As the Obama administration and the rest of the Washington foreign policy community struggle to come to terms with the unfolding events in Egypt, top White House officials and an increasing number of top lawmakers seem to agree that the U.S. should not suspend military aid to the Egyptian military in the near term.

The speculation over whether U.S. military aid to Egypt, which totaled $1.3 billion last year, would be suspended hit a high pitch on Jan. 29 when White House spokesman Robert Gibbs told reporters, "We will be reviewing our assistance posture based on events now and in the coming days." That same day, House Foreign Affairs Chairwoman Ileana Ros-Lehtinen (R-FL) said in a statement, ""The United States must leverage its long-standing assistance to press Mr. Mubarak to let the voice of his people be heard through legitimate democratic elections."

But Secretary of State Hillary Clinton walked that back on Jan. 30, telling ABC News, "There is no discussion as of this time about cutting off any aid. We always are looking and reviewing our aid."

And on Monday, House Appropriations State and Foreign Ops subcommittee chairwoman Kay Granger (R-TX) also indicated that aid to Egypt would not be cut off anytime soon.

"While there are calls for eliminating Egypt's economic and military aid, I urge caution when deciding what the U.S. response will be," she said. "It is critical that we are deliberate about the actions we take. Egypt has been a moderate influence in the Middle East and has a peace agreement with Israel."

U.S. aid to Egypt totaled $1.55 billion in fiscal 2010, which includes $1.3 million in direct military aid. That's down from a high of $2.1 billion in total U.S. assistance in fiscal 1998. For fiscal 2011, the Obama administration had requested $250 million in economic support funds. That request is still pending.

The Obama administration's response to political upheaval this month in Lebanon is the most recent indicator of how they view the continuation of military aid to a country where the political winds are blowing against the interests of the United States.

Despite the fact Lebanon now has a prime minister backed by Hezbollah, the U.S. will continue funding to the Lebanese Armed Forces (LAF) for now, Deputy National Security Advisor Denis McDonough said in a Jan. 27 roundtable that included The Cable.

"We think that it's a very important independent institution," McDonough said about the LAF. "That's why we support the Lebanese Armed Forces, not because of their association or non-association with Hezbollah, but rather because of their independence -- their independence from any political actor. We think that's very important, we're going to continue to work with them, but obviously we're going to take a look at each of the developments along the way."

The U.S. relationship with the Egyptian military closely mirrors the U.S. relationship with the LAF, said Andrew Tabler, next generation fellow at the Washington Institute for Near East Policy.

"The military in Egypt right now is maintaining control and they've been responsible regarding the protesters, so they're definitely a force that the U.S. government wants to maintain favor with at this stage," Tabler said.

The administration's latest message, that military and foreign aid suspension is not in the works, is due to the fact that the military aid is directly tied to Egypt's peace accord with Israel - and, of course, because the political situation in Cairo is still in flux, Tabler said.

"The administration is sending a signal to the Egyptian military that if you act responsibly we'll stand behind you. I think that's a smart policy."

Georgetown University successfully evacuated a group of students from the American University in Cairo due to the political unrest there, the university's president told the Georgetown community on Monday.

"After careful consideration, and following guidance from the U.S. State Department and American University of Cairo officials, Georgetown yesterday made the decision to get our students out of the country and began working to make appropriate arrangements," wrote Georgetown President John DeGioia in a letter to Georgetown students and faculty.

15 Georgetown students were just beginning their semester of studies in Cairo when the crisis broke out. They were all safely evacuated to Doha, Qatar, where Georgetown has a satellite campus, and will remain there for the next few days, DeGioia wrote. Where the students will complete the semester isn't yet decided.

DeGioia wrote that although the Georgetown students were safe, the situation on the ground was still volatile and he expressed concern for both Egyptians and foreigners who remain on the ground.

"As much as we are appreciative of the fact that our students are safe, we must also continue to be mindful of the ongoing unrest in Egypt. We pray for the safety and wellbeing of the many others who remain in the region, and we are seeking to understand these events," he wrote. "Our thoughts and prayers remain with those in the midst of the current conflict."

Officials from both the George W. Bush and Barack Obama administrations are scrambling to argue that they have aggressively pressured embattled Egyptian President Hosni Mubarak on the issues of human rights and political reform. But a closer look at the statements made by U.S. officials helps explain the antipathy toward the United States that some protesters -- including potential presidential candidate Mohamed ElBaradei, who blasted America's "failed policy" in Egypt -- have expressed.

From 2005 to 2008, Frank Ricciardone was the U.S. envoy in Cairo. Ricciardone, now the U.S. ambassador to Turkey following a recess appointment by Obama, was not confirmed by the Senate because many senators had lingering concerns about his tenure there. Those in the Bush administration who were pushing for a tougher line against Mubarak believed Ricciardone was too cozy with the regime and made too many excuses for Mubarak's authoritarian policies.

"President Mubarak is well known in the United States," Ricciardone said on March 12, 2006, to a group of students in Egypt participating in a model American Congress. "He is respected. If he had to run for office in the United States, my guess is he could win elections in the United States as a leader who is a giant on the world stage."

The Bush administration's effort to push Mubarak toward reform suffered widespread implementation problems, which went far beyond Ricciardone. But For Ricciardone's critics, statements he made in Egypt served to undermine the democracy push and helped lead to the current situation where the United States finds itself stuck today between a dictator and his people.

"Especially in 2005 and 2006, Secretary Rice and the Bush administration significantly increased American pressure for greater respect for human rights and progress toward democracy in Egypt. This of course meant pushing the Mubarak regime, arguing with it in private, and sometimes criticizing it in public. In all of this we in Washington found Ambassador Ricciardone to be without enthusiasm or energy," former top National Security Council aide Elliott Abrams told The Cable.

Not all Bush administration officials agree with that assessment. "He's an outstanding and extremely dedicated Foreign Service officer who has served his country in some very delicate and dangerous postings," said Mitchell Reiss, who served at the State Department's director of policy planning under Bush.

But for critics like Abrams, Ricciardone was hesitant to directly criticize Mubarak, overly optimistic about the progress of reforms, and often drew an equivalence between Egypt's struggles with human rights and democracy and the U.S. political debates.

Four days after his remarks to students in Egypt about Mubarak being able to win a U.S. election, for example, Ricciardone sought to dispel any rumors that Mubarak was not welcome in Washington.

"President Mubarak is loved in the U.S. and we always welcome him and appreciate his advice and benefit from it. He is a figure of historic importance in the global arena, and for the U.S.," he said in an interview.

Al Ahram Weekly, which is owned by the government, featured a quote by Ricciardone on Feb. 9, 2006, where he claimed that Mubarak had made "great progress" toward democratic reforms.

