As the Obama administration pursues new multilateral Iran sanctions at the U.N., Congress is getting ready to move forward with its own sanctions bill, which the administration is still not happy with.

A senior Senate aide close to the process said the House and Senate will soon move to conference on resolving the two versions of the Iran sanctions legislation, one led by Rep. Howard Berman, D-CA, and the other sponsored by Chris Dodd, D-CT. The State Department had been negotiating with key senators over Dodd's bill, seeking an exemption for any countries they determine to be "cooperating" with the U.S. on the sanctions regime.

This Washington Post article makes it seem like the Obama administration is just beginning to push for exemptions for all the P5+1 countries, including Russia and China, but actually that's been the State Department's position since December.

Senate Majority Leader Harry Reid, D-NV, has faced pressure not to dawdle with the bill, passing it through his chamber at the end of January. But the conference, where the State Department planned to get the exemptions it wants, wasn't expected to go forward until the U.N. game had played out.

And while the conference could last a long time and no final vote push is imminent, several congressional aides told The Cable Friday that their bosses were getting impatient with the ever-slipping deadline for U.N. action and that a large exemption that includes Russia and China would not fly on Capitol Hill.

"When we had the discussions in December about cooperating countries, it boiled down to the fact that the administration was demanding an exemption that was large enough to drive a truck through and that was not well received in the Congress," said one senior congressional aide close to the discussions.

The administration had pledged to wrap up at the U.N. in February during the French rotating presidency, then that slipped to March, and now lawmakers are being told April. The timing and the strength of the U.N. sanctions will directly affect what Congress does, the aide said.

"People on both sides want to give the administration the time they need and there's a genuine desire to be helpful, but the more this things drags on, the more there is going to be growing pressure in Congress about this," said the aide.

The aide spelled out two hypothetical scenarios: In Scenario A, the Security Council puts in place a very tough sanctions regime with China's signoff. In that case, the imperative for stringent congressionally mandated sanctions could diminish.

In Scenario B, despite a year spent on engagement, sold as necessary to rally the international community, sanctions are weak and China is not forced to change its behavior. In that case, the aide said, it will be very hard for the administration to turn to Congress and say "You don't need to move on tough sanctions now."

Some senators don't think an exemption for cooperating countries is necessary in the first place, since the bill gives the president the power to waive any sanctions if he chooses. One senior Senate aide said that his boss will resist any attempts to water down the Senate version of the bill.

Also, "I have not heard anybody who thinks it's a good idea to exempt China from the sanctions regime," this aide said.

The Cable is hearing from multiple congressional sources, diplomats, and former officials that the Obama administration is getting ready to finalize a new National Intelligence Estimate that is expected to walk back the conclusions of the 2007 report on Iran's nuclear program.

The new NIE has been expected for a while, but now seems to be close to release, perhaps within two weeks or so, according to the pervasive chatter in national-security circles this week. In addition to the expectation that the new estimate will declare that Iran is on a path toward weaponization of nuclear material, multiple sources said they are being told there will be no declassified version and only those cleared to read the full 2007 NIE (pdf) will be able to see the new version.

The Obama administration finds itself in tough situation as it pursues new sanctions against Iran both at the United Nations and using domestic levers. Many feel the administration needs to correct the record by somehow disavowing the intelligence community's controversial 2007 conclusion: "We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program."

The new estimate might not directly contradict that judgment, but could say that while the intelligence community has not determined that Iran has made the strategic decision to build a nuclear weapon, it is seen to be working on the components of a device -- a parsing that some would see as too clever by half.

"It's like saying that you're not building a car, but you are building the engine, the chassis, the upholstery," said one Middle East hand who had no direct knowledge about the estimate's contents. "It's a distinction without a difference."

Multiple Hill aides said they expect only a classified version with no public document; the 2007 estimate included an unclassified version. They see that move as an effort by the Obama administration not to have the new estimate unnecessarily complicate the ongoing negotiations to seek new sanctions against Iran at the U.N.

David Albright, a nuclear-weapons expert and president of the Institute of Science and International Security, said that the administration might want to avoid a lengthy and complicated public debate about the new estimate's conclusions, seeking to prevent the fractious debate that followed the release of the older estimate.

