The Latest from Iran (21 May): A Freudian Slip on the Economy

See also The Latest from Iran (20 May): A Tip of the Hat to President Obama?

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1824 GMT:. Fraud Watch. In the 11th hearing in the trial of dozens of defendants over a $2.6 billion bank fraud, a former deputy at the Ministry of Industry has accused Alaeddin Boroujerdi, head of Parliament's National Security Committee, of involvement.

1813 GMT: Death to the Rapper Watch. Hojatoleslam Mohammad Jafar Montazeri, the head of the Administration Court, is the latest cleric to call for the killing of rapper Shahin Najafi because of his "insult to Imams" with his song "Naqi".

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The Latest from Iran (14 May): Will a Nuclear Drawing Unsettle the Talks?

The drawing that "proves" Iran is pursuing nuclear weapons --- a "high-explosives containment chamber" at the Parchin military site

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2011 GMT: All-Is-Well Alert. Iran's Statistical Center has said that in the Iranian year ending on 19 March, the jobless rate fell 1.2% to 12.3%.

The Center said that by March 2013, the government plans to reduce unemployment rate to 7%, investing around $200 billion to create one million jobs a year. It added that by 2015, the Government may send nearly 100,000 Iranians to work abroad.

1948 GMT: Nuclear Watch. We have expected back-channel discussions between the public resumption of talks between Iran and the 5+1 Powers (US, UK, Germany, France, China, and Russia) in Istanbul in mid-April and the next meeting in Baghdad on 23 May. Laura Rozen offers confirmation:

The European Union’s Helga Schmid and Iran’s Ali Bagheri held meetings in Geneva May 6-7, a diplomatic source [said].

The deputy nuclear negotiators for the P5+1 and Iran respectively are due to hold a second meeting this week, but I’ve been asked to hold off reporting the date and location as negotiators are seeking to minimize publicity for the preparatory talks. Schmid and Bagheri are meeting to prepare the agenda for the next round of Iran nuclear talks due to be held May 23rd in Baghdad.

Western negotiators have made clear that when it comes to the exceedingly sensitive Iran nuclear negotiations process, they believe more can be accomplished in such quiet meetings.

But notable as well is the fact that no scuttlebutt from the first known face-to-face talks between Schmid and Bagheri since Istanbul has leaked from the Iranian side, as has occurred in many similar past cases. That may be a sign of Tehran’s efforts to maintain the positive atmosphere and a modicum of trust and goodwill that was established at the last round of talks in Istanbul last month.

The lead U.S. negotiator with the P5+1 group, Undersecretary of State for Political Affairs Wendy Sherman, did not participate in the Schmid-Bagheri discussions this past week, I was told. But American officials have made clear that she is open to do so — and that they have zero plans to advertise it if and when she does.

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The Latest from Iran (28 April): Nuclear Step Forward, Nuclear Step Back

1513 GMT: War Watch. There has been quite a flutter on the Internet over comments by the former head of Israel's internal intelligence agency Shin Bet, Yuval Diskin, critising Prime Minister Binyamin Netanyahu and Defence Minister Ehud Barak over postures and policies on Iran based on "messianic feelings". Diskin said he would not trust the Israeli leaders in the event of a pre-emptive strike on Iran's nuclear sites.

The comments should be seen in the context of a wave of recent comments by former and current Israeli military and intelligence leaders, including former head of the Mossad, Israel's foreign intelligence service, Meir Dagan and current Chief of General Staff Benny Gantz, playing down talk of an imminent Iranian nuclear weapons capability and warning against the consequences of an Israeli attack (see the discussion in Comments).

Interpretation? Seeing this as a possible contest and even rift between the military and the political leadership, I would note the significant influence of the ties between the Israeli and the US military and inteligence communities. Washington's military commanders have not only been vocal this spring in their caution against an assault; they have given signals to Israeli counterparts that they would like to see the same out of West Jerusalem.

Video from The Guardian:

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Iran Special: Why Both Sides Shifted in Nuclear Talks --- And What Comes Next (Dalton)

See also Iran Analysis: The Nuclear Talks --- The Effectiveness of Sanctions, The Effectiveness of Iran's Uranium Enrichment

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Each side moved some way. Earlier each had escalated in the hope of bringing extra pressure to bear to shift any negotiations their way. The Iranians started 20% enrichment, and then moved it from exposed Natanz to safer Fordow, underlining the perils for the Six in delaying a move to a more flexible and hence constructive position. And ever-tighter financial sanctions and the partial oil embargo appear to have led Iran to moderate its defiance and allow itself the option of a change of policy.

It will be tough turning these preliminary moves into a deal. The first requirement for the Six is to recognize in practise that distrust is two-way. They must be seen to negotiate in good-faith on nuclear issues and not to hold regime change up their sleeves.

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Iran Analysis: A 4-Point Beginner's Guide to the Nuclear Talks

After days of last-minute fencing --- reflecting both the tensions of diplomacy and the tensions within the Iranian political system --- Tehran finally agreed on Monday to the start of nuclear discussions in Istanbul. Iran's representatives will sit down with those of the 5+1 Powers (US, UK, France, Russia, China, and Germany) on Saturday to consider the future of Tehran's uranium enrichment.

The theatrical dispute over location, which started when Iran pulled back last week from Turkey as the host of the talks, ended with the declaration that Istanbul's opening meeting would be followed by another round of discussions in Baghdad.