"There were some shortfalls in the exercise of democracy that President Mubarak and the prime minister have recognized. These have made headlines around the world and sometimes these headlines were negative and obscured the larger reality I experience every day which is a very positive reality," he said.

In an interview with Egyptian media on March 16, 2006, that was posted on the U.S. embassy in Cairo's website, Ricciardone downplayed the idea that the Egyptian government persecuted Coptic Christians.

"Naturally, here in Egypt as in the U.S., there is freedom of speech, so it is possible for anyone to complain about any personal or social problem. If there is a problem, there are legal ways to deal with it, whether here or in the U.S.," Ricciardone said.

In a Feb. 26, 2007, interview with Lamees El-Hadidi of Egyptian Television Channel One, Ricciardone was asked what kind of pressure the U.S. government was placing on Mubarak to enact human rights and political reform. He said there was none.

"I don't think there's any kind of pressure. There's an exchange of ideas and advice between friends within an atmosphere of constant dialogue, so I don't think there's any kind of pressure," Ricciardone said.

Later in the same interview, Ricciardone was asked about the 2005 State Department report on human rights, which said that protections in Egypt were weak. He responded that he was "optimistic" about reforms in Egypt and referenced problems in the United States, by way of comparison.

"I think there's a deeply-rooted and strong civil society here (in Egypt)," he responded. "I'm optimistic despite all the shortcomings and problems. Some problems have taken place in the U.S., but what's important is that every day we seek to improve ourselves." 

As recently as February 2008, Ricciardone praised the level of political openness in Egypt in an interview with Egypt's Dream TV. "Nowadays, in Egypt there is freedom of expression and that's how it should be," he said.

The State Department has been working furiously and mostly behind the scenes to cajole and pressure Arab governments to halt their clampdowns on communications and social media. In Tunisia there seem to have been real results. In Egypt, it's too soon to tell.

Ever since the State Department intervened during protests by the Iranian Green movement in June 2009, convincing Twitter to postpone maintenance so opposition protestors could communicate, the U.S. government has been ramping up its worldwide effort to set up a network of organizations that could circumvent crackdowns on Internet and cell phone technologies by foreign governments. That effort faced its first two major tests over the last few weeks and the State Department has been working with private companies, non-governmental organizations, and academic institutions to activate this network and put it to use in real time.

"Our mission is to provide a lifeline of protection when people get in trouble through a range of support for the activists and the people on the ground," Assistant Secretary of State for Democracy, Human Rights, and Labor (DRL) Michael Posner said in an interview on Friday with The Cable. "I think there will be an increase in contacts on several levels in the coming days and weeks."

Even before the unrest in Tunisia and Egypt, the State Department was working to drastically increase its activities with the internet freedom organizations, many of them using State Department funding provided through a grant program administered by DRL. This month, State announced it would spend another $30 million on this project.

For Posner, the drive to create an "open platform" for Internet communications is part of the overall drive to protect the universal rights the administration has been trumpeting in recent days and that Secretary of State Hillary Clinton laid out in her speech on Internet Freedom.

"What we're really talking about here is the ability of people to speak freely, to demonstrate peacefully, to associate and assemble in the public square. These are the human rights that are being restricted," Posner said.

In the case of Tunisia, the State Department mixed a strategy of working with companies and third party groups with a series of private and public communications between the Obama administration and the government of now-ousted president Zine al-Abidine Ben Ali.

The effort began shortly after a Tunisian street vendor, Mohamed Bouazizi, lit himself on fire in Sidi Bouzid on Dec. 17. News of the event shot around the country through Twitter and Facebook, sparking a wider protest movement. The Tunisian government responded by hacking massive amounts of Twitter, Facebook, and e-mail accounts and targeted other sites where protestors were convening or communicating.

Facebook contacted the State Department soon thereafter, another State Department official told The Cable, asking for assistance and to help coordinate the response. Facebook then created an encrypted option for accessing the site from Tunisia while the State Department convoked the Tunisian ambassador in Washington to complain about the government's tactics.

"These tactics were used against American companies, so we have equities on multiple fronts," the official said. Assistant Secretary of State Jeffrey Feltman delivered a stern message to the ambassador in DC while the U.S. ambassador in Tunis Gordon Gray delivered the same message to the top levels of Ben Ali's government. When these private efforts to convince Tunis to open Internet restrictions failed, senior U.S. officials went public with their criticisms.

"We've been in touch with State and a lot of people on the ground and helping them navigate any of the blocks the government has put in place," said one Washington human rights advocate who was deeply involved in the effort.

State Department officials told The Cable that their efforts paid off, given that Ben Ali -- before stepping down -- said that he "heard the Tunisian people" and removed the blocks on the Internet and social media sites, although he had never cut off the entire country from communication. The State Department official said that while technology was an accelerant for the protests and a way for the protesters to get unvarnished information, it did not spur the movement.

"This was not a Twitter revolution. It was not a revolution either made possible or successful through the use of applications like Twitter," the State Department official said. "It mattered in Tunisia but ultimately that was a revolution of, for, and by the Tunisians."

Then came the protests this week in Egypt and the Mubarak government's decision on Thursday to cut off all Internet and cell phone service to the entire country. This sweeping, unprecedented action stymied both the State Department and the private and non-governmental organizations they were working with in Egypt.

"When a government literally shuts down the networks, the solutions are few. You can't circumvent a complete network shutdown," the State Department official said.

"None of this was an issue in Egypt until 24 hours ago," said another Washington expert who works on Internet freedom and human rights issues in the Arab world.

Nevertheless, the pro-Internet freedom network kicked into high gear, looking for loopholes in the blackout and connecting with people on the ground via the few pieces of communications technology that were still working -- land line telephones and ham radios.

The State Department started sending increasingly strong private messages to Cairo, the official said, culminating with Clinton's public statement on Friday, when she said, "We urge the Egyptian authorities to allow peaceful protests and to reverse the unprecedented steps it has taken to cut off communications."

State Department officials also ramped up their coordination with U.S. companies, advocacy groups, and universities to share information on workarounds and connect these institutions to people on the ground.

The official declined to comment on whether State was pressing Internet and cell phone carriers in Egypt to defy the government and restore access to services. Vodaphone, for example, said it was "obligated" to comply with the Egyptian government's demand to shut down. But the work with private entities to restore lines of communication in Egypt continues.

For critics of the administration's stance on the Egypt protests, the State Department's furious efforts behind the scenes on the issue of Internet freedom are insufficient to compensate for what they see as an overall lackluster, and belated, U.S. government response to the crisis.

