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Russian authorities have put on hold a secret contract with Iran. The contract, which is believed to have been signed in 2005, planned to arm the Islamic Republic with the famous S-300 air-defence missile systems. The latest move comes ahead of talks between the Russian and American presidents set for April 2009.

Iran’s defence minister Mostafa Mohammad Hajjar, a veteran of the Revolutionary Guards of Iran, arrived in Moscow on Monday for talks on the supply of Russian arms to Iran, particularly the S-300 systems.

However, as reported in Kommersant Daily, Moscow will not deliver the missile systems for some time, at least not before the

first meeting of Russian president Dmitry Medvedev and American counterpart Barack Obama, a historic event widely expected to melt the ice in Russia-US relations and restart a dialogue between the two sides.

Iran does not follow resolutions of the UN Security Council concerning its nuclear programme and that fact alone is enough to put Russia in an awkward position if it delivers S-300s to Iran now.

So far, Moscow and Tehran have fulfilled only one contract in air defence dating back to 2005 when Russia sold Iran 29 Thor-M1 middle-range missile air-defence systems for US$700 million.

Since then, Tehran has showed intense interest in S-300 systems and even signed a secret contract for delivery of 5 divisions of S-300s for US$800 million. But despite the fact that the contract has been initialised and Iran expresses its readiness to pay, Moscow has delayed the supply for political reasons as the question of arming Iran with the newest defence systems greatly alarms America’s principle Middle East ally, Israel.

Nerves of nylon, nerves of steel

It’s not just once that the Iranian authorities have jumped the gun and declared that S-300s have already been delivered and deployed, claims always refuted by Russia. The last such instance was on December 22, 2008.

Iran desperately needs the S-300s to protect the almost completed Bushehr nuclear power plant, which is likely to be a high priority target in the event of military conflict with Israel. If S-300 systems are deployed near Bushehr, Israel will be unable to conduct air strikes without response as it did in 1981, when it destroyed a nuclear reactor in Iraq, as well as in 2007, when it took out a supposedly nuclear target in Syria.

At the same time Russian experts doubt whether Israel would dare to conduct an air strike against Iranian nuclear targets.

“Israel does not have a reason for such an assault since Iran does not have and, in the near future, will not have nuclear arms, and the US seems to be looking for a political resolution with Iran, Israel will not do the dirty on Obama’s administration” says political analyst Aleksandr Pikayev from the Institute of World Economy and International Relations.

Russia does not supply only military products to Iran. The construction of a nuclear power plant in Bushehr is just another example for this.

“For Russia, Iran is a friendly state. Russia is in constant dialogue with Iran, advising it to comply with its international obligations. Clever people in Washington understand that Russia has vast interests in Iran because it is an ally and strategic friend and neighbour, so it is natural that Russia extends some commercial projects in Iran” commented military expert Viktor Mizin from the Moscow Institute of International Affairs.

It is true that five S-300 missile systems could secure the skies above Bushehr nuclear power plant, but it looks really doubtful that Moscow will put at risk the opportunity of improving the severely damaged relations with Washington.

This means that this time the Iranian delegation may leave Moscow without any tangible results. However, the political situation is subject to change, which means that the fate of Iranian air defence literally depends on what Barack Obama has to propose to Dmitry Medvedev in April this year.

“There is no doubt that the deadlock of Iran’s nuclear programme will be among the top priorities at these talks and that this question definitely needs re-examination from both the US and Iran to bring positive results,” says Pikaev.

In turn, it is obvious that American leadership is planning to take a diplomatic pause till June when Iran will elect a new president and if it turns out to be someone less irreconcilable like Mahmoud Ahmadinejad, then the US will deal directly with the Iranian authorities.

JERUSALEM (CNN) — Israel’s two largest parties each claimed a mandate early Wednesday after exit polls showed a surprise first-place finish by the ruling Kadima party and dramatic gains by its conservative rivals.
Kadima’s Tzipi Livni won more support than was predicted in the Israeli elections.

Foreign Minister Tzipi Livni’s failure to assemble a ruling coalition for Kadima last year triggered Tuesday’s elections. But she told supporters after the vote that the narrow edge Kadima appears to have held over the conservative Likud shows her party is “the common denominator of Israeli society.”

Livni called on Likud leader Benjamin Netanyahu “to respect the choice of Israel’s citizens … and to join a unity government, led by us, that will be based on the large parties in Israel, left and right.”

But Netanyahu said the showing by Likud — which appears to have more than doubled the number of seats it holds in the Knesset — Israel’s parliament — show voters have rejected Kadima’s leadership, and he said conservative parties could form a majority when the results are in.

“With God’s help, I shall head the coming government,” he said. “I am sure that I can manage to put together a good, broad-based and stable government that will be able to deal with the security crisis and the economic crisis.”

