I would like to thank my friend, Dean Jessica Einhorn, and the faculty and students here at The Johns Hopkins School of Advanced International Studies for welcoming me back to my alma mater. I can think of no better place to discuss one of the United States’ most critical foreign policy challenges than here at SAIS, the home of an academic program Foreign Policy Magazine recently named number one in the study of international relations. We are all proud of this well-deserved honor. Not that we ever had a doubt! SAIS’ educational mission to train young men and women for diplomacy and business in the modern world continues to be essential for our nation’s future, especially on issues as challenging as the one I wish to discuss today – the future of U.S. relations with Iran.

The United States and Iran – A Complicated History

The United States has no relationship as unique, complex and difficult as it has with Iran. Iran is the only country in the world today with which the United States has no sustained direct contact. That is not true of North Korea or Syria, and it is not true of Libya – with whom we now have nascent relations, following that country’s renunciation of WMD – but it is true of Iran. Indeed, we have had no significant connection with the Government of Iran since 1979, when Iranian students stormed our Embassy and Iran held 52 American diplomats hostage for 444 days. Iran has never apologized for this transgression against the American people – an event still clear in our collective consciousness. It led to over 25 years of polarization between our governments and estrangement between our peoples. And since then Iran’s leadership has chosen, repeatedly, to turns its back on democracy, human rights and responsible action on nuclear issues and terrorism.

It may be hard to imagine now, but Americans and Iranians once shared many common interests. In the early years of the 20th century, Iranians were at the forefront of the first attempt to promote democracy in the Middle East. Between the two World Wars we maintained commercial and important political ties. During the Cold War, the United States had a mutually beneficial alliance with the Shah’s government – a government that, despite its real and deep flaws, helped modernize Iran and make the country an important actor on the world stage.

More importantly, Iranians and Americans in business, sports, the arts and academia grew to know each other well as they created strong and lasting bonds between our societies. By the mid-1970s, over 200,000 Iranians – a phenomenal number – were studying in the United States. To provide a point of comparison, that is more than twice the number of students in the United States from any single foreign country today. Many Iranians under the Shah, of course, wanted more than a robust economy and social freedoms. They wanted a greater voice in their country and broader democracy.

A quarter of a century ago, the Iranian revolution unseated a close U.S. ally in the Shah. After his fall, we nonetheless attempted to engage with Iran’s new Islamic leadership. The forces that had come together in the revolution were diverse but united in their goal of overthrowing the Shah. As in most revolutions, however, they lacked unity when it came time to create a new way forward and a new government. The result was a disastrous and bloody struggle for power that ultimately stifled the Iranian people’s quest for greater freedom and democracy.

By seizing the U.S. Embassy in Tehran and holding American diplomats hostage, Iran’s hard-liners commandeered the new Iranian state and stripped away the very democratic rights which many Iranians had sought. Those who stood for Iran’s democratic future were suppressed. The country’s international standing was shattered, as was its long relationship with Washington. Thus began a new era of complex and troubled relations between Tehran and Washington, characterized by direct Iranian support for Lebanese Hezbollah’s terrorism against the United States, beginning in the early 1980s.

Despite this deep freeze between the U.S. and Iranian governments over the last 25 years, the United States has never wanted to distance itself from the Iranian people. Indeed, the United States has welcomed to its shores tens of thousands of Iranian political refugees and immigrants seeking better lives for themselves and their children. Their community has become an important part of our country. Today, many proud American citizens of Iranian heritage are making significant contributions in every part of our society. They have preserved family and cultural bridges to Iran long after diplomatic contact was broken off. Many Iranian-Americans want for their native country what the Iranian people surely prize – a more democratic future.

Our respect for the Iranian nation remains strong. As President Bush said in June, "The Iranian people are heirs to a great civilization – and they deserve a government that honors their ideals and unleashes their talent and creativity."