"The real problem is that when your macro policy and your micro policy don't match up, it takes all the credibility away," said Danielle Pletka, vice president at the American Enterprise Institute. "It's one thing to stand up and say don't shut off access to cell phones, but when top administration officials refuse to side with the protestors overall, it sends the message that there will be no consequences" for the Egyptian government if it chooses to ignore the administration's calls for information openness.

The Obama administration knows that their efforts to keep communications systems up and running are but a small part of what's needed diplomatically in Egypt. But they see it as one more tool they can use to pressure the government toward better behavior and find ways to protect American citizens and businesses caught in the crossfire.

"None of us are cyber-utopians, we have always been clear eyed about this," the State Department official said. "The question is not whether tech is good or bad, it's disruptive. And in a disruptive environment, the question is, how can you maximize your interests."

A top State Department official in Tunis pledged full American support for the Tunisian drive to hold free elections on Wednesday, but also sought to distance the U.S. position on Tunisia from other mass protests in the region, such as the ongoing unrest in Egypt.

"What happened in Tunisia strikes me as uniquely Tunisian. That the events that took place here over the past few weeks derive from particularly Tunisian grievances, from Tunisian circumstances by the Tunisian people," Assistant Secretary of State for Near East Affairs Jeffrey Feltman said at a press conference.

He called for free and fair elections in Tunisia and pledged both American and international support to set them up.

"The United States stands with the people of Tunisia. This is an exciting and unprecedented moment in Tunisia's history with great challenges but also great opportunities for the Tunisian people to chart their own course," he said.

Feltman allowed that there are some fundamental similarities with regard to human rights.

"The challenges that are faced here are in some cases shared. And we think governments everywhere should be finding ways to permit peaceful assembly, freedom of speech, freedom of the media in order to give people a say in how they are governed and to give them a stake in the future," he said.

Feltman's remarks echo Secretary of State Hillary Clinton's latest statement, which also calls on the Egyptian government to stop harassing protesters, but doesn't call on the Egyptian government to let them participate in a real election process.

"It is important that the government listens to the concerns of those demonstrating and respects rights of freedom of assembly and expression," she said. "Openness, transparency and political freedom are important tenets of stability. We urge the government and demonstrators to seek a peaceful way forward."

The Obama administration's support for Tunisians' right to self determination was on display during last night's State of the Union speech by President Obama, a speech in which he didn't mention Egypt at all.

"We saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator. And tonight, let us be clear: the United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people," said Obama.

The White House issued a statement from Press Secretary Robert Gibbs at about 11:30 PM, after the president's speech had concluded, expressing U.S. support of Egyptians right to peaceful assembly, but without any call for free and fair elections.

"The Egyptian government has an important opportunity to be responsive to the aspirations of the Egyptian people, and pursue political, economic and social reforms that can improve their lives and help Egypt prosper. The United States is committed to working with Egypt and the Egyptian people to advance these goals," the statement read.

During a Wednesday morning roundtable, State Department Policy Planning Director Anne Marie Slaughter explained the seeming disparity by noting that there was consistency in the sense that both stances include a respect for "universal values."

"That means we are strongly supportive of the Tunisians in the effort to achieve democracy, it also means we are not imposing our values on countries around the world," she said.

The New America Foundation's Steve Clemons said that the George W. Bush administration, despite that it outwardly advocated for democratic change in the Arab world, might have taken a similar stance as the Obama administration has on Egypt.

"The notion that we're somehow in the streets with every potential freedom movement would be a mistake in foreign policy," he said. "If this administration was out there calling for regime change in Egypt, I think that would be a huge mistake."

The Obama administration is negotiating civilian nuclear cooperation agreements with a host of countries around the world. But Congress will intervene to try to stop some of those deals, if House Foreign Relations Committee chairwoman Ileana Ros-Lehtinen but has anything to say about it.

Ros-Lehtinen, the Cuban-American firebrand who took over the committee last week, has promised to fight the administration's foreign policy agenda on a wide range of fronts. On her first day, she pledged to take an axe to the State Department's budget, and last month she single-handedly killed the bill to make opposition to forced child marriages an element of U.S. foreign policy. Her next target is the Atomic Energy Act (AEA), the law that governs civilian nuclear agreements -- commonly known as "123" agreements for the section of the AEA governing them.

Ros-Lehtinen is angry that the U.S. entered into a 123 agreement with Russia this month. The administration submitted the agreement to Congress last May. Ros-Lehtinen introduced a resolution to stop it during the previous congressional session, but the resolution never came up for a vote in the Democratic-led House. The deal consequently went through after the 90-day waiting period expired.

"The U.S.-Russia nuclear cooperation agreement that went into effect this week never got a vote in Congress," Ros-Lehtinen said Thursday. "The Atomic Energy Act must be reformed so that these far-reaching and potentially dangerous agreements are required to receive an up-or-down vote in Congress before going into effect."

She also promised that her bill would require the administration to certify that a country has met a number or requirements before signing a nuclear deal with the United States, and to verify that the deal would advance U.S. interests.

Ros-Lehtinen said that Russia did not deserve that "concession" due to what she calls its ongoing support of Iran's nuclear program. She specifically mentioned its assistance in building and fueling the Bushehr nuclear plant, even though George W. Bush's administration actually supported that project.

She also criticized Russia for continuing "to shield Iran from U.S. and international sanctions and taking other actions that undermine U.S. interests around the world, such as selling weapons to Syria and signing a nuclear cooperation agreement with the Burmese regime, which is a North Korea nuclear partner."

In Ros-Lehtinen's view, the administration has given several "concessions" to Russia already, including the New START nuclear reductions pact, changes in European missile defense plans, and exempting Russian companies from Iranian sanctions.

Others in Congress opposed the Russia 123 agreement, including Ed Markey (D-MA), chairman of the Energy and Environment Subcommittee. That loose coalition could create problems for the administration if and when it completes new 123 agreements.

The next countries in line for 123 agreements are Vietnam and Jordan, and their deals promise to face a different criticism than the agreement with Russia. Critics in both parties on Capitol Hill are set to press the administration to include bans on plutonium reprocessing and uranium enrichment in the deals, and those countries aren't likely to agree.

The administration painted itself into a corner on this issue when it hailed the 2009 123 agreement with the UAE as the "gold standard," because it included the provisions banning enrichment. But team Obama then hit a wall when Vietnam refused to agree to the same prohibitions. Jordan as well has indicated it wants to preserve what it views as its right to produce nuclear fuel sometime in the future.

If the administration insists on the prohibitions now, it risks causing the pending deals with Vietnam and Jordan to unravel in the short term, and perhaps losing out on other potential deals in the longer term. If the administration backs down and signs agreements without nuclear fuel production restrictions, it will cause a bipartisan uproar on Capitol Hill.

