nflicts and differences consistent
with its own interests. Accordingly, the Support Group should actively
engage Iran and Syria in its diplomatic dialogue, without
preconditions.

The Study Group recognizes that U.S. relationships with Iran and Syria
involve difficult issues that must be resolved. Diplomatic talks
should be extensive and substantive, and they will require a balancing
of interests. The United States has diplomatic, economic, and military
disincentives available in approaches to both Iran and Syria. However,
the United States should also consider incentives to try to engage
them constructively, much as it did successfully with Libya.

Some of the possible incentives to Iran, Syria, or both include:

i. An Iraq that does not disintegrate and destabilize its neighbors
and the region.

ii. The continuing role of the United States in preventing the Taliban
from destabilizing Afghanistan.

iii. Accession to international organizations, including the World
Trade Organization.

iv. Prospects for enhanced diplomatic relations with the United
States.

v. The prospect of a U.S. policy that emphasizes political and
economic reforms instead of (as Iran now perceives it) advocating
regime change.

vi. Prospects for a real, complete, and secure peace to be negotiated
between Israel and Syria, with U.S. involvement as part of a broader
initiative on Arab-Israeli peace as outlined below.

RECOMMENDATION 9: Under the aegis of the New Diplomatic Offensive and
the Support Group, the United States should engage directly with Iran
and Syria in order to try to obtain their commitment to constructive
policies toward Iraq and other regional issues. In engaging Syria and
Iran, the United States should consider incentives, as well as
disincentives, in seeking constructive results.

IRAN. Engaging Iran is problematic, especially given the state of the
U.S.-Iranian relationship. Yet the United States and Iran cooperated
in Afghanistan, and both sides should explore whether this model can
be replicated in the case of Iraq.

Although Iran sees it in its interest to have the United States bogged
down in Iraq, Iran's interests would not be served by a failure of
U.S. policy in Iraq that led to chaos and the territorial
disintegration of the Iraqi state. Iran's population is slightly more
than 50 percent Persian, but it has a large Azeri minority (24 percent
of the population) as well as Kurdish and Arab minorities. Wo