Reuters reports: Iran has approached Baghdad to host forthcoming talks with six world powers over its disputed nuclear program, Iraq said on Wednesday, apparently departing from plans for an Istanbul meeting following Iranian frictions with Turkey.

Iranian media quoted Iranian foreign minister Ali Akbar Salehi as saying the talks could take place in Baghdad or China. He gave no further details.

U.S. Secretary of State Hillary Clinton announced the April 13-14 negotiations would take place in Istanbul, the first such meeting since January 2011 when the sides did not even manage to agree on an agenda.

Iraqi Foreign Minister Hoshiyar Zebari told Reuters an Iranian delegation proposed Baghdad for the talks during a visit to Iraq on Tuesday.

“The proposal came from them. We received a delegation from Iran … Today we are inviting G5 plus one ambassadors to hand over a letter about the proposal,” Zebari said.

A Western diplomat in Baghdad confirmed envoys had been called to Iraq’s foreign ministry for a meeting on Wednesday.

There was no immediate reaction from the six powers – the United States, Britain, France, Russia, China and Germany – to the proposal to hold talks in Iraq.

Tony Karon writes: ‘I believe there is a window of time to solve this diplomatically but that window is closing,” President Barack Obama said last week about the nuclear standoff with Iran. The “window closing” phrase was then echoed on Friday by Secretary of State Hillary Clinton, who insisted: “We are determined to prevent Iran from obtaining a nuclear weapon.”

But hang on a minute. Three weeks ago, Mr Obama warned that he would take military action if it became necessary to stop Iran from acquiring a nuclear weapon. But in the same breath, he pointed out that Iran was not building a nuclear weapon, and had not in fact taken a decision to do so despite steadily amassing infrastructure that would enable it. Mr Obama quoted approvingly from a recent speech in which Supreme Leader Ayatollah Ali Khamenei reiterated his long-standing fatwa declaring that the construction, stockpiling and use of nuclear weapons was a “sin against Islam”.

So, if Mr Obama himself has emphasised that Iran is not moving towards his trip-line for military action, unless there’s been a qualitative shift towards weaponisation in Iran’s nuclear work in the past three weeks, who is closing the metaphorical “window” for diplomacy?

There may be three related elements at work. First, there is Israel threatening unilateral military action based on its own red lines and on its own timetable unless Iran yields. Then there’s the fact that Mr Obama’s Iran strategy was designed by Dennis Ross, who has since returned to his old job at a think tank created by the pro-Israel lobby Aipac. Mr Ross believes the only way to achieve diplomatic results with Iran is to pin it in a chokehold of sanctions, and make it believe worse is to come.

And then there’s Mr Obama’s concern with securing his re-election in November, which requires tough-guy posturing on Iran to counter charges from his Republican opponents, egged on by Israel’s alarmism, about being “weak” in the face of an Iranian “danger”.

The Associated Press reports: China rejected President Barack Obama’s decision to move forward with plans for sanctions on countries buying oil from Iran, saying Saturday that Washington had no right to unilaterally punish other nations.

South Korean officials said they will continue working with the U.S. to reduce oil imports from Iran, as other U.S. allies who depend on Iranian oil worked to find alternative energy supplies.

Obama announced Friday that he is plowing ahead with the potential sanctions, which could affect U.S. allies in Asia and Europe, as part of a deepening campaign to starve Iran of money for its disputed nuclear program. The U.S. and allies believe that Iran is pursuing a nuclear bomb; Iran denies that.

China is one of the biggest importers of Iranian oil, and its Foreign Ministry reiterated its opposition to the U.S. moves.

Gary Sick writes: Imagine that you wake up tomorrow morning and discover that during the night. Israeli planes had conducted a bombing raid on Iran. How would your world have changed?

Apart from the sensational headlines and breathless reports, the initial change might not be very significant. You would probably want to know whether the United States approved or assisted in the attack on Iran’s nuclear sites. In fact, it doesn’t really matter. Just about everyone in the world will assume that the U.S. was complicit, regardless of what Washington says.