Inside the administration, Deputy Energy Secretary Daniel Poneman has been arguing for months that the administration should just get rid of the enrichment provisions. On the other side of the debate, Deputy Secretary of State Jim Steinberg has taken the position that the provisions are important.

In addition to Vietnam and Jordan, the administration is also considering beginning negotiations on a 123 agreement with Saudi Arabia. Ros-Lehtinen has already come out as a critic of the administration's plan to sell $60 billion worth of weapons to the kingdom.

Last August, a bipartisan group of lawmakers wrote to Obama to demand that the UAE standard be applied to all future civilian nuclear deals. The lawmakers threw Obama's own words from his 2009 speech in Prague back at him, when the president said, "We need a new paradigm for civil nuclear cooperation that allows all countries to enjoy the benefits of nuclear power, while avoiding the spread of nuclear weapons and technologies."

"That new paradigm exists," the lawmakers wrote, referring to the UAE standard.

In November, a group of 16 non-proliferation experts wrote to the administration to demand that the standard in the UAE 123 agreement be extended to U.S. federal energy loan guarantees, federal contracts, or other subsidies or assistance to help foreign government-backed nuclear firms expand their nuclear business in the United States.

The letter was signed by right-leaning experts such as Henry Sokolski, executive director of the Nonproliferation Policy Education Center, as well as left-leaning experts such as Daryl Kimball, executive director of the Arms Control Association.

"All of us believe that it makes no sense for our government to help foreign firms expand their nuclear business in the U.S. with federal loan guarantees, government contracts, or Nuclear Regulatory Commission licenses unless they are willing to support the very toughest nuclear nonproliferation standards our own government has developed in the U.S.-UAE deal," the experts wrote.

Secretary of State Hillary Clinton voluntarily raised the attempted assassination of Congresswoman Gabrielle Giffords (D-AZ) on a trip to the Arab world, comparing alleged shooter Jared Lee Loughner to Muslim extremists. The State Department clarified that she was not saying Loughner should be treated as a terrorist.

"We have extremists in my country. A wonderful, incredibly brave young woman Congress member, Congresswoman Gifford[s], was just shot by an extremist in our country," Clinton said during a "Townterview" (half town hall, half interview) with students in Abu Dhabi on Monday.

The student had asked Clinton why many in the United States target the entire Arab world when assigning blame for the 9/11 attacks. In response, Clinton drew a comparison between Arab terrorists that perpetrate violence and Loughner.

"The extremists and their voices, the crazy voices that sometimes get on the TV, that's not who we are, that's not who you are, and what we have to do is get through that and make it clear that that doesn't represent either American or Arab ideas or opinions," Clinton said.

But Clinton wasn't advocating that the U.S. government treat Loughner in the same manner as it would treat a non-American Muslim extremist, which might include detention without trial, aggressive interrogations, or even extrajudicial killing.

"She was making remarks in the context of the environment she was in, talking about the parallels," said State Department spokesman Mark Toner.  "I don't think she was talking about some kind of equivalency in terms of how we treat them. We have a legal due process here in terms of the Arizona incident."

According to U.S. law, "the term ‘terrorism' means premeditated, politically motivated violence perpetrated against noncombatant targets by subnational groups or clandestine agents."

Some Americans, such as Muslim cleric Anwar al-Awlaki, have reportedly been stripped of their rights and put on U.S. government "kill lists" due to their alleged participation in terrorist activities.

Other Americans, such as Fort Hood shooter Army Major Nidal Malik Hasan, have not been treated as terrorists. Hasan reportedly tried to make contact with al Qaeda and had ties to Awlaki dating back to the cleric's time living in Falls Church, VA.  

Loughner himself addressed, albeit in a murky fashion, whether he can be classified as a terrorist in one of his many Youtube videos.

"[A] terrorist is a person who terror or terrorism, especially as a political weapon," Loughner wrote. "If you call me a terrorist then the argument to call me a terrorist is Ad hominem. You call me a terrorist. Thus, the argument to call me a terrorist is Ad hominem."

MANAMA, Bahrain—Doha, Qatar, was full of life Thursday night, with men in white robes dancing in the streets, hanging out of car windows, blowing Vuvuzela horns, and participating in all sorts of other non-alcoholic celebrations of Qatar's victory in securing the 2022 World Cup.

Your humble Cable guy landed in Doha Thursday evening on his way to the IISS 2010 Manama Security dialogue, which began Friday in Bahrain. But before going to bed late Thursday night, we had the chance to party along with the locals, eat some baby camel (true story), and tour a city filled with posters and other advertisements for Qatar's expensive bid to host the tournament.

Of course, the United States was among the finalists for the hosting honors. So when The Cable sat down Friday for an exclusive interview with Secretary of State Hillary Clinton, we couldn't help but ask what she thought of Qatar's selection.

Clinton said that the selection of Qatar for 2022, Russia for 2018, and the earlier selection of Brazil for 2014 represent an effort by FIFA, the world soccer body, to spread the honor to new regions and reward new audiences.

"It does make a certain logic, to kind of expand the global reach and give people who love football more than we do -- soccer football, not football football -- a chance to have their moment," she said.

Clinton did admit to being at least a little unhappy about the decision, and gently alluded to the fact that Qatar is a long way from building all of the stadiums needed for the tournament, not to mention protecting fans from the blistering summer Doha heat.

"Obviously we were disappointed because, look, we could do it tomorrow. We've got the facilities already built," she said. "We don't have to air-condition stadiums."

Secretary of State Hillary Clinton's seven-hour marathon meeting with Israeli Prime Minister Benjamin Netanyahu Wednesday in New York could signal a turning point in the effort to revive the stalled Middle East peace talks, as the administration works to resolve the dispute over Israeli settlement building by turning the focus to borders and security.

The Obama administration's latest strategy seems to have two main elements, according to a senior official's read out of the meeting and analysis by current and former officials on both sides.  First, the Obama administration is offering Netanyahu as many security guarantees as possible in order to give the Israeli government increased confidence to move to a discussion of the borders that would delineate the two future states. Second, the administration wants to work toward an understanding on borders so that both sides can know where they can and can't build for the duration of the peace process.

"If there in fact is progress in the next several months, I'm confident people will look back at this meeting between Secretary Clinton and Prime Minister Netanyahu as the foundation of the progress. It was that important," former Congressman Robert Wexler, now the president of the S. Daniel Abraham Center for Middle East Peace, told The Cable.

