Hamas and Hezbollah in Flux/ Sanctioning Iran’s Central Bank
Dec 13, 2011
December 13, 2011
Number 12/11 #03
This Update features two pieces on how Damascus-dependent terrorist organisations Hamas and Hezbollah have coped with the possible loss of President Bashar al-Assad as a key ally in the wake of the recent unrest in Syria.
First up is veteran Israeli Arab Affairs analyst Pinhas Inbari, who looks at Hamas’ situation in the wake of the uncertain future in Syria and also Egypt. He notes that the leadership of Hamas is quite happy to be moving its alliance from Damascus to a Cairo dominated by their Muslim Brotherhood allies, as looks likely to eventuate. However, he notes that this new alignment is likely to place great stress on the movement because neither the Brotherhood nor the Egyptian military can tolerate Hamas’ overwhelming focus on “resistance” – violent confrontation with Israel – given their own need for peace along the Egypt-Israel border. For Inbari’s complete look at Hamas’ new dilemmas, CLICK HERE. Some more on Hamas’s quest for a new home, and the rising power in Gaza of Palestinian Islamic Jihad, now being intensely funded by Iran as an alternative to Hamas, is here. Meanwhile, reports say Hamas is setting up a rocket building factory in Sinai to escape Israeli attacks on such factories in Gaza.
Next up, the British-Israel Communications and Research Centre has a new analysis of the dilemmas of Hezbollah in Lebanon, which is even more dependent on Damascus than Hamas. The analysis makes it clear that Hezbollah’s alignment with the increasingly isolated regime in Damascus is a disaster for the international image Hezbollah is trying to project in the Arab world, and is already eroding its standing within Lebanon. The BICOM paper goes on to analyse Hezbollah’s efforts to deal with this new reality, as well as the implications for Israel. For all the details, CLICK HERE. Plus, a report Hezbollah may stage a military coup if the Assad regime falls, plus an interesting take on Hezbollah’s reported discovery of a CIA spy ring.
Finally, noted American foreign policy expert Ilan Berman discusses the recent international focus on sanctions against Iran’s Central Bank as the key to the sanctions regime against the Iranian nuclear program. Berman argues that the reason behind such a focus is simple, – it is “one of the most potent ways to hit Iran’s chief export commodity: oil.” He goes on to argue that US Administration’s concerns that such sanctions could adversely affect international petroleum prices, and thus the world economy, are probably exaggerated. For Berman’s argument in full, CLICK HERE. Meanwhile, the Washington Post published an editorial arguing that on the Central Bank sanctions and other recent issues, the US administration is sending the wrong signal to Iran. More details on the American political debates about measures to sanction Iran’s Central Bank are here.
Readers may also be interested in:
- American Middle East specialist Ray Takeyh makes an interesting argument to explain why Iran continues to defy international sanctions on its nuclear program.
- Israeli academic and former Ambassador Dore Gold explains why efforts to link Iran’s nuclear program to Israel’s are wrong.
- New evidence that Iran played a significant role in the 1998 al-Qaeda attacks on two US embassies in Africa.
- An essay on why some intellectuals make excuses for the Iranian regime.
- Following up on our last Update on the Salafists of Egypt, some analysis of the Salafist movement in Tunisia.
- Despite rising antisemitism in Egypt and other countries post-revolution, Arab revolutionaries still look to Israel as a model of democracy they would like to emulate.
- An anonymous Syrian author reveals the reality of the situation inside Syria in an important article in the New York Review of Books. Meanwhile, the rebel Free Syrian Army is claiming more success in getting Syrian soldiers to switch sides, and there are more reports of military battles between the sides, suggesting the unrest is becoming something resembling a civil war.
- A new video on the reality of the refugees from the 1948 war – plus some additional comments from a representative of the Association of Jews from the Middle East and North Africa.
- Rockets have been hitting Israel from Gaza in numbers over the weekend, (see here and here) though there is little reporting of this in Australia. Video of an Israeli counter-attack on a Hamas weapons factory illegally operating amidst civilian housing is here.
