UPDATED Iran Snap Analysis: Waiting for the Crumbling?

UPDATED: An EA reader responds to our thoughts with a second account from Iran: "Our family are rural. This is EXACTLY what my relative found on the economy. 'They' [Iranian authorities] are terrifed of the sanctions."

For me, the most striking statement on Monday came not from a President or a Supreme Leader, not from a Mousavi or Karroubi, but from a phone call from Tehran, summarised by an EA reader:

"A friend reported rising unemployment and prices for food and other commodities: meat costs 12 Euro/kg (about $6.50 per pound), i.e., the price has doubled within a year. He also said that the people have adopted a policy of passive resistance, watching the economy crumble, so that the regime cracks down."

Only one report and, of course, it could be exaggerated or even wishful thinking. But on 7 Tir --- yesterday's anniversary of the 1981 bombing that killed many in Iran's leadership, leaving martyrs such as Ayatollah Beheshti --- there was little to counter that message.



President Ahmadinejad once again focused on (took refuge in?) the "international", making the pointless declaration that Iran would "punish" the West for sanctions by refusing to hold uranium enrichment discussions until late August. The Supreme Leader's office, hoping to obscure the doubts about Iran's judicial process, issued a tangential statement denouncing the "propaganda" of the opposition and foreign media.

That was about that. The only public gathering that was noted were "hundreds" of Iranian who made a synchronised appearance in front of the French embassy to chant against foreign perfidy and the Mujahedin-e-Khalq, who carried out the 1981 attack.

Meanwhile, throughout the day, the drip-drip-drip of  economic and political news, pointing to erosion and division, continued....

The Latest from Iran (28 June): Remembering 7 Tir?

1835 GMT: Political Prisoner Watch. In a decree issued on Monday,the Supreme Leader gave amnesty to 708 prisoners,based on the recommendations of the Iranian judiciary. No indication that any of those whose sentences were commuted were political prisoners.

1800 GMT: The Oil Squeeze. Finally, information arrives of French oil company Total's cessation of supplies to Iran (see 1020 GMT). "I can confirm that we have suspended [gasoline] sales to Iran," said spokesman Paul Floren.

1745 GMT: Loss of Expertise in State Department? Laura Rozen reports that John Limbert, the first ever Deputy Assistant Secretary of State for Iran Affairs, is leaving his post in July.

NEW Thinking Human Rights: Citizens, Technology, and the “Right to Protect” (Mazzucelli)
Shanghai Power Politics: China Shuts Out Iran (Shan Shan)
The Latest from Iran (27 June): Grumbles

Limbert was distinctive in the Department because he was a fluent Persian speaker and held a Ph.D. in History and Middle Eastern Studies. He was one of 52 Americans held in the takeover of the US Embassy in Tehran in 1979-81.

Limbert is saying that he is stepping down because he has only a one-year leave of absence from his academic job at the US Naval Academy in Annapolis.

1435 GMT: Karroubi's 7 Tir Moment. Meeting families of those killed in the 1981 bombing, Mehdi Karroubi dec;ared, “Recent events and the attacks on the members of the Parliament and other senior and prominent political figures prove that those who are in power today are after eliminating and isolating the figures and revolutionary fellows. [They are after] not only a certain political party but even the independent individuals from the country and the scene of the Revolution."

Karroubi added, "Unity will never be achieved by words and slogans. Unity will never be achieved by applying pressure and force, arrests, long detentions, insults and disrespect of senior religious figures, intimidation and threats, unjust disqualifications, shutting down the press, preventing the activities of political parties, and using these kinds of ridiculous methods. Unity will not be achieved by calling the great nation of Iran 'dust and dirt'."

Karroubi concluded, "Comforting the families of victims, release of political prisoners, identifying and firm and legal confrontation with those who use violence against the people, lifting the ban on media and legal activities of the political parties, freedom of speech, tolerance and listening to the opposition as long as they don’t use weapons, and the return to the principles of the Constitution and the high values of Imam [Khomeini] and the Revolution can be the essential steps toward establishing unity in the society.”

1430 GMT: Larijani the Nationalist. Speaker of Parliament Ali Larijani may be feuding with the President, but he is also trying to match Ahmadinejad phrase-for-phrase for Iranian defiance of the West. He has used a speech to a crowd in western Iran to address "the West": "You will have to bury your wish for shutting Iran's nuclear activities. The era that you could change conditions in Iran has ended. Today the (Iranian) people protect their national achievements and lay emphasis on them."

1325 GMT: The Universities Row. Rooz is claiming that, at the first meeting of Azad University trustees since the Parliament v. President argument over control, Ahmadinejad's appointed representatives were not allowed into the meeting. And Mir Hossein Mousavi was an invited guest.

Javan Online, linked to the Revolutionary Guard, is claiming that Rafsanjani and Mousavi have met to plot over the issue.

1310 GMT: Ahmadinejad "We Will, We Will Punish You". Unsurprising news of the day --- the President has chosen on 7 Tir to devote his attention to foreign challenges.

In an announcement which will no doubt bring much gnashing of teeth in Washington (or not), President Ahmadinejad told a news conference that Iran was prepared to return to uranium enrichment talks but only by late August, during the second half of the Muslim festival of Ramadan.

"It's a punishment to teach them a lesson to know how to have a dialogue with nations," he said. And he added the chest-pumping frosting on the cake with a warning to any power thinking of inspecting Iranian ships: "If they make the slightest mistake we will definitely retaliate."