Wexler said that President Obama had long been asking both the Israelis and the Palestinians for clarity on the territories they envisioned being part of their future states. The recent meeting, he said, could be an important step in that direction -- at least in clarifying Israel's position.

"I am hopeful that yesterday's meeting was the beginning of clarity in terms of Israel's visions about her own borders -- where does Israel want Israel's borders to be," said Wexler. "Because ultimately, we can't help our close friend until they share with us their own vision."

The meeting was the highest level interaction between the U.S. and Israeli governments since the last round of direct talks in September. Wexler said that while the two leaders didn't sit down with a map and draw lines around particular neighborhoods, the administration's switch to a focus on borders as a means of getting at the settlements problem was clear. "It's the only rational, sane way to proceed," he said. "Talking about borders and territories will by definition minimize the impact of the settlement issue."

Wexler said that by virtue of the fact that the meeting was seven hours, it's reasonable to assume that significant progress was made. "I think we're very close to creating that magic formula that satisfies both the Israelis and the Palestinians to come back to the table."

The head of the PLO mission in Washington, Maen Rashid Areikat, wasn't so sure. He pointed to the boilerplate statement that Clinton and Netanyahu issued after the meeting as evidence that no real breakthrough was achieved.

"Prime Minister Netanyahu and Secretary Clinton had a good discussion today, with a friendly and productive exchange of views on both sides. Secretary Clinton reiterated the United States' unshakable commitment to Israel's security and to peace in the region," the statement read.

But Areikat endorsed the idea of discussing borders ahead of the settlements issue, saying that's what the Palestinian side has been advocating all along.

"The conventional wisdom is that if we deal with the issue of the borders then we will be able, by default, to deal with the issue of settlements -- and if you can define the borders of the two states and agree on these borders, then each party can build in its own territory without being contested by the other party," Areikat told The Cable. "This is what everybody is aiming at.... Now whether the Americans are going to succeed in convincing the Israelis to do it, we have to wait and see."

Of course, the two sides disagree over the order of events even when discussing the border issue.

"The Palestinian position is that we need to agree on the borders, then we will discuss in parallel the security arrangements. The Israelis are saying no, we need to define first what the security arrangements are to project what the final borders will be," Areikat explained.

In what appears to be a recognition of the Israeli position, Clinton and her team apparently spent a good deal of their time with the Netanyahu team spelling out a long list of additional security guarantees the Obama administration is offering to Israel.

In a Friday morning conference call with Jewish community leaders, notes of which were provided to The Cable, the National Security Council's Dan Shapiro described several of the ways America has been advocating on behalf of Israel's security in recent months. They included increased U.S. diplomatic opposition to efforts to delegitimize Israel in international fora, continuing to block efforts to revive the Goldstone Report at the United Nations, promising to block condemnation of Israel at the United Nations for its raid on the Gaza-bound Mavi Marmara, and defeating resolutions aimed to expose Israel's nuclear program at the IAEA, and increasing pressure on Iran and Syria to stop their nuclear and proliferation activities.

The U.S. position on settlements has not officially changed, Shapiro said. The United States still believes that the Israeli settlement moratorium should be extended, but that Palestinians should stay in peace talks even if it is not. He said that President Obama -- who said Monday that Israeli settlement construction was "never helpful" to peace talks Israel announced further construction plans in East Jerusalem -- wasn't trying to publicly criticize Netanyahu with his remarks. He simply answered a question put to him in a direct way, said Shapiro.

The Clinton-Netanyahu meeting was the culmination of several days of intensive, personal attention to the issue by Clinton herself. On Tuesday, she held a joint news conference with Palestinian Prime Minister Salam Fayyad to announce $150 million in new U.S. assistance to the Palestinian Authority. On Wednesday, she met with Egyptian Foreign Minister Aboul Gheit and Lieutenant General Omar Suleiman to discuss the Middle East peace process.

But in the Washington press, the seven-hour conversation was somewhat overshadowed by Netanyahu's meeting with incoming House Majority Leader Eric Cantor (R-VA). Unlike Clinton, Cantor publicly disclosed what he told Netanyahu.

"Eric stressed that the new Republican majority will serve as a check on the Administration and what has been, up until this point, one party rule in Washington," read a statement from Cantor's office on the one-on-one meeting. "He made clear that the Republican majority understands the special relationship between Israel and the United States, and that the security of each nation is reliant upon the other."

Wexler said he didn't see a problem with Cantor's remarks or stance. "It's a perfectly natural, appropriate meeting to have," said Wexler, who pointed out that Netanyahu also met with Sen. Chuck Schumer (D-NY). "I don't believe he intended to play the president, the prime minister, or anyone else against one another."

But Areikat saw Cantor's stance as extremely unhelpful.

"This amounts to undermining the efforts of the U.S. to achieve peace," he said. "People like Eric Cantor who blindly oppose the Palestinians, they think they are helping Israeli interests but he is hurting Israeli interests. By making these statements they are hardening Israeli positions."

UPDATE: This story was updated to reflect that Shapiro was describing a list of ways America was already working on behalf of Israel's security, not a new list of incentives discussed in the Clinton-Netanyahu meeting.

The White House spent an hour Friday afternoon trying to convince angry Hill staffers and human rights activists that "naming and shaming" governments that recruit child soldiers, rather than imposing Congressionally-mandated sanctions on them, will better address the problem. But advocacy leaders are upset with the administration and rejected top White House officials' contention that removing sanctions against four troubled states will be a positive move.

The White House began a conference call on the issue Friday afternoon by apologizing to the NGO and Hill community for the decision's botched rollout, which was announced only through a short official presidential memorandum on Monday and then reported on by The Cable on Tuesday, Wednesday, and Thursday. The call was off the record and not for press purposes, but a recording was made available to The Cable.

"This is a call that should have happened before you read about the administration's child soldiers' posture in the newspaper," said Samantha Power, the National Security Council's senior director for multilateral affairs and human rights. "Given the way you all heard about the implementation of the statute, I can understand why some of the reactions that you had were prevalent."

Power defended the president's decision to waive penalties under the Child Soldiers Prevention Act of 2008, which was set to go into effect this month, for Chad, the Democratic Republic of the Congo (DRC), Sudan, and Yemen. She argued that identifying these countries as violators while giving them one more year to stop recruiting underage troops would help make progress.

"Our judgment was brand them, name them, shame them, and then try to leverage assistance in a fashion to make this work," said Power, adding that this was the first year the Obama administration had to make a decision on this issue, so they want to give the violator countries one more year to show progress.

"In year one to just say we're out of here, best of luck, we wish you well... Our judgment is we'll work from inside the tent."

