IRAN'S MEDIATORY ROLE IN MIDDLE EAST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002600100001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 12, 2016
• Document Release Date: January 2, 2002
• Sequence Number: 1
• Publication Date: May 29, 1975
• Content Type: MEMO

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SECRET/NO FOREIGN DISSEM
OCI NO. 0680/75
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
May 29, 1975
SUBJECT: Iran's Mediatory Role in Middle East
1. Iran's economic and political ties to the three
principals in the Arab-Israeli dispute--Egypt, Syria, and
Israel--give it enough. leverage to play a modest mediatory
role. The Shah will use his limited leverage with great
caution, however, and will be unwilling to risk his
standing in either camp unless success is virtually assured.
If he did agree to play a mediatory role, he would be much
less willing to press the Arabs to concede on substantive
points than to so press Israel.
Ties to Israel
2. Tehran has developed extensive, though circum-
spect, links to Tel Aviv since the establishment of
offices in each other's country in the late 1950s. These
offices function as diplomatic missions in all but name.
The Iran--Israel entente has remained remarkably stable
over thb years, and has been based largely on a common
antipathy toward Arab nationalism, and more specifically
on a common desire to neutralize the -Iraqi regime. This
base has eroded in recent years, however, and Tel Aviv has
shown some uneasiness over the recent improvement in Iran's
relations with Arab governments.
3. In the commercial field, Iran is Israel's sole
foreign supplier of oil, which is used both for domestic
consumption and for reexport to earn foreign exchange.
SECRET/NO FOREIGN DISSEM
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The Shah supplied virtually all of Israel's oil before
1967. In 1974 Tehran supplied about 30 percent (40,000
bpd) of Israel's domestic needs; the remainder came from
captured Egyptian oil fields in the Sinai. The Shah
attempts to get around Arab criticism of his actions by
purporting that Iran sells oil to the oil companies., not
to governments, and that he has no control over its
ultimate destination.
4. Other trade is marginal; neither country produces
the kinds of industrial goods that can account for a major
share of the other's import needs. Iran has benefited
from Israeli technical help in the fields of water re-
sources and agriculture, and Israel provides overhaul and
maintenance service on Iranian aircraft.
6. There are continuing military contacts between
the two governments. Cooperation includes training,' ex-
i
pment.
changes of personnel, and the purchase of military equ
Ties to the Arabs
7. Egyptian President Sadat is-the key.to the Shah's
attempt to stake out a larger role for Iran in the Middle
East. The two le-3orS have consulted twice this year--in
January and April
SECRET/NO FOREIGN DISSEM
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8. The Shah uses his ties with Sadat to increase
his acceptability to other Arab leaders. Sadat benefits
from the Shah's political support, which has the outward,
appearance of furthering the political isolation of Israel.
Sadat also hopes to use the Shah to influence US Middle
Eastern policy.
9. Economic aid to Egypt is an important source of
the Shah's influence in Cairo. Sadat values Tehran's aid
because-it lessens-somewhat his dependence on Moscow and
the Arabs. The Shah, wishing to encourage this independence,
has been generous. He responded immediately to urgent re-
quests from Sadat for oil in November 1974--sending 600,000
tons--and for $120 million in budgetary help in March 1975.
In addition, Iran has provided some $850 million in economic
credits.
10. Iran also has promised $150 million in economic
credits to Syria. They will pave the way for an expanded
dialogue between the two governments, but probably do not
constitute any leverage-on negotiating issues. Iranian-
Syrian relations have been strained somewhat in recent months
by Syrian criticism of the Iran-Iraq accord.
The Shah's Attitude Toward a New war
11. The Shah might be willing to use his influence
in a low-keyed way with both sides, but probably only if
there is a good chance it would encourage a settlement.
He would want to avoid involvement in a failing effort,
or in one that appeared to ally Iran with US Middle East
policy. The Shah has traditionally tended to regard
conflict between Israel and the Arabs as serving Iranian
interests. It occupied the Arabs and gave Iran a freer
hand to pursue its interests in the Persian Gulf. The
Shah sought to sit on the fence, keeping his ties to Is-
rael low-key in order to avoid antagonizing his Arab neigh-
hors and to minimize protests from those Iranians who
favored a strong pro-Arab stance by Tehran.
SECRET/NO FOREIGN DISSEM
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12. The Shah now appears to regard a settlement
.as generally serving Iran's interest, although a new
oil embargo would ensure continued high revenues for a
non-participating Iran. The more direct involvement of
Saudi Arabia and the other Gulf states in the Arab-
Israeli question and the almost certain use of oil as a
weapon in any new war would make it much. more difficult
for Iran again to stay on the fence, as is its preference.
25X6.
13. In addition, the conflict has encouraged the
development of radical Palestinian organizations, the
strengthening of Arab unity, and increased Soviet pene-
tration of the region--all, the Shah believes, to the
detriment of long-range Iranian goals.
14. A settlement, on the other hand, especially if.
achieved with Iranian help, would promote the Shah's
regional goals and at the same time preserve his ties with
Israel against the day when Iranian ambitions clash more
directly with Arab nationalism.
Limitations
15. The Shah is more able and probably more willing
to press Tel Aviv for concessions than the Arabs. Good
relations with moderate Arab leaders are essential to his
oil policy and to the kind of regional security system
he is trying to construct in the Persian Gulf. Moreover,
the Arabs are in a position to exert counterpressure on
Iran.
16. Tel Aviv, on the other hand, has little leverage
with Tehran. In fact, as Iran's relations with the Arabs
improve, Iran's Israeli connection becomes an increasing
liability. Close ties to Israel would tend to vitiate
Iranian efforts to command political developments in the
SECRET/NO FOREIGN DISSEM
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Gulf by adding to existing Arab suspicions of Persian
nationalism. At the same time, Israel is in no position
to aid Tehran should the Shah become involved in conflict
with a Gulf competitor such as Iraq. One factor that will
limit the Shah's willingness to be in the forefront pressur-
ing Israel is his probable belief that the Israelis would
win any new war.
17. Iran's basic position on the Arab--Israeli issue
also militates against it pushing for substantive con-
cessions from the Arabs. The Shah condemns Israeli
occupation of Arab territory, calls for a return to the
boundaries existing before the 1967 conflict, and does not
accept the change in status of Jerusalem. His public
support for this position has sharpened considerably in
the past year, and he has stressed the theme that Israeli
intransigence is the main impediment to a settlement. The
Shah, therefore, would be most likely to apply pressure on
Israel to. alter its substantive position, while any pressure
on the Arabs would probably be designed to deter the initiation
of new. host:ilities, rather than to modify their principal
demands. In return, the Arabs would probably demand that
the Shah use his influence in Washington to secure greater
pressure on Tel Aviv to make concessions.
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