As with individuals, the same is true for countries. Anyone can blithely say Cuba or Serbia would not dare ignore the will of their more powerful neighbors, or that Brazil’s or Egypt’s nuclear programs are so inconsequential as not to impact the international balance of power. But such opinions — even if they truly are near-certainties — cannot form the foundation of state power. National leaders do not have the luxury of ignoring the plethora of coulds, mights and maybes that pepper their radar screens every day. An analyst can dismiss a dark possibility as dubious, but a national leader cannot gamble with the lives of his countrymen and the existence of his state. They must evaluate even improbable threats against the potential damage to their respective national interests.

Many of the standing policies we take for granted have grown from such evaluations. While the likelihood of Israel bombing the Aswan High Dam is rather remote, Egypt cannot afford to risk the possibility, which contributed to Cairo’s burying-of-the-hatchet with Israel. Worrying about continental European countries sublimating their national differences, uniting into a federated superstate and invading the United Kingdom may seem to flirt with lunacy, but within that lingering concern lies the root of the Anglo-American alliance. Similarly, worrying about China using the archipelagos of Southeast Asia as a staging point for an invasion of Australia may seem ludicrous, but that fear dominates military planning in Canberra.

Predicting national management of improbable outcomes is among the more difficult tasks presented to Stratfor’s staff. Such empathetic analysis requires not just a deep and dispassionate understanding of a country’s strengths and weaknesses, but also a deep and extremely passionate understanding about how a country’s neighbors perceive it. Our work is not simply about what is, but about what leaders fear might come to be. And that requires not merely understanding reality, but developing an accurate evaluation of the sorts of risks national leaders are willing to take with their actions — and their inactions.

The Sunnis of Iraq not only are the smallest of Iraq’s three major ethno-sectarian groups, but as a community, they are just as fractured as the country’s notoriously squabbling Shia. The Sunnis thus sport splits between secular Baathist nationalists and Islamist militants, among other fractures. Yes, the Sunnis under Saddam Hussein rose to command all of Iraq, but even with strong American support the recreation of such a constellation could come neither quickly nor easily. And even were that to occur, it is not as if Iraq’s Sunnis are itching for a genocidal war with a neighboring country sporting a population more than ten times the size of Iraq’s Sunni community.

On the flip side, the Iranian military is hardly capable of marching into the Saudi oil fields. The mountainous nature of Iran means the country is packed with minority groups — in fact nearly half of all Iranians are not ethnically Persian — that could rise up and threaten the regime in Tehran. Managing this country requires an infantry-heavy military better suited toward domestic control than to a 350-mile slog through swamps and very flat, very hot, dry deserts where the Iraqi army discovered it was very easy to see one’s entire force become very destroyed.

Yet what may seem remote to one side cannot be ruled out as impossible by the other, and in that sliver of possibility lies a foe’s worst fear — and American and Iranian leaders alike do not dare ignore the risks of those nightmares arising. The last Persian-Mesopotamian war (known in modern vernacular as the 1980-1988 Iran-Iraq war) claimed a million casualties. Would you like to be the Iranian leader who allowed a Sunni-ruled Iraq to re-emerge? Nearly 25 million barrels per day of crude oil — nearly one-third of global output — is produced in the Persian Gulf. Would you like to be the American president who failed to prevent all that power from becoming concentrated under a single (hostile) state?

The topic of the American-Iranian negotiations is not to get past these fears — no amount of Carter-esque goodwill is going to convince Washington and Tehran to trust the other — but instead to embed these fears in the final settlement and craft a solution that is institutionally neutral. For this a template does indeed exist. In fact, the United States has done precisely this, in partnership with a country for which it held far more vitriol and anger that it does for Iran.

At the end of World War II, the Soviets wanted to ensure that Finland could never again bloody the Russian nose (casualty ratios in the Russo-Finnish War, or Winter War, of 1941 were the worst Soviet Russia ever suffered). Yet the bulk of Finland was not in Soviet hands at war’s end, and the Western powers certainly did not want to see the balance of power in the Baltic states altered. The settlement was that Finland would have a Western-style participatory democracy, but the Soviet Union would enjoy a de facto veto over all decision-making. The result was a “free” Finland with a capitalist economy and a robust defense force, but a country that did not join either NATO or the European Economic Community and remained strictly neutral in international affairs.

