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The United States now has no good choices...
Topic: War on Terrorism 6:12 pm EDT, Aug  9, 2006

Stratfor: Geopolitical Intelligence Report - August 8, 2006

Break Point: What Went Wrong

By George Friedman

On May 23, we published a Geopolitical Intelligence Report titled "
Break Point ." In that article, we wrote: "It is now nearly
Memorial Day. The violence in Iraq will surge, but by July 4 there
either will be clear signs that the Sunnis are controlling the
insurgency -- or there won't. If they are controlling the
insurgency, the United States will begin withdrawing troops in
earnest. If they are not controlling the insurgency, the United
States will begin withdrawing troops in earnest. Regardless of
whether the [political settlement] holds, the U.S. war in Iraq is
going to end: U.S. troops either will not be needed, or will not be
useful. Thus, we are at a break point -- at least for the
Americans."

In our view, the fundamental question was whether the Sunnis would
buy into the political process in Iraq. We expected a sign, and we
got it in June, when Abu Musab al-Zarqawi was killed -- in our
view, through intelligence provided by the Sunni leadership. The
same night al-Zarqawi was killed, the Iraqis announced the
completion of the Cabinet: As part of a deal that finalized the
three security positions (defense, interior and national security),
the defense ministry went to a Sunni. The United States followed
that move by announcing a drawdown of U.S. forces from Iraq,
starting with two brigades. All that was needed was a similar
signal of buy-in from the Shia -- meaning they would place controls
on the Shiite militias that were attacking Sunnis. The break point
seemed very much to favor a political resolution in Iraq.

It never happened. The Shia, instead of reciprocating the Sunni and
American gestures, went into a deep internal crisis. Shiite groups
in Basra battled over oil fields. They fought in Baghdad. We
expected that the mainstream militias under the Supreme Council for
Islamic Revolution in Iraq (SCIRI) would gain control of the
dissidents and then turn to political deal-making. Instead, the
internal Shiite struggle resolved itself in a way we did not
expect: Rather than reciprocating with a meaningful political
gesture, the Shia intensified their attacks on the Sunnis. The
Sunnis, clearly expecting this phase to end, held back -- and then
cut loose with their own retaliations. The result was, rather than
a political settlement, civil war. The break point had broken away
from a resolution.

Part of the explanation is undoubtedly to be found in Iraq itself.
The prospect of a centralized government, even if dominated by the
majority Shia, does not seem to have been as attractive to Iraqi
Shia as absolute regional control, which would guarantee them all
of the revenues from the southern oil fields, rather than just
most. That is why SCIRI leader Abdel Aziz al-Hakim has been pushing
for the creation of a federal zone in the south, similar to that
established for the Kurdistan region in the north. The growing
closeness between the United States and some Sunnis undoubtedly
left the Shia feeling uneasy. The Sunnis may have made a down
payment by delivering up al-Zarqawi, but it was far from clear that
they would be in a position to make further payments. The Shia
reciprocated partially by offering an amnesty for militants, but
they also linked the dissolution of sectarian militias to the
future role of Baathists in the government, which they seek to
prevent. Clearly, there were factions within the Shiite community
that were pulling in different directions.

But there was also another factor that appears to have been more
decisive: Iran. It is apparent that Iran not only made a decision
not to support a political settlement in Iraq, but a broader
decision to support Hezbollah in its war with Israel. In a larger
sense, Iran decided to simultaneously confront the United States
and its ally Israel on multiple fronts -- and to use that as a
means of challenging Sunnis and, particularly, Sunni Arab states.

The Iranian Logic

This is actually a significant shift in Iran's national strategy.
Iran had been relatively cooperative with the United States between
2001 and 2004 -- supporting the United States in Afghanistan in a
variety of ways and encouraging Washington to depose Saddam
Hussein. This relationship was not without tensions during those
years, but it was far from confrontational. Similarly, Iran had
always had tensions with the Sunni world, but until last year or
so, as we can see in Iraq, these had not been venomous.

Two key things have to be borne in mind to begin to understand this
shift. First, until the emergence of al Qaeda, the Islamic Republic
of Iran had seen itself -- and had been seen by others -- as being
the vanguard of the Islamist renaissance. It was Iran that had
confronted the United States, and it was Iran's creation,
Hezbollah, that had pioneered suicide bombings, hostage-takings and
the like in Lebanon and around the world. But on Sept. 11, 2001, al
Qaeda -- a Sunni group -- had surged ahead of Iran as the
embodiment of radical Islam. Indeed, it had left Iran in the role
of appearing to be a collaborator with the United States. Iran had
no use for al Qaeda but did not want to surrender its position to
the Sunni entity.

