Is Iran seeking to reduce tension with U.S. in Iraq?

By Fredrik Dahl - Analysis

TEHRAN (Reuters) - Iran is defiant in a row with the West over its disputed atomic plans but may be seeking to ease tension with the United States by trying to restrain Shi'ite militias in Iraq and restricting arms crossing the border.

U.S. officials, who accuse predominantly Shi'ite Muslim Iran of stirring up instability in its neighbor, appear to have softened their language in the past few weeks and pointed to a decline in attacks in Iraq by groups using Iranian munitions.

Some analysts say this may show Iran's desire to tone down a war of words about Tehran's nuclear goals. Washington says Iran is seeking to build bombs and that, if the country succeeds, it could spark World War Three. Iran says its aims are peaceful.

"For both sides, there is some logic in at least trying to reduce tension," said one Iranian political analyst. "For both sides, the prospect of confrontation is dangerous."

Iraq's foreign minister, Hoshiyar Zebari, said last week Iran had helped "rein in" militias blamed for fuelling violence.

Tehran may be trying to show goodwill at the same time as it underlines its ability to cause trouble again if pushed, said security expert Mustafa Alani.

"It is (aiming) to prove the size and weight of Iranian influence in Iraq," said Alani, who is based in Dubai.

But analysts said it was difficult to assess Iran's motives and the extent of its ability to shape developments in Iraq, where many majority Shi'ites may feel more loyalty towards their own country than Tehran, despite close religious ties.

FEWER ATTACKS

Iran has consistently dismissed accusations it is arming and training allied groups in Iraq and says the violence there is due to the presence of U.S. forces, which it wants withdrawn.

"I don't think Iran has as strong influence in Iraq as the Americans want to show, but they do have influence," said one European diplomat in Tehran, who was skeptical that Iran had changed tack over Iraq.

U.S. officials have attributed falls in U.S. military and Iraqi civilian casualties in the past two months to a "surge" of 30,000 extra U.S. troops and tribal Sunni Arab sheikhs organizing supporters into local police units.

They have also noted a sharp drop in mortar attacks on Baghdad's heavily fortified Green Zone last month. Many of those have been blamed on Shi'ite militias using Iranian-made weapons.

Another Western diplomat in Tehran said Iran appeared to be curbing the flow of weapons to Iraq, a policy which could be reversed if it felt the need, even though Iran would ultimately prefer to have a stable neighbor.

"I do see some restriction here on arms exports (to Iraq), but they could just open the border," he said.