“It’s a typical Israeli election in that you might have two winners,” Israeli political analyst Chemi Shalev told CNN. “The clear-cut winner, in the sense that she did much better than any expectations, is Tzipi Livni and Kadima. But we have to judge elections by the bottom line, and if it turns out that … Benjamin Netanyahu will be the the prime minister, he will be judged to have been the winner.”

CNN correspondent Ben Wedeman and Israeli political analysts warned that exit polls had been wrong in past elections.

The campaign was dominated by the recent war with Palestinian militants in Gaza, which was popular within Israel despite widespread international condemnation. Netanyahu was a harsh critic of Kadima founder Ariel Sharon’s 2005 withdrawal of Israeli troops and settlers from Gaza, and his supporters say he has been proven right.

Unofficial results gave Kadima a narrow lead over Likud, with the right-wing Yisrael Beiteinu in third place and Labor — Israel’s founding party and Kadima’s current coalition partner — in fourth.

According to Israeli media, with all precincts reporting, Kadima was on track to win 28 seats in the 120-member Knesset, the same as it currently holds. Likud was forecast to win 27 — a dramatic jump from its current 12.

Yisrael Beiteinu was on track to win 15 seats, up from 11 currently, while Labor appeared to have slid from 18 seats to 13. A fourth-place finish would be an unprecedentedly weak showing for Labor, now led by Defense Minister and former Prime Minister Ehud Barak.

With those numbers, Avigdor Lieberman’s Yisrael Beiteinu, a party even further right-wing than Likud, would be the third largest faction in the legislature.

If the numbers hold up and Lieberman’s party surpasses Labor, the founding party of the Jewish state, it would be unprecedented.

Lieberman, 50, is a polarizing figure whose party has been accused of racism against Palestinians and Arab citizens of Israel.

But he said early Wednesday that his party “is not only the key to the next coalition, it will also set the agenda for the next government.”

And Likud member Reuven Rivlin, a former Knesset speaker, said voters decided “to change the ideas of the former government.”

“We have to continue the negotiations with the Palestinians, but under mutuality and under the idea that it is a give and take — that after the agreement, we will find ourselves at peace,” Rivlin said.

Shalev suggested a Kadima-Likud-Labor coalition is possible — but it was not clear who would lead it. The next prime minister will have six weeks to form a coalition government.

A government needs a controlling majority of 61 in the 120-seat Knesset. Neither Likud nor Kadima is expected to reach even half that figure.

Livni took control of Kadima in September, when Prime Minister Ehud Olmert stepped down as the party leader amid several corruption investigations.

She has been careful not to cast herself as a dove in the election with advertising focused on the military assault in Gaza and tough statements against the Palestinian fundamentalist group Hamas.

Netanyahu served as prime minister from 1996 to 1999. He has supported the expansion of Israeli settlements in the West Bank and opposed further territorial concessions to end the decades-old Israeli-Palestinian conflict.

Kadima member Machman Shai told CNN that Livni “was attacked from the right and the left. They said she was not capable for the job — very chauvinistic. And I think it was all wrong. She is a leader and up to leading Israel in the years to come.” Video Early joy at Kadima HQ »

“The majority of the people want a windfall,” Netanyahu said Tuesday while casting his ballot. “They want a change of direction to security, honor and hope, and I think they will vote for this today.”

About 5.2 million people were eligible to vote, choosing from 33 parties, with polls closing at 10 p.m. (3 p.m. ET). According to the Central Election Committee, 62.5 percent of eligible voters cast ballots — about 2 percentage points higher than the country’s last elections, in 2006. Video Will a new leader make any difference? »

This year, the election was expected to largely determine which Israeli parties should take credit for the recent war in Gaza. iReport.com: See photos of the scene as voters head to the polls

Despite international condemnation over the high number of Palestinian civilian casualties, it was a popular war in Israel. Domestic support was strong throughout, especially among residents within Palestinian militant rocket range, and it was perceived in Israel as a success. Polls showed that could bode well for Israel’s right-wing parties.

Defense Minister Ehud Barak, head of the Labor Party, also hoped for a sizable boost from the three-week Gaza war. But it probably will not be enough to lead the government. Before the operation, Labor was tipped to win just eight seats. That doubled in some polls, albeit briefly.

A small number of rockets are still falling in southern Israel, and that could play into the hands of Netanyahu.
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He was not in a position of power during the war, but he sought to capitalize on his opposition to Israel’s 2005 withdrawal from Gaza, telling voters he warned the move would result in Palestinian militant rockets hitting major cities. At the time he was ridiculed by his political rivals, but his supporters say he was proven right.

Washington and Tehran severed relations after the 1979 Iranian revolution

TEHRAN, Iran – Iran’s president said Tuesday the world was “entering an era of dialogue” and that his country would welcome talks with its longtime adversary, the United States, if they are based on mutual respect.

Mahmoud Ahmadinejad’s announcement comes a day after President Barack Obama said his administration was looking for opportunities to engage Iran and pledged to rethink United States’ relationship with Tehran.

