A Digest of DEBKAfile Round-the-Clock Exclusives in Week Ending January 26, 2012

January 20, 2012 Briefs
• Iranian Speaker Larijani: "The Zionist regime should be punished in a way that it can not play such games with our country again".
• Sarkozy says time running out to avoid military conflict over Iran.
• Ten NATO soldiers killed in Afghanistan – six in a helicopter crash, four French troops shot by an Afghan soldier in the east. Sarkozy suspended Afghanistan operations.
• Defending his Iran policy against critics, Obama said US-led sanctions had reduced Iran's economy to a shambles.
• Iran's FM Salehi warns neighboring states not to put themselves in dangerous position by aligning with the US. He spoke in Ankara.
• More than 750 people killed during Arab League observers three-week Syria mission.

January 21, 2012 Briefs
• Forty Arab League monitors leave Syria in fear of their lives.
• Chinese PM Wen Jiabao says China's oil trade with Iran is normal commercial activity.
• Palestinian mortar team attacked by Israeli Air Force in S. Gaza early Saturday seconds after three shells harmlessly at Eshkol district.

Nuclear Iran is past its point-of-no-return, yet oil sanctions stay on paper

21 Jan. Israeli Prime Minister Binyamin Netanyahu advised visiting Chairman of the US Joint Chiefs of Staff, Gen. Martin Dempsey Friday, Jan. 20 that the time for action against Iran was now – for two reasons: First, Iran has passed the point of no return for developing a nuclear weapon; second, the US-led embargo on Iranian oil is not catching on. debkafile: China, Japan, South Korea, India, Turkey and the European Union members, which buy 85 percent of Iran's exported oil, are dilly-dallying.
The Obama administration disputes the Israeli prime minister on both points, insisting there is still time for tough sanctions to incapacitate the Iranian economy in time to stop Tehran before it reaches the point of no return. Israel insists this pivotal point was reached four years ago in 2008.
Maj. Gen. (ret.) Asher Yadlin, until last year Israel chief of military intelligence, maintained in a detailed article in the Tel Aviv daily Maariv: "If Iranian leaders were to convene tonight and decide to go ahead with the secret production of a nuclear bomb, they already possess the resources and components for doing so. [As matters stand] now, Iran's nuclear timeline no longer hinges on the calendar; it rest entirely on a decision in Tehran."

January 22, 2012 Briefs
• Arab League foreign ministers proposed Assad hand over power to deputy at head of unity government to end 10 months of bloodshed.
• Saudi Arabia withdraws its monitors from Syria.
• A source close to Iranian Al-Qods Force leader Qassem Suleimani says “the security situation in Syria and Lebanon might lead to the abduction of foreigners”.
• Libya may be heading towards a bottomless pit said ruling council head Jalil after protesters stormed his Benghazi office. His deputy later resigned.
• Palestinian knifeman shot in the foot trying to rush West Bank-Jerusalem checkpoint at Kalandia.
• Jordan sends back Israeli parliamentary speaker's New Year greetings to his opposite number because of its heading: From the Knesset, Jerusalem, capital of Israel.
• Palestinian Mufti Mohammed Hussein says Muslims are obligated to kill Jews to attain resurrection. He spoke at a public event marking 47th anniversary of Palestinian Fatah. The moderator referred to Jews as "the descendants of apes and pigs".
• No comment from Abbas although the Mufti is appointed by the Palestinian Authority.

The USS Abraham Lincoln transits Hormuz on eve of talks

22 Jan. Three weeks after Tehran threatened action against any US aircraft carrier entering the Strait of Hormuz, Washington made two moves: US Defense Secretary Leon Panetta disclosed Sunday, Jan. 22, that the USS Enterprise Carrier Strike Group would steam through the strait in March; a few hours later, the USS Abraham Lincoln carrier transited Hormuz accompanied by British and French warships without incident. Defusing the Hormuz dispute set the scene for resumed US-Iranian nuclear talks amid the suspension of tough sanctions as Israel was preparing to strike Iran's nuclear facilities.
These developments deepened the breach between the US and Israel. When Gen. Martin Dempsey, Chairman of the Joint US Chiefs of Staff, visited Israel Friday, Binyamin Netanyahu and his ministers complained that action against Iran had been postponed for years on one pretext or another, and the same thing was happening again with effective sanctions against Iran's oil exports and central bank. Israel was compelled to rely on its military option against a nuclear Iran before it is too late.

January 23, 2012 Briefs
• The US announces sanctions against Iran's third-largest Bank, Bank Tejarat which handles oil transactions.
• European Union foreign ministers Monday adopt an oil embargo against Iran to be phased out by July 1st as "legitimate pressure" for Tehran to enter into nuclear dialogue.
• Netanyahu: Iran is not deterred by sanctions from pressing ahead uninterrupted with its nuclear weapon program.
• India will take as much Iranian oil as it can because terms are favorable, said Indian oil minister Jaipal Reddy Monday in a setback for US-EU sanctions.
• Newly-elected Lower House of Egyptian parliament Monday appoints Muslim Brotherhood party's Mohamed Saad al-Katatni as first speaker.
• Ruling circles in Libya: Pro-Qaddafi' forces recapture Bani Walid between Sirte and Tripoli.
• Two influential Iranian lawmakers: Hormuz would definitely be closed if the sale of Iranian is violated.
• Boeing and Israel's Aerospace Industries sign cooperation agreement for developing Arrow 3 missile interceptors.
• Damascus took 24 hours to reject Arab League proposal for Assad to delegate power to a deputy and set up unity government.
• Moscow announces sale of 36 Yak 36 training planes to Syria.
• Bank of Israel cuts interest by 0.25% to 2.5%.

