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Financial pressure on Iran gathering steam

By Times Wires
Published September 19, 2007

WASHINGTON - One year after the United States launched an intensified global economic campaign against Iran with the stated aim of halting Tehran's nuclear work, the Bush administration is counting its successes - and calling for still more pressure.

In recent months, once-reluctant European countries have joined the effort with more vigor.

Germany's largest bank, Deutsche Bank AG, said recently that it would stop doing business in Iran. France has trimmed export credits that encourage business in Iran and advised French firms, including the oil and gas giant Total S.A., not to start new investments there. Even Japan, heavily dependent on Persian Gulf oil, has pulled back from energy projects in Iran.

While hard to quantify, the multipronged effort appears to be causing significant pain in Iran, raising the cost of doing business and delaying Tehran's plans to modernize its inefficient oil and gas industry, say U.S. officials, Western diplomats and analysts.

In Washington, the drive for financial sanctions has proved a boon to Bush aides seeking to head off military operations against Iran, which Vice President Dick Cheney favors.

Whether it will succeed in thwarting Iran's nuclear ambitions remains to be seen.

In concert with the economic measures, the top U.S. military commander for the Middle East is pressing Arab allies to form a more united front against Iran.

At military compounds and royal reception halls across the Persian Gulf, Adm. William Fallon is delivering personal appeals to Arab leaders to counter Iran's ambitions to expand its regional influence and move ahead with its nuclear program.

Fallon, head of U.S. Central Command, has carefully avoided publicly discussing any war contingency plans or making any direct threats against Iran, which sits in his sphere of operations.

"We are not looking for a new NATO-type alliance against Iran," Fallon said Saturday.

But the United States wants that "when they (Iran) look to the gulf, they see a group united in response to Iranian hegemonic behavior," Fallon said.

Additionally, envoys from six nations will meet in Washington on Friday to discuss an already-delayed third U.N. Security Council sanctions resolution against Iran. But of the six, China and Russia oppose more punishment for Iran, and Germany is unenthusiastic. The eventual resolution, if any, is expected to be watered-down, Western diplomats say.

Information from McClatchy Newspapers and Associated Press was used in this report

Fast facts

Reporter is freed

An Iranian-American reporter who was trapped in Iran for months on suspicion of trying to stir up a revolution was allowed to leave the country Tuesday and return to the United States. Parnaz Azima was one of four Iranian-Americans charged with endangering national security, an accusation they denied.

[Last modified September 19, 2007, 01:32:58]