Let’s assume that Israel notified the Obama administration about the same time the planes were taking off, if only to ensure that U.S. aircraft and missiles in the Persian Gulf region would not interfere with the bombers and refueling aircraft as they passed over one or more Arab countries. But for Iran and just about everyone else, the fact that most of the Israeli aircraft and bombs were made in the U.S. would be all they needed to know.

On that first morning, the U.N. Security Council would convene in emergency session to consider a resolution denouncing the Israeli raid. If the United States vetoed the resolution, that would remove any lingering doubt of U.S. complicity.

Perhaps more significant, however, would be European support of the resolution. This would signal the beginning of the collapse of the sanctions coalition against Iran that had been so laboriously assembled over the past several years. Both the Europeans and the Americans had operated on the tacit belief that crippling sanctions were an alternative to war. With the outbreak of war, that assumption would no longer be valid.

What would Iran do? Everyone would be poised for a massive military response. They might be surprised.

Iran would almost certainly give the required 90 days notice of its intention to quit the Nuclear Non-Proliferation Treaty and terminate inspections by the International Atomic Energy Agency. Iranian officials would not necessarily announce that they intended to proceed with development of a nuclear weapon, but they would certainly make clear that as a nonnuclear state that had been attacked by another state with nuclear weapons, that was a decision that was entirely up to them. All enriched uranium stocks would be removed from IAEA seal, and all monitoring cameras would be removed.

A different twist would be introduced if Iran had succeeded in shooting down one or more of the Israeli planes. One or more Israeli pilots in Iranian hands would sharply increase the risk of further escalation by either the United States or Israel.

Of more general significance, the markets would realize that some two million barrels a day of Iranian oil were now removed from the world market for an indeterminate period of time, and the price of oil would jump. The head of the IMF has suggested that an immediate increase of 20% to 30% could be expected.

The New York Times reports: President Obama said on Friday that there is enough oil in world markets to allow countries to rely less on imports from Iran, a step that could increase Western actions to deter Tehran’s nuclear ambitions.

Mr. Obama is required by law to decide by March 30, and every six months after, whether the price and supply of non-Iranian oil is sufficient to allow for countries to cut their oil purchases from Iran.

Mr. Obama’s decision was announced Friday afternoon in a conference call. He made the decision after consultations with a number of oil exporters that had agreed to increase production. The decision comes even as gas prices have risen in recent months, a rise that his political advisers say could hamper his re-election efforts.

The new sanctions, passed as part of the defense budget and mandated by the Senate in a rare 100-to-0 vote, penalize foreign corporations or other entities that purchase oil from Iran’s central bank, which collects payment for most of the country’s energy exports. The penalties are meant to pressure Iran to curb its nuclear program.

The law includes loopholes that allow Mr. Obama to waive the measures if they threaten national security or if gas prices increase.

Gas prices in the United States have climbed about 19 percent this year on worries about a confrontation with Iran, investor speculation about higher prices and other factors. A gallon of gas currently costs an average of $3.93, up from about $3.30 a gallon in December. The rising prices have weighed on economic confidence and cut into household budgets, a concern for an Obama administration seeking re-election.

Mark Perry writes: In 2009, the deputy chief of mission of the U.S. embassy in Baku, Donald Lu, sent a cable to the State Department’s headquarters in Foggy Bottom titled “Azerbaijan’s discreet symbiosis with Israel.” The memo, later released by WikiLeaks, quotes Azerbaijan’s President Ilham Aliyev as describing his country’s relationship with the Jewish state as an iceberg: “nine-tenths of it is below the surface.”

Why does it matter? Because Azerbaijan is strategically located on Iran’s northern border and, according to several high-level sources I’ve spoken with inside the U.S. government, Obama administration officials now believe that the “submerged” aspect of the Israeli-Azerbaijani alliance — the security cooperation between the two countries — is heightening the risks of an Israeli strike on Iran.

In particular, four senior diplomats and military intelligence officers say that the United States has concluded that Israel has recently been granted access to airbases on Iran’s northern border. To do what, exactly, is not clear. “The Israelis have bought an airfield,” a senior administration official told me in early February, “and the airfield is called Azerbaijan.”