Exploiting U.S. Distractions

Russia has taken advantage of the imbalance in the U.S. politico-military posture to attempt to re-establish its sphere of influence in the former Soviet Union. To this end, Russia has taken advantage of its enhanced financial position — due to soaring commodity prices, particularly in the energy sector — as well as a lack of American options in the region.

The Russians do not have any interest in re-establishing the Soviet Union, nor even in controlling the internal affairs of most of the former Soviet republics. Moscow does want to do two things, however. First, it wants to coordinate commodity policies across the board to enhance Russian leverage. Second, and far more important, it wants to limit U.S. and European influence in these countries. Above all, Russia does not want to see NATO expand any further — and Moscow undoubtedly would like to see a NATO rollback, particularly in the Baltic states.

From a strategic point of view, the United States emerged from the Cold War with a major opportunity. Since it is not in the United States’ interests to have any great power emerge in Eurasia, making certain that Russia did not re-emerge as a Eurasian hegemon clearly was a strategic goal of the United States. The Soviet disintegration did not in any way guarantee that it would not re-emerge in another form.

The United States pursued this goal in two ways. The first was by seeking to influence the nature of the Russian regime, trying to make it democratic and capitalist under the theory that democratic and capitalist nations did not engage in conflict with democratic and capitalist countries. Whatever the value of the theory, what emerged was not democracy and capitalism but systemic chaos and decomposition. The Russians ultimately achieved this state on their own, though the United States and Europe certainly contributed.

The second way Washington pursued this goal was by trying to repeat the containment of the Soviet Union with a new containment of Russia. Under this strategy, the United States in particular executed a series of moves with the end of expanding U.S. influence in the countries surrounding Russia. This strategy’s capstone was incorporating new countries into NATO, or putting them on the path to NATO membership.

NATO Expansion and Color Revolutions

The Baltic states were included, along with the former Soviet empire in Central Europe. But the critical piece in all of this was Ukraine. If Ukraine were included in NATO or fell under Western influence, Russia’s southern flank would become indefensible. NATO would be a hundred miles from Volgograd, formerly known as Stalingrad. NATO would also be less than a hundred miles from St. Petersburg. In short, Russia would become a strategic cripple.

The U.S. strategy was to encourage pro-American, democratic movements in the former Soviet Republics — the so-called “color revolutions.” The Orange Revolution in Ukraine was the breaking point in U.S.-Russian relations. The United States openly supported the pro-Western democrats in Ukraine. The Russians (correctly) saw this as a direct and deliberate challenge by the United States to Russian national security. In their view, the United States was using the generation of democratic movements in Ukraine to draw Ukraine into the Western orbit and ultimately into NATO.

Having their own means of influence in Ukraine, the Russians intervened politically to put a brake on the evolution. The result was a stalemate that Russia appeared destined to win by dint of U.S. preoccupation with the Islamic world, Russian proximity, and the fact that Russia had an overwhelming interest in Ukraine while the Americans had only a distant interest.

U.S. interest might have been greater than the Russians thought. The Americans have watched the re-emergence of Russia as a major regional power. It is no global superpower, but it certainly has regained its position as a regional power, reaching outside of its own region in the Middle East and elsewhere. The Iranians and Germans must both take Russia into account as they make their calculations. The Russian trajectory is thus clear. They may never be a global power again, but they are going to be a power that matters.

The Closing Window

It is far easier for the United States to prevent the emergence of a regional hegemon than to control one that has already emerged. Logically, the United States wants to block the Russian re-emergence, but Washington is running out of time. Indeed, one might say that the Americans are already out of time. Certainly, the United States must act now or else accept Russia as a great power and treat it as such.

