The continuing US interest in the country stems from the latter's abundant oil wealth and its strategic location -- having command over the vast swathe of oil and gas fields and their supply routes. However, much of the US hopes were dashed with the coming of a hard-line president in Iran. That has again brought Mr. Bush on the warpath with regard to Iran.

President Bush has already branded Iran as one of the "axis of evil." The neo-cons, who find Iran to be the only impediment to their gaining supremacy over the entire region from Morocco to Indonesia, compiled numerous allegations against the country. They include Iran's opposition to the Israeli-Palestinian peace process, aiding Hamas and Islamic Jihad in occupied West Bank, a nexus with Lebanon's Hizbollah, and of course, interference in Iraq's internal politics.

But the most potent excuse they have in their hand, is Iran's assertion of going ahead with its "peaceful" nuclear program. Iran has, in the meantime, angered the West as well as the international community by calling the restriction on Iran's uranium enrichment program "nuclear apartheid." It also inadvertently made the provocative statement of "wiping Israel off the map" and called the sensitive Nazi Holocaust a "myth" -- thus providing excuse for hostility from various quarters.

The American had already been beating the war drum with regard to Iran which was brought to a crescendo in the run up to the crucial IAEA board of governors meeting on November 24 in Vienna. The Bush administration has pulled out all the stops in its efforts to cajole, bully, and scare the world into believing that Iran is on the very brink of acquiring nuclear weapons capability.

Last September the EU troika succeeded in convincing the IAEA board of governors to declare that Iran was in non-compliance with the Nuclear Non-Proliferation Treaty. But it stopped just short of referring Tehran to the UNSC, the next logical step. Backed obviously by the US, the EU-3 restarted talks that had precipitately been terminated by the EU-3 itself four months ago. The fresh negotiation to be resumed without precondition from either side will start any time soon.

The November 24 IAEA meeting was designed to effect a consensus to put Iran in the dock of the UNSC for possible sanctions including an oil embargo. To make the resolution sufficiently propitious, a flurry of diplomatic campaigns were launched. However, a sudden turn around on the part of President Bush, who seems to have somewhat relented on the Iran issue, has taken many by surprise.

It will no doubt allow a reprieve to Iran which has been contently living under the threat of Damocles' Sword falling on it at any time. There has been a certain climb down also on the part of western capitals who however always favoured a negotiated settlement of the issue. But what has led to this refreshing change of mind is still a puzzle, although speculation abounds.

The discerning observers of the Gulf affair see it in a light that again highlights the geo-politics of the region splashed with the world's most sought after strategic commodity. The countries, be they big or small, but dependent on oil imports, are increasingly reluctant to antagonise those endowed with oil.

EU-3 did realise that the UN sanctions including an embargo were the only effective was to punish a non-compliant Iran. But it also knew that the step would inevitably increase the oil price and damage the western economy. Therefore in punishing Iran, the West will be equally punished.

There could have been another secondary factor behind the climb-down. And that was the change in rotating membership of 35-strong IAEA board of governors and India's position on the issue. The pro-western countries that voted with the EU-3 and the US in September have since been replaced by Belarus, Cuba, and Syria -- all of then anti-West.

Also India, which had voted for the EU-3 resolution in September, to raise the "yes" tally to 22, was expected to abstain on any fresh anti-Iran resolution -- thus reducing the pro-western total to a bare majority of 18 -- not a strong motion for sanction by UNSC.

There are reasons for India behaving differently this time. There is already a Iranian proposal for $22 billion worth supply of Iranian natural gas to India for the next quarter century. Between now and 2025 the import of hydrocarbon energy required by a fast industrialising India will substantially rise. Along with India, another fast industrialising country China also has joined the scramble for energy, thus reshaping the global geo-politics in favour of the oil-rich countries.

Brig ( retd) Hafiz is former DG of BIISS.