The Iranian election is currently in turmoil. Both Iranian President Mahmoud Ahmadinejad and challenger Mir Hossein Mousavi are claiming to be ahead in the vote. Preliminary results from the presidential vote show Ahmadinejad leading; Iranian Election Commission chief Kamran Danesho held a press conference at 11:45 p.m. local time and announced that with some 20 percent of the votes counted, the president was leading with 3,462,548 votes (69.04 percent), while his main challenger, Mousavi, had 1, 425,678 (28.42 percent). Sources tell STRATFOR that these preliminary numbers pertain to the votes from the smaller towns and villages, where the president has considerable influence, as he has distributed a lot of cash to the poor.

However, Iran’s state-run Press TV is saying that only 10 million of 24 million votes, or around 42 percent of the vote, have been counted. At the same time, they are also claiming that 69 percent of the vote has been counted. Obviously the numbers are not adding up, and the agencies themselves appear to be in chaos.

Prior to the announcement of the results, Mousavi held a press conference in which he said he was the winner of the election. The opposition camp is greatly concerned about fraud, and STRATFOR has been told that Mousavi has vowed to resist any fraud, even if it entails taking to the streets. This means there is considerable risk of unrest should Ahmadinejad emerge as the winner. But so far there is no evidence that the government is mobilizing security forces to deal with any such eventuality.

The situation is being monitored carefully, as it is potentially explosive.

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West Bank Settlements and the Future of U.S.-Israeli Relations

Amid the rhetoric of U.S. President Barack Obama’s speech June 4 in Cairo, there was one substantial indication of change, not in the U.S. relationship to the Islamic world but in the U.S. relationship to Israel. This shift actually emerged prior to the speech, and the speech merely touched on it. But it is not a minor change and it must not be underestimated. It has every opportunity of growing into a major breach between Israel and the United States.

The immediate issue concerns Israeli settlements on the West Bank. The United States has long expressed opposition to increasing settlements but has not moved much beyond rhetoric. Certainly the continued expansion and development of new settlements on the West Bank did not cause prior administrations to shift their policies toward Israel. And while the Israelis have occasionally modified their policies, they have continued to build settlements. The basic understanding between the two sides has been that the United States would oppose settlements formally but that this would not evolve into a fundamental disagreement.

The United States has clearly decided to change the game. Obama has said that, “The United States does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop.” Israeli Prime Minister Benjamin Netanyahu has agreed to stop building new settlements, but not to halt what he called the “natural growth” of existing settlements.

Obama has positioned the settlement issue in such a way that it would be difficult for him to back down. He has repeated it several times, including in his speech to the Islamic world. It is an issue on which he is simply following the formal positions of prior administrations. It is an issue on which prior Israeli governments made commitments. What Obama has done is restated formal U.S. policy, on which there are prior Israeli agreements, and demanded Israeli compliance. Given his initiative in the Islamic world, Obama, having elevated the issue to this level, is going to have problems backing off.

Obama is also aware that Netanyahu is not in a political position to comply with the demand, even if he were inclined to. Netanyahu is leading a patchwork coalition in which support from the right is critical. For the Israeli right, settling in what it calls Samaria and Judea is a fundamental principle on which it cannot bend. Unlike Ariel Sharon, a man of the right who was politically powerful, Netanyahu is a man of the right who is politically weak. Netanyahu gave all he could give on this issue when he said there would be no new settlements created. Netanyahu doesn’t have the political ability to give Obama what he is demanding. Netanyahu is locked into place, unless he wants to try to restructure his Cabinet or persuade people like Avigdor Lieberman, his right-wing foreign minister, to change their fundamental view of the world.

Therefore, Obama has decided to create a crisis with Israel. He has chosen a subject on which Republican and Democratic administrations have had the same formal position. He has also picked a subject that does not affect Israeli national security in any immediate sense (he has not made demands for changes of policy toward Gaza, for example). Obama struck at an issue where he had precedent on his side, and where Israel’s immediate safety is not at stake. He also picked an issue on which he would have substantial support in the United States, and he has done this to have a symbolic showdown with Israel. The more Netanyahu resists, the more Obama gets what he wants.

Obama’s read of the Arab-Israeli situation is that it is not insoluble. He believes in the two-state solution, for better or worse. In order to institute the two-state solution, Obama must establish the principle that the West Bank is Palestinian territory by right and not Israeli territory on which the Israelis might make concessions. The settlements issue is fundamental to establishing this principle. Israel has previously agreed both to the two-state solution and to not expanding settlements. If Obama can force Netanyahu to concede on the settlements issue, then he will break the back of the Israeli right and open the door to a rightist-negotiated settlement of the two-state solution.

