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Showdown With Iran

PRODUCED BY
Greg Barker

CO-PRODUCER
Claudia Rizzi

WRITTEN AND DIRECTED BY
Greg Barker

ANNOUNCER: Tonight on FRONTLINE-

Pres. GEORGE W. BUSH: Iran's active pursuit of weapons threatens the security of nations everywhere.

ANNOUNCER: Diplomacy-

JOHN BOLTON, U.N. Ambassador, 2005-06: We squandered five years of time-

HAMID REZA ASEFI, Fmr. Foreign Ministry Spokesman: Everywhere when there is a problem, the American has got a finger in it.

ANNOUNCER: -or military action?

Pres. GEORGE W. BUSH: -threatens the Middle East-

ROBIN WRIGHT, The Washington Post: Many of the people who argued to take the United States into Iraq are again beating the war drums.

ANNOUNCER: Is Iran next?

RICHARD ARMITAGE, Dpty. Secretary of State, 2001-05: It would be the worst of all worlds for the outgoing administration to start a conflict.

Pres. GEORGE W. BUSH: We will confront this danger before it is too late.

ANNOUNCER: Tonight on FRONTLINE, Showdown With Iran.

NARRATOR: The USS Nimitz, on patrol off Iran. America has dominated these waters for 50 years, ensuring the free flow of oil through the Persian Gulf. But to the east, Iran is rising.

Capt. MICHAEL MANAZIR, USS Nimitz: There's a Combattante, an Iranian patrol vessel, who is surveilling areas adjacent to their territorial waters. And he has positioned himself about 10 miles away. He carries weapons systems that are a threat to the aircraft carrier.

NARRATOR: This year, Iran staged one of its largest military exercises ever, demanding its place on the world stage.

HAMID REZA HAJIBABAEI, Parliamentary Leader: [through interpreter] Iran is a regional power. We can be the strongest in the Persian Gulf. The United States doesn't like this. It wants to see Iran weakened. It wants us to take orders from them.

NARRATOR: Iran wants to extend its influence across the Middle East. The Bush administration says not on its watch.

Vice Pres. RICHARD CHENEY: [USS Stennis, May 11, 2007] We're sending clear messages to friends and adversaries alike. We'll keep the sea lanes open, and we'll stand with others to prevent Iran from gaining nuclear weapons and dominating this region.

NARRATOR: Two days after Cheney's visit, Iran's president visited American allies in the Gulf and called on the U.S. to pack up and go home.

VALI NASR, Author The Shia Revival: Iran and the U.S. are now locked in a very dangerous game of each trying to appear harder than the other side and get the other side to blink first. But there's a threshold when this kind of an indirect game of cat and mouse will become an outright direct confrontation.

NARRATOR: Late this summer, FRONTLINE traveled to Iran to learn the roots of the regime's new confidence and how it has found itself on a collision course with the Bush administration.

Outside Friday prayers in downtown Teheran, a possible war with America was on everyone's minds.

MAN OUTSIDE MOSQUE: [subtitles] George Bush is only bluffing. Saddam attacked us when we were weak, and we survived that test. Today we're much stronger.

NARRATOR: Inside, this week's official sermon, delivered by a leading ayatollah, was about America and Iraq.

AYATOLLAH: [subtitles] I say to the Americans, "You are drunk with power. And the more you stay in the region, the more you'll be hated. You should get out of Iraq, defeated, with your tail between your legs."

NARRATOR: That day, the same sermon was read in every town across the country.

CROWD: [subtitles] Death to America!

NARRATOR: Anti-Americanism is one of the regime's founding principles. It's turned the former U.S. embassy, where the hostages were seized back in 1979, into a kind of museum of grievance, recounting decades of U.S. meddling in Iran's affairs.

In the main stairwell, a mural depicts the latest perceived grievance, America's actions in the Middle East since 9/11. The mural begins with Hollywood, run by Jews, who controlled bin Laden, who worked with George Bush to attack America.

INTERPRETER: Do you know any American or any Israelis who have been killed here in these buildings?. The information that they have says no American and no Jew were inside. If you have any information, you can give it to him.

NARRATOR: It's a conspiracy theory Iran's current hardline government seems to encourage.

GREG BARKER, Producer: There were thousands of Americans inside the buildings.

NARRATOR: But on 9/11 itself, Iran's reaction to the news was very different.

U.S. NEWSCASTER: Oh, my God. That just exploded!

U.S. NEWSCASTER: It looks like a second plane-

MOHAMMAD ALI ABTAHI, Fmr Vice President: [through interpreter] I think for the first couple of hours, everyone was in a state of shock, not knowing what was going on exactly. I mean, America was our enemy.

NARRATOR: Mohammad Ali Abtahi was Iran's vice president.

MOHAMMAD ALI ABTAHI: [through interpreter] But then, just a few hours later, President Khatami issued a statement condemning the acts. It was a very important move for Iran.

DEMONSTRATORS: [subtitles] Death to terrorists!

NARRATOR: In north Teheran, thousands took to the streets to express sympathy with America. More importantly, Iran's Supreme Leader, Ayatollah Ali Khamenei, also spoke out against the attacks.