The second factor that must be considered is Iran's goal in Iraq.
The Iranians, who hated Hussein as a result of the eight-year war
and dearly wanted him destroyed, had supported the U.S. invasion of
Iraq. And they had helped the United States with intelligence prior
to the war. Indeed, it could be argued that Iran had provided
exactly the intelligence that would provoke the U.S. attack in a
way most advantageous to Iran -- by indicating that the occupation
of Iraq would not be as difficult as might be imagined,
particularly if the United States destroyed the Baath Party and all
of its institutions. U.S. leaders were hearing what they wanted to
hear anyway, but Iran made certain they heard this much more
clearly.

Iran had a simple goal: to dominate a post-war Iraq. Iran's Shiite
allies in Iraq comprised the majority, the Shia had not resisted
the American invasion and the Iranians had provided appropriate
support. Therefore, they expected that they would inherit Iraq --
at least in the sense that it would fall into Tehran's sphere of
influence. For their part, the Americans thought they could impose
a regime in Iraq regardless of Iran's wishes, and they had no
desire to create an Iranian surrogate in Baghdad. Therefore, though
they may have encouraged Iranian beliefs, the goal of the Americans
was to create a coalition government that would include all
factions. The Shia could be the dominant group, but they would not
hold absolute power -- and, indeed, the United States manipulated
Iraqi Shia to split them further .

We had believed that the Iranians would, in the end, accept a
neutral Iraq with a coalition government that guaranteed Iran's
interests. There is a chance that this might be true in the end,
but the Iranians clearly decided to force a final confrontation
with the United States. Tehran used its influence among some Iraqi
groups to reject the Sunni overture symbolized in al-Zarqawi's
death and to instead press forward with attacks against the Sunni
community. It goes beyond this, inasmuch as Iran also has been
forging closer ties with some Sunni groups, who are responding to
Iranian money and a sense of the inevitability of Iran's ascent in
the region.

Iran could have had two thoughts on its mind in pressing the
sectarian offensive. The first was that the United States, lacking
forces to contain a civil war, would be forced to withdraw, or at
least to reduce its presence in populated areas, if a civil war
broke out. This would leave the majority Shia in a position to
impose their own government -- and, in fact, place pro-Iranian
Shia, who had led the battle, in a dominant position among the
Shiite community.

The second thought could have been that even if U.S. forces did not
withdraw, Iran would be better off with a partitioned Iraq -- in
which the various regions were at war with each other, or at least
focused on each other, and incapable of posing a strategic threat
to Iran. Moreover, if partition meant that Iran dominated the
southern part of Iraq, then the strategic route to the western
littoral of the Persian Gulf would be wide open, with no Arab army
in a position to resist the Iranians. Their dream of dominating the
Persian Gulf would still be in reach, while the security of their
western border would be guaranteed. So, if U.S. forces did not
withdraw from Iraq, Iran would still be able not only to impose a
penalty on the Americans but also to pursue its own strategic
interests.

This line of thinking also extends to pressures that Iran now is
exerting against Saudi Arabia, which has again become a key ally of
the United States. For example, a member of the Iranian Majlis
recently called for Muslim states to enact political and economic
sanctions against Saudi Arabia -- which has condemned Hezbollah's
actions in the war against Israel. In the larger scheme, it was
apparent to the Iranians that they could not achieve their goals in
Iraq without directly challenging Saudi interests -- and that meant
mounting a general challenge to Sunnis. A partial challenge would
make no sense: It would create hostility and conflict without a
conclusive outcome. Thus, the Iranians decided to broaden their
challenge.

The Significance of Hezbollah

Hezbollah is a Shiite movement that was created by Iran out of its
own needs for a Tehran-controlled, anti-Israel force. Hezbollah was
extremely active through the 1980s and had exercised economic and
political power in Lebanon in the 1990s, as a representative of
Shiite interests. In this, Hezbollah had collaborated with Syria --
a predominantly Sunni country run by a minority Shiite sect, the
Alawites -- as well as Iran. Iran and Syria are enormously
different countries, with many different interests. Syria's
interest was the domination and economic exploitation of Lebanon.
But when the United States forced the Syrians out of Lebanon --
following the assassination of former Prime Minister Rafik
al-Hariri in February 2005 -- any interest Syria had in restraining
Hezbollah disappeared. Meanwhile, as Iran shifted its strategy, its
interest in reactivating Hezbollah -- which had been somewhat
dormant in relation to Israel -- increased.

