"No major confrontations or crises have occurred in the Persian Gulf since 1998, but regional security challenges that could erupt into crises on short notice have not been eliminated. Most observers agree that Iraq is contained militarily, unable to rebuild its conventional forces and constrained in its ability to acquire technology that could be used to build prohibited weapons of mass destruction (WMD). On the other hand, the U.N. Security Council has become deeply divided on Iraq policy, and unable to obtain a restart of U.N. weapons inspections, which ended on the eve of a U.S./British bombing campaign against Iraq in December 1998. Administration officials acknowledge that, without inspections, there is substantial uncertainty about the state of Iraq's WMD capabilities and activities, if any. The Administration has moved to end twenty years of hostility with Iran since the unexpected election in May 1997 of a relative moderate, Mohammad Khatemi, as President. Administration efforts might have contributed to an apparent reduction in Iranian support for international terrorism and an accelerated effort by Iran to end its international isolation. However, Administration overtures toward Iran over the past year have not yet brought Iran into a formal dialogue with the U.S. government. Administration hopes that a moderating Iran might also slow its WMD acquisition and development programs have not materialized, although most observers attribute Iran's commitment to those programs to the security threats Iran perceives on virtually all its borders. Since the Islamic revolution in 1979, Iran is or has been at odds with several of its neighbors, including the Gulf states (Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, Qatar and Oman), Iraq, and the Taliban-ruled Afghanistan, and it views Israel as an adversary."
CRS Report for Congress, RL30728