AYATOLLAH ALI KHAMENEI: [subtitles] Mass killing is wrong, whether it's Hiroshima, Bosnia, New York, or Washington.

NARRATOR: And that week at Friday prayers, the ritual "Death to America" chants were dropped for the first time since the revolution.

MOHAMMAD ALI ABTAHI: [through interpreter] For Iran's leaders, it's important to have enemies. The reformists made great attempts to ban slogans that insulted the American people.

NARRATOR: Abtahi and the president, Mohammed Khatami, were leaders of Iran's reform movement, hoping to improve ties with America.

MOHAMMAD ALI ABTAHI: [through interpreter] Suspending the "Death to America" chants was a political decision made at the highest level.

NARRATOR: Iran's change of tone was noticed in Washington as the Bush administration prepared to invade Afghanistan, Iran's neighbor.

RICHARD ARMITAGE, Dpty. Secretary of State, 2001-05: Iran initially- we had discussions with it right after 9/11. We made it very clear that although we would be kinetically involved in Afghanistan, that we bore no ill will to Iran. And the Iranians accepted this. So initially, things were on an even keel.

Pres. GEORGE W. BUSH: [October 7, 2001] On my orders, the United States military has begun strikes against al Qaeda and the Taliban regime in Afghanistan.

NARRATOR: The U.S. accepted Iran's help in Afghanistan. Sunni extremists like al Qaeda and the Taliban were also enemies of Iran's Shia regime.

RICHARD ARMITAGE: We shared a general view that stability in Afghanistan would very much benefit everybody. But the Iranians were not unhelpful, mostly by staying out of the way.

NARRATOR: Iran encouraged its allies, the Northern Alliance, to fight alongside U.S. special forces. Within weeks, the Taliban collapsed.

MOHAMMAD ALI ABTAHI: [through interpreter] This was Iran's first major effort to help the United States, to topple the Taliban and al Qaeda. This would have been impossible without Iran's help.

NARRATOR: In fact, Hamid Karzai took charge in Kabul only after Iran had broken an impasse with the Northern Alliance.

HILLARY MANN, Fmr. Iran Director, NSC: We had been negotiating with them, you know, for all these months, and it culminates with the Iranians basically telling the people that they had a relationship with to get out of the way for the- you know, the pro-American Afghans to stand up and take control. The Iranians thought legitimately that they had done a tremendous amount to help us and to help Afghanistan.

[www.pbs.org: More on Iran's help in Afghanistan]

RICHARD ARMITAGE: There was another side to U.S.-Iran relations. Their cooperation on Afghanistan was good, but I think it was- from my own view, it was somewhat lacking in other areas.

NARRATOR: U.S. officials believed senior al Qaeda operatives, including bin Laden's son, had crossed the Afghan border into Iran and found safe haven in Teheran under the protection of hardliners in the regime.

RICHARD ARMITAGE: The fact is that the government authorities knew where they were. There's no question about that.

INTERVIEWER: And you were asking what?

RICHARD ARMITAGE: Turn them over. We'd like them. We wanted to get them. We wanted to question them.

INTERVIEWER: And the response was?

RICHARD ARMITAGE: There was no cooperation. There was a variety of responses, as I recall, from, "We don't have them" to "We don't know where they are," which we don't believe.

NARRATOR: The White House decided it couldn't trust Iran's government.

Pres. GEORGE W. BUSH: [State of the Union, January 29, 2002] Our second goal is to prevent regimes that sponsor terror from threatening America or our friends and allies with weapons of mass destruction.

Iran aggressively pursues these weapons and exports terror, while an unelected few repress the Iranian people's hope for freedom. States like these and their terrorist allies constitute an axis of evil, arming to threaten the peace of the world.

NARRATOR: Iran's response was immediate, and President Khatami was thrown on the defensive.

MOHAMMED KHATAMI, President of Iran: [subtitles] America, your politicians are working against you!

NARRATOR: The reformists felt undermined by Washington at a crucial time.

MOHAMMAD ALI ABTAHI, Former Vice President: [through interpreter] The very least expectation we had, at the height of our struggles for real reform, was not to be branded like this. Politically, it was an odd thing to do. We helped overthrow the Taliban. Instead of opening a path for even greater cooperation, they turned to this slogan, the "axis of evil." That was Mr. Bush's biggest strategic and political blunder.

HAMID REZA ASEFI, Fmr. Foreign Ministry Spokesman: My personal reaction, I said the American administration is the center of the evil in the world. And I still believe that, the center, because everywhere when there is a problem, everywhere when there is a chaos, everywhere when there is a war, the American has got a finger in it.

NARRATOR: Hamid Reza Asefi was Iran's spokesman at the time, adept at crafting the regime's anti-American rhetoric. He's now a senior diplomat.

HAMID REZA ASEFI: You see, there is one thing wrong with the American, especially this administration. They think they are responsible for every event in every part of the world. Nobody has given this responsibility to the American.

HOSSEIN SHARIATMADARI, Editor, Kayhan Newspaper: [through interpreter] We believe that the world order must be changed.

