IN March 1995, the Clinton administration launched a high-profile diplomatic offensive to pressure Russia to cancel an $800 million sale to Iran of a nuclear-power reactor.
Senior officials warned the deal could advance the Islamic republic's alleged atomic-weapons development efforts. Russia responded with angry denials and refused to abandon the sale. As congressional calls for sanctions against Moscow fueled the dispute, the White House vowed that derailing would be it a major priority.
A year later, the reactor project remains on track. But it has all but disappeared from Washington's pronouncements on differences with Moscow. The reason: a realization that by focusing attention on its failure to halt the deal, the administration could be forced to take punitive action against Russia that could seriously jeopardize overall relations, including cooperation on nuclear disarmament.
Accordingly, officials say, the administration has deliberately taken the spotlight off the issue while continuing to pursue it behind the scenes amid scant hope that it might still persuade Russia to drop the project.
"We were in danger of rhetorically painting ourselves into a corner," says one official. "There was a realization that the steps we could take that might result in stopping this deal ... might endanger other aspects of our relations with Russia that were not worth it."
Asserts another official: "We continue to oppose this reactor sale. It is an extremely ... intensive effort" being handled directly by President Clinton, Vice President Al Gore, and Secretary of State Warren Christopher. But, he acknowledges, success is "not predictable."
New world compromise
The issue underscores the difficult tradeoffs the administration must make in maintaining smooth relations with the world's No. 2 nuclear power. It also illustrates the limits of Washington's policy of isolating Iran. While the administration last year banned American firms from doing business with Tehran, it has failed to persuade other governments to cut economic ties with a regime it says nurtures terrorism, aspires to regional hegemony, and seeks weapons of mass destruction.
Under a January 1995 accord, Russia agreed to complete construction of a nuclear-power reactor at Bushehr, on Iran's Gulf coast, that the German firm, Seimens, abandoned after the 1979 overthrow of the late Shah Reza Pahlavi.
Russia signed a separate $30 million contract to provide nuclear fuel to Bushehr and take back the spent fuel.
News reports and officials say the project is moving ahead despite temporary problems Iran has had in meeting payment deadlines. They say Russian technicians completed design studies in January and have begun dismantling old structures to make way for new construction.
In urging Russia to cancel the deal, the United States contended that knowledge derived by Iran from operating the plant could be used to advance its alleged clandestine effort to develop nuclear weaponry. The threat from such weaponry would extend to Russia, it argued.
Russia defended the sale, saying that Iran is obliged to observe international safeguards as a signatory of the Nuclear Non-Proliferation Treaty. It also compared the deal to the American-led initiative to provide North Korea with nuclear power reactors.
Mr. Clinton made Bushehr a prime concern of his May 1995 summit in Moscow with Russian President Boris Yeltsin.
The Russian leader agreed to cancel a related contract for the sale of nuclear weapons equipment to Iran. Resolution of the Bushehr reactor dispute was referred to a commission on US-Russian relations co-chaired by Mr. Gore and Russian Prime Minister Viktor Chernomyrdin.
Since then, Bushehr has been missing from public statements of American foreign policy priorities.
To have kept the heat up, officials say, the administration would have brought pressure on itself to stop the project by threatening Moscow with serious consequences, such as an American aid cutoff demanded by Republican lawmakers. Such a step, they say, would have a dire impact on US-Russian relations.
To begin with, a wide range of programs supporting Russia's difficult transition to a stable free-market democracy would be canceled. Congress approved about $150 million for privatization assistance, political reforms, and other programs in fiscal 1996.
More critically, an aid cutoff would endanger the Cooperative Threat Reduction program, under which the US is helping Russia eliminate nuclear- weapons systems to meet the terms of the START I and II arms-control accords.
Since 1992, the United States has spent more than $233 million to fund the dismantling of weapons systems once targeted at the US. The US is also helping Russia improve shaky security at its stores of weapons-grade nuclear materials.
"We don't have a one-dimensional policy and there are a number of things that are going on in the world and going on with Russia, one of them being getting rid of a large number of nuclear weapons," says one official. "We don't want to risk this."
Some members of Congress see things otherwise.
"It's time to pull the plug on US aid to Russia," asserts Rep. James Traficant (R) of Ohio. He is calling for reconsideration of legislation he sponsored last year that would do just that.
While the administration has been unable to persuade Moscow to halt the reactor project, officials insist that quiet American diplomacy has produced results.
They point out that Russia had once spoken of building up to four power reactors in Iran. Now, they say, Russia appears to be limiting itself to just one.
"Our role has narrowed the scope of the deal," says one official. "No high-level meeting passes without this coming up."
It now appears that the administration is pinning its main hope for the collapse of Bushehr on Iran's internal economic crisis, which it believes will hinder Tehran's ability to pay Russia.
The US has been working hard to limit foreign sources of credit to Iran and lobbying its European allies and Japan not to reschedule tens of billions of dollars in unpaid loans. The effort, however, has been largely unsuccessful and some experts believe that Iran will not only be able to service its foreign debt, but pay for Bushehr in full.