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WSJ: "India has tightened the web of sanctions around Iran by barring Indian companies from a range of deals transacted through a key trade-finance clearinghouse. India is Iran's biggest trading partner in business done through the Asian Clearing Union, originally set up by the United Nations in 1974 to help facilitate trade in South Asia and headquartered in Tehran. The same mechanism that has allowed the body to fill its original purpose of greasing the wheels of international trade-by letting central banks handle payments on behalf of their nations' companies-can also obscure which firms are doing business on both ends of a deal. That, the U.S. alleges, can mean firms are dealing through their central banks with blacklisted companies, such as firms owned by Iran's elite Revolutionary Guard. The Reserve Bank of India instructed the country's lenders Monday to stop processing current-account transactions with Iran using the ACU. Last Friday, the central bank said Indian firms can't use the ACU mechanism when making payments for the import of oil or gas. While the earlier order didn't explicitly mention Iran, the Islamic republic is the only major crude exporter in the ACU. Iran has ramped up its use of the clearinghouse by more than 50% this year compared to last year, after it advertised the clearinghouse to Iranian and Indian firms in early 2009 as a way to avoid having to use dollars for their transactions and thus 'sidestep the U.S. banking system altogether.'" http://on.wsj.com/g8Suw0

AP: "Israel's minister of strategic affairs said Wednesday that technical difficulties have pushed back the Iranian timetable for producing a nuclear weapon. Moshe Yaalon, a former military chief of staff whose portfolio includes monitoring Iran, said he believes Iran is at least three years away from developing a nuclear bomb. Iran denies such intentions. Israeli military officials have said Iran has the expertise to build a bomb, but still needs time to gather the necessary materials. Yaalon's assessment matches the outer range of past Israeli estimates that Iran is anywhere from one to three years away from developing a weapon. 'These difficulties postpone the timetable, so we can't talk about a point of no return. Iran does not currently have the ability to produce a nuclear weapons by itself,' he told Israel Radio. 'It could happen in the next three years if the process succeeds. I hope it won't succeed at all and that the Western world's effort will ultimately bring about Iran not having a nuclear capability.'" http://wapo.st/haeWyj

AP: "Fuel consumption has fallen by a fifth since the government began slashing energy and food subsidies earlier this month, a top government official said Wednesday, claiming an early sign of success in the controversial program. Gasoline prices quadrupled and bread prices tripled after the cuts came into effect Dec. 19, part of a government effort to boost Iran's ailing economy by reducing the massive drain on the state budget from the subsidies... Vice President Mohammad Royanian said on state TV Wednesday that 'overall, there has been a 20 percent fall in fuel consumption' since the cuts were enacted. Gasoline consumption now stands at 50 million liters (13 million gallons) a day and diesel consumption at 42 million liters (11 million gallons) a day, he said." http://wapo.st/h4EVYk

Nuclear Program & Sanctions

Daily Telegraph: "Standard Chartered has launched a review of its compliance with US sanctions, after revealing it is in discussions with American authorities about its 'past business' with Iran. The company cut all ties with Iran in 2007 and did not disclose any discussions with the US authorities about its dealings with the pariah regime until this year. It slipped a cautionary paragraph about meetings with US authorities into its annual report of March, and in its rights issue prospectus this October, the company stepped up its warning to shareholders. 'Several US agencies have investigated how a number of other financial institutions have processed US dollar payments potentially involving sanctioned parties,' the document said. 'In light of that activity relating to other institutions, the group initiated discussions with US authorities to discuss its past business.'" http://bit.ly/enNfB7

RIA Novosti: "Russia's committee on foreign investments declined a request by an Iranian company to purchase a shipping port on the Volga River in Astrakhan, Federal Anti-Monopoly Service head Igor Artemyev said on Tuesday. Iranian-owned Khazar Sea Shipping Lines put forward its intentions to purchase Alfa Port, but was declined by the committee because the company refused to reveal the actual owner of the company, Artymyev said, adding that the company was on the international blacklist in regard to sanctions on Iran. 'Since [this company] is on the blacklist, the committee replied negatively [to the request],' Artemyev said. Alfa Port has an area of 45,164 square meters and can accept ships with cargoes up to 5,000 tons each. The company handles loading and unloading of large ships and has access to Russian railways."http://bit.ly/hrfQZ9