NARRATOR: Hossein Shariatmadari is the editor of Kayhan, the newspaper that is the mouthpiece of the Supreme Leader himself. Ayatollah Khamenei never gives interviews to Western journalists. The editor is said to speak on his behalf.

HOSSEIN SHARIATMADARI: [through interpreter] The Supreme Leader believes America doesn't want negotiations to solve the problems that exist between us, America wants negotiations just for the sake of negotiations.

NARRATOR: The official distrust of America extends to the conspiracy theories about 9/11.

HOSSEIN SHARIATMADARI: [through interpreter] Frankly, we consider Al Qaeda an American creation. So did 9/11 take place to justify Mr. Bush's next moves? We believe it paved the way for the neocons to take the actions they did- invade Afghanistan, invade Iraq. And invading Iran was in the works, as well.

NARRATOR: In fact, behind closed doors in Washington, one of the arguments for invading Iraq was the possible impact on its neighbor, Iran.

RICHARD ARMITAGE: I think the idea in the minds of some who were so enthusiastic about the invasion of Iraq was two-fold. One, that Iraq, which was much more kindly disposed to the United States, would give us the ability, should we want to, to be able to pressure Iran on the use of facilities, military facilities in Iraq.

Secondarily - this is certainly the president's view - democracy in Iraq would have a very positive effect on the other states.

FLYNT LEVERETT, Fmr. Middle East Director, NSC: I heard the president say exactly that. If you went to war, overthrew Saddam, it would empower those in Teheran who really wanted to push for a different kind of political order.

NARRATOR: Flynt Leverett, a senior director for Mideast policy at the National Security Council, was skeptical.

FLYNT LEVERETT: It was a nice idea, completely out of touch with the way that Iranian politics and society work, and fundamentally rooted in ignorance about the region.

Pres. GEORGE W. BUSH: A new regime in Iraq would serve as a dramatic and inspiring example of freedom for other nations in the region.

NARRATOR: While the administration made its case at home, in London, Iraqi opposition leaders in exile gathered to plan their nation's future. Many of them had close ties to Iran.

DAVID PHILLIPS, Fmr. State Department Liaison: During the week before the London Opposition Conference, which was the penultimate event during the run-up to the war, all the leading opposition figures met in Teheran in order to caucus their strategy.

NARRATOR: David Phillips was a State Department liaison to the Iraqi opposition.

DAVID PHILLIPS: The fact that they went to Teheran to do that was revealing. And when it became time for Iraqis to designate an advisory council, none of those Iraqi Shia groups were prepared to put names on the table before they got on the phone to Teheran and cleared that. I think that was an important wake-up call that a lot of these Iraqi Shia groups were much more beholden to Teheran than they were to us.

HAMID REZA ASEFI: All these people, the rulers of Iraq, they were living in Iran. We were supporting them, Mr. Talabani and Mr. Hakim, all of them, all of them.

NARRATOR: The Iranian government thought it deserved to be consulted on Iraq's future.

HAMID REZA ASEFI: We believe the American should have act from the beginning, listen to other people advices, because the American are far from the region. They do not know the region. They do not know the delicacy of the region.

HOOSHANG AMIRAHMADI, American-Iranian Council: Iran wanted more than George W. Bush, Saddam Hussein overthrown. That was absolutely 100 percent. There was not an epsilon of doubt on Iran side that Saddam has to go.

NARRATOR: Hooshang Amirahmadi, a prominent Iranian-American often used as a back channel by both governments, says he was privy to a series of high-level meetings during the run-up to the war. One of the most important was between Zalmay Khalilzad, then at the National Security Council, and Javad Zarif, then Iran's U.N. Ambassador.

HOOSHANG AMIRAHMADI: Dr. Zarif told Zalmay Khalilzad that, "Listen, you really need our help. Let us get in it with you because after Saddam leaves, that place will be a mess. But after the mess is created by you, we will not get in. We will only be there with you if we are also part of the mess."

RICHARD ARMITAGE, Dpty. Secretary of State, 2001-05: They had a good sense of the competing tensions and the ethnic strife, sectarian strife that did exist and was kept from boiling because of the lid of Saddam Hussein. That's what their concern was.

HOOSHANG AMIRAHMADI: They thought if they were in the partnership with the U.S. in overthrowing Saddam, U.S. then will have a hard time to extend that war into Iran.

NARRATOR: As American forces massed in the region, the administration was confident it didn't need Iran.

HILLARY MANN, Former Iran Director, NSC: There was a sense that Iran was going to be the big loser in this game. They were going to be surrounded. If things had gone better in Iraq, if Iraq had been the Bush administration's version of success, then, yeah, I think there would have been- I think Iran was- was next.

NARRATOR: Iran could only watch as the U.S. military crushed Saddam's forces in a few weeks, the same Iraqi army Iran once fought for eight years to a stalemate.

RICHARD ARMITAGE: On April 9, when that statue of Saddam Hussein came down, the world thought George Bush was brilliant. You remember that day? Nobody was complaining.