In the course of all of this, Obama is opening doors in the Islamic world a little wider by demonstrating that the United States is prepared to force Israel to make concessions. By subtext, he wants to drive home the idea that Israel does not control U.S. policy but that, in fact, Israel and the United States are two separate countries with different and sometimes conflicting views. Obama wouldn’t mind an open battle on the settlements one bit.

For Netanyahu, this is the worst terrain on which to fight. If he could have gotten Obama to attack by demanding that Israel not respond to missiles launched from Gaza or Lebanon, Netanyahu would have had the upper hand in the United States. Israel has support in the United States and in Congress, and any action that would appear to leave Israel’s security at risk would trigger an instant strengthening of that support.

But there is not much support in the United States for settlements on the West Bank. This is not a subject around which Israel’s supporters are going to rally very intensely, in large part because there is substantial support for a two-state solution and very little understanding or sympathy for the historic claim of Jews to Judea and Samaria. Obama has picked a topic on which he has political room for maneuver and on which Netanyahu is politically locked in.

Given that, the question is where Obama is going with this. From Obama’s point of view, he wins no matter what Netanyahu decides to do. If Netanyahu gives in, then he has established the principle that the United States can demand concessions from a Likud-controlled government in Israel and get them. There will be more demands. If Netanyahu doesn’t give in, Obama can create a split with Israel over the one issue he can get public support for in the United States (a halt to settlement expansion in the West Bank), and use that split as a lever with Islamic states.

Thus, the question is what Netanyahu is going to do. His best move is to say that this is just a disagreement between friends and assume that the rest of the U.S.-Israeli relationship is intact, from aid to technology transfer to intelligence sharing. That’s where Obama is going to have to make his decision. He has elevated the issue to the forefront of U.S.-Israeli relations. The Israelis have refused to comply. If Obama proceeds with the relationship as if nothing has happened, then he is back where he began.

Obama did not start this confrontation to wind up there. He calculated carefully when he raised this issue and knew perfectly well that Netanyahu couldn’t make concessions on it, so he had to have known that he was going to come to this point. Obviously, he could have made this confrontation as a part of his initiative to the Islamic world. But it is unlikely that he saw that initiative as ending with the speech, and he understands that, for the Islamic world, his relation to Israel is important. Even Islamic countries not warmly inclined toward Palestinians, like Jordan or Egypt, don’t want the United States to back off on this issue.

Netanyahu has argued in the past that Israel’s relationship to the United States was not as important to Israel as it once was. U.S. aid as a percentage of Israel’s gross domestic product has plunged. Israel is not facing powerful states, and it is not facing a situation like 1973, when Israeli survival depended on aid being rushed in from the United States. The technology transfer now runs both ways, and the United States relies on Israeli intelligence quite a bit. In other words, over the past generation, Israel has moved from a dependent relationship with the United States to one of mutual dependence.

This is very much Netanyahu’s point of view, and from this point of view follows the idea that he might simply say no to the United States on the settlements issue and live easily with the consequences. The weakness in this argument is that, while Israel does not now face strategic issues it can’t handle, it could in the future. Indeed, while Netanyahu is urging action on Iran, he knows that action is impossible without U.S. involvement.

This leads to a political problem. As much as the right would like to blow off the United States, the center and the left would be appalled. For Israel, the United States has been the centerpiece of the national psyche since 1967. A breach with the United States would create a massive crisis on the left and could well bring the government down if Ehud Barak and his Labor Party, for example, bolted from the ruling coalition. Netanyahu’s problem is the problem Israel has continually had. It is a politically fragmented country, and there is never an Israeli government that does not consist of fragments. A government that contains Lieberman and Barak is not one likely to be able to make bold moves.

It is therefore difficult to see how Netanyahu can both deal with Obama and hold his government together. It is even harder to see how Obama can reduce the pressure. Indeed, we would expect to see him increase the pressure by suspending minor exchanges and programs. Obama is playing to the Israeli center and left, who would oppose any breach with the United States.

Obama has the strong hand and the options. Netanyahu has the weak hand and fewer options. It is hard to see how he will solve the problem. And that’s what Obama wants. He wants Netanyahu struggling with the problem. In the end, he wants Netanyahu to fold on the settlements issue and keep on folding until he presides over a political settlement with the Palestinians. Obama wants Netanyahu and the right to be responsible for the agreement, as Menachem Begin was responsible for the treaty with Egypt and withdrawal from the Sinai.

