America and the Middle East: An explosive mix

By Geoff Dyer and Richard McGregor

Pressure builds over Iran’s nuclear ambitions

Just minutes after Barack Obama reassured a pro-Israel lobby group in Washington on Sunday that, when it comes to Iran, “I have Israel’s back”, Mitt Romney went on the attack against the US president. “If Barack Obama is re-elected, Iran will have a nuclear weapon and the world will change,” the frontrunner for the Republican presidential nomination told a pancake breakfast meeting in Atlanta, Georgia.

At about the same time Newt Gingrich, the former House of Representatives speaker, was taking aim at a different but related political target – the rising price of oil, which is partly the result of sanctions placed on the Iranian regime because of its efforts to acquire a nuclear weapon.

“The price of gasoline is becoming a genuine crisis for many American families,” said Mr Gingrich, who is also a Republican candidate. “If it continues to go higher, it will crater the economy by August.”

Electoral opportunism aside, the comments underline a political trap that is developing for Mr Obama. Since he took office three years ago, Iran has remained one of the most intractable and complex foreign policy issues he has faced. And at precisely the moment various strands of the problem appear to be reaching a crunch point, there is a danger of Iran becoming the wild card in this year’s presidential election.

Mr Obama’s re-election campaign has been buoyed in recent weeks by lower unemployment numbers, better news on Europe’s long-running sovereign debt crisis and bitter infighting among a weak field of Republican candidates. Yet if he mishandles the Iran issue in the coming months, he could find himself facing oil price spikes that undermine the fragile economic recovery, full-throated accusations of political weakness from his rivals that affect important constituencies or even a new war in the Middle East.

“It is a Catch-22 in an election year for the administration,” says Suzanne Maloney, a former diplomat now at Washington think-tank the Brookings Institution, referring to the pressure to take action against Iran and the consequences of those actions. “Navigating that balancing act is going to be a very difficult one throughout the course of this year.”

This week’s visit of Israeli prime minister Benjamin Netanyahu, with whom Mr Obama has had a prickly relationship, is throwing this mixture of political and diplomatic pressures into sharp focus. Mr Netanyahu was at the White House on Monday, and was due to speak himself at the annual meeting of the American Israel Public Action Committee, the lobby group Mr Obama addressed.

The president has adopted a range of tactics to prevent Iran from getting a nuclear weapon. Within weeks of taking office, he posted a video on YouTube appealing to the Iranian public, promising a “new beginning” and “constructive ties”. Yet at the same time he was reportedly giving the nod to covert activities aimed at slowing Tehran’s nuclear programme, including a range of different attempts to sabotage nuclear activities. He has also put in place by far the toughest sanctions regime the Islamic Republic has faced – a campaign that gathered steam after it was revealed in late 2009 that Iran had built an underground uranium enrichment facility at Fordow, near the holy city of Qom.

Supporters say the policies amount to a sophisticated mixture of carrots and sticks; critics claim that they are incoherent and that the outreach strategy was not given enough time. But whatever the reality, the Mr Obama’s Iran policy is reaching a critical stage.

On one hand, tensions between the US and Israel are rising. Watching Iran’s advancing uranium enrichment activities, especially at Fordow, many Israeli officials believe the window for taking military action is fast closing, prompting intensifying speculation about an Israeli attack in the coming months. The fact that most estimates suggest such an aerial strike would set Iran back by only a couple of years does not dissuade some in Israel. “Lots of things can happen in two years,” says one official. . . . The Obama administration sees things very differently. The president points out that Iran has yet to make the crucial political decision to build a nuclear weapon. But an attack now would ensure Tehran decides it definitely needs one, officials say. “Now is not the time for bluster, but a time to let our increased pressure sink in,” Mr Obama said on Sunday.

On the other hand Iran, which held parliamentary elections at the weekend, is also approaching a crucial point. While its nuclear programme has made progress in recent years, its diplomatic strategy has often revolved around playing for time. But with the sanctions beginning to have a sharp impact on its economy, some analysts believe Ayatollah Ali Khamenei, supreme leader, could be forced into making a final decision. “Khamenei’s back is increasingly against the wall,” says Karim Sadjadpour at the Carnegie Endowment for International Peace in Washington. “He has two ways out. He can compromise or he can decide to go for a nuclear weapon.”

Into this complex mix comes the US election. Republican candidates have been hammering Mr Obama on Iran because they believe this is one foreign policy issue where they can portray the president who ordered the killing of Osama bin Laden as weak. They also hope they can peel away Jewish voters worried about the growing friction with Israel over Iran.

That in turn offers Mr Netanyahu a vulnerable point on which to apply pressure on the Obama administration this week. Ahead of his visit, there was intense lobbying to convince the president to harden his position on military action against Iran – including details of the circumstances under which he would support a strike.

Some of Mr Obama’s political opponents have been happy to help out Mr Netanyahu. John McCain, the Republican senator whom Mr Obama beat in the 2008 election, led a small congressional delegation to meet Mr Netanyahu in Jerusalem last week. “There should be no daylight between America and Israel in our assessment of the threat [from Iran],” Mr McCain said after the meeting. “Unfortunately there clearly is some.”

Iran will hang over the elections in lots of other ways, starting with sanctions. Mr Obama argues that Israel should allow time to assess the impact of sanctions on Iran. From the end of June, the administration will ban banks from countries conducting oil trade with the Iranian central bank.