He said the nature of the estimate, which seeks to find consensus between all of the various intelligence agencies, makes it tough to give out enough information to make it bulletproof. Regardless, he lamented that the administration might not provide some of the information in a public way.

"They owe it to us to provide clarification of their position publicly," he said. "Speaking just as a citizen, I want my government to be transparent about something that could potentially involve military strikes."

Any clarification would bring the U.S. position more in line with that of with key allies like France and Germany, who have been long arguing for a stronger public position on Iran's nuclear program, according to Albright. A clarification would also help square the U.S. conclusions with the recent IAEA report on Iran that went further than previous reports in expressing concerns about weaponization, he added.

"The 2007 NIE really hurt things politically for getting sanctions and building momentum and they had to relook at this," Albright said. "Who knows if was really a mistake? It may be what they honestly believed at the time."

Any walking back of the 2007 estimate is likely to give Republicans comfort that their longstanding criticism of that report was justified.

A spokesperson for Senate Intelligence Committee ranking Republican Kit Bond, R-MO, told The Cable Bond has long argued the 2007 NIE went too far in suggesting that Iran did not intend to develop weapons.

"They may intend to, they may not, but the bottom line is that we just don't know," the spokesperson said. "Unfortunately, the NIE gave people a false security by making them think the Intelligence Community assessed there was no intent."

The NIE is compiled by the National Intelligence Council, but rollout and classification decisions are ultimately made by Dennis Blair, the director of national intelligence. Blair's office declined to comment.

Alex Wong/Getty Images

The State Department today urged Iran to publicly address issues raised in a new report by the International Atomic Energy Agency regarding the Islamic Republic's nuclear activities.

"We cannot explain why it refuses to come to the table and engage constructively to answer the questions that have been raised," State Department spokesman P.J. Crowley told reporters today, "And you have to draw some conclusions from that."

Crowley noted that this was the first report on the issue from the IAEA since the agency's new director general, Yukiya Amano, took up his post and the first since the existence of Iran's secret uranium enrichment facility near Qom was exposed last September.

"There is no explanation for that facility that is consistent with the needs of a civilian nuclear program. And it characterizes the way in which Iran has conducted its relations with the IAEA and its failure to satisfactorily explain, you know, what its activities and ambitions are in the nuclear sphere," Crowley said.

Regarding the Qom facility, the IAEA report said the agency has information disputing Iran's contention that it chose the location in 2007. The agency says it was planned in 2006, when Iran would have been require to notify the IAEA. Iran has failed to answer properly several of the IAEA's questions on Qom, the report stated.

"The Agency has verified that the construction of the facility is ongoing, but that no centrifuges had been introduced into the facility as of 16 February 2010," it reads.

"The IAEA report shows in stark terms that Iran continues to obfuscate on its safeguards obligations," said Nima Gerami of the Carnegie Endowment for International Peace. "Regrettably, results from the IAEA's inspection of Iran's enrichment plant near Qom are still pending because Iran delayed access to the facility last October and ElBaradei did little to put his foot down."

Amano is not doing much better, according to Gerami.

"If Amano wants to be successful he should report as straightforwardly as possible in explaining Iran's safeguards failures and avoid using falsely reassuring statements, as he did in this report, that the IAEA seeks to ensure its continuing ability to verify the non-diversion of declared nuclear material" in Iran.

As the United States shifts from engagement to sanctions against the Islamic Republic of Iran and the Iranian opposition takes to the streets, a broad and diverse team of officials inside the Obama administration is working on the issue day in and day out.

It's easy to see the role of the principals: Secretary of State Hillary Clinton delivers the lead message, signaling overall policy positions. Defense Secretary Robert Gates holds the line that there are no good military solutions, while reiterating that all options are on the table. National Security Advisor Jim Jones is in charge of overall policy coordination.

But The Cable would like to introduce you to the U.S. government officials who are working on Iran one or two levels down. "The complexity of the problem makes it by necessity a team effort," explained Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies. "There is not one person who is the Iran czar; there are different people who handle different parts of the equation."

