Wheeling and Dealing

By Thomas A. Sancton

Christopher rushes to Algiers--again--as the U.S. bids for the captives Once more the pace quickened. After eight weeks of stop-and-start negotiations for the freedom of the 52 U.S. hostages, a flurry of activity in Tehran, Washington and Algiers raised hopes last week that a possible settlement might at last be imminent. Or was it? The nation's very capacity for optimism seemed to have been blunted by 14 months of watching the cruel pendulum swing between hope and disappointment.

A rapid-fire exchange of messages volleyed between the capitals. Tantalizing public statements from Iranian leaders suggested that a secret Algerian plan could provide a solution to the crisis. As suspense mounted, Deputy Secretary of State Warren Christopher flew to Algiers to explain the U.S. position to the Algerian officials who are serving as diplomatic intermediaries between the U.S. and Iran. Said Christopher: "The process is continuing, and the distance between us which is still measured in very large numbers, seems to be narrowing somewhat. ] emphasize seems to be."

His caution was understandable. Only two weeks earlier, Tehran had appeared to close off discussion altogether with it stunning "final" demand for a $24 billion "guarantee" in exchange for the American captives. Washington had countered with a proposal that offered to place as much as $7 billion in U.S.-held Iranian assets into an escrow account, to be transferred to Tehran upon the release of the hostages. The Algerian go-betweens had carried the U.S. proposal to Tehran on Jan. 2--along with a pointed reminder hat time was running out for the Carter Administration. It was hoped that Tehran's reluctance to deal with the tougher-sounding Reagan Administration might prompt a rapid response.

Reagan then did some prodding of his own by indicating that he might attempt a different, unspecified tack if the crisis was not resolved by the time he takes office on Jan. 20. Though he said he would probably support a Carter-negotiated settlement, the President-elect would not commit himself absolutely. Said Reagan:

"I don't think anyone should be asked to sign a blank check."

Even before Reagan's statement, Tehran seemed eager to speed up the negotiations. On Tuesday an Iranian message clattered into the teletypes of the State Department's operations center. Christopher hastily called in the six-man hostage negotiating group he heads to discuss the latest communication: a series of about 15 questions concerning "the procedures and mechanics" of the U.S. proposal. After more than four hours of deliberation, the U.S. team dispatched its reply to Algiers for relay to Tehran.

But when the message arrived at the Foreign Ministry in Algiers, the Algerians held it up. Washington was told that its answers were inadequate--at least in part because they were incomprehensible to the Algerians. After conferring with President Carter at the White House on Wednesday afternoon, Christopher decided to fly to Algiers with three other U.S.

negotiators. On arrival at Dar el Beida Airport, Christopher was driven to a two-hour meeting with Algerian Foreign Minister Mohammed Ben Yahia. Meanwhile, a second set of Iranian questions arrived in Washington, prompting Christopher to extend his stay in Algiers.

Despite the snag that had arisen, Washington officials remained encouraged by the tone of the Iranian questions, which suggested that Tehran might at least be seriously considering the U.S. terms. Explained an official familiar with the minuet of the negotiations: "They were asking us, 'If what you propose were to take place, how would it be done and what would happen next?' They engaged our proposals."

In Tehran, meanwhile, Iranian leaders seemed almost to be parading a series of highly ambiguous public statements about a mysterious Algerian plan. First, Prime Minister Mohammed Ali Raja'i announced that Revolutionary Leader Ayatullah Ruhollah Khomeini had approved Algerian efforts to resolve the hostage issue. Said Raja'i: "We explained the Algerian proposal, which has suggested that it will guarantee to solve our problem with the United States, and the Imam permitted us to accept these guarantees." But Raja'i made no attempt to explain what those guarantees were.

Then Iran's chief hostage negotiator, Behzad Nabavi, compounded the confusion at a much ballyhooed press conference. Declared Nabavi: "The Algerian government has said in its proposal that it is ready to accept the undertakings of both sides." He refused to be specific about the content of the Algerian plan, but indicated that it "has been considered and discussed and has generally been agreed to in principle." Just what the Algerian suggestion was all about remained a mystery. The very existence of an independent Algerian "plan" was vehemently denied by both Algerian diplomats and State Department officials. While conceding that the Algerians' role had grown with each exchange of proposals, State Department Spokesman John Trattner insisted that "their role does not make them guarantors."