Reuters: "Iran's central bank has asked for a meeting with its Indian counterpart over payments issues for crude imports from the Islamic Republic, a Reserve Bank of India spokesperson said on Wednesday. 'The central bank of Iran has sought a meeting with the RBI,' the spokesperson said. 'No date has been fixed yet.' An oil industry source said the meeting may take place on Friday in the financial capital of Mumbai. The RBI has said deals with Iran must be settled outside the Asian Clearing Union (ACU) system, used by central banks of member nations to settle net bilateral trades, cutting use of forex reserves and transfer costs. Sources earlier told Reuters that NIOC has refused to sell oil to Indian outside ACU mechanism." http://bit.ly/f5FkYw

Human Rights

Radio Farda: "Seven friends and relatives of Iranian political prisoner Ali Saremi are reported to have been detained outside Tehran's Evin prison where he was hanged on December 28, RFE/RL's Radio Farda reports. Saremi's brother Hassan told RFE/RL the family was not notified in advance of his impending execution. He said seven friends and relatives, including Saremi's sister, wife, daughter, and son-in-law, went to Evin prison after being informed by Ali's cellmates at Gohardasht prison that he had been suddenly transferred. Hassan Saremi said they were detained there on December 28 by security forces. According to Iranian state media, Saremi, 62, was found guilty of membership of the exiled opposition group Mujahedin Khalq Organization (MKO), 'waging war against God,' and 'propaganda activities against the sacred regime of Islamic Republic of Iran.'" http://bit.ly/f4Lz7X

Opinion & Analysis

Mohamad Bazzi in The National: "After the disputed re-election of the Iranian president Mahmoud Ahmadinejad in June 2009, the clerical regime in Tehran consolidated its grip on power and stifled internal challenges. To the outside world, it appeared that Iran was torn by a conflict between Shiite Islam and democracy. But last year's unrest and violent crackdown in Iran were actually battles in a larger war that has been raging for centuries within Shiism - a struggle over who should rule the faithful, and how. Shiite clerics have long debated their role in politics. The 'quietist' school - rooted in the sect's tradition of seeking to avoid confrontation with powerful rulers - argues against direct engagement in political matters. The more activist school emphasises the martyrdom of one of Shiism's founding figures, Imam Hussein, who advocated rebellion and confrontation. But even within the activist school, there is a debate over the extent of clerical power. The model of absolute rule that dominates Iran today is just one of several competing doctrines within the Shiite clergy. Wilayat al Faqih, or 'guardianship of the jurist', triumphed under Ayatollah Ruhollah Khomeini, the leader of Iran's 1979 Islamic Revolution. Khomeini's charisma and political skill overshadowed the more moderate vision of Shiism emanating from the Iraqi city of Najaf. By eclipsing the Najaf school, Khomeini succeeded in combining the role of Shiite theologian with that of political leader. Any long-term change in Iran could be driven by a return to a more traditional interpretation of this concept - one that emphasises rule by consensus, as opposed to an all-powerful leader." http://bit.ly/hnMxfo

J.E. Dyer in Commentary: "There's more than one way to undermine America's ability to conduct military strikes on the Iranian nuclear program. Iran has been working hard on one of those methods over the last six months: denying us our use of regional military bases for the attack. Of the bases we use in the Persian Gulf region, the most significant to an attack campaign are in the small kingdoms of Bahrain and Qatar, which host, respectively, our fleet headquarters and a very large multi-use facility at Al-Udeid Air Base. For security operations in the Strait of Hormuz, we also rely on the use of airfields and ports in Oman.? We have additional facilities in Kuwait and the UAE, but for waging an offensive campaign in any part of the Gulf region, the necessary bases are the ones in Qatar, Bahrain, and Oman. These are the nations Iran has been concentrating on. The approaches are different for the different nations: in Bahrain, where a majority of the Arab population is Shia and the emir's government is justifiably concerned about unrest fomented by Tehran, the Iranians have alternated between threats and cajolery. In August their intimidation campaign paid off: the Bahraini foreign minister announced that Bahrain would not allow its territory to be used as a base for offensive operations. Because the U.S. military doesn't usually operate strike aircraft out of Bahrain, the impact of this is uncertain - but it could well jeopardize the U.S. Navy's ability to command and supply its fleet during an air campaign. With Qatar and Oman, Iran has sought bilateral defense-cooperation agreements. That approach introduces ambivalence in the host nation's strategic orientation - and hence in the status and purpose of the U.S. forces on its territory. Last week, for example, Qatar hosted a visit by three Iranian warships and a military delegation. The unprecedented event concluded with an announcement of Qatar's readiness for joint military exercises with the Iranian Revolutionary Guard." http://bit.ly/fIcVDN