If Iran does not back down from enrichment will these moves just be proof that there is no talking to Iran and make the case for bombing them even stronger?

The Iranians were starting a "freeze for freeze" agreement initiated by the Europeans (no new sanctions, no advancement in enrichment). I'd be surprised if either side deviated from it. In the end I suspect either side will make some concessions and we end up with an agreement for heavily scaled back enrichment, heavily monitored enrichment, or multinational enrichment in Iran.

If I were Henry Paulson I would be pounding every table in the White House, insisting that any strike on Iran by either the U.S. or Israel has the potential to drive oil up to $200/bbl and convert a global recession into a depression just by the shock value alone. And this includes the probability that the U.S. would open up the SPR.

Is it worth destroying Republican chances in November completely, and more importantly, bankrupting several major financial institutions, for a difficult air strike with dubious prospects of success?

Your point that the November air strike was halted because of a looming recession is probably right, though it may be giving them too much credit. The economy did not start its swoon until October, and it was probably too early for the White House to see a recession by November because the data were just emerging and only partially hinted at a slowdown.

As to the release of the NIE, it may be stretching things to call this a Bush administration event. It seems like it was orchestrated by forces within the administration and the civil service against Cheney and the neocons.

Which leads to another interesting development. Normally it takes about a year or even two for a new president to be educated about what the office requires, and to begin performing with consistency. Often, at that point the new president begins adopting some of the foreign policy objectives of the previous administration, because they make sense, they conform to the broader wishes of our allies, and something can be achieved by them.

Bush has wasted seven whole years on a fruitless and dangerous foreign policy, and only now is getting down to diplomacy and relationship-building and beginning to achieve something, as with North Korea and now possibly with Iran. Is this the work of his father's implants like Gates? Do you think it is possible he can still pull out a magic trick with Israel and its enemies? How has Cheney been neutered during this process, especially since he had so many allies positioned in key parts of the bureaucracy?

A further question for you: has a similar process been underway in Israel? It seems Olmert or some of his cabinet about a year ago began talking to Syria, and now we see this prisoner swap with Hezbollah, something that could have been done much earlier and avoided the disastrous war a few years ago. Something is going on here, and once again the neocons (or in this case Likudniks) have been pushed out into the cold.

I wonder how coincidental all this is.

Your post, Hannes, needs to be buzzflashed not simply for its important observations, but because more people could use a bit of cheering up in this bleak world.

Somehow you all are mistaking Iranians with the Seyyed regime. The people of Iran will never allow the Seyyeds to get into war.

How much oil it'd take to buy US

At the recent price of $140 a barrel, it turns out to be a mere 400 billion barrels, or just about the combined reserves of Iran and Saudi Arabia.

I did inhale.

See for example this:

link added by editor

Let's hope this ray of hope materializes and the next major American opera will be "George W. Bush goes to Iran".

It is an odd incident that this came out the same day that this Spiegel article was published that reports on a major shift away from terrorism as acceptable means in Islamistic circles.

If Spiegel won't translate this for its English site sometime soon I will put together a short summary on the weekend.

By Leonard Doyle in Washington
Friday, 18 July 2008

Condoleezza Rice was George Bush's handmaiden for the war in Iraq but she is now emerging as the best hope for avoiding a military conflict between the United States and Iran.

The Secretary of State, who is one of the few people with the President's ear, has shown the door to Vice-President Dick Cheney's cabal of war-hungry advisers. Ms Rice was able to declare yesterday that the administration's decision to break with past policy proves that there is international unity in opposing Iran's nuclear programme. "The point that we're making is the United States is firmly behind this diplomacy, firmly behind and unified with our allies and hopefully the Iranians will take that message," Ms Rice said.

Mr Bush's decision to send the number three in the State Department, William Burns, to attend talks with Iran in Geneva at the weekend caused howls of outrage that were heard all the way from the State Department's sanctuary of Foggy Bottom to the White House on Pennsylvania Avenue. A parallel initiative to reopen the interest's section of the American embassy in Tehran, which would be the first return of a diplomatic presence on Iranian territory since 1979, has also received a cool response from neo-conservatives.

"This is a complete capitulation on the whole idea of suspending enrichment," said Mr Bush's former UN envoy, John Bolton. "Just when the administration has no more U-turns to pull, it does another."

In public, Ms Rice has been as bellicose as any neo-con when it comes to Iran, calling dialogue with its leaders "pointless" and declaring: "For the sake of peace, the world must not allow Iran to have nuclear weapons."