- Meanwhile, Israeli Ambassador Ron Proser invites American readers to imagine similar rockets were hitting Texas from Mexico or Seattle from Canada.
- Israel again offers unconditional direct peace talks with the Palestinians, but is rebuffed.
- US Secretary of State Hillary Clinton sparked controversy with reported in-camera remarks about, among other things, bus lines in Israel which reportedly allow legally non-binding gender separate seating as preferred by some ultra-Orthodox Jews. An Orthodox Jewish woman reports on the reality of such buses. Plus, Israeli PM Netanyahu and President Peres speak out on this issue.
- New demographic data seems to suggest that claims that Israel faces a “demographic threat” are likely exaggerated.
- An example from the many stories and comments now appearing at AIJAC’s daily “Fresh AIR” blog:
Jerusalem Issue Brief
Vol. 11, No. 21 9 December 2011
- Hamas is abandoning the sinking ship of Syria and many senior cadres have already settled in Gaza. At the same time, Iran has cut its subsidy to Hamas.
- Not only is there a need to find new accommodations for Hamas political leader Khaled Mashaal and company, but there is also a political price: the need to decrease terror and transform itself from a pro-Iranian/Syrian “muqawama” (“resistance”) movement into a typical political party of the Muslim Brotherhood-type that are now in the process of taking control in the Arab world.
- The Hamas leadership in Gaza prefers engagement with Cairo because the prospects of Muslim Brotherhood dominance are much more advanced in Egypt and the close vicinity to Gaza is promising for an eventual joining of forces to advance to the restoration of the worldwide Islamic Caliphate.
- The problem is that both the Egyptian military and the Muslim Brotherhood cannot accept it as a militant movement that threatens the precarious security situation in Egypt and the delicate balance the Brotherhood wants to establish with the military in Cairo. It is not that the Brotherhood doesn’t care whether Hamas continues to be a “resistance” movement – to the contrary – but as long as they don’t do it from Cairo.
- So what can Hamas do? Abandoning the “resistance” is a non-starter; conducting resistance from Gaza is possible, but the leadership is not sure if they can sustain another Israeli blow of the scope of Israel’s 2009 operation. They may aspire to move the “resistance” to the West Bank – and this is exactly what they are currently trying to do – but here they face the IDF.
In December 2011, reports from several directions converged to suggest that Hamas is abandoning the sinking ship of Syria: that many senior cadres have already settled in Gaza and only the upper echelon of leadership that bears symbolic meaning still remains in Damascus.1 By and large those reports are correct. At the same time, Iran has cut its subsidy to Hamas, which now relies mostly on revenues from commerce through the smuggling tunnels, which can hardly support the Gazan economy.2
These new developments caught Hamas unprepared. Not only is there a need to find new accommodations for Hamas political leader Khaled Mashaal and company, but there is also a political price: the need to decrease terror and transform itself from a pro-Iranian/Syrian “muqawama” (“resistance”) movement into a typical political party of the Muslim Brotherhood-type that are now in the process of taking control in the Arab world. In other words, to undo Sheikh Ahmed Yassin’s old decision to turn the political/social Muslim Brotherhood group that operated in Gaza until the eve of the First Intifada into a military group, despite the objection of the Muslim Brotherhood leadership in Cairo.3
As far as the Hamas leadership in Gaza is concerned, of all the options available, they prefer engagement with Cairo because the prospects of Muslim Brotherhood dominance are much more advanced in Egypt and the close vicinity to Gaza is promising for an eventual joining of forces to advance to the restoration of the worldwide Islamic Caliphate. The problem faced by Hamas is that both the Egyptian military and the Muslim Brotherhood cannot accept it as a militant movement that threatens the precarious security situation in Egypt and the delicate balance the Brotherhood wants to establish with the military in Cairo. It is not that the Brotherhood doesn’t care whether Hamas continues to be a “resistance” movement – to the contrary – but as long as they don’t do it from Cairo.
The same applies to Jordan. The new prime minister of Jordan, Judge Awn Khasawneh, made it clear that he was interested in opening a new page with Hamas and that the old decision to shut down its offices in Amman was a mistake. There are frequent reports that Hamas leader Khaled Mashaal is about to pay a visit to King Abdullah II in the royal palace, yet no date for the visit has been announced.