At one level, that's a face-saving arrangement. The Islamic Republic had boxed itself in with its posture that Turkey --- which has been a diplomatic partner of Tehran, which had been vital in working with Iran for a possible agreement in 2010, but which had angered some in the regime with its position on the Syrian crisis --- was no longer acceptable as the venue. The Iranians (and by this, I primarily mean the Supreme Leader) either had to take this pose all the way to the collapse of discussions even before they started, or accept that it was the Istanbul way or no way for the negotiations.

At another level, however, the Baghdad add-on is a tip-off from the Islamic Republic to the US and European powers not to expect an immediate meeting of minds in Turkey. If there is to be an agreement, it will have to come through lengthy talks producing compromise, rather than an Iranian concession to sanctions and other pressure, and an arrangement not only respecting but highlighting the Islamic Republic's sovereignty. A meeting in Iraq is symbolic of that desire --- the Iranians know that Washington is suspicious of Baghdad's political leanings towards Tehran, so the US would have to make a concession in entering that diplomatic territory.

At the same time, the setting-out of not just one but two sets of talks --- albeit with those in Baghdad on an unspecified date, only to be confirmed at the end of Istanbul --- raises the question as to whether either side will put a substantial offer on the table this week or whether each will fence for position, trying to get the other to tip off their negotiating hand and even give way on it.

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Iran Propaganda Special: US Officials Spin Away from War

On Friday, Reuters published a significant article by Tabassum Zakaria and Mark Hosenball, "Intel Shows Iran Nuclear Threat Not Imminent".

The significance, however, is not in the "Intel": the information in the article is far from new. What is significant is that, in the battle amongst US officials to set the agenda over Iran, that information has not only resurfaced but has gained the upper hand.

The media spin has shifted. Iran is no longer an imminent threat. Although it should still be watched, Tehran is not approaching the Obama "red line" --- the pursuit of the Bomb --- which would bring Washington's endorsement of a strike on Iranian facilities.

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Special Report: Intel Shows Iran Nuclear Threat Not Imminent
Tabassum Zakaria and Mark Hosenball

The United States, European allies and even Israel generally agree on three things about Iran's nuclear program: Tehran does not have a bomb, has not decided to build one, and is probably years away from having a deliverable nuclear warhead.

For months, the analysis that "Tehran does not have a bomb, has not decided to build one, and is probably years away from having a deliverable nuclear warhead", put forward in the 2007 National Intelligence Estimate, had been pushed aside. Instead --- partly because of pressure from Congress, partly because of its own drive for tough sanctions --- the Administration had used compliant reporters to put out the spectre of an imminent Iranian threat.

This was just a spectre: there has little if any information since 2007 pointing to a resumption of a militarised Iranian programme. However, politics ruled the day in the presentation of the nuclear issue.

And that is still the case. What changed, with respect to Zakaria and Hosenball, was not some breakthrough of investigative journalism. Rather, key members in the Obama Adminisration, including the President, began to worry that an Israeli attack might become a reality rather than a perpetual warning. And some officials are also seeking a deal with Tehran over the nuclear issue, or at least accepting the resumption of talks.

So the media spin has shifted. Iran is no longer an imminent threat. Although it should still be watched, Tehran is not approaching the Obama "red line" --- the pursuit of the Bomb --- which would bring Washington's endorsement of a strike on Iranian facilities.

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Iran Document & Snap Analysis: The IAEA Report on Tehran's Nuclear Programme

I suspect there will be a lot of fuss this weekend about today's quarterly report from the International Agency Energy Agency, much of it made without actually reading the document. Many in the mainstream media are already primed to see a likely if not inevitable military showdown, and they will be fed soundbites that prove Iran's confrontational approach.

In fact, the major shift is not in substance --- "the Agency continues to verify the non-diversion of declared nuclear material" is the same clause in its conclusions of the last two years --- but in tone.

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Iran Snap Analysis: Nuclear Postures and "War is Coming!"

The signal could not have been clearer or louder. Steve Forbes, one of America's most prominent businessmen, has used the pages of his magazine to declare, "War with Iran is Coming!"

In the heat of battle the ayatollahs may not be able to contain themselves. Iran will also attempt to have its agents carry out terrorist acts around the world, particularly in the U.S....Israel will find itself embroiled in a horrific conflict....Much as the White House might wish otherwise, the U.S. will become involved. In fact, President Obama could well respond to the conflict the way he did when he went after Osama bin Laden: give U.S. forces the green light to do whatever is necessary on water and in the air to help the Israelis. 

Having set out Armageddon, Forbes then advised, "This conflict will obviously also roil the financial markets. Best advice to investors: Don’t panic."

On Wednesday, two developments on the nuclear front guaranteed that this chatter will get louder.

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The Latest from Iran (22 February): Rafsanjani Far from Finished?

1905 GMT: Economy Watch. Iran's Statistics Center has said that the unemployment rate is 11.8%. Among 15- to 29-year-olds, the rate is 23.9%.

Unemployment is higher for women than men and in cities versus rural areas.

1715 GMT: Nuke Watch. More on the tension between the International Atomic Energy Agency and Iran, after Tehran restricted the movement of inspectors on a two-day visit --- a diplomat in Vienna says that the Islamic Republic asked the IAEA team to sign a document regulating their activists. They refused.

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Iran Audio Feature: Scott Lucas with the BBC on "War" and the Nuclear Programme

I spoke with BBC Wales this morning about the current visit by International Atomic Energy Agency inspectors to Iran, assessing the signals --- does this mean Tehran is ready to discuss its nuclear programme with the "West?" --- and trying to damp down the white noise about an Israeli attack on Iran.

The discussion starts at the 33:20 mark.