In his 2002 State of the Union Address, President George W. Bush referred to Iran, together with Iraq and North Korea, as the "axis of evil." The unfolding and, indeed, growing violence in Iraq, Lebanon, and Palestine, that is instigated and often directed and financed, by Iran, has shed new light on the Islamic Republic's role as a leading extremist state in the Middle East.
Coalition of Extremists
Iran presides over a confederation of extremists comprising Hassan Nasrallah's Hizbullah in Lebanon; Muqtada Al-Sadr's militia, known as Jeish al-Mahdi (the Mahdi Army) in Iraq; and Bashar Al-Assad's Syria - Iran's principal ally, and Iran's subcontractor for guiding and arming Hizbullah, and for providing the political and financial support for the Hamas Islamic ovement in Palestine.  Syria is also the headquarters for a variety of small terrorist groups. Its borders serve as the main crossing channel for terrorists feeding the ranks of the suicide bombers of Al-Qa'eda in the Land of the Two Rivers, established by Abu-Mus'ab Al-Zarqawi in Iraq, and for Iraqi Sunni elements active in Iraq. Muwaffaq Al-Rubai'i, Iraq's National Security Adviser, accused Syria of harboring in Damascus the leader of Ansar Al-Sunna organization who "directs the terrorist activities against our people in Iraq." Al-Rubai'i also claimed that 90 percent of terrorists use the Damascus airport before crossing the border into Iraq. 
Iran dispenses to the members of this coalition a lot of oil money and weapons. As the international pressure mounts on Iran to come clean on its nuclear program, Iranian surrogates are stirring up conflicts to divert attention from the nuclear issue. The July 12, 2006 Hizbullah provocation on Israel's border, the ongoing conflict in Gaza after Israel's total withdrawal, and the increased sectarian violence in Iraq in which Jeish Al-Mahdi and the other Shi'ite militias financed by Iran play a key role, are examples of Iran seeking to instigate violence in three critical areas in the Middle East - Iraq, Lebanon, and Palestine.
The most recent example of instigating violence are the street demonstrations and sit-ins that are part of the declared goal of Hizbullah to overthrow the Lebanese government, by force if necessary - a government that was democratically elected and enjoys a clear majority in parliament. What brings together the various groups of demonstrators outside the sarai (central government headquarters in Beirut) is the determined attempt to forcibly change the political landscape in Lebanon for the primary purpose of frustrating an international effort to bring to trial those high-level officials associated with the assassination of the former Lebanese prime minister Rafiq Al-Hariri. The trial could implicate high-level Syrian and Lebanese officials as well as the principal Syrian collaborator in Lebanon, President Emile Lahoud, whose term as president was unconstitutionally extended for two years under pressure of the Syrian government when its army was still occupying Lebanon. Lahoud echoes faithfully the Syrian and Hizbullah positions, including the spurious argument that the Lebanese government of Fuad Al-Siniora is illegitimate.
Iran's Support of Hizbullah
Given Syria's limited financial resources, it is beyond doubt that the arming of Hizbullah, whether by Iran directly or through Syrian subcontracting, is financed almost entirely by Iran, although one should not exclude some elements of financial support from local businessmen in Lebanon.
By Hizbullah's own admission, Iran finances its multi-faceted political and charitable organizations. In a statement to Agence France Press, reported in the London daily Al-Hayat, Bilal Na'im, assistant chief of the Executive Council of Hizbullah, the organizations connected with Hizbullah receive funding from the Islamic Religious Fund [al-maal al-shar'i] controlled by Iran's Supreme Leader Ali Khamenei. Quoting his leader Hassan Nasrallah, Na'im said the fund was "pure" because those who make it available "do not seek a political gain or mortgage anyone's loyalty."
Hizbullah has already made payments to the tune of $300 million out of an estimated $600 million committed as compensation to those affected by the war with Israel. There is also a plan for the construction of "underground parking" which could be a euphemism for bomb shelters.
In terms of services, Hizbullah runs 14 schools under the moniker of "Mahdi Schools," two hospitals, 36 health clinics which provide free medical services, and four "resistance information media centers," including Al-Manar TV. Hizbullah also provides agricultural guidance, veterinarian services, and marketing. Finally, there is the Martyrs Foundation, which provides support to "the families of the martyrs." The foundation was originally an Iranian foundation listed as "Imam Khomeini Foundation," but was renamed and attached to Hizbullah. 
Support for the Shi'ite Militias in Iraq
Iran's strategy for Iraq has many dimensions, but two in particular should be underscored: First, Iran prefers to see Iraq weak so that it will not rise again to challenge Iran's religious, revolutionary, and political hegemony in the Gulf area or, indeed, pose a threat to Iran itself; and second, and perhaps contrary to its public statements, Iran wants the U.S. to sink deeper into a very difficult situation while at the same time calling for the U.S. to withdraw from Iraq. With regard to the Sunnis in Iraq, Iran has dual strategic objectives: causing maximum human and material loss to the Sunnis by escalating the sectarian war and, on the other hand, preventing the Sunnis from ever rising again as the dominant political force in Iraq. 
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One of the main instruments for spreading chaos and violence in Iraq is Jeish al-Mahdi (the Mahdi Army), whose leader is the radical Shi'ite cleric Muqtada Al-Sadr, who is rapidly becoming a disruptive element in the Iraqi political life. Jeish al-Mehdi and Hizbullah have many features in common:
- Both are Shi'ite organizations which draw on the poorest and most disenfranchised elements in their respective countries.