For Hamas to open a bureau in Cairo, what is needed is a clear-cut and reliable commitment that “resistance” business will not be planned and directed from there. For re-opening a Hamas office in Amman, besides the same commitments, there are further complications that are related to inter-Arab disputes.
The declared policy of Jordanian Prime Minister Khasawneh, as well as the elections in Morocco that brought to power the Justice and Development Party – which is a Muslim Brotherhood party – was not approved in Riyadh, where the Saudis have taken a firm position against the Brotherhood.4 As a result, the price that Jordan might pay for hosting Hamas could be the denial of its joining the Gulf Cooperation Council (GCC), which might inflict a blow to Jordan’s economy. The same applies to Morocco, especially now after the leader of the Muslim Brotherhood in Tunisia, Rashid al-Ghannouchi, threatened that all the monarchies in the Middle East are not immune from collapse.5
While Salafist Saudi Arabia is taking a firmer position against the Muslim Brotherhood, its tiny neighbor, the Emirate of Qatar, is championing the Brotherhood’s spread across the Middle East. The widening gaps inside the GCC are adversely affecting Hamas’ prospects to be re-installed in Amman, since the main go-between is Qatar which insists on having a senior member of the emir’s family accompany Mashaal on his scheduled visit to the royal palace in Amman.
Not only is Saudi Arabia angry at Qatar’s policy of promoting the Muslim Brotherhood, Iran and Syria are even more so. The presence of high-ranking Qataris accompanying Mashaal can only mean a complete divorce between Hamas, on the one hand, and Syria and Iran, on the other. This Hamas cannot afford, and all sides have personal knowledge of how Iran can be cruel as a spoiler.
So what can Hamas do? Abandoning the “resistance” is a non-starter; conducting resistance from Gaza is possible, but the leadership is not sure if they can sustain another Israeli blow of the scope of Israel’s 2009 operation. They may aspire to move the “resistance” to the West Bank – and this is exactly what they are currently trying to do – but here they face the IDF.
The bottom line: The advent of Muslim Brotherhood government across the Middle East and especially in Egypt is good news for Hamas. But on the other hand, they are about to lose their safe haven in Damascus. In order to share in the Muslim Brotherhood success and relocate to Cairo or Amman, they have to leave behind their “resistance” spirit – at least for now – and that they cannot do. At the same time, they cannot re-open the Gaza front and their preferred option is to move the “resistance” to the West Bank – where they find the IDF.
3. Pinhas Inbari, The Palestinians: Between Terrorism and Statehood, (Brighton, 1996), p. 138.
4. Dore Gold, “The Saudis Despise the Muslim Brotherhood,” Israel Hayom (Hebrew), December 2, 2011, http://www.israelhayom.co.il/site/newsletter_opinion.php?id=7546&newsletter=02.12.2011.
Pinhas Inbari is a senior policy analyst at the Jerusalem Center for Public Affairs. He is also a veteran Palestinian affairs correspondent who formerly reported for Israel Radio and Al Hamishmar newspaper, and currently reports for several foreign media outlets.
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- Hezbollah leader Hassan Nasrallah made a rare public appearance on Tuesday 6 December, reaffirming his support for the embattled Syrian regime, and promising that his movement’s armed forces were stronger than ever. But behind this defiant stance, the movement faces serious challenges as a result of the Syrian uprising.
- The Assad regime is a key conduit for arms supplies to Hezbollah. Assad’s influence in Lebanon also enables Hezbollah to maintain its independent military infrastructure. Were Assad to fall, all of this would be likely to change.
- Hezbollah’s activities against Syrian oppositionists in Lebanon and vociferous support for Assad are harming Hezbollah’s carefully crafted image as a champion of Arab peoples against unrepresentative rulers.
- Hezbollah and Syria are vital tools for Iran to project its influence into the Arab world and to threaten Israel’s borders. Should Assad fall, it would represent a major loss for the Iran-led bloc in general.
