Still chance for diplomacy with Iran: U.S. officials

Sanctions and diplomacy may yet persuade Iran to give up its nuclear program, as its leaders have shown a rational "cost-benefit approach" in their calculations, senior US officials said.

The top intelligence officials suggested Tuesday that military conflict with Iran was not inevitable, despite soaring tensions with Tehran and a war of nerves over the strategic Strait of Hormuz, a key oil trade choke point.

"We judge Iran's nuclear decision-making is guided by a cost-benefit approach, which offers the international community opportunities to influence Tehran," Director of National Intelligence James Clapper told the US Senate Select Committee on Intelligence.

"Iranian leaders undoubtedly consider Iran's security, prestige, and influence, as well as the international political and security environment, when making decisions about its nuclear program," he said.

He said economic sanctions were taking a toll and described a worsening rift between Iran's Supreme Leader Ali Khamenei and President Mahmoud Ahmadinejad.

The overriding goal of Iran's leaders remained "regime survival," and it was too early to say how economic strains triggered by tougher sanctions would affect their decisions, CIA Director David Petraeus told the same hearing.

With a run on the Iranian currency, inflationary pressures and unemployment, the sanctions were "biting" more now than ever before, Petraeus said.

"I think what we have to see now is how does that play out. What is the level of popular discontent inside Iran? Does that influence the strategic decision-making of the supreme leader and the regime?" he said.

The comments by senior intelligence officials echoed President Barack Obama's assessment in his State of the Union address last week, when he said "a peaceful resolution" remains possible with Iran.

The head of the intelligence committee, Senator Dianne Feinstein, meanwhile revealed that Israel's spy chief Tamir Pardo had visited Washington last week, amid speculation over a possible Israeli strike on Iran's nuclear facilities.

Such trips are usually secret, but Feinstein mentioned Pardo's visit at the televised hearing as she discussed how Israel views Iran's nuclear ambitions.

When asked by Feinstein about the likelihood of preemptive Israeli military action, Clapper replied that he would prefer to answer in a closed-door session but said sanctions might force Tehran to change course.

"Our hope is that the sanctions... will have the effect of inducing a change in Iranian policy toward their apparent pursuit of a nuclear capability," he said.

"Obviously, this is a very sensitive issue right now."

The United States and the European Union have ramped up sanctions on Iran following a damning UN International Atomic Energy Agency report in November.

The measures focus on Iran's vital oil industry and central bank in a bid to force Tehran to curtail its uranium enrichment program, which the West suspects is part of a secret drive to build an atomic bomb.

Iran insists its nuclear project is peaceful and has threatened retaliation over the fresh sanctions, including possibly disrupting shipping through the strategic Strait of Hormuz.

The head of the Defense Intelligence Agency, Lieutenant General Ronald Burgess, told senators Iran had "the capability, we assess, to temporarily close" the channel, but he did not elaborate.

The US intelligence chiefs made clear their view of Iran's nuclear program had not changed since an assessment last year by all 16 spy agencies that concluded Iran's leaders are divided over whether to build nuclear weapons and have yet to take a decision to press ahead.

Asked what would be a signal that Iran had decided to build a bomb, Clapper suggested that highly enriched weapons-grade uranium would be one clear sign.

With protests and unrest sweeping Syria, Petraeus said Iran was worried about its ally and was working to prop up the embattled regime.

The fall of President Bashar al-Assad would deliver a major blow to Tehran, which relies on Syria as a logistics link to Hezbollah militants in Lebanon, said the CIA director.

"Clearly, the loss of Syria as a logistics platform, a line of communication into Lebanon to support Hezbollah, would be a substantial setback for Iran in its effort to use Hezbollah as a proxy," he said.

"That's indeed why the (Iranian) Revolutionary Guard is so engaged in trying to prop up Bashar al-Assad right now."