Ahmadinejad's most notable reference to the internal situation was to claim, in the face of tougher US and UN sanctions, "If we decide today, we can halve our gasoline consumption overnight without damaging our economic growth."

1150 GMT: Political Prisoner Watch. RAHANA reports that heavy prison sentences have been handed down to four student activists in Mir Hossein Mousavi's campaign.

1040 GMT: And Now Khamenei.... The supposed highlight from today's statement by the Supreme Leader: "One of the big dangers is that political propaganda by various parties, newspapers, and foreign media will affect the right channel of judgment and legal proceedings."

1030 GMT: Posing for 7 Tir. Ahh, here we go. "Hundreds" of Iranians have gathered outside the French Embassy in Tehran in response to a demonstration in Paris last week by the National Council of Resistance of Iran.

The NCRI is the overseas political committee for the People's Mohajedin Organization of Iran and the "terrorist" Mujahedin-e-Khalq (MKO). The MKO carried out the bombing on 7 Tir (28 June) in 1981 that killed 73 leading officials of the Islamic Republic.

1020 GMT: The Oil Squeeze. A spokesman for Spain's largest oil company Repsol has confirmed that it is withdrawing from a contract to develop part of the South Pars gas field in Iran. Repsol's partner, Royal Dutch Shell, has declined to confirm whether it is withdrawing, although a spokesman said it will comply with any international trade restrictions.

(This is all window-dressing. Repsol and Shell suspended plans months ago, and Iran has already moved to give the projects to Iranian companies, including firms connected with the Revolutionary Guard.)

Britain's Financial Times is also putting out a report that France's Total is halting gasoline/petrol sales to Iran but, curiously, has no source for the claim.

0854 GMT: In Case You're Wondering. Why have I not been posting updates on the on-again, off-again, maybe-someday statements about an Iranian aid flotilla to Gaza? Well, because I never thought this was an initiative likely to come off, amidst the politics of Tehran and other countries.

For those keeping score, the latest report is that the Iranian Red Crescent has cancelled the sailing of a ship, blaming Egypt as well as Israel for preventing passage.

0850 GMT: Rafsanjani Watch (cont.). More on Hashemi Rafsanjani's statement for 7 Tir (see 0720 GMT). ...

The pro-reformist Radio Zamaneh publishes extracts and has no doubt that Rafsanjani is aiming at those in power: “The enemies have diversified and enemies disguised as friends have infiltrated our ranks....Divisiveness is called honesty, insult is called candour, lies are called tact, slander is called boldness and slogans are called insight.”

0745 GMT: The Regime and 7 Tir (So Far). There are no significant headlines in Fars News marking the 1981 bombing, and the Islamic Republic News Agency's reference is defensive, to say the least: a "member of the Assembly of Experts" says that the memory of Ayatollah Beheshti, slain on 7 Tir, does not belong to any one group.

0730 GMT: Economy Watch. Iranian state media are headlining the opening of a new phase of a major steel complex in Natanz, with President Ahmadinejad attending the ceremony.

Not-so-happy news, carried by Iranian Labor News Agency, is that malnutrition amongst children has risen 3 percent during the Ahmadinejad Government.

0725 GMT: Larijani Watch. Speaker of Parliament Ali Larijani, continuing his manoeuvres against President Ahmadinejad, has asserted that "the independence of judiciary"" has not yet been seen.

Larijani's brother Sadegh is the head of the judiciary.

0720 GMT: Rafsanjani's Statement. Former President Hashemi Rafsanjani has said, in a meeting with the families of the martyrs of the 1981 bombing, that today anyone who causes division among the people --- even if it claim good intentions --- is making a great and strategic mistake: “Today in a situation that we need unity more than before some visible and invisible hands are playing the division drum.”

As always, those who cause division are not specifically identified by Rafsanjani; however, he did give an important signal by strongly condemning the attacks against senior clerics and the family of the late Ayatollah Khomeini by pro-government groups.

0700 GMT: Today is the 29th anniversary of the bombing in Tehran that killed 73 leading officials of the young Islamic Republic, including the head of judiciary, Ayatollah Mohammad Beheshti.

We'll be having a look to see how the day is commemorated, but early signs are that it will be accompanied, if not overshadowed, by the tensions within the current Republic. The Beheshti family, in a pointed protest, have already cancelled a memorial ceremony, and reformist groups and opposition groups have pointed to 7 Tir as a reminder of the betrayals of the Government. As the family of the late Grand Ayatollah Montazeri declare today, "It is not the Revolution that eats its children, but rather the opportunists that were opposed to the Revolution in the past, who change colour and destroy the children of the Revolution.”

Meanwhile....

Thinking Human Rights: Citizens, Technology, and the "Right to Protect" (Mazzucelli)

Colette Mazzucelli writes for Diplomacy and Power:

In the 21st-century world, countries and their cultures differ. The abuse of human rights does not: post-election turmoil in Kenya, 2008; brutality against the protesters in Iran, 2009; longstanding sexual violence against women in war-torn Congo; mass starvation over time in North Korea. The list grows as globalization intensifies.

In the face of these ongoing abuses, a series of questions: Is there a local-global consciousness emerging to combat the atrocities states inflict arbitrarily on their citizens? And can that consciousness use digitally networked technology (DNT) to make a difference by slowing the trends of abuse? For example, is the exponential growth of mobile phone use in the developing world a revolution that allows civil society to find its voice preventing the murder of innocents by state leaders? And what can this transformation mean for the West with its interventionist ideals and its international norms, most notably, Responsibility to Protect (R2P)?