Here are some -- but by no means all -- of the most important players:

Bill Burns, under secretary of state for political affairs

Burns is the administration lead on the multilateral process to deal with Iran's nuclear ambitions. His primary, but not exclusive role is to lead the U.S. in the P5+1 talks (the permanent U.N. Security Council members plus Germany). A skilled diplomat, he was previously ambassador to Russia, and assistant secretary for Near East affairs before that. Insiders describe Burns as quietly effective, a reasoned and thoughtful voice. Steve Mull is the key Iran guy in Burns' shop.

Dennis Ross, special assistant to the president and senior director for the central region

Ross's general role at the NSC is as a strategic thinker and coordinator rather than a person with line responsibilities. He works with Puneet Talwar, the NSC senior director responsible for Iran, Iraq, and the Gulf, and they do things in coordination and in parallel on Iran. Ross is consistently a voice but never the only voice when it comes to the Iran discussion.

Bob Einhorn, State Department advisor for nonproliferation and arms control

Einhorn is a technical guy and a seasoned nuclear negotiator who got much of the credit for the now-troubled Geneva deal over transferring Iran's low-enriched uranium to France. Some had expected Einhorn to be named under secretary for arms control, but that job was given to former California Rep. Ellen Tauscher. Their division of labor isn't entirely clear, but Einhorn's influence is important nonetheless.

Stuart Levey, under secretary of the Treasury for terrorism and financial intelligence

Levey's operation has been very successful in targeting banks and the income of key regime officials under existing sanctions. He's an important carryover from the Bush years, bringing demonstrated expertise and skill in leading Treasury's efforts to trace shadowy financial transactions and unravel opaque business connections. Iran is not his sole preoccupation, but he plays a large and growing role, not least due to his ability to act without international or congressional approval.

Dan Poneman, deputy secretary of energy

When the U.S. held talks with Iran over providing fuel to the Tehran Research Reactor in October, Poneman was the lead U.S. negotiator. A nuclear power expert, a key nonproliferation figure in the George H.W. Bush and Bill Clinton administrations, and a former principal in the Scowcroft group, he's widely respected and relied upon for things like how to organize fuel supply or establish proper safeguards. Insiders say he's a problem-solver, not an ideologue.

Gary Samore, special assistant to the president and White House coordinator for arms control and weapons of mass destruction, proliferation, and terrorism

As the WMD czar at the NSC, Samore works with Einhorn and Ponemen on technical matters but is also part of the team coordinating overall policy. Although his portfolio spans the world of proliferation threats, in practice he is very focused on Iran. Observers see him as skeptical of nuclear deals with Tehran. Rexon Ryu, an ex-staffer for retired Sen. Chuck Hagel and a former Foreign Service officer, works for Samore and has been active on Iran at the staff level.

John Limbert, deputy assistant secretary of state for Iran

Limbert is a unique and fascinating player on the administration's Iran team. The most senior Farsi speaker in the U.S. government, he's married to an Iranian woman, served the Peace Corps in Iran, and was an involuntary guest of the Iranian government for 444 days three decades ago. If there's anyone in the administration with a keen sense for the rhythms and nuance of Iranian politics, it's him. The team relies on Limbert, who recently published a book called Negotiating with Iran, when crafting messages to Iran and thinking through how the country's complex internal politics factor in.

Tom Donilon, deputy national security advisor

Donilon, as Jones's top deputy, is charged with managing aspects of the interagency coordination process but also how the policy affects broader issues. How, for instance, do administration moves on Iran affect America's overall diplomatic standing, the White House's relations on the Hill, and in the media?

Jeffrey Feltman, assistant secretary of state for Near Eastern affairs

Feltman is charged with managing U.S. relationships with other regional actors as they relate to the Iran nuclear issue. Many Arab regimes are deeply worried at the direction Iran's nuclear program is heading, and Feltman's role here is to make sure the U.S. government and its embassies are communicating and coordinating with them as the ball continues to bounce.

As Susan Rice's shop in New York pursues multilateral sanctions against Iran at the U.N. and Congress moves its own sanctions regime on Capitol Hill, the Treasury Department is moving forward with targeted actions against a new set of Iranian companies.

