Iran: Beneath the Rhetoric
In 1979, the most radical faction of Iran's newly victorious revolutionary leadership orchestrated the seizure of American hostages as a means to antagonize the West and seal the country from Western influence which they believed would corrupt and reverse their revolution. The newly elected hard-line president, Mahmoud Ahmedinajad, appears to be seeking a similar effect by goading the West through his repeated calls for Israel's elimination, and his denial of the Holocaust. Ahmedinajad's demagoguery, however, appears to be driven less by geopolitical objectives than by a domestic power struggle that pits him against the more pragmatic wing of the conservative ruling elite – the faction led by former president Ali Akbar Hashemi Rafsanjani, which, with the blessing of supreme leader Ayatollah Ali Khameini, seeks to improve relations with the West in order to stimulate economic growth. Ahmedinajad hopes to sabotage their efforts by raising tensions with the West.

But the strategic calculations are different this time from what they were in 1979: The U.S and the EU suspect Iran may be using its civilian nuclear program to assemble the elements to build a bomb, and absent any viable alternative – to effectively neutralize a strategic threat from Iran, military action would need to reach as far as invasion and occupation, a scenario currently beyond the reach of U.S. capabilities; while the realities of the global energy market suggest that UN sanctions remain improbable – the Western powers will continue negotiating despite Ahmedinajad's verbal torrents. Tehran's position in the talks is strong, and is made more so by the failure of the U.S. to achieve its political objectives in Iraq, making it increasingly dependent on cooperation from Iran to secure a stable order there. But Tehran's fundamental weakness lies in its inability to generate domestic economic activity that can raise the living standards of the impoverished majority whose votes put Ahmedinajad into power. Despite his promises, the new president has no program capable of generating the jobs and social support they demand – and saber rattling against far-off Israel is unlikely to distract them from their deepening economic crisis.

Israel and the Palestinians: All Change, No Change
Ariel Sharon completed Israel's remarkable journey away from the Oslo Accords and the concept of a negotiated settlement with the Palestinian leadership when he withdrew Israeli soldiers and settlers from Gaza. Despite the optimism in Washington that this might herald a resumption of the “roadmap” process, Sharon made clear that the “roadmap” has not come into effect, nor will it ever until the Palestinian leadership dismantle all armed groups outside of the Palestinian Authority security apparatus – something unlikely to occur to Israel's satisfaction for the foreseeable future. In the interim, Sharon plans to pursue his unilateral redrawing of boundaries between Israel and the Palestinians by completing his security wall that cuts deep into Palestinian lands on the West Bank, and also cuts off the Palestinians of East Jerusalem from the rest of the West Bank. He has also begun expanding and strengthening a number of West Bank settlements that would contradict his “roadmap” obligations but which conform with his own ideas of a the final boundaries between Israel and a Palestinian state.

Where the peace strategy of Oslo had required Israel to prop up its Palestinian partner, Sharon operates on the principle that there is no Palestinian partner and that Israel must act unilaterally to transform the strategic environment. The fortunes of Mahmoud Abbas, the Palestinian leader in which the U.S. has invested much hope, are, at best, a secondary concern for the Israeli leader. And absent an Israeli leadership ready to make concessions that would help him restate the case for the Palestinians putting their fate once more in the hands of a U.S.-authored diplomatic process with Israel, Abbas has floundered. Recognizing that he lacks the political authority and muscle to directly confront the likes of Hamas and the militant faction of his own Fatah party, Abbas's strategy has been to win their consent for a new diplomatic process by drawing them into the structures of Palestinian governance. But even if Israel had been willing to play along – which it has not been – it may already be too late for Abbas, and the rest of Yasser Arafat's “Old Guard,” whose moment at the helm of the Palestinian national movement appears to have passed with its founder. Abbas was elected PA president only because the more popular imprisoned Fatah leader Marwan Barghouti withdrew from a race that the most authoritative Palestinian polling organization had him winning by three or four percentage points. He postponed legislative elections planned for July, in the hope that he might gain a political “bounce” from Israel's Gaza withdrawal. But as the January poll draws near, not only has Abbas lost a bruising Fatah internal battle against the Barghouti camp that has seen many of the “Old Guard” effectively consigned to the political wilderness; indications are strong that Hamas may yet trounce Fatah at the polls and emerge by democratic means as the dominant voice in the Palestinian legislature.

While Abbas's plight may ring alarm bells among those in Washington and other capitals still clinging to the idea of a negotiated peace agreement to settle the conflict, it does not much concern Sharon, for whom the rise of Hamas simply strengthens his argument in favor of unilateralism. As the year drew to a close, only two factors seemed to cloud Sharon's political horizons: The first, and perhaps most important, was his arteries – he suffered a stroke late in December, which temporarily incapacitated him and raised questions over his ability to lead a new coalition government built around endorsement of his unilateral peace plan. A second was the eclipse of his friend and ally Shimon Peres as leader of the opposition Labor Party, with the election of Amir Peretz – a Moroccan Jewish trade union leader – potentially allowing Labor to draw significant support among the impoverished Jews of Arab origin that have long made up the core support base of Sharon and the Likud Party. Still, as long as Sharon's body does not fail him, he may yet complete his unilateral withdrawal strategy in 2006 – although, whatever the fate of Mahmoud Abbas, Sharon's own “map” is unlikely to end the conflict.