But Hill staffers and advocacy leaders on the call weren't buying what Power was selling. They were upset that they learned about the decision via The Cable, and challenged Power on each point that she made.

For example, Jo Becker, advocacy director for the children's rights division at Human Rights Watch, pointed out that the law was passed two years ago.

"The law was enacted in 2008, so countries have had two years to know that this was coming down the pike," she said. "So the consequences of the law really shouldn't be taking anyone by surprise, so to say countries need a year to get their act together is really problematic."

She also disputed Power's contention on the call that "there's evidence that our diplomatic engagement and this military assistance has resulted in some changes."

"The U.S. has been providing training for years already with no real change on the ground," said Becker. "We haven't seen significant changes in practice so far from the engagement approach, so that seems to indicate to me we need to change the approach, maybe withholding programs until we see changes on the ground."

"I think the logic of engagement is something reasonable people can disagree on," Power responded. "There's probably empirical evidence on both sides."

Advocates on the call did acknowledge Chad's efforts on child soldier demobilization, but lamented that little or no progress has been seen in the DRC or with South Sudan's Southern People's Liberation Army (SPLA). But they wanted to know: If the administration believes that the threat of the sanctions has caused progress, then how does removing that threat keep the pressure on?

"Why remove that leverage now when we've seen it's been so valuable?" asked Scott Stedjan, senior policy advisor at Oxfam America

Jesse Eaves, policy advisor for children in crisis at World Vision, was one of several on the call to wonder why the administration decided to waive all sanctions, rather than using a part of the law that allows the continuation of military assistance to violator countries, along as that assistance goes toward military professionalization.

"Naming and shaming has not worked," he said. "You can give support under the law. Much of the aid that's even discussed in the justification memo that many of us have seen can still be given to these countries if they show a reasonable attempt to demobilize child soldiers."

Overall, Power wanted to point out that the administration is still intent on fighting the use of child soldiers and that waiving the sanctions doesn't mean that all pressures will stop. She promised that if these countries don't shape up, the administration will take a tougher line when reevaluating the sanctions next year.

Power repeatedly attempted to argue that the attention over the president's decision to waive sanctions was exactly the kind of public pressure needed to spur violator governments to change. However, her argument was complicated by the fact that the administration failed to tell anyone about the decision and announced it with no rollout or explanation whatsoever.

"I do think there's something different between what happened in 2008 [when the law passed] versus actually being named this week," she said. "And we're already seeing out in the field via our embassies a huge amount of discomfort and angst on the part of those countries about being branded in this way."

Power said at the end of the call that the administration plans to capitalize on the fallout from its decision. She said that the administration planned on "[u]sing the attention from this moment and the leverage of having abstained from having put the sanctions in effect right now and saying... ‘You're not going to get so lucky next time if we don't see some progress.'"

Overall, the call showed that the White House realized it botched the rollout of the decision but is standing by the decision itself. Next, they will have to defend it on Capitol Hill, where staffers are set to receive a special briefing on the issue next week.

"I think it's unfortunate that the NGO community and those in Congress who wrote the law were not involved in its implementation," said Kody Kness, an aide to Sen. Sam Brownback (R-KS), one of the lead sponsors of the law. "I think that's a missed opportunity."

The Obama administration quietly waived a key section of the law meant to combat the use of child soldiers for four toubled states on Monday, over the objections the State Department's democracy and human rights officials. Today, the White House tells The Cable that they intend to give these countries -- all of whose armed forces use underage troops -- one more year to improve before bringing any penalties to bear.

The NGO community was shocked by the announcement, reported Tuesday by The Cable, that President Obama authorized exemptions from all penalties set to go into effect this year under the Child Soldier Prevention Act of 2008. The countries that received waivers were Chad, the Democratic Republic of the Congo, Sudan, and Yemen.

The failure of the administration to consult or even warn those groups that had worked hard to pass the law caused unease and concern around the advocacy community Tuesday. Child protection advocates worried that the administration was abandoning the tactic of threatening to cut off military assistance as a means to pressure abusive regimes to stop forcibly recruiting troops under the age of 18.

"This took us totally by surprise and was a complete shock to people who are working in the field," said Jesse Eaves, policy advisor for children in crisis at World Vision, a children-focused humanitarian organization.

On Tuesday evening, a White House official explained to The Cable the reasons for the decision and the details of what it means for U.S. activity in the affected countries. Essentially, the administration decided that it could not ensure that the offending countries would be able to abide by the law in time -- the breach of which would have required Washington to pull funding. In the end, the administration's calculus weighed in favor of continuing to fund several ongoing assistance programs like military training and counterterrorism advising. They decided to give each country at least one more year to implement reforms before sanctions are brought to bear, according to the official.

"This is the first year that sanctions were to take effect and part of our thinking here has been to put countries on notice of these legal provisions that are taking effect for the first time and that progress is going to have to be made on these things if these countries are going to continue to receive assistance," the White House official said.

The official also noted that the Obama administration was keen to preserve their relationships with the governments in question and argued that engaging troubled militaries was the most effective way to encourage the reform the law was designed to bring about.

"We still think it's important to maintain a solid relationship with the governments there to ensure they provide protection to those folks," the official said. "One rationale for continuing the assistance is to help them address the very problem that is the source of the sanctions."

Inside the administration, however, The Cable has learned that there was a heated debate over whether to issue the waivers. Apparently, this debate was held inside the State Department, with the bureau of Democracy, Human Rights and Labor (DRL) and the Office to Monitor and Combat Trafficking in Persons arguing against blanket exemptions. The bureau of Political and Military Affairs (PM) argued for the exemptions. The PM bureau's argument won the day and the State Department submitted recommendations to the White House, which issued the waivers.

The 2008 Child Soldier Prevention Act was originally sponsored by Sen. Dick Durbin (D-IL) and wrapped into a larger bill sponsored by then Sen. Joe Biden. Durbin's office was not able to comment by deadline and Biden's office deferred to the White House.

Leading human rights activists involved in the issue were skeptical that letting abusive governments evade sanctions would have the effect of producing reform faster.

"This is the first year it's being enacted, so to waive everyone right out of the gate sends exactly the wrong message," said Jo Becker, advocacy director for the children's rights division at Human Rights Watch. "By providing a blanket waiver, the U.S. is really giving up all of its leverage to force them to change their approach to using child soldiers."

She also criticized the official's contention that the abusive countries needed more time to become aware of the law, which was signed in December 2008. It became operative in June 2009 but couldn't go into effect until violator countries were identified in the State Department's 2010 Trafficking in Persons Report, which came out in June.

"If the State Department was doing its job, governments would have been well aware two years ago that this process was underway," said Becker.