- Hezbollah has been effectively deterred from attacking Israel since 2006. However, given the high stakes involved, the possibility of Hezbollah raising tensions with Israel, as a means to divert attention from the pressure on Assad, cannot be ruled out.
Why is Hezbollah concerned about events in Syria?
Hezbollah, which is the dominant force in the Lebanese government, has perhaps the largest stake in the survival of the Assad regime of any regional element, other than Assad himself. Why is this and how is Hezbollah seeking to respond to this threat?
Syria played a key role in facilitating Hezbollah’s growth from a sectarian militia into a formidable political and paramilitary force. Damascus, on the commencement of its occupation of Lebanon in 1990, disarmed all militias with the exception of Hezbollah, permitting the movement to continue attacks on Israeli forces in the south. Hezbollah is primarily a client of Iran with whom it shares a radical Shia Islamist ideology. But Syria, as the only Arab state allied with Iran and the dominant power in Lebanon from 1990 to 2005, has been vital in facilitating Hezbollah’s growth. Damascus allowed Hezbollah to train and store weaponry within Syria. The Syrian capital also served as the key conduit for Iranian weaponry on its way to Hezbollah.
Following the Syrian departure from Lebanon in 2006, Hezbollah, working with Syria’s allies in the Shia and Christian communities, moved to secure control of the reins of government in Lebanon. This process culminated in January 2011, when the pro-western and pro-Saudi March 14 movement withdrew from the government, leaving Hezbollah and its allies ruling the country alone.
During the Second Lebanon War in 2006, Lebanon’s eastern border with Syria served as Hezbollah’s strategic hinterland. The movement was able to bring supplies across the border and evacuate wounded fighters, knowing that if Israel interfered with this process, it would have risked war between Syria and Israel. Since 2006, Syria has been a key staging point for Iranian weaponry as Hezbollah has rearmed.
Given the importance of Syria to Hezbollah, the events in Syria are putting increasing pressure on the movement. Around 4,000 people have been killed by the Assad regime in the wave of protests that have swept the country. With the opposition increasingly organised and armed, the situation is moving towards that of a civil war.
Hezbollah, meanwhile, out of strategic necessity remains staunchly on the side of the regime. This is having a negative effect on perceptions of the movement both in Syria and in the wider region. Hezbollah tries to present itself as a movement of muqawama (resistance) in the Middle East, representing the supposedly shared interests of Arab and Muslim peoples against the US, Israel and their allies.
Today, however, Hezbollah is openly allied with a sectarian, Iran-aligned, non-Sunni regime which is engaged in the savage repression of its own, mainly Sunni Arab people. Such a situation represents a disaster for the image Hezbollah wants to project.
Should Assad eventually fall, he would likely be replaced by a regime dominated by the country’s Sunni Arab majority, which constitute 60-65% of Syria’s population. They are dominant in the ranks of the uprising and in the leadership of the Syrian National Council (SNC), the main opposition coalition. A Sunni-dominated Syria would likely seek new alliances for the country, away from the Iran. For example, SNC leader Burhan Ghalioun said last week that an SNC-ruled Syria would work to rebuild links with Egypt and the key Arab countries of the Gulf, as opposed to Iran.
Such a scenario is of deep concern to Hezbollah, since it could significantly alter the balance of power in Lebanon between the movement and its more pro-Western March 14 rivals. March 14 is dominated by the Mustaqbal (Future) movement of former prime minister, Sunni leader Saad Hariri. A Sunni-dominated Syria, with natural links to Sunni forces in Lebanon, would radically shift the internal balance of power in its smaller neighbour.
This change could jeopardise Hezbollah’s ability to preserve its independent military infrastructure and freedom to take military action against Israel without consulting with other Lebanese elements. Hezbollah’s independent armed forces are key to its power within Lebanon. When aspects of its independent military and decision-making capacity were challenged in 2008, it was prepared to use violence within Lebanon to force its opponents to back off. But with a Sunni regime in Syria, Hezbollah’s ability to intimidate its domestic opponents may be undermined. Within Lebanon itself, the Syrian situation is already leading to increased polarisation. Last week, a rejuvenated March 14 movement held a mass rally in the northern Lebanese, Sunni town of Tripoli where anti-Hezbollah and anti-Syrian banners were flown.
