... With the election of Khatami, some observers in the Middle East say they see signs that the U.S. administration already is quietly adopting a less hostile, more nuanced stance toward Iran. One such signal came last week, when the U.S. State Department put an anti-Iranian group, the People's Moujahedeen, on the list of terrorist organizations that should be banned from entry into the United States. Will Iran's new president reciprocate?

"It depends on a struggle for power going on inside Iran now. If [Khatami] can dominate, I think he will do something to open channels with the United States," predicted Iran-watcher Khairallah Khairallah, managing editor of the Saudi-owned Al Hayat newspaper, in a telephone interview...

Missiles Superiority, Associated Press, October 18

TEHRAN - Iran declared Saturday that it possessed the strongest missile force in the volatile Gulf, the latest in a series of claims about its growing military prowess.

Adm. Mohammad Razi Hadayeq, who commands the missile force, said Iran's Qareh missile system had turned Iran into the region's "strongest missile power," the Islamic Republic News Agency said...

Iran's former president, Hashemi Rafsanjani, said last week that his country could now build anti-aircraft missiles with a 156-mile range.

Meanwhile, the news agency quoted a senior navy commander as saying that Iran could also design and build speed boats capable of firing missiles and was working on building small tactical submarines.

Iran’s Regional Ambitions, Los Angeles Times, October 18

... Iran, meanwhile, is believed to have regional ambitions and has rearmed steadily since it fought Iraq to a bloody standstill in 1988. It has been showcasing a growing navy with maneuvers in the Gulf this week and, according to some reports, is also on the verge of acquiring long-range ballistic missiles and is working to get nuclear weapons--a charge the government vehemently denies.

With Russian-built submarines, Iran already could stop oil from getting through the Strait of Hormuz, the narrow gap in the Gulf through which one-fifth of the world's petroleum flows, and would do so if it ever came under attack from the West, Iranian newspapers have said...

Khatami Calls on Hezbollah to Take a Wider Role, Agence France Presse, October 19 

TEHRAN - The Lebanese Hezbollah movement will continue to fight Israel until the "total elimination" of the Jewish state, the leader of the Iranian-backed Shiite Moslem fundamentalist group said.

Iranian President Mohammad Khatami said last week that he hoped Hezbollah would take a wider role in the political and cultural life of Lebanon.

Iranian leaders have reaffirmed their support for Hezbollah during Nasrallah's visit.

Commentary

[Excerpts from a column by Martin Schram]

… the world does not need Europeans or anyone pumping money into an Iran that may still be radical and is certainly unrepentant: An Iran that may use that Euro-oil money to continue funding terrorists; an Iran that may use funding terrorists; an Iran seeking to develop nuclear weapons that may one day terrorize us all.

Yet Europe’s energy elite (and their politician-protectors) persist in doing business with an Iran that still considers the Western world its enemy:

Last month, the French (ah, the French) oil company Total announced a plan to invest $2 billion to develop Iran’s offshore as resources.

Last Sunday, The Washington Post reported that another multi-billion-dollar Iranian gas pipeline project is being negotiated by Shell, the oil conglomerate owned by the Dutch ... and the British…

Today’s controversy is whether the newly tough United States will really clamp sanctions on each of its allies, one by one, that insist on investing in Iran’s offshore resources.

America and its allies may never be able to undo the damage of a risky business policy that is built upon Europe’s nouveau-Neville Chamberlain hope. Namely, that Tehran’s terrorists will become noble world citizens -- if we just close our eyes and pray, while we pour potential trouble on Iran’s richly oiled waters.

Moolah for mullahs is bad and dangerous business today. It always has been.

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