Inside Report (2)

Iran's military victories over Iraq could soon begin to have major consequences, including the downfall of Iraqi President Saddam Hussein.

That's the view of Washington analysts. The US would not like to see either country win a dominant position in the oil-rich Gulf region. But Washington is particularly worried that Iran will gain the upper hand over Iraq and then move to destabilize Saudi Arabia and other states along the Gulf.

To State Department officials, the good news is that the threat from Iran is causing pro-Western Gulf states to tighten joint security measures.