an easy time in Tehran. ¶4. (C) Baranov, who served in Tehran before taking over the MFA Iran Desk, speculated that Larijani's appointment as parliamentary speaker meant the he was positioning himself for another run for President. Economics and Energy -------------- ¶5. (C) Baranov described Iran's approach to its economic and energy interests as essentially "pragmatic," with Tehran willfully presenting itself as Russia's economic partner at the same time they were also competitors. Russia and Iran share, for example, an interest in developing closer transportation links that will provide Russia increased opportunities to trade with the Middle East and Asia. Russia, Iran and Azerbaijan have been discussing completing an Azerbaijan-Iran railway link as part of the International North-South Transport Corridor (INSTC),a necessary element for increased Russian trade with India. Baranov noted Iran's recent agreements signed with India and Turkmenistan to expand sea and rail transit links would also benefit Russia. MOSCOW 00001648 002 OF 002 ¶6. (C) On energy, Baranov said that Russia's relationship with Iran was more complex than typically portrayed. He pointed, for example, to a recent press report that Iran was ready to start work on the Nabucco pipeline intended to deliver gas from the Caspian region to Europe and bypass Russia, as well as to a seemingly contradictory report that Gazprom was establishing a joint venture with the Iranian state oil company that could allow Russian participation in Nabucco. Baranov offered that it would be in Russian interests to be involved in Nabucco, which is commonly seen as a competitor to the South Stream pipeline ¶7. (C) Baranov explained that the "mystery element" in the Iranian energy picture was Iran's relationship with the European Union, which sees a vital need to tap Iranian gas supplies at the same time European countries press Iran on its nuclear program. He pointed to statements by European officials that the EU could separate its need for energy from other political interests as an indication of Europe's pragmatic approach, while the U.S. appeared to link all Iran-related matters to security. Baranov posited, however, that the EU might one day lose out to Asian countries whose demand for gas would surpass that of the Europe and could draw away Iranian supplies. Hizbollah -------------- ¶8. (C) Baranov confirmed that the GOR reached out to the Iranians at various levels of government, asking that they help stabilize the political situation in Lebanon by reigning in Hizbollah (reftels). He dismissed, however, any suggestion that Hizbollah was a "puppet" of either Iran or Syria, explaining that Hizbollah had legitimate political interests in Lebanon and a substantial level of support from segments of the population. Baranov thought that while Tehran might be the leading sponsor of Hizbollah, Damascus still had influence, and the Hizbollah leadership preferred to play one off the other in order to lessen dependence on a single patron. RUSSELL