Are we bearing witness to a sea change that makesthe  “ordinary people” of the world a bulwark of protection against would-be political entrepreneurs seeking power at any human price?

Experience taught us in Rwanda the speed with which genocide was carried out by extremists with a political agenda as the West chose selective indifference. Failures to prevent mass murder in Bosnia and Kosovo showed the limits of transatlantic power. If responsiblity-to-protect is not to remain too closely linked with intervention, criticised as a tool to facilitate Western neo-colonial adventures, citizens must assume that responsibility to defend the human rights of fellow citizens. Their actions can make a difference.

Mobile applications, whether on the cell or smart phone, are evolving rapidly as millions acquire new means to communicate. The empirical data, which is still limited, informs us that technology can be used to incite ethnic conflict or to deter human rights abuses. Joshua Goldstein and Juliana Rotich, for example, discuss the impact of digitally-networked technology during Kenya’s 2007-2008 post-election crisis.  Their research findings illustrate how text messages incited violence across Kenya. In comparison to Rwanda, however, where radio mobilized the 1994 genocide leaving moderate voices unable to respond, in Kenya, the use of SMS also circulated messages of a moderate nature.

Michael Joseph, the CEO of Safaricom, the largest mobile phone provider in Kenya, distributed SMS texts to the company’s 9 million customers to counteract the hate messages that had incited mob violence after the 2007 Presidential election. His effort underlines the multi-directional nature of mobile technology, and the Kenyan case also highlights the emerging role telecommunications leaders and visionary designers are playing as tensions between state and society escalate in contested elections.

Violence in Kenya also sparked the design by David Kobia and Erik Hersman of Ushahidi, a revolutionary platform combining Google Maps with a tool allowing mobile users to report cases of abuse in precise detail, including images and written observations at the time and place of the incident.

The application of Ushahidi in other countries experiencing human rights abuses makes digitally networked technology, mobile use in combination with blogs, interactive maps, and satellite imagery, the people’s choice in developing countries to forge local-global interactions. There are policy and educational implications for the transatlantic area as we identify a DNT-R2P connection in polities where citizen initiatives redress the heavy footprint of the state. This civic dimension of the responsibility to protect --- the agency to act on behalf of human security --- must rely on the courage and conviction of local engagement not foreign interventions.

As Barbara Slavin writes, “Internet and cell phone technology have become to Iran’s current democracy movement what the telegraph and cassette tapes were to previous political upheavals.” This is why transatlantic support for public spending to help Iranians evade government Internet filters is a critical element in policymaking. The Iranian people have a right to communicate with each other and with the world through blogs, text messages, and video images. Digitally networked technology offers Iranian citizens a chance to construct alternative narratives, thereby nurturing the internal democracy building that challenges a brutal theocratic regime.

Another area where DNT can support human rights initiatives is in the protection of those working on behalf of NGOs like Peace Brigades International, whose members accompany the human rights defenders protecting internally displaced persons (IDPs).  Francis Deng observes that digital networked technology provides the “eyes and ears” for the world to make sure that the dangers facing humanitarian workers as well as the plight of the IDPs they defend are not forgotten.

As the use of mobile networks increases around the world, another challenge for the transatlantic is to develop educational initiatives that bring DNT right into our study of global affairs. Innovative curriculum development is evolving as a necessary component of humanitarianism in a model that President John Sexton has defined at New York University as the “global network university.” Its aim is to “maintain human community” as NYU classes, held simultaneously in Abu Dhabi and New York, and networked with other locations in Prague and Buenos Aires, “break the time-space continuum.”

The perils and the promise using technology of a multi-directional nature are unprecedented. The policy and educational responses of the transatlantic may help establish a DNT-R2P connection aiding citizens in fragile polities as they protect themselves against oppressive regimes at home.

US Foreign Policy Video & Analysis: CIA Director Panetta from Afghanistan to Iran (27 June)

The Director of the Central Intelligence Agency, Leon Panetta, was interviewed by Jake Panetta of ABC's This Week this morning. The 24 minutes proved a depressing illustration both of the illusions and self-constructed evasions of US foreign policy and the failure of a mainstream media to offer any meaningful interrogation. Tapper would put up a headline question on a topic. After Panetta offered his set-piece answer --- which was usually a deflection or even a half-truth rather than a response to the enquiry --- there would be no follow-up or further consideration.

Three examples....

1. AFGHANISTAN: Tapper's simplistic questions are "Are we winning?" and "Are the Taliban getting stronger?". Panetta's answer is an extraordinary shift: "We are disrupting Al Qaida's operations in the tribal areas of the Pakistan,", which of course says nothing about the Afghan conflict.

Tapper misses/ignores this and puts a set-piece follow-up, "What does winning look like?", allowing Panetta to go on about defeat of Al Qa'eda even though --- at another point in the interview --- the Director of the CIA has said there are no more than 100 members of the organisation in Afghanistan.

2. TARGETED KILLINGS: Asked about the US targeting of an American citizen, cleric Anwar al-Awlaki, Panetta offers the suspect claim, "We have no assassination list" and then makes the startling assertion, "He's a U.S. citizen, but he is first and foremost a terrorist and we're going to treat him like a terrorist." In effect, all questions of law and due process have been swept away by the CIA director in a single sentence.

