Plenty of people, in the last week, have discussed the essential insanity of the US's Middle East policy – supporting regimes like Saudi Arabia in covert warfare against Iranian interests. As noted, these covert interests are the same sorts of people; and in some cases the exact same people, who supported and funded al-Qa'eda.

It's worth taking a step back and looking at the Iranian situation as it relates to the US. There are three main problems here. First, too many American policy makers are living in the past. Second, there is conflation of Israel's interests with US interests, the two are not identical, despite the implicit message constantly being sent by AIPAC. Third, the hysteria over a nuclear armed Iran is simply not born out by the facts.

Let's start with the first – the humiliation of the Iran hostage crisis is still having a psychological effect on policy makers. Let me point out something: the hostage crisis happened over 25 years ago. A quarter century. Iran is not, today, the country it was then. At that time Americans had just been helping the Shah remain in control, a control the king maintained through heavy use of his much feared secret police service, the Savak. [1]

Iranians, quite understandably, given the U S's current actions and past history in their country, were rather angry at the US. But the best thing that has happened to US/Iranian relations since then is simple – not much. Whatever problems Iranians have, since after the Iran/Iraq war, were clearly not caused by the US. Unlike with its client states, the US was not propping up a despotic system.

And, overall, Iran did not act in particularly anti-American fashion after the late eighties. Hezbollah, for example, which is strongly influenced by Iran has an explicit policy of not attacking Americans and hasn't done so since the early nineties.

When the US invaded Afghanistan Iran cooperated and aided the invasion with intelligence. In the aftermath of the invasion it helped stabilize Afghanistan, in cooperation with the US.

Iran, in short, did not, in the early 2000's, particularly act as if it was the U S's mortal enemy.

Then, of course, came the “Axis of Evil” speech, in which the US declared that it was Iran's mortal enemy, followed by huge amounts of saber-rattling about regime change and an explicit refusal to accept an Iranian offer to end its nuclear program in exchange for some aid and strong assurances of safety.

Let's move to point two – the conflation of US and Israeli interests. Iran doesn't have a lot of interests at odds with the US – it wants a stable Iraq, and one that isn't nuclear armed. It wants a stable Afghanistan and one that isn't home to terrorists. It wants a stable oil market (though, as with all oil states, including US clients, it wants higher oil prices than the US wants.) It may or may not want nuclear weapons (the evidence is, actually, mixed) and the US doesn't want any other nations to have nukes – so that's a possible area of real dispute – but again, when the US had a chance to get a negotiated settlement on the issue, it turned it down. So clearly this can't be the U S's primary concern.

A country whose interests Iran is clearly at odds with, however, is Israel. Put simply, Israel wants to be able to walk all over Lebanon any time it feels like. Iranian support for Hezbollah, as proven last year, makes that impossible. However, as noted, Hezbollah does not attack US interests and hasn't for over 15 years. When Hezbollah did attack US assets, by the way, it was after the US had, first, shelling Lebanese Shia villages. If the US does not attack Hezbollah, Hezbollah has indicated very clearly that it will not attack Americans.

Now it should be noted, just for the record, that Hezbollah is not an existential threat to Israel. The light infantry dug in in Lebanon who defeated the Israelis are not capable of operating in Israel – they need their fortifications, knowledge of the local ground, and local support, in order to even the odds against Israel's much better equipped military. They are not capable of offensive operations against Israel that amount to more than pinpricks. Even the missile attacks, for all the hysteria about them, killed remarkably few people.

So Hezbollah's main effect is to make any significant incursion into Lebanon a costly exercise for the Israelis. It is unclear why the US would want Israel invading Lebanon. In fact, since invasions of Lebanon destabilize the region, and inflame anti-US sentiments, the reverse is the fact. If the facts on the ground meant that Israel will think twice before attacking Lebanon, that's not bad for the US, it's good.

Likewise Israel wants to maintain its nuclear superiority in the Middle East. That's understandable, but it brings us to our third point.

Iran having nukes would not be the end of the world. As French President Chirac noted, if Iran used them, Tehran would be razed to the ground. Nukes come with return addresses. What about, then, the possibility of Iran giving a nuke to terrorists?

First: the major terrorist organization in the world today which targets Americans is al-Qa'eda. They're Sunnis. They don't get along with Iran. Iran will not give them nukes. Period. The main terrorist asset of Iran, Hezbollah, doesn't attack Americans. And, frankly, why would Iran risk it? Think it through – what's the upside for Iran and what are the risks? The risks are phenomenal – the end of Iran if they are discovered. The upside? Well, the only upside would be weakening the primary supporter of Sunni states who are engaging in covert operations (read, terrorism) against Iran.

So the idea that Iran can't have nukes because it would use them offensively is absurd – the calculus doesn't work, the risks are so far greater than the gains that the Iranians would have to be suicidal to do so. Nuclear weapons are not, oddly, offensive weapons. What they are is a strategic deterrent – they make a country safe from overt attacks.

Ah.... So perhaps we're coming to the nub of the situation. The US wants to be able to attack Iran any time it feels like, which it can only do if it doesn't have nukes.

But again – the US and Iran don't intrinsically have a lot of national interests that differ, other than the one that Iran shares with all oil-producing nations – to make everyone else pay through the nose for oil. On the other hand Iran does have every reason to want to crush al-Qa'eda; to keep Afghanistan stable and not a haven for terrorists, and so on. Iran is fundamentally and innately on the US side when it comes to the war against terrorism, which in its current anti-US incarnation, almost entirely a Sunni phenomenon.

I would argue that far from wanting to crush Iran, the US should be turning Tehran into one of its primary allies in the middle east. Iran has far more interest in helping the US against al-Qa'eda, and in making both Iraq and Afghanistan stable then any of the US's Sunni allies, like Saudi Arabia, do. Despite its fiery rhetoric against Israel (which arose after US hostility to Iran cut the legs out from under moderates) Iran does understand that even if it had the means to destroy Israel, it itself would be destroyed.

The best thing to do with Iran is to open up operations and to be frank about what each side wants and needs.

If the real goal is to fight terrorism aimed at the US (which, for the Bush administration, it clearly never has been), then of all nations in the Middle East, Iran is arguably the U S's most natural ally and Saudi Arabia and Egypt, which the US supports in many ways, clearly are not good allies.

In the eighties the US used Saudi Arabia as a conduit for covert action against the USSR in Afghanistan. That led, pretty close to directly, to the attacks on 9/11. Now the US wants to do it again, this time against Iran.

It's time to end funding for Sunni extremists. It's time to stop trying to use the “enemy of my enemy” as if they were actually your friends, and not just people who have a common fear.

And its time to get over the trauma of the Iran hostage crisis, do some hard realpolitik analysis and realize that not only does Iran not have to the US's enemy, there is enough commonality of interests, that it should be an ally – and an ally who who would be far less likely to be funding people to attack the US the way so many Saudi interests do.