Two thirds of Iranians today are below the age of 35 and have no personal memory of the revolution and its hijacking by extremists. They are not responsible for the wave of terror sponsored by Iran’s revolutionary leadership over the past quarter century. But having lived under the strictures of this regime, Iran’s new generation has renewed its historic struggle for political participation, free speech, and openness to the world. Many young Iranians desire an improved relationship with the United States. Over the past decade, this new generation has begun to make its voice heard – despite the attempts of hard-liners to silence it. By the late 1990s, Iran appeared to be shifting toward reform and popular aspirations for democratic government.

Tragically for the people of Iran, the hard-line defenders of absolute clerical rule struck back to suppress reforms and, for the moment, appear to be prevailing. They have used their control of the security forces, the judiciary, and other levers of power to frustrate reform and suppress critics. There is a clear struggle underway between the reactionary Iranian government and the moderate majority.

In February 2004, for example, the ruling authorities blocked thousands of candidates from running in the Majles elections, including sitting members. When reformist members of the Parliament signed a petition to the Supreme Leader asking for more democracy they were threatened with arrest and stripped of their parliamentary immunity. And in this year’s presidential election, only eight of the 1,012 declared candidates were permitted to have their names on the ballot in June's presidential elections. In the past few years alone, unelected clerics vetoed every piece of reformist legislation passed by the parliament, closed hundreds of newspapers and weblogs that dared to criticize the Islamic system, and sanctioned repression against dissidents. A recently-released "open letter" signed by more than 650 prominent Iranian intellectuals and political figures reads, in part, "It is essential to remind those in power that they are the servants of our nation and no one in whatever position is permitted to consider himself the absolute and perpetual ruler of our nation by exerting total control over all branches of the government."

In August, the country’s clerical and military leaders supported the Mayor of Tehran, Mahmoud Ahmadi-Nejad, for the presidency. In their four months in office, President Ahmadi-Nejad and his cabinet have pursued a highly ideological and confrontational foreign policy that is isolating Iran from the international community. In his first weeks in power, the new president suspended negotiations with the UK, France and Germany on nuclear issues. In September at the UN General Assembly, Ahmadi-Nejad stunned the world with a combative speech in which he insisted Iran would pursue a nuclear future against the wish of nearly all nations. He has turned to the alumni directory of the Iranian Revolutionary Guard Corps to fill many cabinet positions. In addition, he removed nearly 40 experienced Ambassadors from their posts. Moreover, Ahmadi-Nejad called for Israel "to be wiped from the face of the earth" and then defended this shocking statement when the entire international community repudiated it. For a world leader to call for the destruction of a nation-state and member of the United Nations is outrageous and intolerable. Through his statements and actions, President Ahmadi-Nejad is digging a hole for himself and he appears determined to keep on digging.

As we look to 2006, Iran is pursuing a radical course through its pursuit of a nuclear weapons capability, its notoriety as the world’s leading supporter of terrorist groups, and its deplorable treatment of its own people. In each of these areas, Iran holds a position inimical to the world community and is moving backward against the tide of international opinion. In coordination with our allies, U.S. policy strives to isolate Iran, promote a diplomatic solution to I Iran’s nuclear ambitions, expose and oppose the regime’s support for terrorism, and advance the cause of democracy and human rights within Iran itself.

Iran’s Nuclear Ambitions

The United States and the world community are acutely concerned by Iran’s pursuit of a nuclear weapons capability. Increasingly, Iran stands isolated from the rest of the world in pursuit of its nuclear ambitions.

There is no real international debate about Iran’s nuclear intentions among the major countries of the world. In our diplomatic exchanges with Iran’s neighbors and with many countries in Asia and Europe, we have heard strong and consistent concerns that the current Iranian government is determined to construct a complete nuclear fuel cycle infrastructure which would lead logically to the manufacture of fissile material. Mastery of the fuel cycle would give Iran the possibility to produce nuclear weapons.

If weapons capability was not Iran’s ultimate objective, why would its leaders have hidden such sensitive aspects of its nuclear activities for 18 years, only acknowledging their efforts when confronted by the International Atomic Energy Agency (IAEA)? Why has Iran refused to grant the IAEA access to documents, sites and people the Agency has requested to see? If Iran’s nuclear aims were peaceful, why would this country continue to insist it must have now an independent uranium conversion and enrichment capability, even though it has no need for enriched uranium for nuclear power generation for at least a decade?