This is why U.S. President George W. Bush has gone to Ukraine. It is important to recall that Bush’s trip comes in the context of an upcoming NATO summit, where the United States has called for beginning the process that will include Ukraine — as well as Georgia and other Balkan powers — in NATO. Having gone relatively quiet on the issue of NATO expansion since the Orange Revolution, the United States now has become extremely aggressive. In traveling to Ukraine to tout NATO membership, Bush is directly challenging the Russians on what they regard as their home turf.

Clearly, the U.S. window of opportunity is closing: Russian economic, political and military influence in Ukraine is substantial and growing, while the U.S. ability to manipulate events in Ukraine is weak. But Bush is taking a risky step. First, Bush doesn’t have full NATO support, which he needs since NATO requires unanimity in these issues. Several important NATO countries —particularly Germany — have opposed this expansion on technical merits that are hard to argue with. Germany’s stance is that not only is Ukraine not militarily ready to start meaningful membership talks, but that the majority of its population opposes membership in the first place.

Assuming Bush isn’t simply making an empty gesture for the mere pleasure of irritating the Russians, the United States clearly feels it can deal with German objections if it creates the proper political atmosphere in Ukraine. Put another way, Bush feels that if he can demonstrate that the Russians are impotent, that their power is illusory, he can create consensus in NATO. Russia’s relatively weak response over Kosovo has been taken by Washington and many in Europe (particularly Central Europe) as a sign of Russian weakness. Bush wants to push the advantage now, since he won’t have a chance later. So the visit has been shaped as a direct challenge to Russia. Should Moscow fail to take up the challenge, the dynamics of the former Soviet Union will be changed.

The Russians have three possible countermoves. The first is to use the Federal Security Service (FSB), its intelligence service, to destabilize Ukraine. Russia has many assets in Ukraine, and Russia is good at this game. Second, Russia can use its regional military power to demonstrate that the United States is the one bluffing. And third, Russia can return the favor to the Americans in a place that will hurt very badly; namely, in the Middle East — and particularly in Iran and Syria. A decision to engage in massive transfers of weapons, particularly advanced anti-aircraft systems, would directly hurt the United States.

Of these options, the first is certainly the most feasible. Not only is it where the Russians excel — and will such a strategy leave few fingerprints and produce results quickly — but the other two options risk consolidating the West into a broad anti-Russian coalition that may well return the favor across the entire Russian periphery. The latter two options would also commit much of Russia’s resources to a confrontation with the West, leaving precious little to hedge against other powers, most notably a China which is becoming more deeply enmeshed in Central Asia by the day.

The Middle East Connection

Still, the United States must focus on where most of its troops are fighting. It would thus appear that provoking the Russians is a dangerous game. This is why events in Iraq this week have been particularly interesting. A massive battle broke out between two Shiite factions in Iraq. One, led by Abdel Aziz al-Hakim — who effectively controls Iraqi Prime Minister Nouri al-Maliki due to the small size and fractured nature of al-Maliki’s party — confronted the faction led by Muqtada al-Sadr. Clearly, this was an attempt by the dominant Shiite faction to finally deal with the wild card of Iraqi Shiite politics. By the weekend, al-Sadr had capitulated. Backed into a corner by overwhelming forces, apparently backed by U.S. military force, al-Sadr effectively sued for peace.

Al-Sadr’s decision to lay down arms was heavily influenced by the Iranians. We would go further and say the decision to have al-Sadr submit to a government dominated by his Shiite rivals was a decision made with Iranian agreement. The Iranians had been restraining al-Sadr for a while, taking him to Tehran and urging him to return to the seminary to establish his clerical credentials. The Iranians did not want to see a civil war among the Iraqi Shia. A split among the Shia at a time of increasing Sunni unity and cooperation with the United States would open the door to a strategically unacceptable outcome for Iran: a pro-American government heavily dominated by Sunnis with increasing military power as the Shia are fighting among themselves.

