Analysis: Iran deal leaves Israel few options

After feverishly trying to derail the international community's nuclear deal with Iran in recent weeks, Israeli Prime Minister Benjamin Netanyahu now has little choice but to accept an agreement that he has derided as deeply flawed.

Netanyahu believes the six-month deal leaves Iran's military nuclear capabilities largely intact, while giving Iran relief from painful economic sanctions, undermining negotiations on the next stage. At the same time, Israel's strongest piece of leverage, the threat of a military strike on Iran, seems to be out of the question despite Netanyahu's insistence it would remain on the table.

"Today the world became a much more dangerous place because the most dangerous regime in the world made a significant step in obtaining the most dangerous weapons in the world," Netanyahu told his Cabinet on Sunday, calling the deal a "historic mistake".

He said Israel was not bound by the agreement, and reiterated Israel's right to "defend itself by itself," a veiled reference to a possible military strike against Iran.

Netanyahu has spent years warning the world against the dangers of a nuclear-armed Iran, calling it an existential threat due to Iranian references to Israel's destruction, its support of hostile militant groups on Israel's borders and its development of missiles capable of reaching Israel and beyond.

Israel also believes that a nuclear-armed Iran will provide militant groups like Lebanon's Hezbollah an "umbrella" of protection that will embolden them to carry out attacks.

As momentum for a deal built the past week, Netanyahu delivered speech after speech and held meeting after meeting, urging the world to seek better terms from Iran. Last week, he hosted French President Francois Hollande, then rushed off to Moscow for talks with President Vladimir Putin in a last-ditch attempt to alter the agreement.

Netanyahu had said that any deal must ensure that Iran's enriching of uranium - a key step toward making a nuclear bomb - must end. He also said all enriched material should be removed from the Islamic Republic, and called for the demolition of a plutonium reactor under construction.

But after the deal was announced, it was clear that Netanyahu made little headway. While freezing parts of Iran's enrichment capabilities, it will leave others, including the centrifuges that are used for enrichment, intact. The deal relies heavily on Iranian goodwill, a still-to-be-defined system of international inspections and the continued pain of sanctions that remain in place.

Yoel Guzansky, who used to monitor the Iranian nuclear program for Israel's National Security Council, said a deal that would satisfy Israel was unlikely from the outset due to differing "red lines" between Israel and the US.

While Israel sees any enrichment as a cause for concern, the US was willing to tolerate nuclear development as long as it was unable to produce weapons, said Guzansky, who is now an analyst at the Institute for National Security Studies, a Tel Aviv think tank.

"It's a bad agreement because of what it symbolizes," he said. "It means Iran is getting an acceptance, a signature that it's a legitimate country." Even worse for Israel, he added, the agreement amounts to "acceptance of Iran as a nuclear threshold state."

US officials said the deal was just a first step and further negotiations aim for a final agreement that would prevent any threat from Iran's nuclear program.

They said the relief from sanctions was minimal and that the most biting economic measures, including sanctions on Iran's vital oil industry, remained in place and more could be imposed if Iran fails to follow through.

Guzansky predicted that despite the tough rhetoric, Israel would move quickly to repair relations with the US, its closest and most important ally, and do everything possible to influence the outcome of the world's final-status talks with Iran.

That could include speeches, threats of military action or behind-the-scenes diplomacy. Israel is not a direct participant in the talks but remains in close contact with many of the negotiators.

The relationship with the US will be critical as Israel conducts peace talks with the Palestinians in the coming months. US Secretary of State John Kerry, who is mediating the talks, has set an April target date for reaching an agreement, and there is widespread speculation that the Americans will step up their involvement as the deadline approaches.

Guzansky also said Israel's main card - military action - appears to be out of the question right now.

"How can Israel, after the entire international community sat with Iran, shook hands with Iran and signed an agreement, operate independently?" he said. "It will be seen as someone who sabotages 10 years of trying to get Iran to the table and trying to get a deal."

Enrichment is at the heart of the dispute because it can be used for peaceful purposes or for producing a nuclear bomb. Tehran insists its nuclear program is for civilian usage such as energy production and cancer treatment.

Uranium at low levels of enrichment, up to 20 percent, is used in research or generating electricity. Uranium must be enriched to a far higher level - above 90 percent - to produce a warhead. So far, Iran is not known to have produced any at that level, but Israel argues that the technology for doing so is the same as that for enriching at lower levels.

Under the compromise, enrichment would be capped at the 5 percent level, and Iran's stockpile of 20 percent uranium would be "neutralised," effectively preventing it from reaching weapons-grade level. Also construction on the plutonium reactor is to be suspended. The White House also promised "intrusive monitoring" of Iranian nuclear facilities.

Israel says any enriched uranium in Iranian hands is potentially dangerous, since its centrifuges can quickly convert it to weapons grade. Israel believes that Iran's ability to keep its nuclear infrastructure intact will allow it to quickly resume the program if the later talks fail.