Why, when the Iranian regime was elected on a pledge of economic recovery, would Iran continue spending billions of dollars on a nuclear infrastructure it does not need? Why is Iran operating a uranium conversion facility and constructing a heavy water reactor in defiance of the IAEA Board, which found Iran in September to be in non-compliance with its safeguards obligations? Finally, why would Iran, according to IAEA Director General Mohammed El Baradei, have information for casting and machining enriched uranium metal into hemispheres – information which clearly applies only to nuclear weapons?

The United States acknowledges the right to nuclear energy for peaceful purposes, provided a country’s nuclear activities are in conformity with its nuclear Nonproliferation Treaty (NPT) obligations – to develop a peaceful program under international verification. But, the IAEA has confirmed that Iran broke its safeguards pledge. Because Iran failed to meet the conditions under which it had obligated itself to pursue nuclear technology, it must now provide the international community with objective guarantees that its nuclear program will be peaceful – including no enrichment or reprocessing in Iran – and it must rebuild the confidence it has lost. Iran is like a person who has fallen into bankruptcy. He may believe he has a right to a bank loan, but the bank manager has no obligation to give him one until he earns back the bank's trust.

And that is Iran’s fundamental problem: its plea that its nuclear objectives are entirely peaceful is not trusted by much of the world. With the possible exceptions of Cuba, Syria or Venezuela, not a single government wants to see Iran proceed unchecked toward full possession of the nuclear fuel cycle. An Iran in possession of nuclear weapons is unthinkable for all who value security and peace. A nuclear-armed Iran would pose an incalculable risk to its Arab neighbors, to the countries of the greater Middle East and to Europe.

President Bush and Secretary Rice have noted publicly our support for the EU-3’s diplomatic negotiations with Iran, aimed at obtaining from Iran objective guarantees that Iran's nuclear program would be solely for peaceful purposes. We hoped the EU’s approach would permit Iran to derive the benefits of nuclear power without the possibility of pursuing a nuclear weapons capability. To support the EU-3, the United States offered its own incentives in March – that we would consider licensing the sale of spare parts for Iran’s aging civilian airliners and dropping our prior objections to Iran’s bid to join the World Trade Organization. Unfortunately, Iran unilaterally violated its agreement with the EU-3 by breaking the suspension of uranium conversion and has since refused to return to the table. Iran has reacted coolly to Russia’s recent suggestions for a return to talks.

The United States is working closely with the Europeans, Russia, India, China and other countries with the hope of forming one increasingly united and purposeful coalition to deter Iran’s efforts. This circle of countries is widening. Iran should listen to the call for it to return to active and sustained negotiations with Europe.

If Iran does not do so, then it will face, at a time of our choosing, a UN Security Council debate to support and reinforce the work of the IAEA. Our patience is not unlimited. The world is unifying around the goal of Iran relinquishing its pursuit of nuclear weapons. We remain confident that a united, international consensus can, in a peaceful way, convince Iran to turn back from its nuclear ambitions.

It is not too late for Iran to reconsider its nuclear ambitions. It could yet choose to emulate Libya, which concluded in December 2003 that pursuit of WMD hindered both its security and economic development. Brazil, Argentina, South Africa, Ukraine and Kazakhstan are other examples of states that concluded nuclear weapons were not in their interest. All of these countries benefited from the trust they earned in the world by increased investment, expanded regional leadership roles, improved and better long-term security, and enhanced international ties.

Iran’s Support for Terrorism

Iran remains the world’s most active state sponsor of terrorism. At a time when nearly all the world’s governments are distancing themselves from groups that engage in terrorism, Iran has retained close links to the most notorious terrorist groups in the Middle East. And when Palestinians and Israelis are rightfully earning the dividends from the Gaza withdrawal and the opening at Rafa, Iran is moving in the opposite direction by encouraging terrorism to thwart progress toward peace.