The Americans also didn’t want this outcome. While the Iranians had restrained al-Sadr at the beginning of the U.S. surge — and thereby massively contributed to the end of the strategy of playing the Sunnis against the Shia — Tehran had not yet dealt with al-Sadr decisively. Just like Iran, the United States prefers not to see a new Sunni government emerge in Iraq. Instead, Washington wants a balance of power in Baghdad between Sunnis, Shia and Kurds, and it wants intra-communal disputes to be contained within this framework. If a stable government is to emerge, each of the communities must be relatively (with an emphasis on “relatively”) stable. Thus, not for the first time, American and Iranian interests in Iraq were aligned. Both wanted an end to Shiite conflict, and that meant that both wanted al-Sadr to capitulate.

This is the point where U.S. and Iranian interests can diverge. The Iranians have a fundamental decision to make, and what happens now in Iraq is almost completely contingent upon what the Iranians decide. They can do three things. First, they can hold al-Sadr in reserve as a threat to stability if things don’t go their way. Second, they can use the relative unity of the Shia to try to impose an anti-Sunni government in Baghdad. And third, they can participate in the creation of that government.

We have long argued that the Iranians would take the third option. They certainly appeared to be cooperating in the last week. But it has not been clear what the U.S. government thought, partly because they have been deliberately opaque in their thinking on Iran, and partly because the situation was too dynamic.

Bush’s Long Shot

It is the decision to visit Ukraine and challenge the Russians on their front porch that gives us some sense of Washington’s thinking. To challenge Moscow at a time when the Russians might be able to support Iran in causing a collapse in the Iraqi process would not make sense. The U.S. challenge is a long shot anyway, and risking a solution in Iraq by giving the Iranians a great power ally like Russia would seem too much of a risk to take.

But Bush is going to Ukraine and is challenging the Russians on NATO. This could mean he does not think Russia has any options in the Middle East. It also could mean that he has become sufficiently confident that the process (let’s not call it a relationship) that has emerged with the Iranians is robust enough that Tehran will not sink it now in exchange for increased Russian support, and that while a crisis with Syria is simmering, the Russians will not destabilize the situation there — Syria lacks the importance that Iran holds for U.S. strategy in Iraq, anyway.

Bush’s decision to go to Ukraine indicates that he feels safe in opening a new front — at least diplomatically — while an existing military front remains active. That move makes no sense, particularly in the face of some European opposition, unless he believes the Russians are weaker than they appear and that the American position in Iraq is resolving itself. Bush undoubtedly would have liked to have waited for greater clarity in Iraq, but time is almost up. The Russians are moving now, and the United States can either confront them now or concede the game until the United States is in a military position to resume Russian containment. Plus, Bush doesn’t have any years left in office to wait.

The global system is making a major shift now, as we have been discussing. Having gotten off balance and bogged down in the Islamic world, the only global power is trying to extricate itself while rebalancing its foreign policy and confronting a longer-term Russian threat to its interests. That is a delicate maneuver, and one that requires deftness and luck. As mentioned, it is also a long shot. The Russians have a lot of cards to play, but perhaps they are not yet ready to play them. Bush is risking Russia disrupting the Middle East as well as increasing pressure in its own region. He either thinks it is worth the risk or he thinks the risk is smaller than it appears.

Stratfor tries not to get involved in this sort of debate. Our role is to try to predict what nations and leaders will do, and to explain their reasoning and the forces that impel them to behave as they do. Many times, this analysis gets confused with advocacy. But our goal actually is to try to understand what is happening, why it is happening and what will happen next. We note the consensus. We neither approve nor disapprove of it as a company. As individuals, we all have opinions. Opinions are cheap and everyone gets to have one for free. But we ask that our staff check them — along with their personal ideologies — at the door. Our opinions focus not on what ought to happen, but rather on what we think will happen — and here we are passionate.

Public Justifications and Private Motivations

We have lived with the Iraq war for more than five years. It was our view in early 2002 that a U.S. invasion of Iraq was inevitable. We did not believe the invasion had anything to do with weapons of mass destruction (WMD) — which with others we believed were under development in Iraq. The motivation for the war, as we wrote, had to do with forcing Saudi Arabia to become more cooperative in the fight against al Qaeda by demonstrating that the United States actually was prepared to go to extreme measures. The United States invaded to change the psychology of the region, which had a low regard for American power. It also invaded to occupy the most strategic country in the Middle East, one that bordered seven other key countries.