Treasury announced Wednesday it is officially affiliating four more companies with the Islamic Revolutionary Guard Corps (IRGC), bringing those companies under the umbrella of Iran sanctions already in place in existing law. The main target is IRGC General Rostam Qasemi, who is also the commander of Khatam al-Anbiya Construction Headquarters, the engineering arm of the IRGC that Treasury says helps the Guards generate income and fund their operations. 

"Khatam al-Anbiya is owned or controlled by the IRGC and is involved in the construction of streets, highways, tunnels, water conveyance projects, agricultural restoration projects, and pipelines," the Treasury Department press release states.

Administration officials are pointing to the move as a sign they are zeroing in on the IRGC specifically.

"As the IRGC consolidates control over broad swaths of the Iranian economy, displacing ordinary Iranian businessmen in favor of a select group of insiders, it is hiding behind companies like Khatam al-Anbiya and its affiliates to maintain vital ties to the outside world," the release quoted the under secretary for terrorism and financial intelligence, Stuart Levey, as saying. "Today's action exposing Khatam al-Anbiya subsidiaries will help firms worldwide avoid business that ultimately benefits the IRGC and its dangerous activities."

Treasury also designated four organizations as being controlled by or connected to Khatam al-Anbiya: the Fater Engineering Institute, the Imensazen Consultant Engineers Institute, the Makin Institute, and the Rahab Institute.

The Senate passed Chris Dodd's Iran sanctions package Thursday evening, following the narrow avoidance of a last-minute crisis over amendments that was solved by ... wait for it ... the mediation of Joseph Lieberman.

That's right. "Joe Lieberman came down and saved the day," one senior Senate aide told The Cable. Here's how it all went down behind the scenes:

Senate Majority Leader Harry Reid was under a lot of pressure to pass the sanctions bill out of the Senate, especially after seven senators sent a bipartisan letter to Obama yesterday urging him to get moving on sanctions. The Dodd bill was extremely popular among senators and Reid has enough problems without being seen as weak on Iran.

Reid had promised to get it done before the break, but if he brought up the bill in February, the administration would complain that it was unhelpful in its drive to seek a new U.N. Security Council resolution on Iran sanctions, which they are expected to do as soon as France takes over the presidency of the council from China next week.

So tonight was the night, before senators leave town, and The Cable reported earlier today that negotiations were underway. As the deadline loomed, only one Senator was threatening to derail the plan to pass the bill easily: John McCain.

McCain’s proposed amendment would require the president to sanction Iranian officials who have committed human rights abuses or acts of violence against civilians engaging in peaceful political activity. Those listed would be subject to visa bans, freezes on their assets in the United States or within U.S. jurisdiction, and other restrictions on their financial activities.

"McCain's amendment would identify Iranian human rights abusers and make them feel some serious pain,” said another senior Senate staffer.

But Reid didn't want to open a Pandora's Box by allowing McCain's amendment and then having to allow amendments by others seeking to weigh in, like John Kerry and Patrick Leahy. He needed everyone on board to pass the bill by unanimous consent and avoid a protracted debate that would eat up precious floor time he doesn't have.

At the eleventh hour, in swooped Lieberman with a compromise. McCain would agree to withdraw his amendment if Reid agreed to add the substance of McCain's amendment into the conference report on the bill. Reid and Senate Minority Leader Mitch McConnell both promised to hold up their end of the bargain, and McCain withdrew his objection to proceeding.

"Lieberman deserves a lot of credit for getting this done," the aide said.

So now the bill goes to conference with the House, which passed Howard Berman's version weeks ago. Does this mean it's time to stock up on petrol and canned goods in Tehran? Not yet; the Democratic leadership will probably wait until the administration's U.N. effort has a chance to play out one way or the other.

And when the conference does happen, the administration will have a role in the crafting of the final version and is likely to continue to argue for things like an exemption for foreign countries that cooperate with American sanctions.

"The next battle will be to make sure the State Department doesn't water this thing down," one senior GOP aide said.

He added that this compromise marks a rare moment of bipartisan cooperation in the upper chamber, saying, "I think this was a good day for the Senate."

Senate Majority leader Harry Reid, D-NV, announced on the Senate floor today that he will bring up Connecticut Senator Chris Dodd's Iran sanctions bill up for a vote during the "current work period."