And there's more. When Tapper tosses up the claim of a United Nations official that the CIA's target killings by drone aircraft in Pakistan may be suspect, Panetta simply declares, "There is no question that we are abiding by international law and the law of war" and then, rather than explaining what law the US is observing, invokes, "Look, the United States of America on 9/11 was attacked by Al Qaida."

Tapper does not follow up on either sweeping statement, despite the political and legal implications.

3. IRAN: Inevitably, Tapper's concern is whether Tehran has The Bomb. And Panetta feeds him with soundbites both vague to the point of irrelevance ("They continue to develop their nuclear capability") and specific to the point of being misleading ("We think they have enough low-enriched uranium right now for two weapons.")

At the same time, Panetta sneaks in one of his few substantial points in the interview: "There is a continuing debate [inside Iran] right now as to whether or nor they ought to proceed with the bomb....We would estimate that if they made that decision, it would probably take a year to get there, probably another year to develop the kind of weapon delivery system in order to make that viable."

Tapper misses the key point --- that the CIA has no firm evidence on the intentions of the Iranian Government --- and thus offers no space to develop the point.

TRANSCRIPT

TAPPER: Good morning. When the President takes a look at the world, he's confronted with threats literally all over the map. In Afghanistan, U.S. and international forces struggle to make headway against the Taliban. Iran moves ahead with a nuclear program in defiance of international condemnation.

North Korea becomes even more unpredictable as it prepares for a new supreme leader. New terror threats from Pakistan, Yemen, Somalia. No one knows these threats better than the president's director of the Central Intelligence Agency, Leon Panetta. He's been in the job for 16 months, and he's here with me this morning, his first network news interview. Mr. Panetta, welcome.

PANETTA: Nice to be with you, Jake.

TAPPER: Now, this was a momentous week, with President Obama relieving General [Stanley] McChrystal of his command. When this was all going down, you were with General [David] Petraeus at a joint CIA-CENTCOM conference. And I want to ask you about the war in Afghanistan, because this has been the deadliest month for NATO forces in Afghanistan, the second deadliest for U.S. troops, with 52 at least killed this month. Are we winning in Afghanistan, and is the Taliban stronger or weaker than when you started on the job?

PANETTA: I think the President said it best of all, that this is a very tough fight that we are engaged in. There are some serious problems here. We're dealing with a tribal society. We're dealing with a country that has problems with governance, problems with corruption, problems with narcotics trafficking, problems with a Taliban insurgency. And yet, the fundamental purpose, the mission that the president has laid out is that we have to go after Al Qaida. We've got to disrupt and dismantle Al Qaida and their militant allies so they never attack this country again.

Are we making progress? We are making progress. It's harder, it's slower than I think anyone anticipated. But at the same time, we are seeing increasing violence, particularly in Kandahar and in Helmand provinces. Is the strategy the right strategy? We think so, because we're looking at about 100,000 troops being added by the end of August. If you add 50,000 from NATO, you've got 150,000. That's a pretty significant force, combined with the Afghans.

But I think the fundamental key, the key to success or failure is whether the Afghans accept responsibility, are able to deploy an effective army and police force to maintain stability. If they can do that, then I think we're going to be able to achieve the kind of progress and the kind of stability that the president is after.

TAPPER: Have you seen any evidence that they're able to do that?

PANETTA: I think so. I think that what we're seeing even in a place like Marjah, where there's been a lot of attention -- the fact is that if you look at Marjah on the ground, agriculture, commerce is, you know, moving back to some degree of normality. The violence is down from a year ago. There is some progress there.

We're seeing some progress in the fact that there's less deterioration as far as the ability of the Taliban to maintain control. So we're seeing elements of progress, but this is going to be tough. This is not going to be easy, and it is going to demand not only the United States military trying to take on, you know, a difficult Taliban insurgency, but it is going to take the Afghan army and police to be able to accept the responsibility that we pass on to them. That's going to be the key.

TAPPER: It seems as though the Taliban is stronger now than when President Obama took office. Is that fair to say?

PANETTA: I think the Taliban obviously is engaged in greater violence right now. They're doing more on IED's. They're going after our troops. There's no question about that. In some ways, they are stronger, but in some ways, they are weaker as well.

I think the fact that we are disrupting Al Qaida's operations in the tribal areas of the Pakistan, I think the fact that we are targeting Taliban leadership -- you saw what happened yesterday with one of the leaders who was dressed as a woman being taken down -- we are engaged in operations with the military that is going after Taliban leadership. I think all of that has weakened them at the same time.

So in some areas, you know, with regards to some of the directed violence, they seem to be stronger, but the fact is, we are undermining their leadership, and that I think is moving in the right direction.

TAPPER: How many Al Qaida do you think are in Afghanistan?

PANETTA: I think the estimate on the number of Al Qaida is actually relatively small. I think at most, we're looking at maybe 60 to 100, maybe less. It's in that vicinity. There's no question that the main location of Al Qaida is in tribal areas of Pakistan.

TAPPER: Largely lost in the trash talking in the Rolling Stone magazine were some concerns about the war. The chief of operations for General McChrystal told the magazine that the end game in Afghanistan is, quote, "not going to look like a win, smell like a win or taste like a win. This is going to end in an argument."

What does winning in Afghanistan look like?