India to buy Iranian oil for gold instead of dollars

23 Jan. India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile reports exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both will therefore substantially cushion the impact of the decision of Monday, Jan. 22, by Europe, which takes about one-fifth of Iran's oil, to impose an oil embargo on Iran. It also enables Iran to go around the EU freeze on the assets of its central bank. debkafile's intelligence sources disclose that Tehran has set up alternative financial mechanisms with China and Russia for getting paid for its oil in currencies other than US dollars. Both Beijing and Moscow are keeping the workings of those mechanisms top secret.

January 24, 2012 Briefs
• US warns Americans traveling to Bahrain to beware of potential unrest targeting foreigners.
• Israel's state attorney orders police probe into Palestinian Mufti's sermon telling believers their resurrection depends on fighting and killing Jews.
• Barak: New US and European sanctions against Iran from July are step in the right direction but not tough enough and too far off. In a radio interview Tuesday, Defense Minister added: He didn’t believe any sanctions would stop Iran pursuing a nuclear weapon. In current Mid East turmoil, Israel's hand is always near the trigger. The defense minister guaranteed that no Jewish outposts would be allowed to remain on private Palestinian land.
• A Palestinian stages unsuccessful knife attack on Israeli border guards in Hebron.
• GCC Gulf emirates pull their monitors from Arab League's Syria mission.
• Four car bombs in Shiite Sadr City of Baghdad Tuesday kill at least 13 people, injure 75.
• India takes command of nuclear-powered Russian-built Chakra II submarine at Vladivostok. The sub is capable of firing torpedoes and nuclear-tipped Granat cruise missiles.
• Amman confirms official Hamas leader Meshaal's visit Sunday for talks with Jordanian officials. His rival Gaza Hamas PM Haniye is invited to Tehran.

Iranian-Hizballah anti-Israel terror strike foiled in Azerbaijan

24 Jan. A Hizballah cell backed by intelligence from Tehran and external Iranian terror cells in Turkey, Bulgaria, Georgia and Armenia, was captured in Baku on Jan. 19 by Azerbaijan's National Security Ministry (MNS) officers about to launch attacks on the Israeli embassy, two Habad center leaders Chief Rabbi Shneor Segal and Rabbi Mati Lewis as well as Israeli and local personages. Two cell members reside in Azerbaijan; its Tehran-based leader was recruited by Iranian intelligence. He arrived from Tehran with a file full of photos of the targeted Israeli figures, plans of the buildings to be attacked, maps and $9,300 to cover costs. Each of the terrorists was promised a fee of $150,000.
This was the first known instance of Iranian intelligence and Hizballah cooperating for a terror operation.

Barak slams EU oil embargo's delay to July

24 Jan. The new round of European sanctions will not stop Iran's pursuit of a nuclear weapon, Israel's Defense Minister Ehud Barak warned in a radio interview Tuesday, Jan. 24. debkafile: The Obama administration and EU delayed oil sanctions to July 1 for back-channel contacts to ripen and produce a fresh round of nuclear talks with Tehran. Meanwhile, Iran gains time to move all its facilities underground. Barak stressed Israel's hand was always near the trigger and advised taking "very seriously" Israel's military option which had not been taken off the table.
His comments aimed at cooling the optimistic notes emanating from Washington, Europe and some Israeli circles Monday after the European Union foreign ministers approved an oil embargo against Iran from July 1 and froze its central bank's assets. The US then applied sanctions to Iran's third biggest bank, Bank Tejerat.

January 25, 2012 Briefs
• Red Cross says head of Syrian Arab Red Crescent in Idlib has been shot dead.
• IMF: Halt in Iran's exports could push prices up by 20 to 30 percent.
• A US helicopter operation in Somalia rescued an American and a Dane held hostage by pirates for three months. Jessica Buchanan and Poul Hagen worked for the Danish Refugee Council.
• Obama: America is determined to prevent Iran from getting a nuclear weapon and will take no options off the table to achieve that goal. If Iran changes course it can rejoin the community of nations.

Jerusalem concerned: Saudi Air Force to outnumber, outclass Israel's air fleet

25 Jan. With its latest purchases from Washington, the Saudi Air Force will have more US fighter-bombers of more advanced models than the Israeli Air Force as well as a substantial influx of sophisticated Eurofighter Typhoons. Deep concern over this was recently relayed by Prime Minister Binyamin Netanyahu and Defense Minister Ehud Barak to President Barack Obama, Secretary of State Hillary Clinton and Defense Secretary of Defense Leon Panetta. Israel acted on the quiet in view of the trepidation in the Gulf over Iranian threats and in consideration of the tens of thousands of American jobs the transaction provides.
At the same time, Israeli leaders warn that four or five Saudi pilots or hired Islamist fliers may one day form an al Qaeda cell inside the Saudi Air Force and conspire to carry out a suicide attack on Israeli cities on the model of al Qaeda's 9/11 attacks on New York and Washington, most of whose participants were Saudis. With their highly sophisticated aircraft several could make it past Israel's air defenses.

Dubai police chief foresees imminent Gulf-Iran war of attrition over oil routes

26 Jan. Military tensions in the Persian Gulf shot up Thursday, Jan. 26, when Dubai police commander Gen. Dhahi Khalfan said on Al Arabiya television that an imminent Gulf war cannot be ruled out and first signs are already apparent. "The world will not let Iran block Hormuz but Tehran can narrow the strait to the maximum," he said. debkafile: The Iranian operating formula says that as the oil embargo on Iran tightens, the Revolutionary Guards will gradually narrow the oil tankers' shipping lane through the Strait of Hormuz. There is much skepticism in Saudi Arabia and Dubai about the ability of the American navy and Gulf forces to keep the Strait of Hormuz open at all times. The expectation is that between February and July, a war of attrition will develop between the US, Saudi Arabia and Iran.

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