“The Iranian nation is ready for talks (with the U.S.) but in a fair atmosphere with mutual respect,” Ahmadinejad told hundreds of thousands of Iranians during a celebration marking the 30th anniversary of the Iranian Revolution that toppled the U.S.-backed shah and brought hard-line clerics to power.

World at a ‘crossroads’

The hard-line Iranian leader said terrorism, the elimination of nuclear weapons, restructuring the U.N. Security Council and fighting drug trafficking could be topics for the two sides to talk about.

“If you really want to fight terrorism, come and cooperate with the Iranian nation, which is the biggest victim of terrorism so that terrorism is eliminated. … If you want to confront nuclear weapons … you need to stand beside Iran so it can introduce a correct path to you,” he said.

Ahmadinejad said the world was at a “crossroads” because it had been proven that military power has not been successful — a reference to the U.S. wars in Iraq and Afghanistan.

But now, he said, “the world is entering an era of dialogue and intellect.”

“The new U.S. government has announced that it wants to bring changes and follow the path of dialogue. It is very clear that changes have to be fundamental and not tactical. It is clear that the Iranian nation welcomes true changes,” Ahmadinejad told the crowds at the rally in Freedom Square.

In a “what the hell” moment in Israeli politics, citizens voting in Tuesday’s national elections will turn away from compromise with the Arabs, polls predict, and opt instead for blunt confrontation.

An overwhelming right-wing vote is forecast by all polls after a campaign in which the issue of peace hardly figured, even as rhetoric. If the polls are correct, most voters have decided that peace is for now an illusion and that they may as well indulge their desire for strong leadership rather than pursue an ever receding rainbow.

The leaders of the main parties are three macho men – two former commando officers and a former nightclub bouncer, none of them holding out olive branches – and a woman determined to prove she’s as tough as any of them.

The militant mindset of the electorate and its leaders stems from a feeling that there is no viable Palestinian entity with which to make peace. The firing of thousands of rockets from the Gaza Strip into Israel since Israel unilaterally withdrew from the area is viewed as clear evidence that the Palestinians are less interested in building a state of their own than in eliminating the Jewish state.

Outgoing Prime Minister Ehud Olmert declared his intention at the beginning of his term three years ago to withdraw unilaterally from parts of the West Bank. However, the example of Hamas in Gaza soon ruled out that possibility for fear that militants would similarly stage rocket attacks against Israel’s heartland from any areas on the West Bank that Israel vacates.

Polls indicate that Likud, led by Benjamin Netanyahu, will take more seats than any party in the next Knesset. However, the surprise of the campaign has been the strong showing by the right-wing Israel Beitainu (Israel Our Home) Party led by Avigdor Lieberman who worked as a bouncer in Moldavia before emigrating to Israel in 1978 at the age of 20. He has in the polls far surpassed the Labor Party led by Ehud Barak, Israel’s most decorated soldier.

Lieberman does not have a military background but his hard-line pronouncements and his bouncer’s build make him seem a genuine tough guy, which is what much of the public is looking for in face of the challenges facing Israel. When Egyptian leaders made hostile statements several years ago, Lieberman said that if it ever came to war Israel had only to bomb the Aswan Dam to flood the Nile Valley and devastate the country. He made similar warnings about bombing Teheran and termed the peace process with the Palestinians a sham. “He has Russian blood,” said an immigrant from the former Soviet Union admiringly of Lieberman. “Stalin, Putin – that’s what we need.”

A woman, asked whether she would vote for the only woman candidate, Foreign Minister Tzipi Livni, replied that she was voting for Lieberman. “We don’t need a woman,” she said. “What Israel needs now is a man’s man.”

Netanyahu and Lieberman, together with a gaggle of smaller right-wing parties, could easily establish a right-wing government, if the polls are correct. Netanyahu, however, has said he prefers a centrist, unity government that could rally the nation behind the strong actions that might be required in the coming term, including a possible confrontation with Iran. For this, he has indicated that if elected he would consider offering Barak to stay on as defense minister.

Netanyahu has also said he would seek to crush Hamas – “We will finish the job in Gaza”.

Barak, whose role as defense minister in the Gaza War drew wide acclaim from all parties, appears willing to serve in a Netanyahu government, if asked. The two men had served in the same crack commando unit as young officers.

Livni, who heads the Kadima Party, is running a close second to Netanyahu in the polls and is the only one of the four candidates to have brought the subject of peace into her campaign. “There is a dove on the sill,” she said. “We can open the window and let it in.” She did not, however, linger on the subject long, devoting her campaign mostly to attacking Netanyahu and Hamas. “The only way we will relate to Hamas is by smashing it.”

She went further than the other candidates on the sensitive subject of the Israeli soldier held captive by Hamas, Gilad Shalit, when she said that the national interest might not permit the release of hundreds of convicted terrorists in exchange for him as Hamas is demanding. She said she would feel the same if her own son had been captured. The biggest problem for any right-wing Israeli government may prove to be not the Arabs but the new American administration which has set its sights on banging heads together in the Middle East until the parties beg for peace.