Iran's rise owes much to Bush's Iraq and Afghan wars

By Alistair Lyon, Special Correspondent - Analysis

TEHRAN (Reuters) - Five years on, Iran can thank the United States for unwittingly aiding its drive for regional power by ousting Saddam Hussein, one of Tehran's deadliest foes.

The U.S. military had already defeated Afghanistan's Taliban after the September 11 attacks on U.S. cities in 2001 -- with the unintended consequence of wiping out another of Iran's enemies and tilting the local balance of forces in Tehran's favor.

"The removal of these two regimes without powerful successor states benefited Iran greatly...and opened elbow room for Iran to spread its influence," said Vali Nasr, senior fellow at the Washington-based Council on Foreign Relations.

Iran cannot entirely rule out U.S. military action to destroy its nuclear sites, and its oil-reliant economy may prove vulnerable a few years hence, but for now it is riding high.

The Iraqi army's swift collapse in 2003 left Shi'ite-ruled Iran with no indigenous military rival nearby, weakening the Arab world and its mostly Sunni Muslim governments.

Windfall oil revenues have further fuelled the Islamic Republic's heady sense of power under its combative president, Mahmoud Ahmadinejad, who has defied Western-led efforts to contain Tehran's nuclear aspirations through U.N. sanctions.

"Every 24 hours we are earning $270 million ... in hard currency -- a magic amount," said Iranian economist Saeed Leylaz. "Iran can transfer its petrodollars to buy loyalty internally and strategic partnerships externally."

In the last five years, non-Arab Iran has become a weighty player in Iraq, nurturing ties to Shi'ite and other factions. It has gained clout elsewhere in the Arab world via its alliances with Syria, Lebanon's Hezbollah and the Palestinian Hamas group.

U.S. Arab allies such as Saudi Arabia, Egypt and Jordan are alarmed at Tehran's rising power, but after the Iraq war's chaotic outcome, they fear any American assault on Iran would produce another destabilizing debacle that would cost them dear.

ON A ROLL

Psychologically Iran appears to hold the upper hand.

"It doesn't matter what politically correct things we say, the Arab world has shown plenty of fear, wariness and anxiety over Iran, whereas Iran is not reciprocating," Nasr said.

Prospects for American strikes on Iran receded sharply when a U.S. National Intelligence Estimate (NIE) released in December surprisingly asserted that Tehran had halted a drive to make nuclear weapons in 2003 and had probably not restarted it.

This conclusion has drawn some attention away from Iran's energetic pursuit of uranium enrichment and ballistic weapons development, seen by some Western analysts as more significant than any immediate attempt to make an atomic bomb.

"We didn't change our assessment of the threat, but the NIE whipped the carpet from under us," said one European diplomat, who argued that the U.S. document had made it harder to rally world powers behind tougher U.N. sanctions against Iran.