For those of you who don't follow the Senate calendar, that's a promise to move the bill before the Feb. 15th district work period begins, making the last possible introduction date Feb. 14, Valentine's Day. How sweet!

"At the end of last December, I made a commitment to bring S. 2799 -- the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2009 -- to the Senate floor early during this session of Congress," said Reid. "This critical legislation would impose new sanctions on Iran's refined petroleum sector and tighten existing U.S. sanctions. The act will create new pressure on the Iranian regime and help stop Iran from acquiring a nuclear weapon."

Reid thanked Dodd, Senate Foreign Relations Chairman John Kerry, D-MA, and "other senators" for putting together an agreement to move the bill forward. More on that later...

For a whole lot of background on this subject, read previous posts here, here, and here.

An 11-person delegation from the European Union will not visit Iran this week as planned, due to the tension and uncertainty surrounding the continued violence there.

The news was announced by Iranian Foreign Ministry spokesman Ramin Mehmanparast as a decision "by mutual agreement," but several of the delegation members had already announced their intention to abandon the planned trip, in which European parliamentarians were set to meet with Iranian lawmakers and human rights representatives.

"At the time blood is flowing on the streets of Iran we cannot remain indifferent but it rather upsets and worries us. For this reason we decided to send a signal to the international community, as a protest we will not join a visit already planned by the ‘Delegation for Relations with Iran' on 7 January to Tehran. Before thinking about such openings and any kind of dialogue, the priority is to stop the violence," said Italian lawmakers Scurria Marco, Salvatore Tatarella, and Potito Salatta in a Dec. 28 press release.

The decision is being seen among many as a sign that even the left of the European Iran-watching community is now coming to the realization that engagement of the Iranian regime is not palatable now and the move to the pressure track is the most appropriate way forward.

"We believe that the Iranian government does not deserve any form of opening, but only a strong condemnation, the same expressed by the United States and several European countries," the Italian lawmakers wrote. "Dialogue is impossible as long as the opposition is soaked in blood and the civil rights have been reduced to waste paper."

Also on Dec. 28, the European parliament group "Friends of a Free Iran" put out a press release condemning the violence and noting that the protestors no longer chant against the West, but rather against Ayatollah Ali Khamenei, who they said should no longer be engaged.

"The uprising in Iran shows that the clerical regime is on its way out. Negotiations and trade with, and appeasement of the medieval regime are futile and will only embolden the mullahs in their suppression and killing of the Iranian people," the group, which as of 2006 consisted of MEPs Alejo Vidal Quadras, Paulo Casaca, Andre Brie, and Struan Stevenson, wrote.

More than a dozen U.S. lawmakers had written a letter to protest the EU trip to Iran. Senate Foreign Relations Committee Chairman John Kerry, D-MA, had also been rumored to be trying to go to Iran. Kerry has denied he is going, but the Iranian government has said it received a request from him and now has apparently rejected it.

Top Senate leaders promised Thursday to bring Chris Dodd's Iran sanctions legislation to the Senate floor soon after returning to town next month.

"I want everyone to know that I am committed to getting this legislation to the floor sometime after we return in January," Senate Majority Leader Harry Reid, D-NV, said on the Senate floor just after Thursday's early morning vote on healthcare reform legislation, "It would impose new sanctions on Iran's refined petroleum sector and tighten existing US sanctions in an effort to create new pressure on the Iranian regime and help stop Iran from acquiring a nuclear weapon."

The significance of Reid's comments is that he is committing to moving the bill regardless of whether or not he can get unanimous consent from all 100 Senators, as was attempted unsuccessfully this month. It places pressure on negotiators working on the bill by telling everyone that time is of the essence.

Senate Foreign Relations Committee chairman John Kerry, D-MA, was playing a leading role in negotiations between Congress and the administration over the State Department's concerns about the bill, as communicated in this letter from Deputy Secretary of State James Steinberg. The key issue was how to exempt from the sanctions countries that cooperate with U.S. efforts to punish Iran.

"I know these discussions will be continuing during recess with the intention of reaching a mutually agreeable resolution so that this legislation can be considered as soon as possible when we get back," Kerry said.

