US claims sanctions can free Iran hostages

A confidential official United States paper provided to allied Governments has argued that tightened economic pressure on Iran can free the 50 US Embassy hostages, but most friendly diplomats here question the reasoning.

The Iranian government, meanwhile, seems to be trying to widen the gap between Washington and allied countries on the issue of economic sanctions against Iran.

The main weapon: hints of possible further outside visits to the captives, in effect shifting the focus of diplomatic concern from the question of actually freeing the hostages.

European diplomats say active allied support for US sanctions is still possible. The decision lies with their home governments and, as one envoy put it, "American pressure on us is very strong."

But at least some Western diplomats -- encouraged by a recent Red Cross visit to the captives and presumably wary of sacrificing European interest for sanctions that they suspect will not work -- argue privately that efforts should be centered on arranging further embassy visits.

The American paper, conveyed to at least some of Washington's allies and shown to the Monitor by a Tehran diplomat, surveys Iran's escalating economic woes and maintains that "holding the hostages is defeating revolutionary [ economic] goals."

The impasse is "costing Iran heavily," the paper says, suggesting that the allies should therefore help intensify economic pressure on Tehran. Friendly governments should also be "aware" of the possibility that Iran will try to purchase American products through third parties.

"In the final analysis, if trends are not reversed," the paper says, "it is the economy, which Ayatollah [Ruhollah] Khomeini's followers used so effectively to topple the Shah, that could seriously undermine the Islamic revolution."

No one, not even Iranian officials, is used to the fact that Iran is in deep, and deepening, economic trouble, the paper suggested.

But Western diplomats point out that the Iranian revolution was by no means a purely economic phenomenon, that a large part of Iran is used to poverty and probably will not yell "uncle" in the short run, and that in some ways the hostage crisis may actually have benefited the Iranian regime.

Among the reasons Iran is seen to benefit from prolonging the hostage crisis:

* The showdown with Washington can help distract popular attention from economic problems. The US analytical paper argued that, in any case, the shattered Iranian economy would not rebound to "positive growth . . . for at least several years."

* Haranguing the "imperialists" is a nice way of undercutting the left, seen as a major threat by Islamic conservatives who have dominated the revolution.

* It bolsters one theme of the revolution -- the reassertion of independence and power by a proud and ancient people relegated to a 20th-century "third world." Iran, quite simply, likes the idea of humbling a superpower and monopolizing front pages worldwide.

* Iranian "moderates" such as President Abolhassan Bani-Sadr may have more to lose than win in an early release of the captives. Oddly enough, Mr. Bani-Sadr shares Washington's feelings that the hostage impasse is blocking efforts to revive the economy.But he has also found that hardline rivals are ready to use the hostage issue to their advantage, isolating him in any effort to resolve the crisis.

American economic sanctions will indeed affect Iran. Indications of concern here over supplies of food, computer spares, and other products suggest the sanctions certainly will hurt more than Iran has openly admitted.

But most Western diplomats argue that the sanctions, even if beefed up and joined by America's allies, will not necessarily win freedom for the embassy captives.

If remarks by diplomats here are any indication, Washington's allies meanwhile are divided on exactly how to respond to President Carter's bid for active support.

Some, although not convinced sanctions will free the captives, echo American frustrations over the failure of more subtle diplomacy. They also fear that unless their government backs Mr. Carter, he may eventually turn to more extreme unilateral moves, even to a potentially dangerous military action.

"And from a purely ethical point of view," one diplomat explained, "we have to do something. The West, after all, is supposed to stand by its moral values. This crisis tests that determination."

Other allied envoys fear that, far from helping the hostages, widened economic sanctions could simply harden Iranian attitudes toward Washington and prolong the crisis.

These diplomats seem to favor a strategy that so far has proved no more successful: appealing to moderate Iranian leaders, in hopes they can eventually turn back hardline pressure and win support from the powerful Ayatollah Khomeini.