Iran: Current Developments and U.S. Policy

Even before Iran's tacit cooperation with post-9/11 U.S. efforts to defeat Afghanistan's Taliban regime, signs of moderation in Iran had stimulated the United States to try to engage Iran in official talks. Iran, still split between conservatives and reformers loyal to President Khatemi did not accept. By early 2002, reports of Iran's continued support to anti-Middle East peace process groups had reversed the warming trend. Iran was grouped with North Korea and Iraq as part of the "axis of evil" identified in President Bush's January 29, 2002 State of the Union message. President Bush has identified Iran's efforts to acquire weapons of mass destruction and delivery means, coupled with its support of terrorist groups, as key U.S. concerns. Iran's ballistic missile program has made major strides over the past few years, with the help of several foreign suppliers, and the strides in its civilian nuclear power program could further a nuclear weapons effort. Iran has opposed the U.S.-led Middle East peace process since its inception in October 1991. It continues to provide material support to Hizballah in Lebanon and to Palestinian groups that oppose the Arab-Israeli peace process (e.g., Hamas and Palestinian Islamic Jihad). Iran's human rights practices, particularly its treatment of the Baha'i and Jewish communities, also are a major concern. The Bush Administration has identified Iran's modernization of its conventional forces as a potential threat to U.S. interests in the Persian Gulf, but others argue that Iran still is relatively poorly equipped. Although the Bush Administration says it is still willing to hold a dialog with Iran, the focus of current U.S. policy appears to be a return to the containment policy that prevailed during the early part of the Clinton Administration. President Clinton imposed a ban on U.S. trade and investment in Iran in 1995, and a 1996 law imposed sanctions on foreign investment in Iran's energy sector (Iran-Libya Sanctions Act).
CRS Issue Brief for Congress.