Another theater for US-Iran fallout: the South Caucasus

Armenia, an ally of both countries, shows how tensions between the two could upset the region's diplomatic balancing act.

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So far, a balance

So far, Armenia has been able to steer a middle course between the US and Iran. It has stayed largely silent on Iran's nuclear policy, but kept its economic ties with the country transparent and – along with Azerbaijan – quietly enforced international nonproliferation agreements.

But the US is concerned about the growing economic ties between Armenia and its neighbor, particularly the new pipeline, which Armenians see as strategically vital.

Armenia has no energy resources of its own and suffered severe energy shortages in the early 1990s as a result of the civil war in neighboring Georgia.

"Armenia was dependent on pipelines that passed through several countries," says Serzh Sarkisian, who recently became Armenia's prime minister. "We remember what the situation was in Armenia when that pipe was out of order. Imagine sitting in Yerevan in January and you have no heat, no water, and it was minus 30 degrees Celsius."

Given Iran's economic importance to Armenia, though, few here believe that Armenia can do anything other than continue to claim neutrality for as long as possible. But beneath Armenia's steady relationship with Iran, there is also wariness in the country about its neighbor's behavior.

"It's very simple. I don't think that anyone in Armenia would be happy if next to their borders they would have weapons of mass destruction," says Mr. Sarkisian.

Tomorrow: A look at US efforts to leverage Iran's disgruntled ethnic Azeri population to foster change from within the country.

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Rich Clabaugh – Staff
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