HOOSHANG AMIRAHMADI: The mood in Teheran was a fearful mood, a frightening mood. Iranian government had almost 100 percent come to the conclusion that after Iraq, it is their turn. And they wanted to prevent that at any price.

NARRATOR: A few weeks after the invasion, a strange document arrived in Washington. It laid out the terms for a "grand bargain" - in essence, a peace treaty between Iran and the United States. But it came as a fax from the Swiss ambassador in Teheran, on plain paper.

Prof. VALI NASR, Tufts University: There are many reasons why it came through the channels that it did. We forget that this offer came after Iran made its boldest cooperation with the United States over Afghanistan, only to be put on the "axis of evil" list afterwards.

NARRATOR: Iran's reformists were again trying to reach out to Washington, as they had after 9/11.

Prof. VALI NASR: So as the Khatami government, the reformist government, is making one last effort to make a pitch to the U.S. it is running a risk. And I assume that their hope was that the U.S. would test the proposal by coming back, which then would have made a signal to the Iranian leadership that the U.S. was interested.

NARRATOR: The reformists put everything on the table: Iran's support for terrorism, its nuclear program, even its hostility towards Israel. In exchange, they asked Washington for security guarantees, an end to sanctions, and a promise never to push for regime change.

[www.pbs.org: Read the fax]

FLYNT LEVERETT, Fmr. Middle East Director, NSC: We were at the height of our apparent power in the region. The president of Iran was not Mahmoud Ahmadinejad, but Mohammed Khatami. Iraq had not yet fallen apart. It was exactly the time for the United States to take up this offer and strike a deal.

[www.pbs.org: Read the extended interview]

RICHARD ARMITAGE: I've seen Flynt Leverett, who's a man for whom I've had a lot of respect. I must say, speaking for me and most of my colleagues at the State Department, we didn't see it that way, and I don't think many others did at the time because it didn't fit with some of the other things, as I said, that we'd been hearing from Iran.

NARRATOR: The State Department thought the reformists were politically weak and promising more than they could deliver. The White House, newly victorious in Iraq, saw no need to negotiate with Iran. The "grand bargain" fax never received a reply.

In Teheran, sources confirmed that the Supreme Leader had, in fact, given the proposal his tacit blessing. A senior diplomat connected to his family even helped draft it. But today, the leader's confidant denies everything.

HOSSEIN SHARIATMADARI, Editor, Kayhan Newspaper: [through interpreter] I'm sure the Supreme Leader had nothing to do with it. Whoever wrote that letter was in no position to do so.

NARRATOR: Iran's reformists were humiliated, their days in power numbered. And they don't talk about the "grand bargain" anymore.

MOHAMMAD ALI ABTAHI, Former Vice President: [through interpreter] What is certain is that it didn't get anywhere and that case is now closed.

NARRATOR: The hardliners now had the upper hand. The Supreme Leader, Ayatollah Khamenei, concluded the reform era was dead and blessed a new president.

Prof. VALI NASR: It was very clear that the reformists were not going to deliver Washington. Their cooperation in Afghanistan failed. Their offer of a peace treaty in 2003 was rejected. And the assumption was that the hardliners would do a better job. And that, many argue, is why the Supreme Leader threw his support to Ahmadinejad.

NARRATOR: Mahmoud Ahmadinejad was a former Revolutionary Guard connected to the security establishment, a fiery populist determined to assert Iran's influence across the Middle East.

HAMID REZA HAJIBABAEI, Parliamentary Leader: [through interpreter] I don't want to say that I agree with everything Ahmadinejad says, with every word he uses. But his politics have been successful against the bullying and power plays of the United States. Mr. Bush pays attention only to the language of force.

NARRATOR: Hamid Hajibabaei is one of the senior hardliners in parliament. Like many of his generation, he is a veteran of the Iran-Iraq war, in which a million Iranians were killed or wounded.

HAMID REZA HAJIBABAEI: [through interpreter] If the U.S. had removed Saddam and put the Iraqi people in power of their government, we would have applauded the Americans. We would have thanked them and been grateful. But the United States didn't come to Iraq for the sake of the Iraqi people, they came because Iraq is tucked in the Muslim belt of nations. They came to establish a presence in the region.

NARRATOR: Within Iraq, Iran boosted its support for Shia militias fighting the American occupation.

HAMID REZA ASEFI, Fmr. Foreign Ministry Spokesman: The American, again, they made a mistake. They said they toppled Saddam Hussein. That is tantamount to win the heart of the Iraqi people. That was their mistake. And they continue to do that. They continue. OK, then you have toppled the regime. Go.

PILGRIMS: [subtitles] To Karbala! To Karbala!

NARRATOR: With Saddam's removal, Iran opened its border. Iranian pilgrims flooded into southern Iraq. They came by the millions to the holiest shrines of the Shia religion. This was the start of a Shia awakening Washington never anticipated.

Prof. VALI NASR, Author, The Shia Revival: We thought of Iran and Iraq in nation-state terms. They are Arab. These guys are Iranian. They fought a war. They should hate one another. We just didn't understand how much southern Iraq has changed. So when we took the lid off, Iran not only had better intelligence about Iraq, not only had better connections with the militias, or the militias to be under the leaders, but it had the good will of southern Iraq.