The world community needs to find a stronger voice in opposing Iran’s support for terrorism. The U.S. remains deeply concerned about Iran's connections to numerous terrorist groups. Its role in providing weapons, funding and guidance to Hezbollah represents a threat to Lebanon’s fragile peace and is an affront to the millions of Lebanese who rallied in February against external interference in their country’s affairs. Independently and through Hezbollah, Iran also provides significant support to Palestinian terrorist groups such as Hamas and Palestine Islamic Jihad. Iran continues to host senior al-Qaeda leaders who are wanted for murdering Americans and other victims in the 1998 East Africa Embassy bombings.

We have called repeatedly for these terrorists to be handed over to states that will prosecute them and bring them to justice. We believe that some al-Qaeda members and those from like-minded extremist groups continue to use Iran as a safe haven and as a hub to facilitate their operations. We call on Iran to abide by the requirements of UN Security Council Resolution 1373 to deny safe haven to those who plan, support, or commit terrorist acts and to take affirmative steps to prevent terrorist acts by providing information and early warning to other states.

In Iraq, we see troubling indications of Iranian interference. Secretary Rice has registered her concern about Iran’s involvement in that country. The United Kingdom has made public statements concerning Iranian support for Iraqi insurgent groups.

Iran’s efforts to influence in a negative way Iraq’s internal politics undermines Iraqi sovereignty and encourages sectarianism. This is contrary to Iran’s repeated claims to support stability and peace in Iraq.

Iran should renounce in word and deed any support to individuals and groups that support instability, insurgency and terrorism in Iraq, and elsewhere.

Iran’s Human Rights Record

Iran’s domestic human rights record remains abysmal. The government continues to commit serious abuses, including summary executions, disappearances, torture and other inhumane treatment. This record has summoned severe international criticism. Earlier this month, the UN General Assembly passed for the second year in a row a resolution deploring Iran’s treatment of its own people. The United States gave vigorous support to this resolution. It sends an important signal to the Iranian people that the world recognizes their plight, and to the Iranian Government, that dialogue on human rights is no substitute for improving its record. U.S. and international policy should be to take active steps to advance the cause of democracy in Iran.

We will continue to highlight the regime’s dreadful human rights record and its ongoing mistreatment of domestic advocates for reform. We will work with other countries for the release of all political prisoners, including journalists Akbar Ganji, Reza Alijani, and Hoda Saber; student activists such as Manouchehr Mohammadi; and crusading lawyers Taghi Rahmani and Nasser Zarafshan. We will also continue to demand – along with the Canadian government and others – that those responsible for the murder of Canadian journalist Zahra Kazemi while in government custody are brought to justice. And we will continue to press the government of Iran to accord the basic human freedoms of speech, worship and assembly to all its citizens – women and men; Azeris, Kurds, Arabs, Baloochis and other ethnic groups; Shia, Sunnis, Christians, and Ba’hais.

Iran’s advocates for change, its dissidents and writers are the latest heroes in that country’s long struggle for a more responsible and representative government. We recognize that Iran is a complex society and that the current regime has been buffeted by fractious power struggles and even internal efforts to promote gradual change. Today, however, the issue is no longer the "moderates" versus the "hard-liners," but the Iranian public’s growing disaffection with the entire clerical system. Many Iranians apparently voted for Ahmadi-Nejad in the hope that he would crack down on corruption and generate more economic opportunities and a better life for the average Iranian.

Instead, the Tehran stock exchange has plunged 25% since the election. The Majles has rejected all three of his nominees for oil minister. There are rumors of significant capital flight, and little appetite among foreign investors to fill the void as the government relies on high oil prices to cure social problems without meaningful economic reform. Instead of rivaling Turkey and South Korea in economic and social indicators as it once did, the last 25 years of radical rule in Tehran have landed the country 106th on the UN’s Human Development index.

And let me return for a moment to the link between Iran’s economic aspirations and its pursuit of a nuclear weapons capability. As one assesses Iran’s intentions, it is impossible to ignore the fact that Iran is choosing to invest in nuclear capability over all other rational choices for economic development. Moreover, Iran’s pursuit of the nuclear fuel cycle has led to a suspension of talks with the EU on a Trade and Cooperation Agreement, and is at least contributing to a general cooling of foreign investment in Iran. Is this a regime that is acting as if improving the lives of average Iranians is its priority?