In a Thursday morning interview with The Cable, Kerry said that an agreement with the administration was all but complete, but multiple Hill sources said that there were still key items left to be worked out.

The bill could come to the floor any time from January 19, when the Senate is scheduled to get back to business.

"This is a matter of great urgency," said Josh Block, spokesman for the American Israel Public Affairs Committee, "Iran's possession of a nuclear weapons capability would be a devastating blow to America's national security interests. The US and our allies must do everything we can to prevent Iran from acquiring that capacity, and AIPAC strongly applauds the Senate's firm commitment to passing this critical sanctions bill upon their return to Washington." 

Meanwhile, Kerry said he is not, after all, traveling to Iran... at least for the time being. The Cable reported last week he had pitched the idea to the White House and the Wall Street Journal followed with a similar story this morning.

"I may go sometime in the future, but I have no plans as of now," Kerry told The Cable, neither confirming or denying that he had proposed being the first senior official to publicly visit Tehran since the revolution.

"There have been a lot of discussions about Iran that I've been involved with," he said, "We talked about various ways to engage Iran and a lot of proposals have been on the table."

As the Senate negotiates with the Obama administration over Iran sanctions, conflict over a French arms sale to Russia could get caught up in the mix.

The friction between top GOP leaders in Congress and the French government is over the Mistral-class amphibious assault ship, which the French are considering selling to the Russian Federation. As the biggest potential arms sale from a NATO country to Russia, U.S. lawmakers are worried this could set off a chain reaction of NATO arms sales to Russia. Plus, they share the concerns of Georgia and the Baltic states that the ship could allow Russia to increase its aggressiveness in its near abroad.

So what does this have to do with Iran sanctions? Well, The Cable brought you exclusively the story of how the State Department wants changes in the Chris Dodd Iran sanctions bill that's currently pending in the Senate. Basically, the Obama administration wants exemptions for countries that cooperate with American sanctions against Iran. France presumably would be at the top of the list.

But a senior GOP Senate aide told The Cable that Republicans negotiating over the Iran sanctions language would not allow an exemption for France or French companies if the Mistral deal goes through.

"Whether or not France gets an exemption could very well depend on whether France decides to sell this ship to Russia," the aide said, explaining that "it's possible to draw that exemption narrow enough so that the president could not possibly exempt France."

One obvious target is the French oil and gas giant Total, which could be caught up in the Dodd bill's restrictions on exporting refined petroleum products to Iran. Total is reportedly in negotiations right now with the Chinese regarding a joint project in Iran's South Pars region.

The petroleum restrictions are also at the core of a companion bill which passed overwhelmingly in the House last week.

Recently, American lawmakers have increased their interest and activity in the Mistral story.

Six GOP senators wrote to French Ambassador Pierre Vimont Monday to express their concerns about the potential sale. House Foreign Affairs ranking Republican Ileana Ros-Lehtinen, R-FL, introduced a bill last week calling on the French to stand down from the deal.

In a letter dated Monday, obtained by The Cable, Vimont responded to the Senators, telling them basically that France would make its own decisions about selling the ship to the Russians, and thanking them for their interest.

"France has no reason to refuse considering a Russian request, which is being examined, and will be concluded, with all the necessary precautions as part of the French military equipment export control regulatory procedures," Vimont wrote.

In other words, France won't go by the Wassenaar Arrangement on Export Controls  or the European Union Code of Conduct for Arms Exports, as the Senators had wanted.

Vimont also repeated various French defenses of the sale, as told to The Cable by French embassy spokesmen, which include that the ship has been used for humanitarian missions, has no really advanced technological elements, and would not present a credible threat to the NATO alliance.

But multiple Senate aides reached by The Cable felt unsatisfied with that response and pledged to fight on.

"If France decides to go ahead and do this, which the letter all but says they will, our options are limited but it will have consequences for the NATO alliance," one senate aide warned.

U.S. Centcom commander Gen. David Petraeus said last week that the United Arab Emirates, a key U.S. ally in the Persian Gulf, has the capability to overpower Iran's Air Force.

"The Emirati Air Force itself could take out the entire Iranian Air Force, I believe, given that it's got ... somewhere around 70 Block 60 F-16 fighters, which are better than the U.S. F-16 fighters," Petraeus said during remarks at a recent conference put on in Bahrain by the International Institute for Strategic Studies. 