NARRATOR: When Iraq's held its first free elections, Iran helped get out the vote and saw its longtime allies take power in Baghdad.

RICHARD ARMITAGE, Dpty. Secretary of State, 2001-05: I was somewhat flummoxed by the description of Prime Minister al Maliki as being a good man and a great leader. He may be, but I would have been much more suspicious of the long-term nature of his involvement with Iran.

Prof. VALI NASR: This is the first Shia Arab government in history. Ever. And Iraq is not a backwater country. In historical memory of Muslims, it's where the battle between Shias and Sunnis was settled. Now, for the Shi'ites to reverse this domination, to take over an Arab state and a key Arab state, has enormous amount of religious and political implications for the Arabs.

Pres. HOSNI MUBARAK, Egypt: [subtitles] Iran has great influence on the Shia. Around 60 percent of Iraqis are Shia, and there are many Shia in other countries, too. And the Shia are mostly loyal to Iran.

NARRATOR: U.S. allies like Egypt, Bahrain and Saudi Arabia, many with large Shia minorities of their own, worried the "Shia revival" could spread. Some of them began privately supporting Sunni insurgents, who targeted Iraq's Shia population. Then in February 2006, Sunni terrorists from al Qaeda destroyed one of the holiest sites in the Shia religion, the al Askariya shrine in Samarra.

HAMID REZA HAJIBABAEI: [through interpreter] What are all these explosions for? In Samarra, the security was in the hands of the U.S. Are the Americans powerless, or do they want these conflicts to exist?

NARRATOR: Shia militias, many funded by Iran, struck back. Sectarian violence exploded. In Iran, we found Iraqi Shia who'd fled the violence.

IRAQI REFUGEE: [subtitles] Iran is helping the Shia of Iraq. We're being persecuted.

IRAQI REFUGEE: [subtitles] Conditions in Iraq are terrible. That's why I came to Iran, because it's safer.

IRAQI REFUGEE: [subtitles] Iran is an Islamic state, thanks be to God. We're all Shia. Against any threat, we are united.

HOSSEIN SHARIATMADARI, Editor, Kayhan Newspaper: [through interpreter] The Iraqi people had great potential, which was trampled by the boots of Saddam. This huge potential was released, and once released, it didn't go toward America, it came to us.

RICHARD ARMITAGE: Historically, no one in the Middle East, although they may like or dislike our policies quite a bit- no one has ever accused us of being incompetent. And for the first time, there was a question of competency. And it's a very frustrating feeling, I think, for our friends in the Middle East.

NARRATOR: In Israel, Iran's rise was viewed with alarm.

UZI ARAD, Fmr. Director of Intelligence, Israel: They certainly can draw satisfaction that the course of history has played into their hands.

NARRATOR: Uzi Arad was chief of intelligence for Mossad and says Israel's greatest threat comes from a resurgent Iran.

UZI ARAD: The weakening of the American position is also much to their benefit. Even the unconvincing Israeli military performance in Lebanon is also playing into their hands.

NARRATOR: Israel's war in Lebanon last year was meant to destroy Hezbollah, an extremist Shia group nurtured and armed by Iran.

HOSSEIN SHARIATMADARI: [through interpreter] The Islamic revolution was an example for Hezbollah. And thanks to our model, Hezbollah's been transformed into a major force across the region.

NARRATOR: When Hezbollah survived, it was also seen as a victory for Iran.

HOSSEIN SHARIATMADARI: [through interpreter] A new era has begun and great things are in store. The "New Middle East" that Mr. Bush is talking about is something we also believe in, but it's based on Islam,

UZI ARAD: Iran is playing a highly risky game of encouraging violence and supporting terrorists, and all this when they are relatively inferior on account of the fact that they do not have nuclear weapons. Just think about the transformation that would occur in the Iranian sense of confidence and real capability to operate if they feel that they are capable of deterring the United States from doing anything against them.

NARRATOR: The new American policy is to contain Iran. This year, President Bush ordered two carrier strike groups into the Persian Gulf, the biggest show of force since the Iraq invasion.

Capt. MICHAEL MANAZIR, USS Nimitz: This is probably the most dangerous four-and-a-half acres on earth. The proverbial 800-pound gorilla, you know he's in the room. So Nimitz, 1,100 feet of American diplomacy. is here, and all the countries of the region know that we're here.

NARRATOR: While the U.S. sent this message, it was also fighting a different battle with Iran on the ground in Iraq.

Pres. GEORGE W. BUSH: Iran is providing material support for attacks on American troops. We will disrupt the attacks on our forces, and we will seek out and destroy the networks providing advance weaponry and training to our enemies in Iraq.

NARRATOR: Since the insurgency began, roadside bombs have been the biggest threat to U.S. troops. Washington says Iran is supplying Shia extremists with advanced explosives that cut through American armor.

