Iran: U.S. Concerns and Policy Responses: RL32048.

According to the Administration's "National Security Strategy" document released on March 16, 2006, the United States "may face no greater challenge from a single country than Iran." That perception continues, generated primarily by Iran's nuclear program and intensified by Iran's military assistance to armed groups in Iraq and Afghanistan and to Lebanese Hezbollah. U.S. officials also accuse Iran of refusing to bring to justice several senior Al Qaeda activists in Iran. In part to direct regional attention to that view but also to engage Iran on an Iraq solution, the Administration attended regional conferences on Iraq on March 10, 2007, and May 3-4, 2007, both attended by Iran (and Syria), and subsequently held bilateral meetings with Iran in Baghdad on May 28 and July 24, agreeing in the latter meeting to form a working group on Iraq security issues, which met for the first time on August 6. The Bush Administration is pursuing several approaches to attempt to contain the potential threat posed by Iran, but the U.S. emphasis is now on multilateral economic sanctions on Iran. Iran has not complied with repeated U.N. Security Council deadlines since August 2006 to cease uranium enrichment. That demand is encapsulated in two U.N. resolutions (1737 and 1747) that ban trade with and freeze the assets of Iran's nuclear and related entities and personalities, prevent Iran from transferring arms outside Iran, and require reporting on international travel by named Iranians. With Iran still refusing to comply, further steps are under discussion at the U.N. Security Council. Separate U.S. efforts, showing some success, have included trying to persuade European governments to curb trade, investment, and credits to Iran; and pressuring foreign banks not to do business with Iran. To strengthen its diplomacy, the Administration has added components to efforts to contain Iran, including a naval buildup in the Persian Gulf; arrests of Iranian agents in Iraq. The Administration strongly denies it is planning on military action against Iran, but has refused to rule it out. Some legislation introduced in the 110th Congress, including H.R. 1400, S. 970, and H.R. 2880, would increase U.S. sanctions on Iran -- both the U.S. trade ban and the Iran Sanctions Act that seeks to prevent foreign investment in Iran's energy sector. The Administration opposes aspects of these bills that would limit Administration flexibility in applying sanctions. Other legislation, such as H.R. 957, H.R. 1357, and S. 1430, would promote divestment of companies that do business with Iran. Some in the Administration believe that only a change of Iran's regime would end the threat posed by Iran, although without specifying a clear means of achieving such a result. For further information, see CRS Report <a target="_blank" href="/document/RS20871">RS20871</a>, The Iran Sanctions Act (ISA), by Kenneth Katzman; CRS Report <a target="_blank" href="/document/RS21592">RS21592</a>, Iran's Nuclear Program: Recent Developments, by Sharon Squassoni; and CRS Report <a target="_blank" href="/document/RS22323">RS22323</a>, Iran's Influence in Iraq, by Kenneth Katzman. This report will be updated as warranted. [ABSTRACT FROM AUTHOR]