PANETTA: Winning in Afghanistan is having a country that is stable enough to ensure that there is no safe haven for Al Qaida or for a militant Taliban that welcomes Al Qaida. That's really the measure of success for the United States. Our purpose, our whole mission there is to make sure that Al Qaida never finds another safe haven from which to attack this country. That's the fundamental goal of why the United States is there. And the measure of success for us is do you have an Afghanistan that is stable enough to make sure that never happens.

TAPPER: What's the latest thinking on where Osama bin Laden is, what kind of health he's in and how much control or contact he has with Al Qaida?

PANETTA: He is, as is obvious, in very deep hiding. He's in an area of the -- the tribal areas in Pakistan that is very difficult. The terrain is probably the most difficult in the world.

TAPPER: Can you be more specific? Is it in Waziristan or--

PANETTA: All i can tell you is that it's in the tribal areas. That's all we know, that he's located in that vicinity. The terrain is very difficult. He obviously has tremendous security around him.

But having said that, the more we continue to disrupt Al Qaida's operations, and we are engaged in the most aggressive operations in the history of the CIA in that part of the world, and the result is that we are disrupting their leadership. We've taken down more than half of their Taliban leadership, of their Al Qaida leadership. We just took down number three in their leadership a few weeks ago. We continue to disrupt them. We continue to impact on their command-and-control. We continue to impact on their ability to plan attacks in this country. If we keep that pressure on, we think ultimately we can flush out [Osama] bin Laden and Zawahiri and get after them.

TAPPER: When was the last time we had good intelligence on bin Laden's location?

PANETTA: It's been a while. I think it almost goes back, you know, to the early 2000s, that, you know, in terms of actually when he was moving from Afghanistan to Pakistan, that we had the last precise information about where he might be located. Since then, it's been very difficult to get any intelligence on his exact location.

TAPPER: We're in a new phase now of the war, in which the threat can come from within, the so-called homegrown terrorists or the lone wolf terrorists. I'm talking about Faisal Shahzad, the would-be Times Square bomber; Umar Farouk Abdulmutallab, the failed Christmas Day bomber; Lieutenant (sic) Nidal Hasan, the Fort Hood shooter. What do these incidents and the apparent increased occurrences of these types of attacks say about the nature of the threat we face?

PANETTA: I think what's happened is that the more we put pressure on the Al Qaida leadership in the tribal areas in Pakistan -- and I would say that as a result of our operations, that the Taliban leadership is probably at its weakest point since 9/11 and their escape from Afghanistan into Pakistan. Having said that, they clearly are continuing to plan, continuing to try to attack this country, and they are using other ways to do it.

TAPPER: Al Qaida you're talking about.

PANETTA: That's correct. They are continuing to do that, and they're using other ways to do it, which are in some ways more difficult to try to track. One is the individual who has no record of terrorism. That was true for the Detroit bomber in some ways. It was true for others.

They're using somebody who doesn't have a record in terrorism, it's tougher to track them. If they're using people who are already here, who are in hiding and suddenly decide to come out and do an attack, that's another potential threat that they're engaged in. The third is the individual who decides to self-radicalize. Hasan did that in the Fort Hood shootings. Those are the kinds of threats that we see and we're getting intelligence that shows that's the kind of stream of threats that we face, much more difficult to track. At the same time, I think we're doing a good job of moving against those threats. We've stopped some attacks, we continue to work the intelligence in all of these areas. But that area, those kinds of threats represent I think the most serious threat to the United States right now.

TAPPER: All three of those individuals were tied in some way to an American cleric who is now supposedly in Yemen, Anwar al-Awlaki. He has said to be on an assassination list by President Obama. Is that true and does being an American afford him any protection that any other terrorist might not enjoy?

PANETTA: Awlaki is a terrorist who has declared war on the United States. Everything he's doing now is to try to encourage others to attack this country, there's a whole stream of intelligence that goes back to Awlaki and his continuous urging of others to attack this country in some way. You can track Awlaki to the Detroit bomber. We can track him to other attacks in this country that have been urged by Awlaki or that have been influenced by Awlaki. Awlaki is a terrorist and yes, he's a U.S. citizen, but he is first and foremost a terrorist and we're going to treat him like a terrorist. We don't have an assassination list, but I can tell you this. We have a terrorist list and he's on it.

TAPPER: "The New York Times" reported this week that Pakistani officials say they can deliver the network of Sirajuddin Haqqani, an ally of Al Qaida, who runs a major part of the insurgency into Afghanistan into a power sharing arrangement. In addition, Afghan officials say the Pakistanis are pushing various other proxies with Pakistani General Kayani personally offering to broker a deal with the Taliban leadership. Do you believe Pakistan will be able to push the Haqqani network into peace negotiations?

PANETTA: You know, I read all the same stories, we get intelligence along those lines, but the bottom line is that we really have not seen any firm intelligence that there's a real interest among the Taliban, the militant allies of Al Qaida, Al Qaida itself, the Haqqanis, TTP, other militant groups. We have seen no evidence that they are truly interested in reconciliation, where they would surrender their arms, where they would denounce Al Qaida, where they would really try to become part of that society. We've seen no evidence of that and very frankly, my view is that with regards to reconciliation, unless they're convinced that the United States is going to win and that they're going to be defeated, I think it's very difficult to proceed with a reconciliation that's going to be meaningful.

TAPPER: I know you can't discuss certain classified operations or even acknowledge them, but even since you've been here today, we've heard about another drone strike in Pakistan and there's been much criticism of the predator drone program, of the CIA. The United Nations official Phil Alston earlier this month said quote, "In a situation in which there is no disclosure of who has been killed for what reason and whether innocent civilians have died, the legal principle of international accountability is by definition comprehensibly violated." Will you give us your personal assurance that everything the CIA is doing in Pakistan is compliant with U.S. and international law?

