IRAN REGIONAL PRESENCE OFFICE - WINDOW ON IRAN - FEBRUARY

S E C R E T SECTION 01 OF 03 RPO DUBAI 000084

NOFORN
SIPDIS

E.O. 12958: DECL: 2/17/2019
TAGS: PGOV PREL KDEM ECON IR
SUBJECT: IRAN REGIONAL PRESENCE OFFICE - WINDOW ON IRAN - FEBRUARY
17, 2009

REF: RPO 76, ISTANBUL 47, MOSCOW 357, MOSCOW 372, MOSCOW 373

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CLASSIFIED BY: Ramin Asgard, Director, Iran Regional Presence
Office - Dubai, DOS.
REASON: 1.4 (b),(d)

1. [S/NF] Khatami Scares Hardliners Into Compromise?: Former
president Khatami's recent entry into the presidential race has
spurred hardliners and conservatives into action. Two days
after his entry, Khatami was menaced by street thugs tied to the
Basij chanting "we don't want an American government" and had to
be defended by supporters. Then the hardline daily Kayhan
compared Khatami to Benazir Bhutto, whom they claim was an
American client, and mused that a similar fate to Bhutto's may
await him. Within this ominous context, hardliners including
the powerful Islamic Coalition Society, or Motallafeh, met to
consider election strategy. So anxious that a Khatami
presidency might signal the end of hardliner control over the
economy and key parts of the government, a hardline MP confirmed
to the press the faction's readiness to withdraw their
substantial support for AN in favor of an "alternative
candidate" if Khatami withdraws from the race. Comment: Taken
together, these developments demonstrate that: first, hardliner
opposition to Khatami's return to power is fierce and may turn
violent; and second, that a deal may be struck to essentially
dump AN as the hardline candidate if Khatami withdraws, likely
leading to a compromise candidate entering the picture. Supreme
Leader Khamene'i has apparently thus far avoided any direct
involvement in resolving this building confrontation. As we
have stated before, and continue to hear from multiple sources,
a leading compromise candidate is former FM and current foreign
policy advisor to the Supreme Leader, Ali Velayati.




2. [S/NF] Khatami-Era MFA Figures Active in Track II, Thinktank
Outreach: As noted in IRPO 76 and Istanbul 47, current and
former Iranian MFA officials have shown signs of exploring
surprisingly diverse venues and partners for their current round
of Track II dialogues. Many of the pragmatic MFA figures purged
by Ahmadinejad in 2005/2006 have passed the past few years on
Tehran's quasi-official foreign policy think tank circuit.
Among their recent/current projects are: Track II dialogue in
December 2008 in Athens, including cordial interactions between
Iranian and Israeli participants; a planned Track II dialogue in
Dubai at an Emirati defense think tank; various publications on
Iranian diplomacy, including an excellent website
www.irdiplomacy.ir, a book-length history of Iranian diplomacy,
and a planned English-language quarterly, The Iranian Review of
Foreign Affairs, set to debut in winter 2009. Among the figures
closely involved with these ventures are former PermRep Javad
Zarif, former Ambassador to Afghanistan Reza Bahrami, Professor
Kazem Sajjadpour of the MFA's School of International Relations
and many others displaced by AN. Dr. Sajjadpour is the main
figure in the Dubai Track II plans, as well as a participant or
supporter of several US-Iran nonofficial exchange programs.
Comment: In discussions with members of this group, they offer
practical and realistic insight into Iran's foreign policy goals
and interests. We are unable to assess their level of influence
within the Leader's Office, the Supreme National Security
Council, and other key foreign policy institutions. They must,
however, have powerful patrons to carry out the broad-ranging,
sometimes controversial, and quite public work they do.




3. [S/NF] IRIG Defense Minister Visits Moscow: Iranian Defense
Minister Mostafa Mohammad Najjar is currently in Moscow, hoping
to finalize arrangements for Russian delivery of S-300 air
defense systems to Iran, according to Russian press reports.
Najjar is scheduled to meet Russian Defense Minister Serdyukov
on Feb. 17. Comment: The apparent lack of candor by senior
Russian officials in recent discussions with USG officials about
the S-300 issue (Moscow 357, 372, 373),together with Najjar's
visit, may portend developments on this matter in coming days.




