Iran confident of no attack, can survive sanctions

TEHRAN Thu Jan 24, 2008 4:34am EST

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TEHRAN (Reuters) - Iran feels it has done enough to avert an imminent U.S. attack and is confident its cushion of petrodollars will help it weather the impact of a third round of mild sanctions, Iranian analysts and politicians say.

Iranian leaders have vowed to press on with Tehran's disputed nuclear work regardless of new U.N. sanctions, after world powers this week agreed the outline of a new resolution.

The steps were far weaker than U.S. officials had previously pushed for after Russian and Chinese reservations became more pronounced following a U.S. intelligence report which said Tehran has halted a nuclear weapons program in 2003.

Both analysts and politicians said the Islamic Republic, which has faced U.S. sanctions for years, had learned to live with such penalties and now had a windfall of oil revenue to cope with any extra losses created by the measures.

"The prospect of an attack is off the menu for the time being. Both sides are buying time," said analyst Saeed Laylaz.

"The Islamic Republic needs time to solve the technical problem (with centrifuges used to enrich uranium) and the United States needs more time to solve the Iraq problem, oil and (is busy) with elections," he said.

A meeting of six world powers in Berlin on Tuesday agreed to a third set of sanctions against Iran for its failure to halt atomic work that Iran says it is mastering to produce power plant fuel but which the West says is aimed at building bombs.

Washington has spearheaded a drive for new sanctions and had been pushing for a new resolution to impose a ban on business with leading Iranian state banks. But diplomats said it backed away in the face of Russian and Chinese opposition.

World powers agreed the new sanctions resolution would name two more large Iranian banks -- Bank Melli and Bank Saderat -- but would not put compulsory restrictions on doing business with them, Western diplomats said.

Iran has consistently said sanctions would not prevent it from pursuing its nuclear work, even though economists say the penalties have been pushing up costs for Iranian traders and deterring foreign investors.

"USELESS POLICY"

Iranian analysts and politicians said new penalties, particularly the weak measures agreed, would not help resolve the dispute.

Asked whether sanctions would change Iran's course, Ali Aghamohammadi, a representative of Supreme Leader Ayatollah Ali Khamenei on a powerful arbitration body, said this week:

"It will take 200 years at least. Then there will be no United States as it is now, just as we don't have a British empire now."

Iranian President Mahmoud Ahmadinejad could even blame the sanctions for his economic woes such as rising inflation.

"It is a useless policy. Sanctions are a long-term weapon ... The nature of the dispute between Iran and the West is not long term," said Laylaz. "They can hide their mismanagement behind these sanctions."

But behind the bluster of Iranian rhetoric, analysts said Tehran had appeared to take the threat of a U.S. attack seriously and seemed to be making concessions in Iraq and elsewhere, even if officials deny compromising with Washington.

"(Fear of an attack) has been tempered but they don't think they are off the hook, they think they have to make concessions (in Iraq) to reduce the chance of an attack," said one Iranian analyst, who asked not to be identified.

Iranian officials, in interviews with Reuters, have boasted about how they helped ease violence in Iraq. But the analyst said Tehran used its influence over Shi'ite Muslim militias mainly to avert a tough military response from Washington.

"They would be happy with U.N. sanctions. A military confrontation will really damage Iran's economy," he said.

Iran also feels a tough stance, spearheaded by Ahmadinejad's speeches pledging no compromise in the atomic row, has yielded results by forcing the United States into talks over Iraqi security, politicians and Iranian analysts said.

Iranian and U.S. officials held several rounds of talks last year, the most high profile face-to-face meetings between the two foes since diplomatic ties were cut in 1980.

Opposition politicians, who are seeking to make a comeback in a March parliamentary election, said the West's tough stance may even play into hardliners' hands.

"The fact is that the aggressive policy (of Ahmadinejad) has reached a conclusion and reached a result," said Hossein Marashi, spokesman for a political party opposed to the president.

Aghamohammadi said Ahmadinejad's uncompromising stance in the nuclear row had "preserved Iran's pride against foreign pressure, especially from the United States."

(Additional reporting by Parisa Hafezi; editing by Matthew Tostevin)

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