PANETTA: There is no question that we are abiding by international law and the law of war. Look, the United States of America on 9/11 was attacked by Al Qaida. They killed 3,000 innocent men and women in this country. We have a duty, we have a responsibility, to defend this country so that Al Qaida never conducts that kind of attack again. Does that make some of the Al Qaida and their supporters uncomfortable? Does it make them angry? Yes, it probably does. But that means that we're doing our job. We have a responsibility to defend this country and that's what we're doing. And anyone who suggests that somehow we're employing other tactics here that somehow violate international law are dead wrong. What we're doing is defending this country. That's what our operations are all about.

TAPPER: I'd like to move on to Iran, just because that consumes a lot of your time as director of the CIA. Do you think these latest sanctions will dissuade the Iranians from trying to enrich uranium?

PANETTA: I think the sanctions will have some impact. You know, the fact that we had Russia and China agree to that, that there is at least strong international opinion that Iran is on the wrong track, that's important. Those sanctions will have some impact. The sanctions that were passed by the Congress this last week will have some additional impact. It could help weaken the regime. It could create some serious economic problems. Will it deter them from their ambitions with regards to nuclear capability? Probably not.

TAPPER: The 2007 national intelligence estimate said all of Iran's work on nuclear weapons ended in 2003. You don't still believe that, do you?

PANETTA: I think they continue to develop their know-how. They continue to develop their nuclear capability.

TAPPER: Including weaponization?

PANETTA: I think they continue to work on designs in that area. There is a continuing debate right now as to whether or nor they ought to proceed with the bomb. But they clearly are developing their nuclear capability, and that raises concerns. It raises concerns about, you know, just exactly what are their intentions, and where they intend to go. I mean, we think they have enough low-enriched uranium right now for two weapons. They do have to enrich it, fully, in order to get there. And we would estimate that if they made that decision, it would probably take a year to get there, probably another year to develop the kind of weapon delivery system in order to make that viable.

But having said that, you know, the president and the international community has said to Iran, you've got to wake up, you've got to join the family of nations, you've got to abide by international law. That's in the best interests of Iran. It's in the best interests of the Iranian people.

TAPPER: The administration has continually said that Iran has run into technical troubles in their nuclear program. Is that because the Iranians are bad at what they do, or because the U.S. and other countries are helping them be bad at what they do, by sabotaging in some instances their program?

PANETTA: Well, I can't speak to obviously intelligence operations, and I won't. It's enough to say that clearly, they have had problems. There are problems with regards to their ability to develop enrichment, and I think we continue to urge them to engage in peaceful use of nuclear power. If they did that, they wouldn't have these concerns, they wouldn't have these problems. The international community would be working with them rather than having them work on their own.

TAPPER: How likely do you think it is that Israel strikes Iran's nuclear facilities within the next two years?

PANETTA: I think, you know, Israel obviously is very concerned, as is the entire world, about what's happening in Iran. And they in particular because they're in that region in the world, have a particular concern about their security. At the same time, I think, you know, on an intelligence basis, we continue to share intelligence as to what exactly is Iran's capacity. I think they feel more strongly that Iran has already made the decision to proceed with the bomb. But at the same time, I think they know that sanctions will have an impact, they know that if we continue to push Iran from a diplomatic point of view, that we can have some impact, and I think they're willing to give us the room to be able to try to change Iran diplomatically and culturally and politically as opposed to changing them militarily.

TAPPER: There was a big announcement over the weekend. South Korea and the U.S. agreed to delay the transfer of wartime operational control to Seoul for three years because of the belligerence of North Korea. Kim Jong-il appears to be setting the stage for succession, including what many experts believe that torpedo attack in March on a South Korean warship. They believe that this is all setting the stage for the succession of his son, Kim Jong-un. Is that how you read all this and the sinking of the warship?

PANETTA: There is a lot to be said for that. I think our intelligence shows that at the present time, there is a process of succession going on. As a matter of fact, I think the....

TAPPER: Was the warship attack part of that?

PANETTA: I think that could have been part of it, in order to establish credibility for his son. That's what went on when he took power. His son is very young. His son is very untested. His son is loyal to his father and to North Korea, but his son does not have the kind of credibility with the military, because nobody really knows what he's going to be like.

So I think, you know, part of the provocations that are going on, part of the skirmishes that are going on are in part related to trying to establish credibility for the son. And that makes it a dangerous period.

Will it result in military confrontation? I don't think so. For 40 years, we've been going through these kinds of provocations and skirmishes with a rogue regime. In the end, they always back away from the brink and I think they'll do that now.

TAPPER: The CIA recently entered into a new $100 million contract with Blackwater, now called Xe Services for Security in Afghanistan. Blackwater guards allegedly opened fire in a city square in Baghdad in 2007, killing 17 unarmed civilians and since then, the firm has been fighting off prosecution and civil suits. Earlier this year, a federal grant jury indicted five Blackwater officials on 15 counts of conspiracy weapons and obstruction of justice charges. Here's Congresswoman Jan Schakowsky, a Democrat from Illinois, who's a member of the House Intelligence Committee.

(BEGIN VIDEO CLIP)

REP. JAN SCHAKOWSKY (D), ILLINOIS: I'm just mystified why any branch of the government would decide to hire Blackwater, such a repeat offender. We're talking about murder, a company with a horrible reputation, that really jeopardizes our mission in so many different ways.