"Iran is a threshold nuclear country," said Netanyahu's Cabinet minister for intelligence affairs, Yuval Steinitz. "So far it was completely against UN security resolutions, and now it gets some kind of recognition at least for the next six months as a threshold nuclear country."

In all, about 250 kilograms of highly enriched uranium is needed to make a weapon. Iran already has about 200 kilograms of enriched uranium.

Ephraim Asculai, a former official at Israel's Atomic Energy Commission, said Sunday's agreement was not all bad for Israel, since it capped enrichment activity and slowed construction of the plutonium reactor. But he said Iran's ability to "break out" and make a nuclear explosive device remained intact, perhaps in as little as four to six months once a decision is made.

"The good part of the deal is that enrichment stops at the present level and that is also some of the bad news because enrichment does go on," he said.

Anatomy of Iranian nuclear deal

Moments after Iran and world powers signed a landmark nuclear deal, US Secretary of State John Kerry was already looking ahead to the "even more difficult" efforts to probe Tehran's atomic capabilities and try to ease international concerns that they cannot be diverted for weapons development. Iran's President Hassan Rouhani, meanwhile, said his country is ready to "remove created doubts" about Iran's nuclear program, which Tehran insists is fully peaceful.

Both Kerry's predictions and Rouhani's promises will shape the next six months in the first step of an accord that could help redefine the politics of the region and reset relations between the US and Iran after nearly 35 years of mutual recriminations and suspicions. Tough and expansive UN inspections are ahead. Iran also must keep up its end of the bargain with measures such as curbing uranium enrichment and halting work on a new reactor.

Here is a look at the demands, the details and the political ripples from the deal hammered out in Geneva:

IRAN STEPS BACK

From a pure number-crunching standpoint, Iranian compliance would make enrichment levels and stockpiles insufficient to create a nuclear weapon or move quickly toward warhead capacity.

The centrepiece of the agreement is the degree of Iran's uranium enrichment, which is the process of converting concentrated uranium into nuclear fuel.

Iran has pledged to keep its enrichment at no higher than 5 percent. This is well below what's needed for weapons-grade material at more than 90 percent enrichment. It would allow Iran to make fuel for its lone energy-producing reactor, a Russian-built plant in Bushehr on the Persian Gulf coast. But it would keep the levels too low for a weapon or even a fast-track effort at so-called "breakout" toward warhead strength.

Iran already has a significant stockpile of higher-enriched uranium: an estimated 185 kilograms of 20 percent-enriched uranium. This is the highest level acknowledged by Tehran. The Geneva deal calls for Iran, over the next six months, to either "dilute" the material below 5 percent or have it repurposed into powder - which makes it useable as nuclear fuel but very difficult to be further boosted. In recent years, Iran has repurposed an amount of 20 percent enrichment similar to its current stockpile.

Specialized centrifuges are needed in the enrichment process. The deal blocks the installation of any new centrifuges for the next six months. This means Iran could not significantly accelerate production of even the 5 percent enriched uranium.

Beyond enrichment, Iran also agreed to halt work on a planned heavy water reactor in Arak, about 255 kilometers southwest of Tehran. Heavy water is a compound used to cool nuclear reactors, which do not need enriched uranium to operate. Heavy water reactors also produce a greater amount of plutonium as a byproduct, which could be used to make warhead material. Iran does not currently possess the technology to extract the plutonium, and promised in Geneva not to seek it.

THE UN STEPS IN

Inspectors for the UN's nuclear watchdog agency have made frequent visits to Iranian facilities for years. The Geneva deal gives them faster and broader access as the linchpin of monitoring and enforcement.

Iran agreed to provide "daily access" to International Atomic Energy Agency teams at the two main enrichment sites: Natanz and Fordo. Natanz, about 260 kilometres southeast of Tehran, is the main enrichment facility. Fordo, built into the side of a mountain about 100 kilometres south of Tehran, was disclosed by Iran in 2009. The area is heavily protected by the Revolutionary Guard.

UN nuclear inspectors have toured both sites, but the Geneva pact would allow everyday access to review UN surveillance video.

The expanded UN reach also stretches to centrifuge construction and storage sites, uranium mines and mills and closer scrutiny of all aspects of the planned Arak reactor.

Another important concession by Iran is its pledge to address all concerns in UN Security Council resolutions on Tehran's nuclear ambitions. One key site is the Parchin military compound outside Tehran. Parchin has been suspected of housing a secret underground facility used for Iran's nuclear program, a claim denied by Iran. UN nuclear inspectors twice visited the site, but seek a third tour.

WIN-WIN?

Before the deal was reached, Iran's president often said settling the nuclear standoff was a "win-win" proposition. In the short-term, it may turn out an easier ride for Rouhani than President Barack Obama, who faces conservative critics calling the deal an appeasement and America's main Mideast ally Israel denouncing it from every angle. A "historic mistake," complained Israel Prime Minister Benjamin Netanyahu.

Rouhani has his own hard-line opposition, which is increasingly uneasy about Iran's outreach to Washington. But Rouhani has the backing of Iran's top authority, Supreme Leader Ayatollah Ali Khamenei, and the deal is likely to elevate his government's image.

