NEWS ANALYSIS Future of U.S.-Iranian relations could depend on fate of 13 Jews

WASHINGTON, June 28 (JTA) — The future of the Clinton administration”s diplomatic dance with Tehran could depend on the fate of 13 Jews who face execution in Iran. President Clinton”s overtures to Iran began two years ago when the Islamic Republic elected Mohammad Khatami, a relative moderate, as president. Now, members of the U.S. Congress who are skeptics of that policy have put Iran on notice that the United States will exact a price if the Jews are convicted on charges of working as “Zionist spies.” The detainees — who are believed to include rabbis, teachers and leaders of the Isfahan and Shiraz Jewish communities in southwestern Iran — had been held for nearly three months without being charged. Earlier this month Iran announced the arrests and charged them with espionage, which resulted in an outcry from Jewish leaders who enlisted presidents, prime ministers, the Vatican and others to help secure their release. “Should these innocents be mistreated, Iran will pay a price for many years to come,” Sen. Charles Schumer (D-N.Y.) said recently. “Should they be executed, Iran will slip back into pariah status for decades — which means no loans, no trade, no international respect,” said Schumer, flanked by two senators and a half dozen member of Congress. Even as members of Congress talked tough last week during a news conference at the foot of the Capitol building steps, real questions remain about what impact U.S. policy toward Iran will have on the regime”s policies. The congressional group said they had gathered to convey a message to Khatami: “The world is watching.” “If we shine the light of world opinion on these 13 hostages, then neither France nor any other Western country will want to invest in Iran or provide them with oil technology,” said Rep. Brad Sherman (D-Calif.). But just what is the world going to do? America”s allies do not appear to be willing to stake their relations with Iran on the situation of the 13 Jews. Although leaders of more than a dozen countries, some with diplomatic relations with Iran, have voiced concern over the arrests and called for the prisoners” release, business deals continue unfettered. European states have shown no signs of slowing their efforts to improve relations with Iran, a process that began last year when Iranian clerics lifted an order to assassinate author Salman Rushdie. Since the arrests of the Iranian Jews became public, the following signs of rapprochement with Iran have occurred: * A delegation of business executives from England reportedly traveled to Iran seeking new investment opportunities; * Norway announced plans to lift export curbs and to send an ambassador to Tehran later this summer; * Japan announced plans to lift a ban on loans and send its foreign minister there later this summer; and * The French energy giant Total continues to develop crucial Iranian gas and oil fields. For years the United States has tried in vain to isolate Iran. Since the 1979 Islamic Revolution, the United States has maintained stiff economic sanctions against Iran. Under U.S. law, Iran is considered a state sponsor of terrorism and until recently was known officially as a “rogue” state. But following Khatami”s election, the United States adopted a more conciliatory tone as it waited to see if Iran”s policies changed to match the president”s rhetoric. U.S. Secretary of State Madeleine Albright laid out a “road map” last year to improve relations between Washington and Tehran. Albright went out of her way to call Iran by its preferred name — the Islamic Republic of Iran — and praised Khatami, who she said “publicly denounced terrorism and condemned the killing of innocent Israelis.” But since the arrest of the Iranian Jews, Clinton administration officials are publicly criticizing Iran. The arrests are “unacceptable,” Albright said recently, adding that the United States views the matter “with great concern.” Yet while administration officials have used strong language to criticize the arrests, the administration has not gone as far as members of Congress in linking future relations with Iran. But Congress has the ability to frustrate Clinton”s overtures, according to a congressional aide who said discussions are under way to develop new legislation aimed at further isolating Iran financially. “The level of economic contact that Iran has with the western world is imperiled by its criminal action,” said Sherman, who spearheaded congressional efforts to pass a resolution condemning the arrests. In recent years, Congress has passed legislation banning U.S. firms from bidding on contracts in Iran and imposing restrictions on overseas business that have lucrative deals with Tehran. To be sure, Iran is already beginning to feel some financial pressure. The World Bank this month reportedly put on hold preparations to provide $200 million in loans to Iran to protest Tehran”s arrest of the 13 Jews. World Bank officials postponed indefinitely a trip to Tehran to discuss the loans for sewer and health care projects, The Washington Post reported last week, citing unidentified bank officials. Last year the World Bank approved some $720 million in loans to Iran. But if other countries continue to pursue warmer diplomatic and fiscal relations with Iran, does U.S. policy matter? Not really, according to Middle East analysts. “The American threats are of some utility but more important is what the Europeans do,” said Daniel Pipes, the editor of Middle East Quarterly. “The United States looms large in terms of ideology and myth in Iran but is rather small in practical matters,” he said, citing the low level of trade compared to Europe. But if Iran needs American humanitarian aid, Congress and the Clinton administration might have some leverage. Although no direct U.S. aid reaches Iran, the Clinton administration earlier this year approved limited humanitarian assistance, including American grain. Last week Iran reported more than $1 billion in crop losses as a result of one of the worst droughts to hit the area this century. Schumer said he would seek to condition any future grain sales on the Jews” fate. “We have to take a hard line,” he said. “We have to say, ”You have to at least show you can have some modicum of civility.” ” But not everyone thinks it is a good idea to completely isolate Iran. Without some engagement, there would be nobody to plead with Tehran to release the Jewish prisoners, some analysts say. In a recent encounter here, Iranian journalists close to Khatami met with a Jewish organization, which asked not to be identified. At the closed-door meeting hosted by Middle East Insight, the journalists said they believe the arrests of the Jews were an effort to thwart the president”s policies. No world pressure will lead to their release, the reporters said. And that is where the first major test of Clinton”s policy of greater engagement with Iran lies. “The harsh reality is that these 13 are being used as pawns between two warring political factions in Iran,” Schumer said. “If Khatami can”t deliver on this issue, than what is his reform movement about in the first place?””