Senior U.S. intelligence officials are increasingly concerned that Israel’s military expansion into Azerbaijan complicates U.S. efforts to dampen Israeli-Iranian tensions, according to the sources. Military planners, I was told, must now plan not only for a war scenario that includes the Persian Gulf — but one that could include the Caucasus. The burgeoning Israel-Azerbaijan relationship has also become a flashpoint in both countries’ relationship with Turkey, a regional heavyweight that fears the economic and political fallout of a war with Iran. Turkey’s most senior government officials have raised their concerns with their U.S. counterparts, as well as with the Azeris, the sources said.

The Israeli embassy in Washington, the Israel Defense Forces, and the Mossad, Israel’s national intelligence agency, were all contacted for comment on this story but did not respond.

The Azeri embassy to the United States also did not respond to requests for information regarding Azerbaijan’s security agreements with Israel. During a recent visit to Tehran, however, Azerbaijan’s defense minister publicly ruled out the use of Azerbaijan for a strike on Iran. “The Republic of Azerbaijan, like always in the past, will never permit any country to take advantage of its land, or air, against the Islamic Republic of Iran, which we consider our brother and friend country,” he said.

But even if his government makes good on that promise, it could still provide Israel with essential support. A U.S. military intelligence officer noted that Azeri defense minister did not explicitly bar Israeli bombers from landing in the country after a strike. Nor did he rule out the basing of Israeli search-and-rescue units in the country. Proffering such landing rights — and mounting search and rescue operations closer to Iran — would make an Israeli attack on Iran easier.

“We’re watching what Iran does closely,” one of the U.S. sources, an intelligence officer engaged in assessing the ramifications of a prospective Israeli attack confirmed. “But we’re now watching what Israel is doing in Azerbaijan. And we’re not happy about it.” [Continue reading…]

Articles in Haaretz quite often blur the lines between reporting, analysis, and commentary. Amir Oren provides the following interpretation of the facts, concluding that Israel will not launch an attack on Iran this year. Who knows whether his is the definitive interpretation?

News that the IDF just cancelled Passover vacation provides yet a new element of uncertainty, though the one thing about which we can remain certain is Israel’s continuing desire to perpetuate a high level of uncertainty about its intentions.

Amir Oren writes: At 8:58 P.M. on Tuesday, Israel’s 2012 war against Iran came to a quiet end. The capricious plans for a huge aerial attack were returned to the deep recesses of safes and hearts. The war may not have been canceled but it has certainly been postponed. For a while, at least, we can sound the all clear: It won’t happen this year. Until further notice, Israel Air Force Flight 007 will not be taking off.

According to a war simulation conducted by the U.S. Central Command, the Iranians could kill 200 Americans with a single missile response to an Israeli attack. An investigative committee would not spare any admiral or general, minister or president. The meaning of this U.S. scenario is that the blood of these 200 would be on Israel’s head.

The moment the public dispute over whether to attack Iran is put in those terms, Israel has no real option to attack in contravention of American declarations and warnings.

That’s the negative side. The complementary positive side was presented this week, on Tuesday evening. At 8:20, Pentagon spokesman George Little announced that the Defense Department would be seeking more money to help Israel fund the Iron Dome antimissile defense system.

Noting that support for Israel’s security was a top priority for U.S. President Barack Obama and Defense Secretary Leon Panetta, Little said that, given the Iron Dome system’s success in intercepting 80 percent of the rockets fired from Gaza this month, the Defense Department “intends to request an appropriate level of funding to support such acquisitions, based on Israeli requirements and production capacity.”

Thirty-eight minutes after that, Defense Minister Ehud Barak publicly thanked both Panetta and himself (“The decision was the result of contacts between the Defense Ministry and the Pentagon” ).

Israelis may be the world champions of chutzpah, but even biting the hand that feeds you has its limits when the bitten hand is liable to hit back. When Barak thanked the Obama administration “for helping strengthen Israel’s security,” he was abandoning the pretension to act against Iran without permission before the U.S. presidential elections in November.

For all intents and purposes, it was an announcement that this war was being postponed until at least the spring of 2013.