In a related development, the new nuclear agreement between the U.S. and the UAE entered into force today, with the signing ceremony presided over by Under Secretary of State for Arms Control Ellen Tauscher and UAE Ambassador Yousef Al Otaiba.

"In today's world, we must find ways to meet the demand for clean energy and to recognize the right that all nations have to pursue the peaceful use of nuclear power. But we need to achieve this balance without increasing the risk of the proliferation of nuclear weapons and material," Tauscher said.

She praised the UAE for agreeing to import nuclear fuel, rather than producing it through reprocessing or enrichment. Tauscher also praised the UAE as a partner in the drive to prevent Iran from acquiring a nuclear weapon.

The agreement, often referred to as the 123 agreement, provides for transfers of nuclear technology and knowhow to the UAE in exchange for its commitment to nonproliferation standards. (Meanwhile there are still concerns that members of the ruling family of Ras Al Khaimah in the UAE are actually facilitating illicit weapons transfers to Iran.)

President Obama sent the agreement to Congress in May. It was negotiated and signed by the previous administration.

The House is set to pass Rep. Howard Berman's Iran sanctions bill today, only the latest in a long string of moves that will help set the administration up for a switch to the "pressure track" next year.

But the real action over Iran sanctions behind the scenes is focused on Sen. Chris Dodd's package of Iran sanctions bills, which is currently the subject of negotiations between the administration and key senators. The administration's concerns over the Dodd bill were outlined in this letter, first reported by The Cable, which asked for a delay in passing the Senate bill until next year.

Interestingly, the administration didn't send Berman any letter and didn't even bother to copy him on the Senate letter, which was specifically requested and then addressed to Berman's Senate counterpart, John Kerry.

The feeling in Congress, multiple sources told The Cable, is that all parties concerned see today's House action as only the latest in a long series of negotiations about how Iran sanctions might materialize. Also, as is often the case, the Berman bill is likely to undergo significant changes after passage, particularly when it goes to conference and has to be reconciled with whatever the Senate and the administration negotiate.

"Everybody is excited, but hold your horses," said one Hill source. "This has to be thoroughly vetted before it goes to Obama's desk."

That will be a tough fight for House conferees, considering that they will be negotiating against both the Senate and the White House with the implicit and omnipresent message about the Senate bill being, "This is what we can get passed and signed."

Moreover, there's a recognition inside the system that the House version of the bill, as stands, has some provisions that are seen as problematic. For example, the Berman bill would mandate some sanctions that are optional under current law, which the administration fears would raise trade and WTO compliance issues.

Specifically, regarding third countries' complicity in complying with the sanctions, the Berman bill would expand their obligation from having to act on "actual knowledge" of violations, to penalizing countries that have "constructive knowledge" of violations -- in other words, holding them to account for things they should know or should have known.

There are other players on the field as well. Insurance companies and other firms that could be affected are sure to lobby for safe harbor within the sanctions regime through their American subsidiaries.

There is also a dispute over strategy within the Senate negotiators among those pushing for sanctions. Some Senate offices, such as that of Joseph Lieberman, are said to be amenable to pushing back the Senate bill until next year, seeing that as the most pragmatic way to get the legislation signed.

Other offices, such as that of Jon Kyl, are said to be pushing a harder line, wanting to make more political hay out of the issue now by resisting administration calls for a delay.

Either way, when the Berman bill passes later today, while many will be cheering it as a victory, the insiders know that the game has just begun.

As the clock winds down on President Obama's year-end deadline for Iran to respond to his efforts at engagement, Congress is preparing to pass language restricting U.S. loans that aid the Islamic Republic's oil industry.

The policy language is part of the fiscal 2010 state and foreign operations appropriations bill, which is moving on the Hill as part of a mammoth catch-all spending bill that's expected to move through both chambers this month. The bill would prevent the Export-Import Bank of the United States "from providing credit, insurance, or guarantees to any project controlled by any energy producers or refiners that contribute significantly to Iran's refined petroleum resources," according to a summary document.

