"Only now it is beginning. The day of rejoicing for the peoples of the region is drawing near... The world is on the brink of great changes, and the Muslims' victory over the aggressors is imminent."

Iranian President Mahmoud Ahmadinejad, IRNA, July 18, 2006

The current crisis in the Middle East has been brewing for months on two different levels - nuclear and conventional - and in three arenas: local, regional, and global.

No matter whether the crisis continues and expands or is stopped and temporarily settled - it already contains the seeds for the emergence of a new order in the Middle East, as well as the potential for global confrontation. In this new order, the U.S.'s traditional allies - Saudi Arabia and Egypt - are about to lose their regional preeminence to Russia's ally, Iran. Russia is repositioning itself vis-à-vis the U.S. as a highly influential superpower in the Middle East as well as in Europe, where it is the primary supplier of oil and natural gas.

The new order emerging in the Middle East will bring East-West relations back to a competitive mode reminiscent of the superpowers' rivalry during the Cold War era in the familiar theaters of the Middle East and Europe.

In the current crisis, Israel and the U.S. are confining themselves to the regional arena and the conventional level, whereas Iran and Russia are acting on all levels and in all arenas, and are making significant achievements on all fronts.

Background and Development of the Crisis

Iranian President Mahmoud Ahmadinejad's accession to power marked the beginning of the "Second Islamic Revolution." [1] Ahmadinejad and his extremist conservative supporters (the religious establishment, the Revolutionary Guards, the Basij, and the politicians affiliated with them) created a power center that strives to significantly promote Iran's position as a regional power, primarily by accelerating the development of nuclear and missile capabilities.

Throughout the last year, the West has attempted to check this development, but to no avail. The main obstacle to forming a diplomatic front against Iran's nuclear armament efforts has been Russia, which has persistently opposed, and is still opposing, the imposition of sanctions on Iran.

In the last few weeks and months, the West has stepped up the pressure on Iran in this regard, and on June 6 Iran was even presented with an ultimatum: either agree to give up uranium enrichment in exchange for the incentives package, or Iran's nuclear dossier will be referred back to the U.N. Security Council - a step that will open the possibility of imposing sanctions on Iran, and perhaps even other punitive measures.

As Western pressures increased, Iran's threats against Israel and the U.S., and at times against Europe as well, grew in their severity. On June 16, it was reported that a military pact had been signed between Iran and Syria, in which Iran agreed to defend Syria against Israeli attack, to fund weapons purchases from Russia, China, and the Ukraine for Syria, and to supply the Syrian army with artillery guns and ammunition, military vehicles, and Iranian missiles. Syria, for its part, agreed to extend its previous agreements allowing Iranian trucks delivering weapons into Lebanon to pass through Syria unhindered. In addition, the Iranian and Syrian defense ministers decided on the establishment of a joint liaison office and on maintaining open communication channels in military and security matters. In a press conference following the signing, the defense ministers stated that the agreement establishes "a joint [Iranian-Syrian] front against the Israeli threats," and that "Iran regards Syria's security as its own." At the same time, the editor of the Iranian conservative daily Kayhan, who is close to Iran's Supreme Leader Ali Khamenei, repeatedly called to take action against "Zionist" commercial and diplomatic targets throughout the world.

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On July 2, the Hamas organization, which receives significant support from Iran (and from Syria), carried out an attack on Israeli soil in which it kidnapped an Israeli soldier and killed two others. Israel's response was relatively restrained, and the incident did not develop into a crisis.

On July 12, Iranian Supreme National Security Council Secretary Ali Larijani, who is in charge of Iran's nuclear dossier, was forced to hold the meeting with Javier Solana (which he had managed to evade a week earlier.) In the meeting, he repeated Iran's position that it will only give its answer to the ultimatum on August 22, 2006. In response, Solana announced, on behalf of the "5+1," that the Iranian nuclear dossier would be referred back to the Security Council. Larijani then returned from Brussels to the Middle East, landing in Damascus for a meeting with Syrian President Bashar Al-Assad.

On that same day - July 12 - Hizbullah carried out an attack on Israeli soil in which it kidnapped two soldiers and killed several. This time, Israel responded with massive force, and the current local, conventional crisis was ignited.