Bloomberg reports: Iran’s “workshops” for making nuclear centrifuges and components for the devices are widely dispersed and hidden, adding to the difficulties of a potential military strike by Israel, according to a new report by U.S. congressional researchers.

Neither Israel nor the U.S. is certain of the locations of all such facilities, analysts at the Congressional Research Service wrote in the report obtained today. The analysts cited interviews with current and former U.S. government officials familiar with the issue who weren’t identified.

Israel’s capability to halt or set back Iran’s nuclear program through a military strike has been central to the debate over whether Israel should undertake such a mission alone. While President Barack Obama has urged more time for economic sanctions to work, Israeli officials led by Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak say it may soon be too late to prevent Iran from developing the capability to produce a nuclear weapon.

The possibility of dispersed facilities complicates any assessment of a potential raid’s success, making it “unclear what the ultimate effect of a strike would be on the likelihood of Iran acquiring nuclear weapons,” the report found.

A U.S. official said in April 2011 that there “could be lots of workshops’ in Iran,” the authors said. Last month, a former U.S. government official with “direct experience” in the issue told the researchers that “Iran’s centrifuge production is widely distributed and that the number of workshops has probably multiplied ‘many times’ since 2005 because of an increase in Iranian contractors and subcontractors working on the program.”

“An attack that left Iran’s conversion and centrifuge production facilities intact would considerably reduce” the time Iran would need to resume its nuclear work, said the congressional researchers led by Jim Zanotti, a Middle Eastern affairs specialist. He wrote the report with analysts Kenneth Katzman, Jeremiah Gertler and Steven Hildreth.

Israel, the U.S. and European allies say they are concerned that Iran may begin trying to produce the highly enriched uranium needed for a nuclear weapon. Iran says its nuclear program is intended solely to generate power and for medical research. Centrifuges spin at high speeds to separate uranium isotopes.

Michael Hayden, a former director of the Central Intelligence Agency, said in January “that neither the U.S. nor Israel knows the location of all key Iranian nuclear-related facilities,” according to the congressional researchers.

Assessments vary on how much impact a military attack would have on Iran’s centrifuge facilities. An executive branch official who wasn’t named told the research service last month that Iran doesn’t have enough spare centrifuges or components to install new devices immediately, the authors wrote. A former official said the same day that Iran probably could rebuild or replicate most centrifuge workshops within six months, the researchers said.

Tony Karon writes: President Barack Obama, speaking Saturday in Turkey on the Iran nuclear standoff, reiterated his belief that “there is a window of time to solve this diplomatically, but that window is closing.” That may be a rhetorical device aimed at turning up the heat on the Iranians and on other interlocutors who might persuade them to be more forthcoming at next month’s nuclear talks with the major powers, but it also reflects the pressure created by Israel’s pounding of the war drum. It’s not Obama’s own hand, after all, that’s “closing” the diplomatic window of opportunity: The President himself made clear just three weeks ago that his own red line for taking military action would be if that became necessary to stop Iran from acquiring a nuclear weapon. But he made clear, at the same time, that Iran is not currently building nuclear weapons, nor has it taken a decision to do so. The “closing window” to which he refers may be a reflection of the fact that the Israelis insist they take a darker view, and work off a shorter timetable.

Iran’s Supreme Leader Ayatullah Ali Khamenei recently reiterated that the regime in Tehran regards the construction and use of nuclear weapons as a “sin against Islam” — in what appeared to be a public signal that Iran has no intention of crossing Obama’s red line. Iran analyst Vali Nasr also read that as a rebuke to those within the corridors of power in Tehran who argue that Iran should build nuclear weapons in the face of a mounting threat of foreign intervention. Khamenei also welcomed Obama’s emphasis on dialogue.

But Netanyahu sets little store by Iran’s declared intentions, seeing the steady progress of its nuclear program as a burgeoning threat, and drawing its own red line at Iran having the capacity to build a nuclear weapon (arguably it already has that capacity). Netanyahu insisted during his recent Washington visit that if diplomacy and sanctions don’t produce the results Israel demands, it will take matters into its own hands by launching military strikes on Iranian nuclear facilities, acting on its own timetable. President Obama, trying to tamp down the war talk, has questioned the value of military strikes in stopping Iran from building nuclear weapons, noting in his speech to the Israel lobbying organization AIPAC three weeks ago that “the only way to truly solve this problem is for the Iranian government to make a decision to forsake nuclear weapons. That’s what history tells us.”

