U.S. sanctions target force at heart of Iran's system

By Edmund Blair - Analysis

TEHRAN (Reuters) - New U.S. sanctions have upped the stakes in a standoff with Iran by targeting a military force at the heart of Iran's ruling system but Tehran is likely to respond cautiously to the move even if its rhetoric toughens.

The United States on Thursday branded the Revolutionary Guards a proliferator of weapons of mass destruction, said its Qods force backed terrorists and slapped additional sanctions on Iran. Some U.S. politicians saw it as a step closer to war.

Iran dismissed the move as illegal. It has said Washington's tactics would not stop Tehran's civilian program that is at the centre of the row between the two arch foes. Washington says Tehran's real aim is to make atomic bombs, a charge Iran denies.

Iranian analysts said Washington's move escalated the row by fingering the Guards, an independent arm of the military set up as guardians of the revolution and answering directly to Iran's top authority, Supreme Leader Ayatollah Ali Khamenei.

"If somebody confronts the Revolutionary Guards, it means he would like to confront the Islamic Republic," said Tehran University professor Hamidreza Jalaeipour.

The Guards have a special status for many Iranians because it was the core force defending Iran in the 1980s war with Iraq, analysts said. When Washington first mooted steps against the Guards, Iranians from across the political spectrum spoke out.

But analysts say Iran is likely to respond cautiously despite other signs of a toughening line in Tehran, such as changing Iran's chief nuclear negotiator this month. The new negotiator is an ally of hardline President Mahmoud Ahmadinejad.

"There will be a lot of strong words. But I don't think there will be any immediate thing that Iranians will do more than just words. They will wait to see if it is something that can really bite," said an Iranian analyst, asking not to be named.

While business executives say existing U.N. and U.S. sanctions are hurting the economy, Iran is enjoying windfall oil earnings that mean it can at least partially offset any impact.

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Iranian officials also repeatedly voice confidence -- in public and private -- that Washington is in no position to open a new front when bogged down in Iraq and Afghanistan, despite a U.S. refusal to rule out military action in the nuclear row.

In addition, Iran will want to see if the U.S. move unites world powers against Tehran or divides them. Russia and China, which have both resisted toughening U.N. sanctions on Iran, said the U.S. move could make the dispute with Iran worse.

But the Guards have become more susceptible to sanctions because of sprawling business interests, ranging from construction work to oil and gas projects. Some have also seen growing political influence of the force

"When you create a big body that does everything you make yourself vulnerable if that one body comes under pressure," the Iranian analyst said.

Such concerns may have influenced the choice of the new Guards commander when Yahya Rahim Safavi was replaced in September after 10 years in charge.