Our view was that the Bush administration would go to war in Iraq not because it saw it as a great idea, but because its options were to go on the defensive against al Qaeda and wait for the next attack or take the best of a bad lot of offensive actions. The second option consisted of trying to create what we called the “coalition of the coerced,” Islamic countries prepared to cooperate in the covert war against al Qaeda. Fighting in Afghanistan was merely a holding action that alone would solve nothing. So lacking good options, the administration chose the best of a bad lot.

The administration certainly lied about its reasons for going into Iraq. But then FDR certainly lied about planning for involvement in World War II, John Kennedy lied about whether he had traded missiles in Turkey for missiles in Cuba and so on. Leaders cannot conduct foreign policy without deception, and frequently the people they deceive are their own publics. This is simply the way things are.

We believed at the time of the invasion that it might prove to be much more difficult and dangerous than proponents expected. Our concern was not about a guerrilla war. Instead, it was about how Saddam Hussein would make a stand in Baghdad, a city of 5 million, forcing the United States into a Stalingrad-style urban meat grinder. That didn’t happen. We underestimated Iraqi thinking. Knowing they could not fight a conventional war against the Americans, they opted instead to decline conventional combat and move to guerrilla warfare instead. We did not expect that.

A Bigger Challenge Than Expected

That this was planned is obvious to us. On April 13, 2003, we noted what appeared to be an organized resistance group carrying out bombings. Organizing such attacks so quickly indicated to us that the operations were planned. Explosives and weapons had been hidden, command and control established, attacks and publicity coordinated. These things don’t just happen. Soon after the war, we recognized that the Sunnis in fact had planned a protracted war — just not a conventional one.

Our focus then turned to Washington. Washington had come into the war with a clear expectation that the destruction of the Iraqi army would give the United States a clean slate on which to redraw Iraqi society. Before the war was fought, comparisons were being drawn with the occupation of Japan. The beginnings of the guerrilla operation did not fit into these expectations, so U.S. Defense Secretary Donald Rumsfeld dismissed the guerrillas as merely the remnants of the Iraqi army — criminals and “dead-enders” — in their last throes. We noted the gap between Washington’s perception of Iraq and what we thought was actually going on.

A perfect storm arose in this gulf. First, no WMD were found. We were as surprised by this as anybody. But for us, this was an intellectual exercise; for the administration, it meant the justification for the war — albeit not the real motive — was very publicly negated. Then, resistance in Iraq to the United States increased after the U.S. president declared final victory. And finally, attempts at redrawing Iraqi society as a symbol of American power in the Islamic world came apart, a combination of the guerrilla war and lack of preparation plus purging the Baathists. In sum, reshaping a society proved more daunting than expected just as the administration’s credibility cracked over the WMD issue.

A More Complex Game

By 2004, the United States had entered a new phase. Rather than simply allowing the Shia to create a national government, the United States began playing a complex and not always clear game of trying to bring the Sunnis into the political process while simultaneously waging war against them. The Iranians used their influence among the Shia to further destabilize the U.S. position. Having encouraged the United States to depose its enemy, Saddam Hussein, Tehran now wanted Washington to leave and allow Iran to dominate Iraq.

The United States couldn’t leave Iraq but had no strategy for staying. Stratfor’s view from 2004 was that the military option in Iraq had failed. The United States did not have the force to impose its will on the various parties in Iraq. The only solution was a political accommodation with Iran. We noted a range of conversations with Iran, but also noted that the Iranians were not convinced that they had to deal with the Americans. Given the military circumstance, the Americans would leave anyway and Iran would inherit Iraq.

Stratfor became more and more pessimistic about the American position in 2006, believing that no military solution was possible, and that a political solution — particularly following the Democratic victory in 2006 congressional elections — would further convince the Iranians to be intransigent. The deal that we had seen emerging over the summer of 2006 after the killing of Abu Musab al-Zarqawi, the head of al Qaeda in Iraq, was collapsing.