The 2010 Trafficking in Persons report identified six countries that are systematically employing the use of child soldiers. In addition to the four that Obama waived sanctions on, Burma and Somalia are also implicated. But neither of those countries receive U.S. military assistance that could be cut off as a sanction, according to the law. Therefore, Obama's waivers have the effect of preventing the law from imposing any sanctions at all this year.

The White House official said when the next State Department report comes out in June 2011, there will be another assessment of whether to impose penalties on violator countries. He also hastened to underline that the waivers weren't issued to pave the way for new military sales to any of the countries found to be using child soldiers.

In Chad, the U.S. is engaged in counterterrorism activities but also is working with the government's armed forces to deal with the spillover of refugees from the crisis over the Sudanese border in Darfur. In the DRC, the U.S. is providing training of various types, military advisors, and also military vehicles and spare parts to the Congolese army. Over 33,000 child soldiers have been involved in the decade old civil war there and the country leads the world in the use of underage troops, according to UNICEF.

With regard to Sudan, other sanctions prevent the United States from helping the Khartoum government in the North, but the U.S. is giving military training assistance to the Southern People's Liberation Army, which could end up a national army if the South votes to separate in the January referendum. The SPLA has about 1,200 child soldiers, the official said, adding that cutting off such training would only undermine ongoing reform efforts.

Yemen is a recipient of significant direct U.S. military assistance, having received $155 million in fiscal 2010 with a possible $1.2 billion coming over the next five years. Yemen is also a much needed ally for counterterrorism operations. The government is engaged in a bloody fight with al Qaeda (among other separatist and terrorist groups), and estimates put the ratio of child soldiers among all the groups there at more than half. Nevertheless, "the president believes there are profound equities with Yemen in terms of counterterrorism that we need to continue to work on," the official told The Cable.

Several outside experts pointed out the existing law already contains an exemption that would permit the U.S. government to sanction abuser countries while still providing assistance that "will directly support professionalization of the military."

"This exception gives the U.S. government very wide berth to continue to provide assistance to bring these militaries more in line with the American image of what their military should look like," said Rachel Stohl, Associate Fellow at the Washington office of Chatham House, a U.K.-based think tank. "The law allows for professionalization of these militaries, so these waivers are really disappointing and add insult to injury."

In a rousing 30-minute speech Wednesday night, Secretary of State Hillary Clinton implored attendees at the annual gala for the American Task Force on Palestine not to give up on the struggling Middle East peace process, despite past, current, and future obstacles.

Hosted by ATFP President Ziad Asali, the event was packed with officials, experts, and influence makers involved with the region. The four honorees of the night were Retired Col. Peter Mansoor, renowned poet Naomi Shihab Nye, playwright Betty Shamieh, and Booz Allen Hamilton's Ghassan Salameh. Other notables figures in attendance included Prince Turki bin Faisal al Saud and Sharif El-Gamal, the developer of the Park 51 Muslim Community Center. Palestinian-American comedienne Maysoon Zayid was also a hit.

All attendees we spoke to praised Clinton's speech as a fair and balanced (no pun intended) assessment of developments in the Israeli-Palestinian peace process, and an impassioned plea for both sides in the conflict to redouble their efforts to reach a negotiated and permanent end to the conflict. "She could have given the same exact speech to AIPAC [the American Israel Public Affairs Committee]," said one very satisfied attendee.

Of course, Clinton didn't get into the details of the ongoing negotiations to try to convince Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas to stay engaged in the direct talks they started last month. But she touched on almost every other issue related to the situation.

Here are some key excerpts:

On the current impasse in the peace talks:

We have no illusions about the difficulty of resolving the final status issues of borders and security, settlements and refugees, of Jerusalem and water. And it's no secret that we are in a difficult period. When President Abbas and Prime Minister Netanyahu came to Washington last month to re-launch direct negotiations, we knew there would be setbacks and struggles.Our position on settlements is well-known and has not changed. And our determination to encourage the parties to continue talking has not wavered.

I cannot stand here tonight and tell you there is some magic formula that I have discovered that will break through the current impasse. But I can tell you we are working every day, sometimes every hour, to create the conditions for negotiations to continue and succeed. We are urging both sides to avoid any actions that would undermine trust or prejudice the outcomes of the talks. Senator Mitchell will soon return to the region for further consultations. We have not given up and neither have President Abbas or Prime Minister Netanyahu.

On the value of the two state solution for Palestinians:

For Palestinians, a two-state solution would mean an independent, viable, and sovereign state of their and your own; the freedom to travel, to do business, and govern themselves. Palestinians would have the right to chart their own destinies at last. The indignity of occupation would end and a new era of opportunity, promise, and justice would begin... There is no substitute for face-to-face discussion and, ultimately, for an agreement that leads to a just and lasting peace. That is the only path that will lead to the fulfillment of the Palestinian national aspirations and the necessary outcome of two states for two peoples.

On what the two states should look like:

We remain convinced that if they persevere with negotiations, the parties can agree on an outcome that ends the conflict; reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps and Israel's goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israel's security requirements. This will resolve all the core issues and, as President Abbas said the other day, end all historical claims.

On seeing past the false choices of the conflict:

Being pro-Palestinian does not mean you must reject Israel's right to exist. And being pro-Israel does not mean you must deny the legitimate aspirations of the Palestinian people. The path to security and dignity for both peoples lies in negotiations that result in two states living side by side in peace and prosperity, and a comprehensive peace in the entire region.+

On the need for more money for the Palestinian Authority:

The Palestinian Authority needs a larger, steadier, and more predictable source of financial support. The United States is proud to be the Palestinian Authority's largest donor. The European Union has stepped up as well. But the broader international community, including many Arab states, can and should provide more financial support. It takes far more than commitments and plans to support making the State of Palestine a reality. And in fact, as the Palestinian economy has increased, the need for future assistance has decreased, but there is still a gap and that gap has to be filled.

On her wish to increase economic activity in Gaza:

Now, we still need many more steps from Israel to enable more economic activity in Gaza, including exports that bolster legitimate business enterprises. Our goal is to support sustainable economic growth in Gaza, and it's a little-known fact that the Palestinian Authority is the principal financial supporter of Gaza. The people in Gaza are dependent upon the Palestinian Authority, which is another reason why the increase in economic activity in the West Bank is not only good for those who live in the West Bank, but those who live in Gaza as well.

On the Obama administration's commitment to seeing it through:

This is not easy. If it were, anybody could have done it already. We've had leaders who have given their lives to this work, and now we have a moment in time that we must seize. I urge you to help lead the way. And I promise you this: The Obama administration will not turn our backs on either the people of Palestine or Israel. We will continue working for and, God willing, achieving the just, lasting, and comprehensive peace that has been a cornerstone of U.S. policy for years.