- Both are financed by Iran. Hizbullah is also armed by Iran but there is no solid evidence of massive transfer of arms to Jeish Al-Mahdi, although it has been suggested in some of the Iraqi press that elements of Jeish Al-Mahdi were training with Hizbullah.
- Both take identical and almost simultaneous actions directed by Iran. For example, they withdrew their ministers from democratically elected governments, in the desire to bring these governments down and to install pro-Iranian governments.
- Both receive considerable financial support from Iran for their extensive social programs that benefit their followers.
- Both share anti-American and anti-democratic platforms.
- Both are headed by a sayyed, meaning a descendent from the Prophet Muhammad's household. The two's authority over their respective militias is absolute.
Financial Support to Hamas
Isma'il Haniyah, Hamas Prime Minister in Gaza, has recently visited Damascus and Tehran. In a Friday sermon delivered in one of Tehran's mosques in early December 2006, Haniyah said that Iran represents "the strategic depth" for the Palestinians. He added that he will resist U.S. pressure to moderate. One of the most extremist Iranian clerics, Ahmad Khatemi, also spoke at the event.  A few days earlier, Haniyah was seen on Al-Jazeera TV seated with Syrian President Bashar Al-Assad and Iranian President Ahmadinejad at the opening ceremony of the Asian Olympic Games in Doha, Qatar.
While in Tehran, Haniya was received by Ahmadinejad and Iran's Supreme Leader Ali Khamenei. Iran has pledged $350 million to pay the salaries of the employees of the Hamas government and to establish "cultural institutions." On his way back, on December 15, he was denied entrance to Gaza by Israel for carrying with him sizable cash estimated at $35 million, which he apparently collected in Iran. He was given a choice to enter Gaza without the money or to stay on the Egyptian side of the border. He opted for the first choice. One would assume that the tunnels used to smuggle arms into Gaza could easily be used to smuggle Iranian cash in the future. In a televised speech on December 19, Haniya admitted that he had been carrying between $32 and $35 million.  It is surprising he did not know the exact amount of money he was carrying with him.
The Role of Syria
Syria shares most of Iran's strategic objectives in Iraq, Lebanon and Palestine. It seeks to destabilize Iraq by allowing the passage of terrorists from various Arab countries into Iraq, while at the same time giving shelter to Iraqi pro-Saddam Ba'thist leaders to operate from its territory against Iraq. Ironically, during his meeting with Bashar Al-Asad, Al-Sadr hailed Syria's support for the Iraqi people "and its concern for their security." 
Syria also seeks the overthrow of the regime in Lebanon, which threatens to proceed with the establishment of an international tribunal to try those individuals, allegedly connected with the Syrian regime, implicated in the murder of Hariri. And, finally, Syria provides shelter and support to the various Palestinian "rejectionist" fronts which oppose peace with Israel. Key among the rejectionists are Khalid Mish'al, the leader of Hamas Islamic Movement; Ahmad Jibril, the secretary-general of the Popular Front for the Liberation of Palestine - the General Command; Na'if Hawatmah, the secretary-general of the Democratic Front for the Liberation of Palestine; and Ramadan Abdallah Shallah, the leader of Palestinian Islamic Jihad.
Being financially poor, Syria plays the role as a surrogate or subcontractor for Iran's designs in these three areas, although the national objectives of the two countries are not necessarily identical. For example, in the case of Lebanon, Iran's primary objective is to turn the reins of government over to Hizbullah and the Shi'ite community of Lebanon. For Syria, the immediate objective in destabilizing Lebanon is to undermine any effort to convene an international tribunal that could implicate individuals connected with the highest centers of authority in the country, while the long-term objective is to regain control over Lebanon, from which it was expelled.
As far as Palestine is concerned, Iran's involvement is part of a deliberate and vicious anti-Israeli strategy. For Syria, the main goal in Palestine is to put enough pressure on Israel to bring it to the negotiating table with the ultimate objective of regaining the Golan Heights.
By acting as a surrogate for Iran, Syria has seriously damaged its relations with three of the most significant Sunni countries in the region - Saudi Arabia, Egypt, and Jordan - not to mention the Gulf countries, which in the past have provided aid to and investments in Syria. It is not inconceivable that the Syrian coalition with Iran is not organic, and that sooner or later Syria will return to its Arab roots, where it will seek money as well as political support.
As the head of the coalition of extremists, Iran provides military, financial, political, and logistical support to organizations and groups that are committed to instigating violence and, sometimes, even acts of terrorism, in three highly sensitive areas in the Middle East - Iraq, Lebanon, and Palestine. In the case of Iraq and Lebanon, Iran seeks to entrench political power in the hands of the Shi'a people and, at the same time, to undermine all vestiges of democracy or the rule of law. In the case of Hamas, Iran views the organization as a corridor to the southern part of Israel, in contrast to Hizbullah, which serves as a corridor to the northern part of Israel.
*Nimrod Raphaeli is Senior Analyst of MEMRI's Middle East Economic Studies Program.
 On the relations between Iran and Syria, see MEMRI Special Dispatch No. 1204, "Iran and the Recent Escalation on Israel’s Borders," July 13, 2006, Iran and the Recent Escalation on Israel's Borders.
 Al-Sharq Al-Awsat (London), December 7, 2006.
 Al-Hayat (London), December 15, 2006.
 Al-Arabiya TV, December 17, 2006.
 Al-Zaman (Baghdad), December 10, 2006.
 Al-Sharq Al-Awsat (London), December 20, 2006.
 Al-Sabah (Baghdad), February 6, 2006.