That's because Iran did not give up the basic elements of its enrichment program, which is seen as a symbol of Iran's self-promoted image as a technological leader in the Islamic world. Khamenei had set this as a "red line" in the talks. The decision of world powers to allow Iran's enrichment program to continue - while concentrating on output levels - gave Rouhani a major credibility boost at home and permitted the first-step accord to move forward.

CARROTS, STICKS AND SANCTIONS

For the West, the deal does not mark a major roll back of sanctions. Iran still faces widespread blocks from international banking networks and oil sales, which have cut the country's main currency source by more than half.

The deal does, however, offer some sanctions easing on gold and other precious metals, Iran's automobile and aviation industries and petrochemical exports. The world powers at the talks - the five permanent Security Council members plus Germany - further agreed to hold off any new nuclear-related sanctions for at least six months in exchange for Iranian adherence to the deal.

It also opens up $4.2 billion from oil sales to be transferred in installments over the next six months as various compliance stages are reached. That's still a very small sum in a country that was once one of OPEC's top exporters.

The White House estimated the total benefit for Iran at about $7 billion, which was described as a "fraction" of the financial hit from sanctions over the half-year period.

But the deal's first stage appeared structured more with reputation than relief in mind.

If Iran fails to abide by the guidelines, its international profile is left in tatters and chances for further sanctions' easing is lost. It also would likely escalate calls from Israel, Gulf Arab states and elsewhere for possible military action against Iran's nuclear facilities.

Winners and losers in Iran's nuclear deal

The political balance sheet from the nuclear deal between Iran and world powers.

WINNERS

DIPLOMACY: A 15-minute phone call in late September between US President Barack Obama and Iran's new president, Hassan Rouhani, did more than break the diplomatic ice that had accumulated over 34 years. It became a rallying cry for those urging to revive stalled nuclear talks and test the "new era" claims of the moderate-leaning Rouhani after his election in June. The UN's annual General Assembly also had a shining moment as the backdrop for the outreach that led to the latest round of talks in Geneva.

ASIAN OIL CUSTOMERS: Sanctions on Iran's oil exports will remain in place during the six-month period covered by the deal, but world powers promise no new economic measures against Tehran as long as compliance moves ahead. This is good news for energy-hungry Asian economies such as India, China and Japan, which have received US waivers to continue Iranian oil imports. The waivers are likely to remain and the prospect of further talks - if the first-step provisions go smoothly - could begin to peel back the wider restrictions on oil sales.

DUBAI: Long before the Gulf city-state was a symbol of gilded excess, it prospered as a commercial crossroads with places such as Iran. Its ports and air cargo terminals were once brimming with Iran-bound goods. Sanctions have sharply cut into the traditional trade and livelihood of many in the large Iranian expatriate community in Dubai. Anything that brings back Iranian business, even in limited steps, is welcome in Dubai. A statement from the United Arab Emirates said the deal "represents a step toward a permanent solution that preserves the stability of the region and protects it against nuclear proliferation concerns and risks".

IRAN'S PRESIDENT: Rouhani often pitched the nuclear talks as a potential for a "win-win" outcome with the West. On one level, he got his take by securing a deal that allows Iran to maintain uranium enrichment - although at lower levels. His hard-line opponents would have pounced on anything that could have sacrificed Iran's nuclear self-sufficiency. It was likely Rouhani could have gone that route in any event. Supreme Leader Ayatollah Ali Khamenei said giving up enrichment was a "red line" in the talks.

LOSERS

ISRAEL: The message came quickly and loudly from Jerusalem: The deal is a mistake and puts Israel in greater peril. Many Israeli officials, including Prime Minister Benjamin Netanyahu, see Iran's ability to enrich uranium as a recipe for potential disaster. Enrichment produces nuclear fuel for reactors but can also make weapons-grade material. No amount of persuasion from Israel's American allies could shake Netanyahu and others from the belief that Iran is a threat as long as it can enrich uranium. Netanyahu must now try to mend relations with Washington and weigh the significant risks of turning his back on the West and considering possible unilateral military options.

SAUDI ARABIA: The oil-rich kingdom has to adjust to an unfamiliar role as opponents, rather than confidants, of Washington. First, Saudi leaders were dismayed when the US abandoned longtime ally ex-Egyptian President Hosni Mubarak to the fate of the Arab Spring uprising in 2011. Then Saudi authorities were angered by the US decision to pull back from possible military strikes on the forces of Syrian President Bashar Assad - attacks that could have helped the rebel forces closely aided by Riyadh and other Gulf states. Saudi Arabia now sees the Iran deal as favouring its regional rival and diminishing the Gulf role in US policy-shaping. It's unlikely, though, to stop the major Saudi military purchases from American defence contractors.

EGYPT: The military-backed leaders in Cairo have rolled back much of the Iran outreach by the Muslim Brotherhood-led government ousted in July. The nuclear deal and the possibility of expanding US-Iran dialogue could cut into Egypt's traditional standing as the guiding force in shaping Western policy in the region.

- AP

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