Arab states gloat at Iran strife, but wary of result

DUBAI (Reuters) - U.S.-allied Arab states who fear Iranian expansionism may be enjoying the spectacle of violent protest over President Ahmadinejad's re-election, but fear over the fallout is beginning to filter through.

Thousands of Iranians have clashed with police in recent days claiming elections that gave populist anti-Western leader Mahmoud Ahmadinejad a second term were rigged.

Arab officials broke their silence on Monday when the United Arab Emirates' foreign minister appeared to back Tehran's claims of Western meddling, saying interference was "unacceptable."

"All countries in the region are in the same boat in believing that there is no interest for any country to be exposed to instability," Sheikh Abdullah bin Zayed al-Nahayan said in comments carried by Al Jazeera television.

Many of the smaller Gulf Arab states lying across the Gulf waterway have maintained close ties with the Shi'ite power, veering from Saudi and Egyptian-led attempts to ostracize Iran over backing for Arab opposition groups and Shi'ites.

Saudi media has given maximum play to Tehran's troubles, with newspapers splashing images of bloodied protesters on front pages and pan-Arab channel Al Arabiya running endless footage.

"The regime feels for the first time that there is a clear domestic threat," wrote Abdel-Rahman al-Rashed, manager of Saudi-owned Al Arabiya TV, in pan-Arab daily Asharq al-Awsat.

"The worst is if it digs its heels in at home and abroad. The best is if it realizes the huge difference between its slogans and people's demands and chooses reconciliation through retreating from its projects and adventures."

Saudi rulers got their first foreign policy break earlier this month after several years of setbacks against Iran when their pro-U.S. allies in Lebanese elections won a surprise victory against Hezbollah-led opposition group backed by Iran.

Some gloating also crept into Egypt's state media coverage.

But analysts say the unfolding events could have unpredictable outcomes for these Sunni Muslim governments, who are pillars of U.S. political, economic and military policy in the region.

A government spokesman said Iraq would respect the result of whoever Iran wants as leader but avoided mentioning Ahmadinejad by name. This may reflect uncertainty over where events are leading.

As'ad AbuKhalil, Lebanese politics professor at California State University, said Iranian opponents of Ahmadinejad -- if they come out on top -- would still likely promote a nationalist agenda that Riyadh sees as a threat to its interests.

Opposition leader Mirhossein Mousavi was prime minister under the Islamic Republic's founder Ayatollah Ruhollah Khomeini.

"The site of public demonstrations by the thousands against their leaders ...troubles all Arab leaders," AbuKhalil said, pointing to the lack of popular democracy on a par with that of Iran in most of the Arab countries.

"Arab regimes may also fear that if the Iranian regime feels cornered and pressured, it may lash out, and Saudi Arabia may be the first to feel the wrath of the regime," he said.

There are already hints of what that could mean.

Iran's airforce began exercises on Monday in the Gulf and the Sea of Oman. Iran has strongest navy in Gulf, deploying ships to international waters such as the Gulf of Aden near Yemen and has carried out numerous long-range missile tests.

BACKING STATUS QUO?

Last week Iran's "Supreme Leader" Ali Khamenei came out openly in favor of Ahmadinejad and his nuclear energy policy, which the West and Gulf Arab countries fear will allow Iran to become a nuclear weapons power. Tehran denies this intention.

A Western diplomat in the Gulf said this would reduce the chances of Iran achieving the rapprochement with Washington so feared by Riyadh." The status quo suits everyone to a degree," he said.

Ahmadinejad's re-election, analysts said, would comfort many Israelis and some Arabs who have long sought international action against Iran and had been concerned by U.S. President Barack Obama's offer of direct talks.

Saudi Arabia, whose absolute monarchy relies on U.S. military support and the backing of hardline Sunni clerics, fears Iran could win recognition from Washington as a regional power in return for checks on its nuclear program.

But there are also signs that Arabs who benefit from Ahmadinejad's strident backing for groups fighting what he depicts as neo-colonialist forces -- Washington and Israel -- are getting nervous over what happens if he is forced out.

"(Hezbollah) genuinely are concerned. Ahmadinejad has clearly been a source of inspiration and support for Hezbollah over the last four years," said Lebanese analyst Oussama Safa.

The group's deputy leader Naim Kassem has backed Iran's charge of foreign interference and its system of clerical rule.

"We see America and Britain and some of the European states getting involved in the events in Iran. There is an attempt to provoke turmoil, to inflate the problem, for foreign interests," he told Lebanon's New TV this week.

(Additional reporting by Tom Perry in Beirut, Mohammed Abbas and Waleed Ibrahim in Baghdad, Cynthia Johnston in Cairo; Editing by Samia Nakhoul)