(END VIDEO CLIP)

TAPPER: What's your response?

PANETTA: Since I've become director, I've asked us to -- asked our agency to review every contract we have had with Blackwater and whatever their new name is, Xe now. And to ensure that first and foremost, that we have no contract in which they are engaged in any CIA operations. We're doing our own operations. That's important, that we not contract that out to anybody. But at the same time, I have to tell you that in the war zone, we continue to have needs for security. You've got a lot of forward bases. We've got a lot of attacks on some of these bases. We've got to have security. Unfortunately, there are a few companies that provide that kind of security. The State Department relies on them, we rely on them to a certain extent.

So we bid out some of those contracts. They provided a bid that was underbid everyone else by about $26 million. And a panel that we had said that they can do the job, that they have shaped up their act. So there really was not much choice but to accept that contract. But having said that, I will tell you that I continue to be very conscious about any of those contracts and we're reviewing all of the bids that we have with that company.

TAPPER: This month, Attorney General Eric Holder announced that Assistant United States Attorney John Durham is close to completing a preliminary review of whether or not there's evidence that CIA agents or contractors violated the law when they used brutal methods, some call it torture, to interrogate terrorist detainees. Do you oppose this investigation? Are your officers -- your current officers, concerned about their legal jeopardy in the future under a future administration and what kind of guarantees can you give them?

PANETTA: Well look, CIA is an agency that has to collect intelligence, do operations. We have to take risks and it's important that we take risks and that we know that we have the support of the government and we have the support of the American people in what we're doing. With regards to this investigation, I know the reasons the attorney general decided to proceed. I didn't agree with them, but he decided to proceed. We're cooperating with him in that investigation. I've had discussions with the attorney general. He assures me that this investigation will be expedited and I think in the end, it will turn out to be OK. What I've told my people is please focus on the mission we have. Let me worry about Washington and those issues. And I think that's -- they have and I think frankly the morale at the CIA is higher than it's ever been.

TAPPER: We only have a few minutes left, but I want to ask, you're now privy to information about some of the ugliest, toughest tactics carried out by intelligence agencies with the purpose of defending our nation, stuff that probably as a member of Congress or OMB director of White House chief of staff, you suspected, but didn't actually know for a fact. How rough is it, and does any of it ever make it difficult for you to sleep at night or run to do an extra confession?

PANETTA: Well, I didn't realize that I would be making decisions, many decisions about life and death as I do now. And I don't take those decisions lightly. Those are difficult decisions. But at the same time, I have to tell you that the most rewarding part of this job -- I mean, we had a tragedy where we lost seven of our officers and it was tragic. But at the same time, it also provided a great deal of inspiration because the quality of people that work at the CIA are very dedicated and very committed to trying to help save this country and protect this country. They're not Republicans, they're not Democrats, they're just good Americans trying to do their job and that, I think, is the most rewarding part of being director of the CIA.

TAPPER: What's the flip side? Sleepless nights?

PANETTA: The flip side is you have to spend an awful lot of time worried about what the hell is going to go on our there and that keeps me up at night.

TAPPER: What -- this is my last question for you because we only have about a minute left -- what terrorist threat are we as a nation not paying enough attention to?

Or forget terrorist threat, what threat are we not paying enough attention to?

PANETTA: I think the one I worry about is, again, the proliferation of nuclear weapons and the fact that one of those weapons could fall into the hands of a terrorist. I think that's one concern. And there is a lot of the stuff out there, and you worry about just exactly where it's located and who's getting their hands on it.

The other is the whole area of cyber security. We are now in a world in which cyber warfare is very real. It could threaten our grid system. It could threaten our financial system. It could paralyze this country, and I think that's an area we have to pay a lot more attention to.

TAPPER: All right, Director Leon Panetta, thank you so much for coming here today. Really appreciate it.

The Latest from Iran (27 June): Grumbles

1815 GMT: Rafsanjani (and Supreme Leader) Watching. Former President Hashemi Rafsanjani chaired a meeting today about the Islamic Azad Universities. That might not be a significant event were it not for the timing --- the discussion takes place days after the President's move to assert control over the chain of universities, interpreted by some as an attack on Rafsanjani's political base.

Meanwhile, Ayatollah Khamenei gave a speech today at Tehran's Abuzar Mosque, explaining that the first duty of women is motherhood.

1510 GMT: Hmmm.... Iran's deputy head of judiciary, Ebrahim Raeesi, as quoted by Press TV:

"The major violators of human rights are Western states. If the true face of Western countries which claim to be custodians of human rights is shown, you will see that people's rights are violated most severely in Europe, the US and Israel”....He said Iran has committed itself to protecting people's rights as it firmly believes in religious and Islamic principles.

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1410 GMT: Political Prisoner Watch. Rah-e-Sabz reports concerns about the health of detained journalist Isa Saharkhiz in the clinic of Rejai Shahr Prison.

1405 GMT: The Oil Squeeze (cont.). One more piece of information, courtesy of Iranian Labor News Agency: Iran's oil exports fell almost 50% from 1979 to 2008.

1350 GMT: All is Well Alert. Irrespective of the news in this update, Habibollah Asgarowladi is on hand to assure, "Iran has had never a better position in the world than now."

1340 GMT: The Oil Squeeze (cont.). As we learn that Iran's oil revenues have dropped 24 percent over the last year (see 0945 GMT), Roshanak Taghavi provides essential context and analysis for The Guardian.