She had been the prime mover behind Mr Bush's disastrous policy of "preventive wars" and cheerleader of his expansive plans to reorganise the entire Middle East and to "export democracy". But with the rumblings of war with Iran growing steadily louder, Ms Rice worked feverishly behind the scenes to stop sparks from flying in the drive by the US and Israel to shut down Iran's nuclear programme.

The breakthrough, if that is what it turns out to be, that persuaded Mr Bush that it was time to end the 30-year boycott of high-level diplomatic contacts with Iran, came from the simple act of Ms Rice signing her name to a joint letter offering sweeter terms to Tehran than it had seen before.

The very act of putting her name to a package of incentives presented in Tehran last month persuaded the Iranian authorities that there was movement that would allow them to proclaim victory over the US, while ending their nuclear programme.

When he saw Ms Rice's signature on the document, Iran's Foreign Minister, Manouchehr Mottaki, was visibly stunned, according to those present at the meeting. He formally responded to the offer with a letter addressed to Ms Rice and the EU's foreign policy envoy, Javier Solana, as well as foreign ministers of the five other countries at the talks.

His letter skirted around the hot-button issue of Iran's uranium enrichment programme, but it contained an olive branch of an offer to "find common ground through logical and constructive actions", according to reports.

Hearing of Mr Mottaki's reaction and then receiving a formal response persuaded Ms Rice that Iran was finally willing to have meaningful talks with the US that could avoid a war.

more

But there's more than one chain of command in the region - and more than one US agenda in play. Policy can't have a coherent and predictable shape; the traditional chain of command is threatening to dissolve into factions (if it indeed has not yet) with different agendas. Perhaps it may look today like some faction or the other (say Condi) has won their temporary point, but it's not meaningful to declare it over yet. And it doesn't take much to start a war.

"Preparing The Battlefield", Seymour Hersh July 7, 2008

... Fallon’s early retirement, however, appears to have been provoked not only by his negative comments about bombing Iran but also by his strong belief in the chain of command and his insistence on being informed about Special Operations in his area of responsibility. ... “He was charged with coming up with an over-all coherent strategy for Iran, Iraq, and Afghanistan, and, by law, the combatant commander is responsible for all military operations within his A.O.”—area of operations. “That was not happening,” Sheehan said. “When Fallon tried to make sense of all the overt and covert activity conducted by the military in his area of responsibility, a small group in the White House leadership shut him out.”

... The degradation of the traditional chain of command in the past few years has been a point of tension between the White House and the uniformed military.

“The coherence of military strategy is being eroded because of undue civilian influence and direction of nonconventional military operations,” Sheehan said. “If you have small groups planning and conducting military operations outside the knowledge and control of the combatant commander, by default you can’t have a coherent military strategy. You end up with a disaster, like the reconstruction efforts in Iraq.”

Admiral Fallon, who is known as Fox, was aware that he would face special difficulties as the first Navy officer to lead CENTCOM, which had always been headed by a ground commander, one of his military colleagues told me. He was also aware that the Special Operations community would be a concern. “Fox said that there’s a lot of strange stuff going on in Special Ops, and I told him he had to figure out what they were really doing,” Fallon’s colleague said. “The Special Ops guys eventually figured out they needed Fox, and so they began to talk to him. Fox would have won his fight with Special Ops but for Cheney.”

(...)

...The White House’s reliance on questionable operatives, and on plans involving possible lethal action inside Iran, has created anger as well as anxiety within the Special Operations and intelligence communities. JSOC’s operations in Iran are believed to be modelled on a program that has, with some success, used surrogates to target the Taliban leadership in the tribal territories of Waziristan, along the Pakistan-Afghanistan border. But the situations in Waziristan and Iran are not comparable...

One of the most intensely hardline factions in Washington essentially has its own military chain of command, its own troops, and a Presidential Finding as a hunting license. It wants a war badly, and it certainly has the means to start one all on its own if necessary.

Asia Times

Iran is not ripe for regime change as any attack on the country would rally people around the government, not alienate them, an influential new report in the United States finds. These conclusions run counter to the neo-conservative argument, but fit with the George W Bush administration's newfound engagement, albeit limited, of Tehran. - David Isenberg (Jul 18, '08)

here. In short, he suggests it is "more like simply throwing some sand in the cogs of diplomacy while at the same time salvaging a little of Bush's legacy by throwing out PR-worthy snippets suggesting - but not actually acting upon - a new spirit of compromise and negotiation."