Israeli Intelligence Minister Yuval Steinitz said in an interview that it would be a mistake for the Obama administration to relax its sanctions on Iran or free up tens of billions of dollars in frozen Iranian funds, highlighting Jerusalem’s growing concern that the Obama administration may be willing to make too many concessions to Iran during the current nuclear talks between the two longtime adversaries.
Steinitz, a close political ally of Israeli Prime Minister Benjamin Netanyahu, told The Cable that the punishing Western sanctions that have been imposed on Iran are the only reason that government of Iranian President Hassan Rouhani is willing to engage in direct talks with the Obama administration. With the Iranian economy in free fall, Steinitz said the sanctions should be kept in place, or even strengthened, until Iran agreed to fully dismantle its nuclear weapons program.
“Iran is now coming to the negotiating table solely because of the pressure,” Steinitz said in the interview. “They are really on the verge of the collapse and that's the reason they're coming to the negotiating table with some willingness to negotiate.”
There’s no question that the current sanctions have devastated the Iranian economy. The measures have sharply limited overseas investment in Iran’s energy sector, locked foreign financial institutions that do oil-related business with Iran’s central bank out of the U.S. banking system, and required banks around the globe to freeze more than $50 billion of Iranian money. Steinitz said Israeli intelligence estimates that the sanctions have cost the Iranians at least $100 billion over the past 18 months and thrown the country into a deep recession.
Steinitz’s trip to Washington this week comes at a pivotal moment in the long Western campaign to persuade Tehran to abandon its nuclear ambitions. Senior U.S. officials who met with their Iranian counterparts in Geneva last week said the Iranian delegation signaled a willingness to take steps -- including opening its facilities to intrusive international inspections and no longer enriching uranium to near weapons-grade levels -- that wouldn’t have been on the table even a few months earlier.
If Iran carries out those commitments, senior administration officials have said that the U.S. would consider freeing up some or all of the roughly $50 billion in frozen Iranian money as a confidence-building measure.
The prospect of Iran gaining access to those funds has triggered alarm bells in Israel, which worries that it would give Tehran a much-needed influx of cash and soften the economic pressures facing the regime. In the interview, Steinitz said that the U.S. and its allies have all of the leverage in the current talks and shouldn’t give up any of it unless Iran agreed to entirely abandon its nuclear push.
"The pressure on the regime is enormous. You can get a very serious agreement for this. Don't give it up so easily,” he told The Cable. “And don't give them extra oxygen while you're negotiating with them. On the contrary, increase the pressure."
At least for now, the Obama administration seems to prefer a different approach. Wendy Sherman, the State Department’s chief nuclear negotiator, has won over Iran hawks like Democratic Rep. Eliot Engel of New York by promising that the administration would support legislation imposing hard-hitting new restrictions on Iran's mining and construction sectors if Tehran didn’t appear willing to make significant concessions during the current talks. At the same time, she has asked Congress to hold off on imposing new sanctions on Iran while the negotiations continue. That’s a significant departure from Israel’s call for the imposition of new sanctions while the talks are still taking place.
Washington’s early optimism about the current talks with Iran has been deeply unsettling to both Israel and many of the Sunni monarchies of the Persian Gulf. Steinitz will use this week’s visit to convey those concerns to the administration and push it to keep the current measures in place. It won’t have been the first time that a senior Israeli official has made that case, and it won’t be the last.