Mehdi Hasan writes: On 7 June 1981 a phalanx of Israeli F-16 fighter-bombers entered Iraqi airspace on the orders of the then Israeli prime minister Menachem Begin. Their mission, codenamed Operation Babylon, was to destroy Saddam Hussein’s nascent nuclear programme. In less than two minutes the eight F-16s dropped 16 1,000-kg bombs on the unfinished Osirak nuclear reactor, situated 10 miles south of Baghdad. It was an audacious attack: the world’s first air strike on a nuclear facility.

Begin claimed to have averted “another Holocaust” by denying Saddam “three, four, five” nuclear bombs. American politicians – from Dick Cheney to Bill Clinton – would later agree with him.

Fast forward to 2012, and the Osirak attack is constantly invoked as a template for military action against Iran. Last month Amos Yadlin, director of Israel’s Institute for National Security Studies and one of the pilots who bombed Osirak, said Iraq’s nuclear programme was “never fully resumed” after that attack. “This could be the outcome in Iran,” he declared in the New York Times. Earlier this month the current Israeli prime minister and sabre-rattler-in-chief Benjamin Netanyahu used a speech on Iran to again praise the Osirak operation, reminding his audience of how Begin ordered the attack despite being “well aware of the international criticism that would come”.

Contrary to the conventional wisdom, however, Operation Babylon was a dismal failure – and did the exact opposite of what it was supposed to do. For a start, Saddam wasn’t building a bomb at Osirak. Richard Wilson, a nuclear physicist at Harvard University who inspected the wreckage of the reactor on a visit to Iraq in 1982, noted how it had been “explicitly designed” by French engineers “to be unsuitable for making bombs” and had been subject to regular inspections by both on-site French technicians and the International Atomic Energy Agency (IAEA).

“The Iraqis couldn’t have been developing a nuclear weapon at Osirak,” Wilson tells me, three decades on. “I challenge any scientist in the world to show me how they could have done so.”

For Wilson, the Israeli raid marked not the end of Saddam’s nuclear weapons programme but the beginning of it. Three months later, in September 1981, Saddam – smarting from the Osirak incident and reminded of Iraq’s vulnerability to foreign attack – established a fast-paced, well-funded and clandestine nuclear weapons programme outside of the IAEA’s purview. Nine years after Osirak, Iraq was on the verge of producing a nuclear bomb.

Reuters reports: Western sanctions have so far failed to deter Iran from pursuing its nuclear program and their unexpected and unintended side-effects are producing a new collection of challenges.

The expected loss of Iranian crude production has helped push oil prices to levels seen threatening the global economy.

Already Iran’s oil exports appear to have fallen this month by some 300,000 barrels per day (bpd), or 14 percent, the first sizeable drop in shipments this year, according to estimates from industry consultant Petrologistics and an oil company.

Oil rose sharply on the news, with Brent jumping to over $127 a barrel, up almost $4 from the day’s low.

Meanwhile, many Iran-watchers, including some Western officials, worry that far from producing compliance, ratcheting up the economic pressure is making the Islamic Republic more volatile, unpredictable and perhaps dangerous.

Julian Borger writes: In May 2003, when the Bush administration’s might was at its zenith, a Swiss diplomat called Tim Guldimann arrived in Washington carrying an extraordinary message.

As Switzerland’s ambassador in Tehran, Guldimann’s job was to represent the interests of the United States, which had no embassy, and that was he thought he was doing. The letter he was carrying was an offer of comprehensive negotiations from the Iranian government. In return for a lifting of US sanctions and the handing over of members of a US-designated Iranian terrorist group, Tehran was willing to place its nuclear programme under an intrusive monitoring and inspection regime, end armed support for Hamas and Hizbullah, and accept a Saudi plan for Israeli-Palestinian peace.