It's been more than a month since the new fiscal year started and several federal agencies are operating under a stop-gap funding measure called a "continuing resolution" that keeps the government humming but doesn't allow for new funding initiatives to begin. That expires on Dec. 18, giving a semi-firm deadline for Congress to pass the real funding bills.

Democrats had promised not to resort to using such sloppy means of doling out appropriations, as was the usual practice in the Bush administration. But they got hampered by other priorities and the GOP stalled the process further by making issues out of things like funding for prisoners being transferred from Guantánamo Bay, Cuba.

Overall, the state and foreign ops funding would be $48.8 billion of discretionary budget authority for fiscal year 2010, $3.3 billion below the president's request. That's also about $1.2 billion less than what was given in fiscal 2009 including supplemental bills. A fiscal 2010 supplemental is widely expected.

Sources tell The Cable that for fiscal 2011 the administration request will be about 11 percent above that level, or at least that's the number decided on by the White House Office of Management and Budget, subject to further ongoing negotiations. OMB declined to comment.

Here are some of the other highlights in the bill:

• Diplomatic and Consular Programs: $8.227 billion, $1.164 billion above 2009 and $733 million below the request, for diplomatic operations and to hire more than 700 new Foreign Service personnel

• Operating Expenses for USAID: $1.39 billion, $330 million above 2009 and $50 million below the request, to allow USAID to hire 300 additional Foreign Service Officers as part of the Development Leadership Initiative (DLI)

• Assistance for Afghanistan: $2.611 billion, $4 million below the 2009 enacted level including supplemental appropriations and $151 million below the request;

• Assistance for Pakistan: $1.459 billion, $17.5 million above the 2009 enacted level including supplemental appropriations and $123.5 million below the request; and

• Assistance for Iraq: $467 million, $142 million below the request
• Assistance for Israel: $2.220 billion, which combined with the $555 million of forward funding in the 2009 supplemental is the same as the $2.775 billion in the request
• Assistance for Egypt: $1.295 billion in economic and security assistance, which when combined with the $260 million in forward funding in the 2009 supplemental is the same as the request
• Assistance for Jordan: $543 million in economic and security assistance, which when combined with the $150 million in forward funding in the 2009 supplemental is the same as the request
• Assistance for Mexico: $231.6 million, which when combined with $254 million in forward funding for Mexico in the 2009 supplemental, results in a total of $485.6 million for bilateral programs for counternarcotics, law enforcement, and development assistance programs

• Assistance for Central America: $83 million for regional security and law enforcement programs with the countries of Central America
• Assistance for the Caribbean: $37 million for a new Caribbean Basin Security Initiative, which seeks to achieve security and prosperity in the region
• Assistance for Colombia: $522 million
• HIV/AIDS: $5.709 billion (including $350 million for AUSAID HIV/AIDS programs), $200 million above 2009 and $100 million above the request, for international HIV/AIDS prevention, treatment and care programs including $750 million for multilateral programs through the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria

• USAID Global Health and Child Survival Programs: $2.42 billion to USAID, including for HIV/AIDS, which when combined with $50 million for global pandemic programs in the FY 2009 supplemental is $134 million above the request and $440 million above 2009, for other global health programs

Now that the House has passed Barney Frank's Iran divestment bill, the attention turns to the Senate, where Kansas Sen. Sam Brownback is working to advance his companion measure.

Both pieces of legislation have basically the same idea, to allow both public and private entities to more easily rid themselves of investments in the Iranian economy. The measure is being sold as a way to tweak Iran without actually imposing new sanctions.

After the House passed its version by a 414-6 vote, Brownback said he would try to add his bill as an amendment to the Commerce, Justice, and Science appropriations bill, which is on the Senate floor this week.

"I think we've got a pretty good shot at getting it moved. I haven't heard of any opposition to it," Brownback told The Cable.

Senate Banking Committee Chairman Chris Dodd, D-CT, has another Iran sanctions bill that would crack down on refined petroleum exports to Iran and seek to freeze Iranian financial assets.

"You're going to see the banking committee come up with a bundle of steps and there's going to be broad bipartisan support for that as well," Brownback said.

The administration wants Dodd to wait until its ongoing engagement push with Iran plays out. But Dodd is set on moving forward in his committee this month.