Taghavi reveals from a source that about 35 million barrels of oil are in offshore storage tankers. This in itself is not unusual --- Iran's summer holdings have been as high as 60 million barrels --- but the political and economic situation has changed:

What is unique this year, and a rising concern for Iran's oil ministry, is the decision by some of the country's important "eastern" customers, including China, India and Japan – who are among the main purchasers of Iran's heavier grades of crude oil – to either reduce their formal term contracts with the Islamic Republic in favour of better prices from other oil producers, or to cut some of their contracts completely.

1335 GMT: President v. Parliament (University Edition). Golnaz Esfandiari of Radio Free Europe/Radio Liberty has written a useful overview of the rising tension between Mahmoud Ahmadinejad and the Parliament over control of Islamic Azad University.

1330 GMT: Visit of the Day. Mehdi Karroubi has visited filmmaker/journalist Mohammad Nourizad, journalist Emaduddin Baghi, and former Vice President and MP Hossein Marashi, all of whom are on bail or temporary release from prison.

1324 GMT: The Hijab Referendum? The head of Iran's police, Esmail Ahmadi-Moghaddam, has announced that a poll will be conducted on the enforcement of hijab in every province.

Not quite sure how Ahmadi-Moghaddam gets the authority to declare public referenda, but I am even more vexed by this question....

Given that President Ahmadinejad has been in conflict with other members of the Iranian establishment over the enforcement of hijab, what will be the announced outcome from the ballot boxes?

1320 GMT: Political Prisoner Watch. Activist and former Army member Firez Yousefi has been arrested, allegedly for giving away secrets in interviews with foreign media.

1215 GMT: Political Prisoner Watch. The former mayor of Ghasr Shirin, Ghodrat Mohammadi, has been released from detention.

1200 GMT: The Battle Within (Hijab Edition). More feuding within the establishment over the President's criticism of "morality police". Partou, the weekly publication associated with Ayatollah Mesbah Yazdi, has sharply attacked Ahmadineajad:"Is the hijab situation now better than under former governments?"

And Ayatollah Ahmad Khatami has made the bold declaration, "I insist on all Islamic rules, especially hijab, even if I have to lose my head for it."

1100 GMT: Parliament v. President. Member of Parliament Ali Motahari, a leading critic of the Government, has claimed that pro-Ahmadinejad Mehdi Kuchakzadeh had a central role in this week's organised rally in front of the Majlis, pressuring Parliament to cede control of Islamic Azad University to the President. Motahari said Kuchakzadeh "even threw a paperclip container at me".

1040 GMT: Messages for 7 Tir. Tomorrow is 7 Tir, a date notable in modern Iranian history for  a 1981 bombing that killed 73 leading officials of the Islamic Republic, including Chief Justice Ayatollah Mohammad Beheshti.

The family of the late Grand Ayatollah Montazeri has put out a message: how can you mourn the dead in an atmosphere which knows nothing except violence?

It is reported that the late Ayatollah Beheshti's family will not hold a memorial service for 7 Tir. Ayatollah Behesti's son, Mousavi chief advisor Alireza Beheshti, has been imprisoned during the post-election crisis.

1000 GMT: Happy Father's Day. On Friday, Father's Day in Iran, Mir Hossein Mousavi met the families of detainees Alireza Beheshti Shirazi, Arab Mazar, and Ghorban Behzadian-Nejad.

The central and youth committees of the reformist Islamic Iran Participation Front also met the families of political prisoners.

0945 GMT: The Oil Squeeze. Fars reports, without citing the source, that Iran’s oil sales from March 2009 to February 2010 fell by 24.3 percent, from $78.65 to $59.55 billion dollars.

Fars softened the blow by adding that non-oil exports rose by 12.7 percent to $19 billion.

0710 GMT: Political Prisoner Watch. The three-year prison sentence of law student Abolfazl Ghasemi, who was detained during the Ashura protests of 27 December, has been upheld.

0705 GMT: The Attack on the Clerics. Video, claiming to be new footage of the attack earlier this month on the houses of Grand Ayatollah Sane'i and the late Grand Ayatollah Montazeri, has been posted.

0655 GMT: Breaking the Quiet? Ahh, this might stir things up. Looks like Mahmoud Ahmadinejad has delivered a statement on the lines of "we need executives who implement the law correctly".

Executives, not Parliament. And judiciary, take that as a directive from y9ur President.

0630 GMT: It appears to be a very quiet morning in Iran.

Iranian state media is preoccupied with criticism of the latest US sanctions. Most of the showpiece reaction is cut-and-paste defiance, as in the statement from Iran's armed forces, "The ploy of imposing sanctions on the Iranian nation is ineffective because the establishment and the people have succeeded in finding their path."

Still, there is a nice touch in one featured critique, from Alaeedin Boroujerdi, the head of Parliament's National Security and Foreign Policy Committee: "The US move to impose sanctions on Iran is in fact imposing sanctions on their own firms."

On the international front, Tehran is claiming --- after a phone call between Brazil's Foreign Minister Celso Amorim and his Iranian counterpart, Manouchehr Mottaki --- that the two will meet Turkish Foreign Minister Ahmet Davutoglu in the near-future to discuss further steps over Iran's uranium enrichment.

Inside Iran, there is growing concern over the health of teacher and activist Ali Akbar Baghani, who has been detained for more than two months.