We find it difficult to imagine how a two-state solution would work, but that concept is at the heart of U.S. policy and Obama wants the victory. He has put into motion processes to create that solution, first of all, by backing Netanyahu into a corner. Left out of Obama’s equation is the Palestinian interest, willingness and ability to reach a treaty with Israel, but from Obama’s point of view, if the Palestinians reject or undermine an agreement, he will still have leverage in the Islamic world. Right now, given Iraq and Afghanistan, that is where he wants leverage, and backing Netanyahu into a corner is more important than where it all leads in the end.

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The former head of MI6 has hit out at ‘striking and disturbing’ invasions of privacy by the Big Brother state.

Sir Richard Dearlove, who led the Secret Intelligence Service from 1999 to 2004, claimed some were an ‘abuse’ of the law.

He attacked the ‘loss of liberties’ caused by expanding surveillance powers and described some police operations as ‘mind-boggling.’

The former spy chief joins a growing number of high-profile critics warning that individual freedom and privacy are being seriously eroded by the Government’s disproportionate efforts to guard against terrorism.

Sir Richard was particularly critical of what he claimed were inadequate laws to regulate some surveillance powers.

Commenting on the massive surge in police use of stop-and-search powers in London, he highlighted the fact that Scotland Yard officers have carried out more than 150,000 searches since 2007.

This compared with fewer than 300 in Manchester. Sir Richard said: ‘That is a mind-boggling statistic. That may well be an abuse of the law.

‘I am a great believer in proportionality and as a citizen I worry about the loss of my liberties.’

He questioned the legal constraints on the use of millions of CCTV cameras across Britain, saying: ‘We have constructed a society which has great technical competence – and some of that competence isn’t particularly regulated.

Daily Mail Online

Barack Obama is a soft power president. But the world keeps asking him hard power questions.

From North Korea to Guantánamo Bay, from Iran to Afghanistan, Mr Obama is confronting a range of vexing issues that cannot be charmed out of existence.

The problem is epitomised by the US president’s trip to the Middle East this week. Its focal point will be a much-trailed speech in Cairo on Thursday June 4, in which he will directly address the Muslim world.

The Cairo speech is central to Mr Obama’s efforts to rebuild America’s global popularity and its ability to persuade – otherwise known as soft power. The president has been trying out potential themes for the speech on aides and advisers for months. He is likely to emphasise his respect for Islamic culture and history, and his personal links to the Muslim world. He will suggest to his audience that both the US and the Islamic world have, at times, misjudged and mistreated each other – and he will appeal for a new beginning.

Here is a commenter’s take:

“My concern over Obama’s ME trip, and his primary goal that they ‘adore’ him, is what will be lost in this pathological psychological agenda.

Obama is declaring that all unrest between the West and the Muslim states is due only to ‘misunderstanding’ between the two. That is, the problem is all in our respective minds.

He refuses to acknowledge that the differences are structural not phenomenological. The Muslim states are trapped within a tribal sociopolitical-economic structure that is hostile to democracy, capitalism, individual freedoms, human rights, etc. These states are repressing their people’s desire for more participation in their own political and economic life – and that has led to Islamic fascism.
Obama totally, completely, utterly – ignores this.

Instead, he – and they – are tripping over a red herring, the Israeli-Palestinian conflict. That is an entirely separate issue, and even if it were resolved, the tribal structure of the Arab and Persian states would remain, and Islamic fascism would remain.

I’ll point out, again, the Israel has no interest in a Palestinian state because it wants the West Bank for itself, and the Arab States have never been interested in a Palestinian state, both because it would be a democracy rather than tribal, and because most Arabs consider Palestinians to be among the lowest on the very rigid ME hierarchical scale of tribal elitism.

But I find it very disturbing that Obama is reducing the very real economic, political and societal structures of the ME – that are trapped within the 7th c – to irrelevance; and that he is saying that the only reason we ‘don’t get along’ is because we, heh, misunderstand each other. What nonsense. It’s the contradictory structures that are battling each other. Why does Obama refuse to recognize this and reduce it to the irrelevance of ‘how we think about each other’.”

…back to the article:

George W. Bush launched a military offensive in the Middle East. Mr Obama is launching a charm offensive…..read more HERE.

CBC Old Port, could be sold off, documents show

The federal Finance Department has flagged several prominent crown corporations as “not self-sustaining,” including the CBC, VIA Rail and the National Arts Centre, and has identified them as entities that could be sold as part of the government’s asset review, newly released documents show.

…full story HERE.