The State Department has been stepping up both its rhetorical and punitive actions against Iran, but the question still remains whether the administration will go as far as to sanction companies based in countries where relations are delicate, especially China.

Last week, the United States announced two steps to increase pressure on Iran: President Obama signed an executive order on Sept. 29 targeting eight Iranian individuals for serious human rights abuses, and the State Department announced on Sept. 30 that it was imposing sanctions on the Switzerland-based Naftiran Intertrade Company (NICO) due to its involvement in the Iranian petroleum sector. These actions are based on the Iran sanctions legislation passed overwhelmingly by Congress and signed into law by President Obama last June.

On Monday, the Government Accountability Office (GAO) released a new report that identified 16 companies as having sold petroleum products to Iran between Jan. 1, 2009, and June 30, 2010. Of those 16, the GAO reported that five have shown no signs of curtailing business with Iran. Three of those companies are based in China, one in Singapore, and one in the UAE.

There are some positive signs, however, that international pressure is having an effect on companies' willingness to do business in Iran. Several firms -- hailing from Switzerland, the Netherlands, France, India, and the United Kingdom -- told the GAO that they are halting their refined petroleum business with Iran.

But leading senators aren't convinced that the holdouts are planning to follow suit. They are pressing the Obama administration to use the new sanctions law to punish those who won't go along -- especially if they are from China.

"The GAO report released today provides encouraging evidence that the comprehensive sanctions legislation passed by Congress earlier this year is indeed persuading many companies to stop selling gasoline and other refined petroleum products to Iran. We applaud those firms that have taken this responsible and important step," said Sens. Joseph Lieberman (I-CT), Susan Collins (R-ME), and Jon Kyl (R-AZ) joint statement. Lieberman and Collins had requested the GAO report in July.

However, the success of sanctions legislation has only made it "even more imperative" that the Obama administration pressure countries that have maintained their ties in Iran, the senators stated. "We are particularly concerned that the majority of the companies that GAO identifies as still selling gasoline to Iran are in China. We urge the Administration to complete its own investigations swiftly and enforce the sanctions law, comprehensively and aggressively, against any violators," the statement read.

Deputy Secretary of State Jim Steinberg told reporters last week that the State Department was looking at additional firms' business in Iran and would consider more direct sanctions through a two-step process that takes up to 180 days. But he added that the administration was first trying to negotiate with foreign governments to stop the companies' activities in advance of imposing penalties.

"We are following the process outlined in the statute," said Steinberg. "If we find credible evidence [of firms violating the sanctions], then we go to the next stage, which is to conduct an investigation ... and then we would make a decision," Steinberg said.

One of the main concerns on Capitol Hill is that, as countries pull out from Iran, other countries will take over contracts, thereby nullifying the effect of the sanctions and enriching themselves at other countries' expense -- a practice known as "backfilling."

The administration and Congress worked hard to convince Japan and South Korea to impose unilateral measures against Iran, which they did, but there's particular concern that China will simply come in and take over those contracts.

Kyl and Sen. Chuck Schumer (D-NY) sent a letter to Secretary of State Hillary Clinton last week on this very issue, pointing out reports that China National Petroleum Company (CNPC) replaced the Japanese firm Inpex and agreed to invest around $2 billion to develop Iran's South Azadegan oil fields last year.

"The Administration, by continuing to ignore blatant violations of our sanctions laws by Chinese companies, has undermined our sanctions regime on Iran.  It has sent the message to our friends and allies -- many of which have taken the difficult steps to reduce their economic ties with Iran -- that others will be let off the hook," Kyl said Sept. 30.

"If President Obama genuinely believes that a nuclear-armed Iran is not acceptable, he must stand by those words and apply the authority Congress has given him to punish all who are violating U.S. sanctions laws, particularly China," said Kyl. "Time is of the essence." 

Steinberg addressed the issue of backfilling in his briefing, saying that such activity would provoke actions under the sanctions legislation. "We've made clear to all our international partners that we are strongly discouraging substitution. And of course, were there to be substitution that came within the ambit of the act, it would raise questions under the act," he said.

Bob Einhorn¸ State's senior advisor on Iran and North Korea sanctions, is the man responsible for delivering that message and he traveled to Beijing last week to press the Chinese not to undermine the sanctions. It's not clear yet if he was successful. 

In a July 29 hearing, Einhorn referenced a previous GAO report that identified 41 foreign firms with a petroleum interest in Iran. "There are a number of entities that are very problematic. I have to say that a number of them have been engaged in sanctionable activity," he said in testimony to the House Oversight and Government Reform committee.

Complicating matters are the persistent rumors that China may have secured some type of immunity from additional sanctions as part of their agreement to support U.N. Security Council Resolution 1929, which established relatively benign sanctions against Iran as punishment for its continued pursuit of nuclear weapons capability.

Undersecretary of State William Burns said at an Oct. 1 hearing of the Senate Foreign Relations Committee that the State Department had competed an internal review of the companies noted in the GAO report and would make more determinations soon, but he cautioned not to expect too many companies to be singled out for punishment.

"There are probably -- there are a number of cases, less than 10, in which it appears that there may have been violations of the Iran Sanctions Act. Most of those appear to involve activities that have stopped, in other words, involving companies that have pulled out of business in Iran, but there are a couple that appear to be ongoing," he said.

Capitol Hill observers have been encouraged by the administration's recent moves -- but are still not convinced they constitute enough of a commitment to increasing pressure on Iran. Staffers say that the administration's new forceful tone and rhetoric are a marked improvement, even if they are only fulfilling the actions required by the sanctions legislation.

What's clear is that the administration is not yet finished implementing sanctions against firms doing business with Iran, and Congress will be pressing it not to back down from punishing companies from countries that may take retaliatory measures.

"Many in Congress are worried that the administration will fall for Iran's latest bid to buy a reprieve from sanctions by appearing interested in negotiations," said one senior GOP senate aide. "Congress will not let up on the pressure on the administration to go after Iran and those who are supporting it, namely, the Chinese."

Russian President Dmitry Medvedev's decision not to sell advanced weaponry to Iran is being hailed as a dividend of the Obama administration's "reset" policy with Russia. And although the administration didn't expressly offer the Kremlin a quid pro quo for the reversal, Moscow will expect moves by Washington in return as it cautiously moves to grasp Obama's outstretched hand.

Both the Obama and Bush administrations implored the Kremlin not to follow through with their 2006 signed agreement to sell almost $1 billion worth of S-300 air defense systems to Iran, and on Wednesday, Medvedev formally announced the sale will not go through.

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