Hezbollah's interest in being reactivated in this way was less
clear. Hezbollah's leaders had aged well: Violent and radical in
the 1980s, they had become Lebanese businessmen in the 1990s. They
became part of the establishment. But they still were who they
were, and the younger generation of Hezbollah members was even more
radical. Hezbollah militants had been operating in southern Lebanon
for years and, however relatively restrained they might have been,
they clearly had prepared for conventional war against the
Israelis.

With the current conflict, Hezbollah now has achieved an important
milestone: It has fought better and longer than any other Arab army
against Israel. The Egyptians and Syrians launched brilliant
attacks in 1973, but their forces were shattered before the war
ended. Hezbollah has fought and clearly has not been shattered.
Whether, in the end, it wins or loses, Hezbollah will have achieved
a massive improvement of its standing in the Muslim world by
slugging it out with Israel in a conventional war. If, at the end
of this war, Hezbollah remains intact as a fighting force --
regardless of the outcome of the campaign in southern Lebanon --
its prestige will be enormous.

Within the region, this outcome would shift focus away from the
Sunni Hamas or secular Fatah to the Shiite Hezbollah. If this
happens simultaneously with the United States losing complete
control of the situation in Iraq, the entire balance of power in
the region would be perceived to have shifted away from the
U.S.-Israeli coalition (the appearance is different from reality,
but it is still far from trivial) -- and the leadership of the
Islamist renaissance would have shifted away from the Sunnis to the
Shia, at least in the Middle East.

Outcomes

It is not clear that the Iranians expected all of this to have gone
quite as well as it has. In the early days of the war, when the
Saudis and other Arabs were condemning Hezbollah and it appeared
that Israel was going to launch one of its classic lightning
campaigns in Lebanon, Tehran seemed to back away -- calling for a
cease-fire and indicating it was prepared to negotiate on issues
like uranium enrichment. Then international criticism shifted to
Israel, and Israeli forces seemed bogged down. Iran's rhetoric
shifted. Now the Saudis are back to condemning Hezbollah, and the
Iranians appear more confident than ever. From their point of view,
they have achieved substantial psychological success based on real
military achievements. They have the United States on the defensive
in Iraq, and the Israelis are having to fight hard to make any
headway in Lebanon.

The Israelis have few options. They can continue to fight until
they break Hezbollah -- a process that will be long and costly, but
can be achieved. But they then risk Hezbollah shifting to guerrilla
war unless their forces immediately withdraw from Lebanon.
Alternatively, they can negotiate a cease-fire that inevitably
would leave at least part of Hezbollah's forces intact, its
prestige and power in Lebanon enhanced and Iran elevated as a power
within the region and the Muslim world. Because the Israelis are
not going anywhere, they have to choose from a limited menu.

The United States, on the other hand, is facing a situation in Iraq
that has broken decisively against it. However hopeful the
situation might have been the night al-Zarqawi died, the decision
by Iran's allies in Iraq to pursue civil war rather than a
coalition government has put the United States into a militarily
untenable position. It does not have sufficient forces to prevent a
civil war. It can undertake the defense of the Sunnis, but only at
the cost of further polarization with the Shia. The United States'
military options are severely limited, and therefore, withdrawal
becomes even more difficult. The only possibility is a negotiated
settlement -- and at this point, Iran doesn't need to negotiate.
Unless Grand Ayatollah Ali al-Sistani, the top Shiite cleric in
Iraq, firmly demands a truce, the sectarian fighting will continue
-- and at the moment, it is not even clear that al-Sistani could
get a truce if he wanted one.

While the United States was focused on the chimera of an Iranian
nuclear bomb -- a possibility that, assuming everything we have
heard is true, remains years away from becoming reality -- Iran has
moved to redefine the region. At the very least, civil war in
Lebanon (where Christians and Sunnis might resist Hezbollah) could
match civil war in Iraq, with the Israelis and Americans trapped in
undesirable roles.

The break point has come and gone. The United States now must make
an enormously difficult decision. If it simply withdraws forces
from Iraq, it leaves the Arabian Peninsula open to Iran and loses
all psychological advantage it gained with the invasion of Iraq. If
American forces stay in Iraq, it will be as a purely symbolic
gesture, without any hope for imposing a solution. If this were
2004, the United States might have the stomach for a massive
infusion of forces -- an attempt to force a favorable resolution.
But this is 2006, and the moment for that has passed. The United
States now has no good choices; its best bet was blown up by Iran.
Going to war with Iran is not an option. In Lebanon, we have just
seen the value of air campaigns pursued in isolation, and the
United States does not have a force capable of occupying and
pacifying Iran.

As sometimes happens, obvious conclusions must be drawn.

Send questions or comments on this article to
analysis@stratfor.com.
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