Prof. VALI NASR: The Iranians began to send weapons into Iraq, probably to make sure that the Americans understood Iran's capabilities in Iraq, the capability of creating a lot more havoc than the United States is currently confronting in Iraq.

NARRATOR: The U.S. military says the advanced roadside bombs, known as EFPs, explosively formed peacekeepers, now account for almost 20 percent of all U.S. combat deaths in Iraq. Washington said the operation was being run by the Quds Force, the elite foreign operations branch of Iran's Revolutionary Guards.

Pres. GEORGE W. BUSH: I can't say it more plainly. There are weapons in Iraq that are harming U.S. troops because of the Quds Force.

NARRATOR: The president authorized strikes against Quds Force operatives. In January, U.S. special forces raided an Iranian government office in northern Iraq.

ROBIN WRIGHT, the Washington Post: The United States was trying to send a strong message: "We know you're operating here. We're going to go after your agents." It was looking for the deputy national security adviser and another senior Revolutionary Guard official. The two of them escaped, and instead the United States got five mid-level Revolutionary Guard and Iranian operatives.

NARRATOR: This May, U.S. and Iranian diplomats crossed paths at a regional conference on stabilizing Iraq. Iran sent its foreign minister, who has relatively little power. Walking behind him was the man considered the real authority, a man the U.S. had just tried to capture in northern Iraq- Mohammad Jafari, a senior commander of the Quds Force, accused of orchestrating attacks on U.S. troops in Iraq.

ROBIN WRIGHT: There's a great irony that in the weeks after the raid designed to capture him, he shows up at an international meeting attended by Condoleezza Rice in Shari eel Sheik, Egypt, to talk about Iraqi stability. It tells you that Mohammad Jafari is a player and his capture would have been a real blow to Iran.

NARRATOR: After weeks of requests, Jafari sat down with FRONTLINE in Teheran, in his first television interview. He brushed off the U.S. attempt to capture him.

MOHAMMAD JAFARI, National Security Council, Iran: [through interpreter] It wasn't a big deal, from our perspective.

NARRATOR: Jafari is one of the architects of Iran's policy in Iraq, and what he really wanted to talk about was the role of America's Sunni allies.

MOHAMMAD JAFARI: [through interpreter] Seventy percent of the terrorists captured in Iraq are from an Arab country that is a friend of the United States. To this day, not one Iranian terrorist has been captured. Not one suicide bomber has been Shia. But the propaganda is all directed against Iran. Why?

NARRATOR: Jafari rejected Washington's charge that Iran is supplying Shia extremists.

MOHAMMAD JAFARI: [through interpreter] We are not helping any group that is causing problems in Iraq. Our policy has been very clear, anti-occupation, anti-violence. That's our policy.

INTERVIEWER: What about the specific accusations that they have made about the explosively formed projectiles?

MOHAMMAD JAFARI: [through interpreter] The questions were supposed to be about the role of Shia in the region. Abandon this line of questioning.

NARRATOR: At that regional conference, Jafari and the Iran delegation witnessed an historic American overture by Secretary of State Condoleezza Rice.

CONDOLEEZZA RICE, Secretary of State: If Iran is prepared to accept the obligations that have been placed upon it by the international community, we are prepared, the united states, to change 27 years of policy and engage with Iran on a broad range of issues, whatever is on anybody's mind.

UZI ARAD, Fmr. Director of Intelligence, Israel: The Americans came there almost like a supplicant. You had the proud secretary of state of the United States accommodating what it would not have accommodated in the past. So it is very much the Iranians on their terms who are dictating some of the approach to the United States.

MOHAMMAD JAFARI: [through interpreter] We met briefly, less than a minute. A representative of Iran met with a representative from the United States, and we set a time for talks in Baghdad.

[www.pbs.organization: Read the extended interview]

NARRATOR: Jafari wanted to talk about one of Iran's key demands at those talks, that the U.S. stop supporting an Iranian opposition group based in Iraq known as the Mujahideen-e Khalq or MEK.

MOHAMMAD JAFARI: [through interpreter] The U.S. gets its intelligence about Iran's role in Iraq from two sources, Saddam's old spies and the Mujahideen-e Khalq, a group even the U.S. government says are terrorists. But unfortunately, over the past four years, the United States has put them under its protection in Iraq and has used them to spy on Iran.

NARRATOR: During the 1980s, MEK forces like these were essentially part of Saddam's military, Iranians who fought against their own country in the Iran-Iraq war. Self-styled "Islamic Marxists," the MEK had also targeted Americans in the 70s, and the State Department considers it a terrorist group.

RICHARD ARMITAGE: I actually served in Iran. I lived there for a year, and it was during that time that our people were killed by the MEK, assassinated.

INTERVIEWER: U.S. citizens?

RICHARD ARMITAGE: Yes. So from my point of view, they were terrorists.

NARRATOR: In 1981, the MEK tried to assassinate the present Supreme Leader, Ali Khamenei, with a bomb, disabling his right arm. In Teheran, the government took us to meet families of other victims of MEK violence and assassination.

FAMILY MEMBER: [subtitles] All of us here have lost our fathers at the hands of the MEK. They assassinated our fathers.