Whatever it was, an intermediary Algerian role seemed important to the Iranian leaders, chiefly as a face-saving device for backing down from their extortionary demands. Said a senior Iranian diplomat in Tehran: "The mullahs' political capital is based on their anti-Americanism. Their problem is that they want both a hostage deal and a sure way to avoid loss of face. Thus the latest strategy for compromise with America is to maneuver Algeria into holding the can."

Compromise on both sides, in fact, had already produced broad agreement between Tehran and Washington in some areas, but numerous questions remained unresolved. Most of these boiled down to one word: money. A major sticking point concerned the return of $8 billion to $14 billion in frozen Iranian assets, much of which was encumbered by American claims and attachments. Another problem appeared to be the Iranians' insistence on a multibil-lion-dollar escrow account to guarantee the return of the late Shah's U.S.-held assets. Said an aide to Secretary of State Edmund Muskie: "That's really where it's hung. They are serious about it. But they have to understand that we are at the limit of our authority." Washington has long promised to help locate the Pahlavi assets in the U.S. and block their expatriation, but has no power to hand them over to Tehran unless Tehran can establish rightful ownership in U.S. courts.

While Americans were preoccupied with the hostages, the Iranians had much of their attention focused elsewhere. With considerable fanfare, Tehran announced it had launched a long-promised counteroffensive in the three-month-old war with Iraq. In Tehran tens of thousands of Iranians braved subfreezing temperatures to climb out on their rooftops to chant vast choruses of "God is great." They had been exhorted to do so by Tehran Radio following a triumphant message from President Abolhassan Banisadr, who was at the front, proclaiming the "unprecedented success" of the Iranian forces. In a series of ground and air attacks along a 500-mile front, mainly in the oil-producing Khuzistan province, the Iranians claimed to have killed more than 2,000 Iraqi soldiers and taken 3,000 prisoners. According to Tehran's claims, the heaviest fighting took place around Ahwaz and Susangerd, both of which had been under Iraqi siege for several weeks.

At midweek, foreign correspondents were summoned to Tehran's railway station to observe the arrival of about 500 Iraqi P.O.W.s from the southern battle zone. Each prisoner had his hands tied behind his back and a card around his neck bearing his name, rank and serial number. As a brass band blared out martial music, thousands of Iranians shouted anti-Iraqi epithets. Iranian officials claimed that the prisoners had been captured around Abadan, Ahwaz and Susangerd that week, but some may have been taken in earlier fighting.

While admitting there had been heavy fighting, the Iraqis played down the Iranian "victory" and played up their own. One communique from Baghdad put Ira nian losses at 710 men in one 24-hour period. The Iraqis said they had lost only 40 of their own troops. In the central sector around the Iranian town of Gilan-e-Gharb, Baghdad claimed to have forced Iranian troops into chaotic retreat in two furious battles. Though claims on both sides were certainly exaggerated, Iran's avowed capacity for counterattack was being taken seriously for the first time since the war began. It remained to be seen whether that initiative could be sustained and intensified in order to turn the tide in Tehran's favor.

The timing of Iran's latest military moves owed as much to internal power struggles--and the hostage crisis--as to the war itself. As commander in chief of the armed forces, Banisadr had been blamed by his opponents in the clergy-dominated Islamic Republic Party for Iran's military setbacks. Thus by ordering last week's counteroffensive, he was able to silence their criticism at least for the time being. Even as they dutifully applauded the "success of the forces of Islam," however, the mullahs loudly demanded more "daring assaults." For the clerical hardliners, in fact, the primary value of the new military campaign may have been to distract public attention from a possible deal over the hostages. Denouncing their blatant opportunism in the Tehran daily Enghelab-e-Eslami, Banisadr demanded, "How come the so-called uncompromising revolutionaries have staged an about-face and are now willing to seek a negotiated end to the hostage crisis?" It was a question the mullahs would rather leave unanswered--or at least out of the spotlight. --By Thomas A. Sancton.

Reported by William Stewart/Beirut and Gregory H. Wierzynski/Washington

With reporting by William Stewart, Gregory Wierzynski

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