Russia and the Iranian Nuclear Program

The G8 Summit, convened on July 15, 2006, was to discuss the Iranian nuclear program and the steps to be taken against Iran. On the eve of the summit, Russian President Vladimir Putin declared that "bringing excessive pressure on Iran regarding the nuclear issue would [only] lead to a dead end."

Due to Russian pressure on the one hand, and to Israel's escalation of its response to the Hizbullah attack on the other, the Middle East crisis was introduced into the summit's agenda, and subsequently became the primary issue on the agenda.

In discussions on Iran's nuclear program, Russia consistently defended Iran's interests and repeatedly expressed opposition to exerting pressure on Iran, demanding that a solution be reached by diplomatic means alone. Russian Foreign Minister Sergei Lavrov even defended Iran's right to defer its response until the end of August. Moreover, the Russian speakers defended not only Iran but also its protégés, Hamas and Hizbullah, and Lavrov went so far as to say that "there is no evidence of Iranian cooperation with Hizbullah." (It should be noted that Russia does not include Hizbullah and Hamas in its list of terrorist organizations). Russia thus positioned itself as the superpower which is the patron of the Iran-Syria-Hizbullah-Hamas bloc.

While resolutely supporting Iran on the nuclear issue, Russia was willing to cooperate with the other G8 members in resolving the local Hizbullah-Israel crisis (in cooperation with Iran and Syria...).

The U.S. got its way in that the G8's final statement endorsed the American position regarding the resolution of the local crisis (that is, the return of the kidnapped soldiers). But regarding pressures on Iran to give up its nuclear program, the U.S. lost, since the Russian pressure at the summit and the Iranian pressure on the ground (via Hizbullah and Hamas) compelled the G8 summit to set this issue aside. President Bush even expressed his satisfaction over the G8's consensus regarding the handling of the local crisis (i.e. the consensus that the Israeli soldiers must be released), despite the fact that, regarding the global nuclear issue, the U.S. was so sorely beaten.

Russia is now trying to capitalize on its success at the summit and to improve its global status by becoming a regional mediator in the local crisis - with the support of the Americans. To achieve this status, it is willing to pay by making real efforts to resolve the crisis; the deputy to the Russian foreign minister has already set out on a visit to Syria, Lebanon, Palestine and Israel in order to "find a way to end the tension and the confrontation in the Middle East." This, even while Russia's consistent support of Iran's nuclear program severely increases the threat to Israel's existence.

Iran Following the G8 Summit

Thanks to the local crisis and to Russia's support, Iran has already succeeded in making significant achievements on the regional and global levels - in the nuclear as well as the conventional spheres. It has come through the G8 summit unharmed, the pressures on it have been deferred for now and it can continue to enrich uranium without American or European interference.

Iran's insistence on deferring its response to the European proposal until August 22 was meant to buy it another round of talks with the Europeans (without American intervention). This would give Iran a few extra months to develop its nuclear program, after which it will be able to announce a significant upgrade in its nuclear status (in terms of uranium enrichment, missile development or even development of a nuclear weapon.) According to reports in the last few days, Iranian President Mahmoud Ahmadinejad plans to make an announcement on this issue.

All these developments should be seen as another phase in Iran's efforts to create deterrence vis-à-vis Israel, even before it attains independent nuclear fuel cycle capability. As MEMRI pointed out two years ago in its analysis of Iran's strategic orientation, this deterrence consists of several components, including the establishment of ballistic missile capability (the Shihab missiles), and supplying long-range missiles (with a range of 250-350 kilometers) to Hizbullah in Lebanon.

On the regional level, Iran - with the help of its proxies, Hamas and Hizbullah - has already become a regional power which America's traditional allies (Saudi Arabia, Egypt, Jordan and some of the Gulf states) fear but are unable to oppose. It is likely that, in the future, Iran will be joined by other Arab countries like Sudan, Yemen and Qatar, which, through its Al-Jazeera TV channel, is already increasing Iran's influence among the Muslim masses.

*Y. Carmon is the President of MEMRI; A. Savyon is Director of MEMRI's Iranian Media Project; and N. Toobian and Y.Mansharof are MEMRI Iranian Studies Department Research Fellows.