MOHAMMAD JAFARI: [through interpreter] It was members of the Mujahideen-e Khalq who first strapped themselves with explosives and blew themselves up among civilians, killing our people and our officials. Unfortunately, the West did not condemn them. Terrorists, just 200 meters from where we are sitting, assassinated the president and prime minister at the same time.

NARRATOR: This is the MEK base near Baghdad. After the Iraq invasion, they were disarmed but remained under the protection of U.S. forces.

RICHARD ARMITAGE: After the invasion, there were some in the administration who wanted to use the Mujahideen-e Khalq as a pressure point against Iran. The MEK had given intelligence on Iran to us, and that they might have capabilities in Iran of a covert nature.

NARRATOR: The MEK remains a potent force with thousands of followers, and rallies like this one at its base in Iraq infuriate Iran.

MOHAMMAD JAFARI: [through interpreter] We have solid evidence that this group is providing intelligence to U.S. forces. We gave this evidence to the Americans and asked, "Why? This is a terrorist group. Why are you working with them? Why are they being used as a source?"

NARRATOR: In Baghdad this summer, Iran raised the MEK issue repeatedly with U.S. diplomats. America's Iran policy is overseen by Undersecretary of State Nicholas Burns.

INTERVIEWER: Is the U.S. using the MEK for any intelligence gathering or any other purposes?

NICHOLAS BURNS, Undersecretary of State: I would- I would- I would not comment in any way, shape or form on that question except to say that our policy towards the MEK of many years has not changed.

ALIREZA JAFARZADEH: The Mujahideen-e Khalq has the experience of 30 years of fighting and countering this, you know, religious Islamic extremism.

NARRATOR: Alireza Jafarzadeh was associated with an MEK front organization in Washington. He says they are supplying intelligence to the U.S., including on Iran's covert nuclear program and Iranian operations in Iraq.

ALIREZA JAFARZADEH: The United States authorities there have been provided with extensive, very, very valuable actionable information about the Iran regime's operations in Iraq, information that has resulted in saving the lives of the Americans.

NARRATOR: But at the talks in Baghdad, both the MEK issue and Iran's alleged arming of Shia militias are sticking points, and since August, the negotiations have been effectively stalled.

[www.pbs.org: More on the MEK issue]

Prof. VALI NASR, Tufts University: We're locked into a situation of no forward movement in U.S.-Iran relations, and at the same time increasing animosity being produced by these low-level confrontations, and then, you know, sort of the looming confrontation over the nuclear issue which rests on the horizon.

Pres. GEORGE W. BUSH: [August 28, 2007] Iran's active pursuit of technology that could lead to nuclear weapons threatens to put a region already known for instability and violence under the shadow of a nuclear holocaust.

NARRATOR: In August, President Bush once again raised the stakes on the nuclear issue.

Pres. GEORGE W. BUSH: We will confront this danger before it is too late.

JOHN BOLTON, U.N. Ambassador, 2005-06: I don't know what the president will do between now and the end of the administration. He has said repeatedly that it is unacceptable for Iran to have nuclear weapons, and if he means unacceptable, then I assume he would take military action if he had to.

NARRATOR: Conservatives like former U.N. ambassador John Bolton have been critical of the State Department's continuing reliance on U.N. sanctions and diplomacy led by the European allies.

JOHN BOLTON: I think that is a failed policy. We squandered four, almost five years of time while the Iranians played the Europeans like playing a fish, allowing the negotiations to go on, all the while working as hard as they could to perfect the scientific and technological capabilities that they needed.

ROBIN WRIGHT, The Washington Post: There is a sense the drumbeat is rolling, that many of the people who argued to take the United States into Iraq are again beating the war drums. I think there's a basic feeling within the administration that they don't trust the Democrats to be able to be tough enough on Iran.

REUEL MARC GERECHT, American Enterprise Institute: I think it is in our interest to have the clerical elite believe that George W. Bush, yes, he could, in fact, bomb those facilities. I think it is possible that George W. Bush, before he leaves office, could look at this situation and say, "Do I want to be the president that allowed the clerical regime in Teheran to get nuclear weaponry?" I think he could say, "No, I don't."

NARRATOR: While different military scenarios are being discussed behind closed doors in Washington, almost all would involve air strikes, whether against Revolutionary Guard training camps or the regime's nuclear facilities.

ANTHONY CORDESMAN, Ctr. for Strategic & Internatl. Studies: If this happens, it's going to be a series of very sophisticated air and cruise missile strikes. It will probably be a lot more decisive than the Iranians expect, and it will be backed by a re-strike capability, which means that once you start this process, you don't stop. I hope the Iranians understand that.

NARRATOR: Strikes on underground targets could involve weapons that are still classified.

ANTHONY CORDESMAN: People talk about this largely in terms of, "Gee, it's really hard to hit underground targets." But what you think is hard, based on the technology the U.S. had in 1990, may not be hard at all in terms of systems we've never discussed publicly today.