How is Hezbollah responding?
Syrian opposition elements maintain that Hezbollah members have been actively supporting Assad’s efforts to crush the revolt. Little proof has yet emerged to back up these claims. However, there are credible reports that Hezbollah is cooperating with the Lebanese security forces in apprehending Syrian opposition activists on Lebanese soil and returning them to Syria.
The Lebanese government, itself dominated by Hezbollah, is cooperating with Damascus in trying to contain the Syrian regime’s crisis. In regional diplomacy the Lebanese government remains opposed to Arab League sanctions against Syria. It is unclear if Lebanon will simply ignore the sanctions. There is also suspicion that the Lebanese banking sector may be used to circumvent the sanctions. This could lead to punitive action against the Lebanese banking sector by major Arab countries. However, the financial sector is the backbone of the Lebanese economy, and this could significantly harm Lebanon’s internal economic situation.
The situation in Syria is also beginning to threaten Hezbollah’s internal political standing in Lebanon. The March 8 coalition, of which it is a part, depends for its parliamentary majority on the support of Druze leader Walid Jumblatt. Often seen as the ‘weathervane’ of Lebanese politics, Jumblatt has begun to criticise Syrian internal repression.
Hezbollah has also been forced to accept a compromise on funding the UN Special Tribunal for Lebanon, which is seeking those responsible for the 2005 assassination of former Lebanese Prime Minister Rafik Hariri. In late June, the tribunal sought four Hezbollah members in connection with the killing. Hezbollah quickly announced that the men would never be apprehended. Despite this strong opposition, Lebanon’s Prime Minister Najib Mikati remained committed to providing funding for the tribunal, and in the end Hezbollah accepted a compromise, as it was not willing to risk a crisis in the coalition.
What are the implications for Israel?
Israel has no influence over internal events in Syria or Lebanon. Its interest is in a quiet northern border. For as long as Hezbollah is able to maintain its independent military infrastructure in Lebanon, the threat of an attack on Israel remains. Hezbollah has extensively rearmed to recoup the losses it incurred in the 2006 Second Lebanon War. It is now estimated to have an arsenal of 40,000 rockets, including precision guided missiles that can reach all parts of Israel. It has also deliberately deployed its weapons in villages to make them harder for Israel to target in any future conflict.
Whilst the situation in Syria may be putting Hezbollah under pressure, no immediate threat to Hezbollah’s military infrastructure currently exists. However, should Assad fall, this would represent a major loss for the Iran-led bloc in general, and for Hezbollah in particular. It would deprive Hezbollah of its key local backer, the principle conduit for its weapons supplies and the guarantor of its unique status in Lebanon. It would no longer be able to rely on Syria’s cooperation during any future conflict with Israel.
In the short term, however, there is the possibility of Hezbollah raising tensions with Israel, as a means to divert attention from the pressure on Assad, or to widen the circle of conflict. Hezbollah has been effectively deterred from attacking Israel following the damage it incurred during the Second Lebanon War. Nonetheless, the stakes for Hezbollah are very high. In a televised speech on 11 November, Nasrallah threatened that, ‘a war on Iran and Syria will not be confined to these two states but will spread to other countries in the region’. The possibility of Syria and Hezbollah trying in some way to widen the conflict, therefore, cannot be ruled out.
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Ever since the late October release of the International Atomic Energy Agency’s latest report on Iran, the White House has been working overtime to convince the world that it is, in fact, committed to preventing the Islamic Republic from going nuclear. Last month, responding to criticism of his Iran policy from Republican challengers, President Obama argued that the sanctions levied by his Administration to date have had “enormous bite.”
The reality, however, is considerably more modest. While it has publicly pledged its commitment to a serious economic offensive aimed at derailing Iran’s nuclear drive, in practice the White House has done far less than necessary to achieve that objective.
