Washington sanctions open a new front with Tehran

Analysis: Mark Tran looks at the reasons behind the US sanctions on Iran's military establishment.

The US is leading a drive for tougher UN sanctions against Iran, but today unveiled measures of its own, far more punitive than anything the UN would be prepared to accept.

The sanctions announced by the US secretary of state, Condoleezza Rice, and the treasury secretary, Hank Paulson, have been in the pipeline for months, delayed by bureaucratic infighting over their timing and their scope.

It is the first time the US has specifically tried to financially hurt another country's military establishment. The targets are Iran's defence ministry, its revolutionary guard corps, including its elite Quds force, and a number of banks.

On one level, this is a shrewd move by the Bush administration as the sanctions squarely target Iran's military. The revolutionary guards, formed to safeguard Iran's 1979 Islamic revolution, have diversified beyond their military roots and into the economy - not unlike the military in other authoritarian regimes, such as Burma, China and Vietnam.

The revolutionary guards own car factories and construction firms and operate oilfields and even newspaper groups. The guards play an increasingly important role in the country's oil and gas industry in recent years, as the national oil company has signed several contracts with a guards-operated building group.

Some deals have been announced, including a near £1bn deal in 2006 to develop part of the important Pars gasfield.

Now numbering about 125,000 personnel, the guards report directly to the supreme leader and handle internal security.

The small Quds force is thought to operate overseas, having helped to create the militant Hizbullah group in 1982 in Lebanon and to arm Bosnian Muslims in the Balkan wars of the 90s.

The American sanctions are designed to financially block the guards, including firms owned or controlled by them from the US financial system. However, as the measures were signalled well in advance in the Washington Post, the money is probably long gone.

However, whatever economic impact the sanctions will have, the guards are probably more hamstrung by Tehran's economic mismanagement. The ever-rising oil revenues are not being invested in much-needed refineries so that Iran has had to introduce petrol rationing, a move behind much public discontent.

On a broader level, the latest sanctions - which come atop past measures stretching back to 1979 - signal US impatience with Iran and strengthen hardliners in both Washington and Tehran.

The US has been stepping up its accusations of Iranian meddling in Iraq and the White House has sounded increasingly apocalyptic about the prospect of Tehran possessing nuclear weapons: President Bush warned this week that for Tehran to possess such a weapon raised the risk of "World War III".

Positions have been hardening in Iran, too. At the weekend, Iran named Saeed Jalili as its new chief nuclear negotiator, replacing Ali Larijani. Insiders interpreted the development as a victory for Iran's hardline president, Mahmoud Ahmadinejad, in a power struggle between his radical supporters and more traditional conservatives.

Analysts claim the Bush administration's latest move provides little encouragement for those in Tehran trying to avoid confrontation.

"The move does not fit in with a desire to find a diplomatic solution," said Dr Claire Spencer, head of the Middle East programme at Chatham House, the foreign policy thinktank.

"It adds fuel to the fire and may be a sign of US impatience with the lack of an international consensus.

"The administration knows it can't fix Iraq between now and the next election so it sees its big opportunity as going after Iran."