JOHN BOLTON: I think what you need to do is break the nuclear fuel cycle at one or more points. That means that you're denying Iran the capability of achieving nuclear weapons through completely indigenous effort. That doesn't solve the problem, but it buys us time. As risky and unattractive as it is, the use of force would put time back on our side.

ANTHONY CORDESMAN: I wouldn't advocate it now at all. I think that, first, Iran still has some years to go. If we're ever going to have to do this, we really need to talk this time to our allies. Since we don't have a real threat yet, the only reason I can see that you would suddenly advocate going ahead right now is if you become obsessed by computer war games and you've forgotten that there are real people somewhere outside the computer.

NARRATOR: In Teheran, our producers found a mixture of caution and confidence.

INTERVIEWER: Are you worried that the Bush administration might decide to attack Iran?

IRANIAN MAN: I don't think so, they're going to do such a damn thing to our country because they have some lessons from Afghanistan and Iraq. OK, that would be enough for them.

IRANIAN MAN: [subtitles] America has had a plan to attack all along. But it's seen our solidarity, and now it's afraid.

Prof. VALI NASR: You have a country of 70 million people in Iran, over 70 percent of whose population is literate. It is very informationally connected with the world. You have a very dynamic society that comes from economic changes, cultural changes, youth, literacy, and that is also fueling the Iranian regional ambition.

ROBIN WRIGHT: The interesting dynamic in Teheran today is that you have this generation of young, and then you have a generation of hardliners who were young themselves at the time of the revolution, who fought that bitter war with Iraq, are committed to the idea of a modern theocracy, and who feel very vulnerable, particularly since the U.S. invasions of Afghanistan and Iraq, and want to secure their position and Iran's Islamic identity.

NARRATOR: Just last month, at a rally of Revolutionary Guards, the Supreme Leader challenged the United States.

AYATOLLAH ALI KHAMENEI: [subtitles] As Imam Khomeini said, the U.S. can't do a damn thing to us.

CROWD: [subtitles] Death to America! Death to Israel!

HOSSEIN SHARIATMADARI, Editor, Kayhan Newspaper: [through interpreter] As the Supreme Leader has said, if we're attacked, we will threaten all American interests around the globe. The first step is our missiles can reach everywhere in Israel. I mean, there is not a single place in Israel outside the range of our missiles.

HAMID REZA ASEFI, Fmr. Foreign Ministry Spokesman: I do not- I do not believe that will happen, at the end of the day. But if that happens, that is bad for the American president because he will suffer.

INTERVIEWER: How?

HAMID REZA ASEFI: Well, we are capable of defending ourselves. I'm not going to tell you how because that is something which one should not speak before the press. But definitely, if the American makes such a bad mistake, it is not in their own interest.

NARRATOR: Many strategists believe that Iran has a limited capacity for retaliation but that the greatest threat to U.S. forces would be in Iraq.

REUEL MARC GERECHT, American Enterprise Institute: I would expect them to try to cause trouble in Iraq. They will try to engage in terrorism. They'll try to get proxies. They'll try to hit supply lines, all those things. Now, can the United States weather that in Iraq? I suspect so.

HILLARY MANN, Fmr. Iran Director, NSC: We think it's bad today in Iraq, if the Iranians really decided, they could cut off supplies to U.S. troops very quickly. They have an incredible infrastructure and network in southern Iraq, and our troops could very quickly be sitting ducks in the middle of the slums in Baghdad.

MOHAMMAD JAFARI, National Security Council, Iran: [through interpreter] You will not find a single instance in which a country has inflicted harm on us and we have not responded. So if the United States makes such a mistake, they should know that we will definitely respond. And we don't make idle threats.

NARRATOR: Last month, President Ahmadinejad said negotiations on the nuclear issue were closed.

HOOSHANG AMIRAHMADI, American-Iranian Council: They are saying, "All right, well, let's say that we have a fight. That's good for us. Why not?" People like Ahmadinejad and his people have absolutely nothing to lose, from an Islamic movement perspective, because that will be the end result. And they are right. Think of U.S. going after Iran. Who is going to win? Islam.

RICHARD ARMITAGE: Having served in Iran, I am fearful of their hegemonistic appetite. Even during the time of the Shah, I find that I've never seen a more ethnocentric country in my life. I have never seen a country for whom the days of Persepolis was- unlike for you and I, 2,500 years ago, they see it as yesterday. So this leads me to some fear about their view of themselves on the world stage. That's quite a bit different from an impending invasion. And it would be the worst of all worlds, unless it was absolutely necessary for the safety and welfare of this nation. It would be the worst of worlds for an outgoing administration to start a conflict.

NARRATOR: In a quiet street in Teheran, Mohammad Ali Abtahi occupies a small office. The reformist vice president who once hoped for reconciliation with the U.S. watches from the sidelines.

MOHAMMAD ALI ABTAHI, Former Vice President: [through interpreter] Relations between Iran and America won't get better anytime soon. Leaders in both countries don't just see themselves as politicians, they also see themselves as carrying out the work of God. They've left the ground a bit. And that's very dangerous for the world.

Showdown With Iran

WRITTEN, PRODUCED AND DIRECTED BY
Greg Barker

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