Egypt: Democracy and its Perils
The emergence of the secular liberal "Kifaya" movement in Egypt last February, in the wake of Iraq's successful election the previous month was taken by some in the U.S. as vindication of President Bush's strategy of exporting democracy to the Middle East. Kifaya and its leader, Ayman Nour, were given a major boost by the Bush administration, which leaned on President Mubarak to allow it to participate in competitive elections for the presidency. Mubarak still won those handily, with a decades old authoritarian system still stacked heavily in his favor. Still, the emergence of the liberal opposition and the small but not insubstantial opening up of the electoral system were taken as proof that the Iraq war had forced Arab autocracies to concede to democratic reforms, and that a secular, Western-oriented opposition was ready to lead their countries into an age of globalization. By year's end, the picture couldn't have looked more different, largely because the original optimism had ignored the elephant in the room: The popular opposition to Mubarak is not the liberal democratic movement headed by Nour, but the outlawed Muslim Brotherhood, which proved its appeal in legislative elections last month (it's candidates, running as independents, expanded their parliamentary representation by around 500% while the liberal opposition received a drubbing at the polls.

Although the strength of the Brotherhood's showing will have surprised the regime as much as it surprised the liberal opposition, it may nonetheless feed into Mubarak's survival strategy, which is based on convincing the U.S. and the Egyptian middle class that his regime is all that stands between Egypt and an Islamist revolution. And just to underscore its renewed confidence of having proved its relevance to U.S. security interests in the region, Mubarak's regime closed out the year by convicting Nour – over Washington's objections – on charges of electoral fraud.

Egypt: Democracy and its Perils
The mass street protests and unprecedented diplomatic pressure that followed the assassination of former prime minister Rafik Hariri were initially greeted as a Lebanese answer to the "pastel" revolutions that had taken place in many former Soviet satellite states, and further vindication of the Bush administration's aggressive democracy policy in the Middle East. As pressure mounted, Syria – widely accused of orchestrating the assassination of the leading anti-Syrian politician – summarily withdrew its armed forces, which had first entered Lebanon (with the endorsement of the U.S. and Israel) in 1976.

But in Syria's wake, the Lebanese opposition seemed incapable of overcoming the sectarian differences that had fueled the civil war which first prompted Syrian intervention, parties made opportunist alliances across traditional divides simply in order to entrench themselves in power, and the Syrian-backed Hezbollah remained a potent force in the Lebanese parliament. A long period of uncertainty followed, with further assassinations of anti-Syrian politicians and pervasive sense that Lebanon's fate may yet rest on the outcome of the confrontation between Damascus and the West. The Mehlis report commissioned by the United Nations raised pressure on Syria over the Hariri killing, but rather than using the alleged involvement of Syrian operatives in the murder as an opportunity to tee up Syria for regime change, the U.S. and its allies appear to have stepped back from the brink. Despite their hostility to the Assad regime, the Western powers may be more fearful of Syria's long-suppressed Sunni majority, among which the Muslim Brotherhood is believed to retain significant popularity, and the prospect that in the turmoil of any attempt at regime change, it would make common cause with the Iraqi insurgency.

Afghanistan, Pakistan and al-Qaeda
Three years after the fall of the Taliban, Afghanistan seated its first democratically elected parliament and U.S. forces prepared to hand over most of their responsibilities to NATO forces, who plan to expand their presence in the former stronghold of al Qaeda. Still, the Taliban is far from beaten, and appears to be resurgent as a guerrilla force. At the same time, the fact that many of those elected to Afghanistan's parliament are local warlords deeply invested in the drug trade does not bode well for long-term stability. Prospects for stabilizing Afghanistan may yet depend on the ability of the Karzai government to negotiate some form of accommodation with the Taliban.

Across the border in Pakistan, where Osama bin Laden and Ayman Zawahiri are believed to be hiding, Pakistani security forces have managed to capture only low-level Qaeda operatives operating in the wilds of Waziristan. Pakistan's military regime remains politically unable to sanction operations by U.S. forces on its soil, although recent reports suggest that U.S. drones may be hunting for Qaeda suspects and even firing missiles at them. The exact role being played by the Qaeda leaders operating out of western Pakistan remains unclear – Bin Laden and Zawahiri release occasionally electronic edicts broadcast on Arab TV channels, but the operational leadership of al Qaeda appears to have devolved to more localized mid-level commanders scattered across the world.

Ironically, perhaps, in light of the arguments offered in support of invading Iraq, that country has emerged as the most visible center today of Qaeda operations, even to the extent of exporting terrorism to other Middle Eastern countries and to Europe. The efforts of Qaeda in Iraq leader Musab al Zarqawi, who has sworn fealty to Bin Laden but has historically been a competitor to the leadership now based in Pakistan, to spread his networks and operations both to neighboring Arab countries and to Europe has reportedly prompted a debate in the international jihadist movement over whether Iraq should replace Afghanistan as the new global command center, or whether the movement should retain its current diffuse form.