In short, Iran was ticking just about every box on the American diplomatic wish-list. So what happened? Dick Cheney and Donald Rumsfeld rejected the offer out of hand. “We don’t speak to evil,” was the official line. Not only was Guldimann sent packing, the Bush administration actually reprimanded the Swiss for over-stepping their diplomatic mandate.

The depressing fiasco is the opening scene of a perfectly-timed new book, A Single Roll of the Dice, by Trita Parsi, a carefully balanced and thoroughly researched account of the tortured US-Iranian relationship in recent years.

Akiva Eldar writes: The murderer who shot students in a Jewish school in Toulouse yesterday, like the one who shot black-skinned French paratroopers a few days earlier, required no motive other than hatred of foreigners and those who are different. Chronic sufferers from anti-Semitism and xenophobia need no special pretexts for their racism.

Nevertheless, an Israeli attack on Iran that sent gas prices soaring would be seized by by right-wing extremists like those who support Marine Le Pen. Thanks to Prime Minister Benjamin Netanyahu’s babble in Washington, even if the United States is the one that ultimately attacks Iran’s nuclear reactors, the bill will (also) be submitted to Jewish communities abroad. The State of Israel, which was established as a haven for Jews from those who hate it, may instead wind up becoming a threat to Jews.

What do you do when the polls show that a solid majority of Israelis refuse to risk being among the 500 casualties of retaliatory Iranian missile strikes on which Defense Minister Ehud Barak is prepared to gamble? The Prime Minister’s Office takes comfort in polls showing increasing American support for military action against Iran. Netanyahu’s spokesmen managed to sell this dramatic headline to several important media outlets as a personal accomplishment by their boss.

Indeed, a Wall Street Journal/CNN poll published the day after Netanyahu’s address to the pro-Israel lobby AIPAC showed that 52 percent of Americans favored a military strike on Iran if the only other option were standing idly by. But when the respondents were presented with a larger range of options, a completely different picture emerged.

Nouriel Roubini writes: Today’s fragile global economy faces many risks: the risk of another flare-up of the eurozone crisis; the risk of a worse-than-expected slowdown in China; and the risk that economic recovery in the United States will fizzle. But no risk is more serious than that posed by a further spike in oil prices.

The price of a barrel of Brent crude, which was well below $100 in 2011, recently peaked at $125 (U.S.). Gasoline prices in the U.S. are approaching $4 a gallon, a damaging threshold for consumer confidence, and will increase further during the high-demand summer season.

The reason is fear. Not only are oil supplies plentiful, but demand in the U.S. and Europe has been lower, owing to decreasing car use in the last few years and weak or negative GDP growth in the U.S. and the eurozone. Simply put, increasing worry about a military conflict between Israel and Iran has created a “fear premium.”

The last three global recessions (prior to 2008) were each caused by a geopolitical shock in the Middle East that led to a sharp spike in oil prices. The 1973 Yom Kippur War between Israel and the Arab states led to global stagflation (recession and inflation) in 1974-1975. The Iranian revolution in 1979 led to global stagflation in 1980-1982. And Iraq’s invasion of Kuwait in the summer of 1990 led to the global recession of 1990-1991.

The New York Times reports: A classified war simulation held this month to assess the American military’s capabilities to respond to an Israeli attack on Iran forecast that the strike would lead to a wider regional war, which could draw in the United States and leave hundreds of Americans dead, according to American officials.

The officials said the so-called war game was not designed as a rehearsal for American military action — and they emphasized that the exercise’s results were not the only possible outcome of a real-world conflict. But the game has raised fears among top American planners that it may be impossible to preclude American involvement in any escalating confrontation with Iran, the officials said. In the debate among policy makers over the consequences of any possible Israeli attack, that reaction may give stronger voice to those within the White House, Pentagon and intelligence community who have warned that a strike could prove perilous for the United States.

The results of the war game were particularly troubling to Gen. James N. Mattis, who commands all American forces in the Middle East, Persian Gulf and Southwest Asia, according to officials who either participated in the Central Command exercise or who were briefed on the results and spoke on condition of anonymity because of its classified nature. When the exercise had concluded earlier this month, according to the officials, General Mattis told aides that an Israeli first strike would be likely to have dire consequences across the region and for United States forces there.