Iran president to capitalize at home on nuclear report

By Edmund Blair - Analysis

TEHRAN (Reuters) - Iran's president wants to silence critics and shore up his support at home by using a U.S. intelligence report that contradicted the Bush administration's assertion that Tehran was actively seeking nuclear weapons.

Even if Washington gets its way for more U.N. sanctions on Iran despite the report's findings that Tehran halted a nuclear arms program in 2003, Mahmoud Ahmadinejad can say it shows the West is determined to penalize Iran regardless, analysts said.

Ahmadinejad seized on the report on Wednesday during a provincial rally, declaring "victory" for Iran and vowing no retreat on the Islamic Republic's nuclear program, which Iranian officials say has always been peaceful.

The report may provide Ahmadinejad ammunition before the March parliament election in countering critics who said his defiance and firebrand speeches against the West only isolated Iran and built support for sanctions, the analysts said.

"Mr. Ahmadinejad can take this opportunity to show his resistance ... actually had a result for the Iranian people," said Amir Mohebian, an analyst and political editor for a conservative Iranian newspaper.

"Any sanctions, in spite of this report, will help Mr. Ahmadinejad tell the people that the intention of the United States is not to (prevent) Iranians from reaching nuclear weapons but is ... against the Iranian people," Mohebian said.

Securing more sanctions may anyway prove an uphill battle for the United States, which has said it still wants a third U.N. resolution. The report said international pressure was probably behind Iran's decision to halt its nuclear weapons program.

Although Britain and France have said pressure should be kept up, Russia and China, which only reluctantly backed two earlier rounds of sanctions, have said the new report would influence the debate over whether more sanctions were needed.

LOOKING FOR A U.S. SHIFT

But in spite of Iran's exultant reaction, analysts said it was too early for Tehran and its firebrand president to declare victory because the report did not put Iran in the clear.

The report, for example, referred to a weapons program that Iran denies ever having had and said this program could be resumed.

One Western diplomat said more sanctions could still be imposed which would not be a welcome development for embattled Iranian business -- even if Ahmadinejad sought to blame it on the West. But he said it appeared to make a military attack, which Washington has not ruled out, more unlikely for now.

One Iranian analyst, who asked not to be named, said Iran would be hoping the report signaled a shift towards a U.S. policy involving more engagement with Tehran.

"If this does not come true, there will be much less room for (the government) to capitalize on this report in the long-term and even in the medium-term," he said.

Tehran University professor Hamidreza Jalaiepour said the personal political benefits for Ahmadinejad might be limited because Iranians knew nuclear policy was ultimately decided by Supreme Leader Ayatollah Ali Khamenei, not the president.