4. [S/NF] UK Foreign and Commonwealth Office Stresses Time Is of
the Essence: FCO Iran Team (working level) told visiting IRPO
Deputy Director and London IW that HMG believed that time was
running short to reach agreement with Iran over its nuclear
activities. Noting that the Administration's policy review was
underway, FCO officials said U.S. engagement could be decisive
in bringing the IRIG to the negotiating table. In their view,

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prolonged negotiations, i.e. into next year, would give Iran
sufficient time to reach a point of no return in being able to
build a weapon, however. Our interlocutors said that the P5+1
also needed to come to consensus on tougher sanctions should
Iran not suspend its enrichment program and should be prepared
to "preview" those sanctions to the IRIG. FCO also raised the
idea of the U.S. engaging more reticent members of the EU to
push for their agreement on stronger sanctions. Comment: Our
interlocutors, without saying so explicitly, seemed anxious for
a U.S. decision to engage Iran, but gently cautioned that the
U.S. should not allow the Iranians to engage in a protracted
bilateral negotiation at the expense of the P5+1 process.




5. [C] "Talking to Iran" Conference: The Feb. 12 "Talking to
Iran" conference in London offered diverse views on when, how,
and with whom to engage Iran but without much consensus how best
to reach or influence Iranian audiences. Opinions among the
journalists, commentators, academics, and members of London's
Iranian diaspora were split over the role and effectiveness of
Western broadcasting services in reaching Iran from outside.
Speakers debated whether VOA, BBC and others should be aimed at
advocacy or traditional, factual reporting. Likewise, there
were differing opinions on the media environment inside Iran,
ranging from government suppression and censorship to a vibrant,
albeit semi-underground, public debate in traditional and
emerging media. Comment: Two themes resonated with us during
the conference and in a separate tour of BBC Persian's newsroom.
First, a large segment of the Iranian population feels vilified
by Western reporting on the country. Second, based on comments
BBC Persian is receiving from its audience and in listening to
observers who follow Iranian media, Iranians want to feel they
are part of the discussion on issues that affect them
personally. As one speaker put it succinctly, "You should be
talking with Iranians, not to them."




6. [S/NF] Swiss Diplomat Story Leaked by MOIS: An Iranian
employee of the U.S. Interests Section in Tehran explained that
the story surrounding the arrest of a Swiss diplomat posted to
the USINT was leaked to the Iranian press by an MOIS employee.
According to the USINT employee, the diplomat was briefly
detained by security agents 18 months ago and then released.
The incident was not publicized until (FNU) Husseini, director
of the MOIS office that oversees the USINT, felt the need to
highlight his own professional accomplishments after learning he
might be removed from his position. Comment: Leaking stories
either for personal or political ends is just as prevalent in
Iran as anywhere. This is worth considering as we assess
Iranian media reports purporting to reflect IRIG intentions and
policies. The above story is another reminder that various
actors inside Iran will use leaks as needed - regardless of
potentially counterproductive impact - if they perceive their
core interests are at stake.




7. [S/NF] Staple Food Prices Head Down in Advance of Election:
The Iranian USINT employee in Tehran also reported that prices
of basic goods in Iran had fallen dramatically in the past two
months. The price of a chicken had been 5,500 tomans (about
$5.75); it is now 1,500 tomans. The price of rice has dropped
from 6-7,000 tomans/kilo to 1,500 tomans/kilo. He attributed
the price drop to Ahmadinejad's electoral maneuvering,
commenting that Ahmadinejad is clearly trying to appeal to his
base. Iranian visa applicants in Dubai - a demographic
generally outside of Ahmadinejad's base - offered a mixed
assessment of food prices. Although a couple applicants said
that rice and chicken prices had dropped, others thought prices
were the same. Comment: Commodity prices are an important
issue among Iranian voters, especially those Ahmadinejad is
courting, and Ahmadinejad could benefit by manipulating the
price. At the same time, the allegation that Ahmadinejad is
behind the price fluctuations may say as much about opinions
toward Ahmadinejad and rumor mongering among his detractors as
it does about his role in the price drops.



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8. [U] Window on Iran is a classified, weekly product providing
Washington policy community and Iran watchers highlights of key
developments on Iran. It is produced by the Iran Regional
Presence Office - Dubai. Please direct any questions/comments
to Kay McGowan (mcgowanka2@state.sgov.gov
) or Charlie Pennypacker
(pennypacker@state.sgov.gov
).
ASGARD