However, the law gives the administration some flexibility in applying the sanctions, and the Israelis will be watching closely to see how it is used. Uzi Rabi, director of Israel’s Moshe Dayan Center for Middle Eastern and African Studies, says that by July or August Israel will have a clearer sense of whether Iran is really facing significant pressure. “If Israel considers that the sanctions are not being fully implemented and that it is more of the same, the government may decide there is no way other than military action,” he says.

. . . Yet if there are political risks from soft-pedalling on sanctions, there are others from applying them too rigidly. The price of Brent crude has risen by 12 per cent since mid-January, in part because of uncertainty already caused by the sanctions imposed on Iranian oil.

Mark Dubowitz, executive director of the Washington-based Foundation for Defense of Democracies, who helped write the latest sanctions bill, admits that there is a risk oil prices could rise even further. “If the sanctions are done right, it should not disrupt the market too much,” he says, with Saudi Arabia and others providing additional supply to compensate for lost Iranian exports. “But it needs to be done properly. The sanctions need to be implemented in the right way.”

A sharp rise in oil prices could yet derail the recovery in the US economy. It would also provide ammunition to Republican candidates, who can use the issue to mobilise their base and hope that high petrol costs become a symbol of broader discontent with the state of the economy.

“The American people want to see the president’s trying to do something about it [rising oil prices],” Mr Romney said last week. It is, to say the least, something of a contradiction to call for “crippling” sanctions on Iran, as Mr Romney does, and also to complain about high oil prices. But contradictions are not always called out in election campaigns.

The political complications do not end there. The objective of sanctions is to force Iran into negotiating over giving up its nuclear weapon ambitions. Yet if the Obama administration does restart talks with Iran in the coming months, as seems likely, the pressure of the election means it will have little, if any, room for manoeuvre.

The biggest and most difficult political question is what would happen if there were a military strike on Iran in the months before the election. Israel pondered such an option in early 2009, the argument being that a new president who had yet to appoint most of his cabinet would be unable to object. By some accounts, it might now be tempted to attack before this year’s election because Mr Obama would be politically constrained from objecting.

“One of the great mysteries is how the Israeli leadership assesses US politics,” says Jon Alterman at the Center for Strategic and International Studies in Washington. “There has been loose talk that the prime minister believes he has a window when the president’s hands are tied. But it is not clear that this is really true.”

The many variables make it hard to predict the political impact. A successful Israeli strike might make Mr Obama look weak, yet he would also be criticised for abandoning an ally if such an attack went badly. Much would also depend on whether the US was sucked into any wider conflict that might break out.

Alternatively, some observers point out that, purely in terms of electoral politics, a US-led attack would yield big benefits. “If you ask anyone inside both of the campaigns, if Obama were to use force against Iran, then the election is over,” says Robert Kagan, the foreign policy scholar who has advised a number of Republican candidates. “This is what people think. He would win the election overwhelmingly.”

Veteran political commentator Charlie Cook disagrees with that view, saying any initial support for the president would be fleeting. “This country is so much more partisan, divided and cynical that, whatever rallying around the flag that there was, it would be shortlived,” he says. “I think we are living in a different time now.”

The Jewish: Small segment but a big role in raising funds

Karl Rove, the political brains of the George W. Bush administration, wrote an article last week entitled “How to Beat Obama”. One of his central points: “Obama has lost much political and financial support in the American Jewish community.”

Ever since Franklin Roosevelt was president, the Jewish community has been one of the most solid parts of the Democratic support base. But this year Republicans feel that support could be vulnerable, a result of both the personal tension between President Barack Obama and Benjamin Netanyahu, Israel’s prime minister, and their apparent differences over how to deal with Iran.

“There is no doubt that the pro-Israel segment of the Jewish community will take a very hard look at the handling of this issue [Iran],” says Jay Lefkowitz, another former adviser to Mr Bush. “The emergence of a nuclear Iran poses an existential threat to Israel, so it may well cause many American Jews whose vote is normally based on liberal social issues to take a closer look at national security.”

The Jewish community makes up only 3 per cent of the electorate in the US, but in a potentially tight election it could play a crucial role: Jewish voters are pivotal in the swing states of Florida and Ohio and are also hugely important for fundraising.

The complicated overlap between Israeli and US politics has already played a role in this year’s campaign. When Newt Gingrich, one of the Republican presidential hopefuls, recently called the Palestinians “an invented people”, he was roundly criticised across the political spectrum in the US and in Israel as well. But he received immediate backing from one quarter – Sheldon Adelson, the Las Vegas casino magnate, whose gambling businesses in the US and Macao, near Hong Kong, have made him a billionaire.

Mr Adelson and his wife Miriam donated $10m in January to the super-political action committee supporting Mr Gingrich and have reportedly poured in further millions since. Without Mr Adelson’s money, which dwarfs what Mr Gingrich and his backers have been able to raise from all other sources, Mr Gingrich would have been forced to drop out of the Republican race.

“I might give $10m or $100m to Gingrich,” Mr Adelson told Forbes magazine in February.

As it happens, Mr Adelson spends a lot of his time in Israel and is a staunch ally of Mr Netanyahu. Israel Hayom, the newspaper the tycoon owns there, is credited by some with helping Mr Netanyahu return to power in 2009.

Copyright The Financial Times Limited 2012.