As we reflect on its first four months in power, the new Iranian government of President Ahmadi-Nejad has pursued a radical course in pursuing an irresponsible nuclear weapons program, continued massive support for terrorism, and denial of basic human rights to its own people.

The world now needs to react to this radical shift in Iran’s behavior. During the eight years of the Khatami government, when reform was at least a hope, many around the world adopted a strategy of engagement with Iran. Isn’t it now time to consider a different approach toward the new, more radical, more intolerant Iranian regime?

Through its diplomatic contacts and its trade and investment, the world does have leverage – and that leverage should be used constructively now – to convince the hard-liners in Tehran that there is a price for their misguided policies. Like any other country, the United States would be prepared to respond if Iran changed its policies fundamentally, but there is little evidence of such inclinations in the new government.

History teaches that oppressive regimes do not survive forever. The history of the past quarter-century in Europe also teaches that democracy can triumph over dictatorship. Events in the Middle East in 2005 resulted in a new Lebanon emerging from 29 years of Syrian domination. The same laws of history shall apply in the future to Iran. Given the clear aspirations of Iran’s younger generation, we hope that some day Iran will become a powerful force for peace, prosperity and democracy in the Middle East. Such an Iran would have good relations with all of its neighbors and would be an entirely changed country for all its citizens.

What the United States is Doing

The government in Tehran knows what the international community expects, and what Iran must do to return to a normal relationship with the U.S. The choice is clearly with Tehran.

The absence of diplomatic ties with the Iranian government has never stopped America’s determination to support the Iranian people in their desire for a more democratic future. Since May 2003 we have funded a Persian-language website that serves as a "virtual embassy" by providing a channel for official U.S. statements in Farsi. We are also funding political discussion in Farsi with television and radio broadcasts on the Voice of America, and news and music broadcasts on Radio Farda, a service aimed at the large population of younger Iranians.

In 2004, we provided one million dollars to document human rights abuses inside Iran and $500,000 for National Endowment for Democracy programming. As we announced in May, this year we will obligate $3 million in Congressional appropriations for democracy programs to support educational, humanitarian and non-governmental organizations in advancing democracy and human rights in Iran. Congress has also earmarked $6.55 million for similar programs related to Iran and Syria for next year, and there is an expectation that additional funds may be programmed to support democracy in Iran.

The Administration is appreciative of Congress’ support for the resources that enable us to implement the President’s Freedom agenda and reach out to the Iranian people. Our commitment of funds is tangible evidence of the United States’ support for a better future for the Iranian people. Through our public statements, internet, radio and TV in Farsi, we will continue to reach out to the broad range of Iranians pressing for change.

Slowly, many in the region – including Lebanon, Egypt, the Palestinian Authority and the countries of the Arabian Peninsula – have begun to undertake important political, economic and social reforms that are providing new political space and economic opportunities for countless citizens in the Middle East. At the same time – and in sharp contrast – an ossified, repressive Iranian government remains determined to resist a more open and democratic future.

In vivid contrast to their government, the Iranian people are moving in a positive direction. We know that the Iranians – like so many others who lack freedom – desire a more open society, freedom of opportunity, free and fair democratic elections, and healthier more constructive relations with the United States. Even from the distance our diplomatic estrangement imposes, we see signs of a complex, multi-faceted movement for a democratic future in Iran. It extends from the students who have rallied for greater freedoms, to the intellectuals, writers and journalists who have resisted censorship, the new thinkers in its seminaries, the government employees trying to promote progressive policies, and the teachers and workers who have protested their low pay.

As President Bush has said, "The Iranian people deserve a genuinely democratic system in which elections are honest and in which their leaders answer to them instead of the other way around."

Americans share the Iranian people’s vision for a prosperous, peaceful and democratic Iran. We are committed to helping them achieve their goal. We are equally dedicated to ensuring that those in the regime who are taking their people down a path with no hope or vision for its people or the region will not succeed. The irrepressible human desire for freedom is clearly imprinted on the hearts of the Iranian people. Working together, we are confident that they will someday prevail.