Thus, nearly a year-and-a-half after the passage by Congress of the most comprehensive sanctions ever levied against the Iranian regime, that leverage remains largely unused. To date, the Comprehensive Iran Sanctions, Accountability & Divestment Act (CISADA) has been applied to just ten foreign companies and entities by an Administration skittish about upsetting foreign corporations and roiling global markets. The White House likewise has proved hostile to CISADA’s successor, the Iran Threat Reduction Act, despite broad support in Congress for the legislation, which would significantly tighten the economic noose around Iran via a number of new penalties and restrictions. And most recently, Administration officials are putting the brakes on what may be the most crucial step yet in sanctions against Iran: targeting the country’s Central Bank.
The logic behind the measure is obvious. Quite simply, Iran’s Central Bank represents one of the most potent ways to hit Iran’s chief export commodity: oil. Iran currently ranks as the second largest producer in OPEC, exporting an estimated 2.4 million barrels of crude daily. In turn, oil and natural gas sales account for some 80 percent of the country’s hard currency export earnings.
The Central Bank of Iran lies at the center of this energy architecture. It serves as an intermediary between the state oil company, the National Iranian Oil Company (NIOC), and the Iranian regime’s international energy customers. By isolating the Bank from global markets, the thinking goes, the United States can help dry up critical funding for the Iranian regime and its strategic programs. The impact, moreover, could be magnified exponentially if such sanctions are coupled with an international embargo on Iranian crude oil exports—something that European countries have begun to discuss in earnest.
Congress understands this very well. Last week, the U.S. Senate voted unanimously in favor of an amendment to the Defense Authorization Bill taking serious aim at Iran’s Central Bank, and establishing a framework for penalizing those global firms that do business with it. The bipartisan measure, sponsored by Senators Mark Kirk (R-IL) and Robert Menendez (D-NJ), passed the Senate with an unprecedented vote of 100 to 0—the clearest indication to date that Congress is committed to waging real economic warfare against the Iranian regime.
The White House, however, doesn’t seem to be. The Administration reportedly is now actively working to dilute the sanctions, requesting material changes to the amendment that would significantly soften the proposed economic pressure on Tehran. In the process, it has sent the unmistakable signal this it is not truly serious about putting the financial squeeze on the Islamic Republic.
Why has the White House gone wobbly on Central Bank sanctions, a measure it itself supported not so long ago? As the Wall Street Journal notes, Administration worries have a great deal to do with the potential impact of such a designation on global oil prices—and, as a result, on prices at the pump. But there are compelling reasons to conclude that the impact of Central Bank sanctions on the global oil market is likely to be less severe than Team Obama seems to fear.
Here, Libya serves as a useful barometer. The three-and-a-half month civil war there earlier this year took the country’s oil production of 1.3 million barrels daily offline in its entirety. In response, global markets registered a significant hike in oil prices. However, this surge took largely place without serious alterations to consumer demand—or severe spikes in the price of gasoline.
There is reason to suspect that a removal of Iranian production would similarly not prove catastrophic. Although Iran’s oil output is considerably larger than that of Libya, authoritative estimates suggest there is sufficient non-Iranian crude available to meet global demand into the foreseeable future, even if current rates of world production remain static. Moreover, countries like Saudi Arabia have already indicated their willingness to ramp up oil output in order to offset any commodity price increases that would occur if and when Iranian oil goes offline. Any such increased pumping would work to drive down prices and compensate for the absence of Iranian crude. And if Washington makes judicious use of the U.S. Strategic Petroleum Reserve to mitigate price spikes in the global energy market, the effects on domestic consumers are likely to be more minimal still.
All this should matter a great deal to the White House. Whatever the public rhetoric, it is painfully clear that the economic pressure levied by Washington so far has fallen short of dissuading Iran’s ayatollahs from seeking the bomb. Recent weeks have seen a flurry of new activity on the sanctions front, as the Obama administration and its allies scramble to make their economic pressure on Iran truly matter. Such steps, however, are destined to remain marginal unless they begin to target Iran’s most important economic institution and its most lucrative export commodity.
Ilan Berman is the vice president of the American Foreign Policy Council.