The Surge

We were taken by surprise by U.S. President George W. Bush’s response to the elections. Rather than beginning a withdrawal, he initiated the surge. While the number of troops committed to Iraq was relatively small, and its military impact minimal, the psychological shock was enormous. The Iranian assumption about the withdrawal of U.S. forces collapsed, forcing Tehran to reconsider its position. An essential part of the surge — not fully visible at the beginning — was that it was more a political plan than a military one. While increased operations took place, the Americans reached out to the Sunni leadership, splitting them off from foreign jihadists and strengthening them against the Shia.

Coupled with increasingly bellicose threats against Iran, this created a sense of increasing concern in Tehran. The Iranians responded by taking Muqtada al-Sadr to Iran and fragmenting his army. This led to a dramatic decline in the civil war between Shia and Sunni and in turn led to the current decline in violence.

The war — or at least Stratfor’s view of it — thus went through four phases:

Winter 2002-March 2003: The period that began with the run-up to invasion, in which the administration chose the best of a bad set of choices and then became overly optimistic about the war’s outcome.

April 2003-Summer 2003: The period in which the insurgency developed and the administration failed to respond.

Fall 2003-late 2006: The period in which the United States fought a multisided war with insufficient forces and a parallel political process that didn’t match the reality on the ground.

Late 2006 to the present: The period known as the surge, in which military operations and political processes were aligned, leading to a working alliance with the Sunnis and the fragmentation of the Shia. This period included the Iranians restraining their Shiite supporters and the United States removing the threat of war against Iran through the National Intelligence Estimate.

The key moment in the war occurred between May 2003 and July 2003. This consisted of the U.S. failure to recognize that an insurgency in the Sunni community had begun and its delay in developing a rapid and effective response, creating the third phase — namely, the long, grueling period in which combat operations were launched, casualties were incurred and imposed, but the ability to move toward a resolution was completely absent. It is unclear whether a more prompt response by the Bush administration during the second period could have avoided the third period, but the second period certainly was the only point during which the war could have been brought under control.

The operation carried out under Gen. David Petraeus, combining military and political processes, has been a surprise, at least to us. Meanwhile, the U.S. rapprochement with the Sunnis that began quietly in Anbar province spiraled into something far more effective than we had imagined. It has been much more successful than we had imagined in part because we did not believe Washington was prepared for such a systematic and complex operation that was primarily political in nature. It is also unclear if the operation will succeed. Its future still depends on the actions of the Iraqi Shia, and these actions in turn depend on Iran.

The Endgame

We have been focused on the U.S.-Iranian talks for quite awhile. We continue to believe this is a critical piece in any endgame. The United States is now providing an alternative scenario designed to be utterly frightening to the Iranians. They are arming and training the Iranians’ mortal enemies: the Sunnis who led the war against Iran from 1980 to 1988. That rearming is getting very serious indeed. Sunni units outside the aegis of the Iraqi military are now some of the most heavily armed Iraqis in Anbar, thanks to the Sunni relationship with U.S. forces there. It should be remembered that the Sunnis ruled Iraq because the Iraqi Shia were fragmented, fighting among themselves and therefore weak. That underlying reality remains true. A cohesive Sunni community armed and backed by the American s will be a formidable force. That threat is the best way to bring the Iranians to the table.

The irony is that the war is now focused on empowering the very people the war was fought against: the Iraqi Sunnis. In a sense, it is at least a partial return to the status quo ante bellum. In that sense, one could argue the war was a massive mistake. At the same time, we constantly return to this question: We know what everyone would not have done in 2003; we are curious about what everyone would have done then. Afghanistan was an illusory option. The real choices were to try to block al Qaeda defensively or to coerce Islamic intelligence services to provide the United States with needed intelligence. By appearing to be a dangerous and uncontrolled power rampaging in the most strategic country in the region, the United States reshaped the political decisions countries like Saudi Arabia were making.