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Iran: Hostage Case Highlights U.S. Diplomatic Dilemma

President George W. Bush says America must hold accountable state sponsors of terrorism. But the victims of one of the first acts of such terrorism -- the U.S. hostages held by Iran in 1979 -- now find themselves fighting the American government in a bid to win compensation from Tehran. As our correspondent Jeffrey Donovan reports, the case highlights America's new diplomatic dilemma.

Washington, 14 December 2001 (RFE/RL) -- America's battle with state-sponsored terrorism didn't start on 11 September but 22 years ago in Tehran, when U.S. embassy personnel were held hostage for 444 days by the hard-line religious leaders of Iran's Islamic Revolution.

The 52 hostages, who were freed after a deal that forced the U.S. government to release $7.9 billion in frozen Iranian assets, became world symbols of terrorist aggression long before 19 Islamic militants hijacked four jets in September, flying them into New York's World Trade Center and the Pentagon and killing more than 3,000 people.

But now, as the United States seeks to build new diplomatic bridges to support its war on terrorism, the ex-hostages find themselves fighting the very government for which they risked dying in 1979.

The former hostages and their families are pitted against the U.S. departments of State and Justice in a lawsuit they filed in August seeking compensation from the Iranian government.

Why the U.S. should oppose the hostages is a complex question. But analysts and some former hostages say its opposition is at least in part due to new, unstated American efforts to establish a dialogue with Iran, with which Washington has not had diplomatic ties since the ordeal and which the State Department still considers the world's leading supporter of terrorism.

The plight of the hostages appears to highlight the diplomatic dilemma America faces as Washington seeks to improve relations with Iran, which has indirectly aided the U.S.-led war in Afghanistan, whose Sunni Muslim Taliban militia was at odds with the Shiite rulers of Tehran.

But it is also bitterly ironic to the former hostages, especially following President George W. Bush's statement that the United States must hold state sponsors of terrorism accountable.

Barry Rosen, a former hostage, was America's last press attache in Tehran. Now head of communications at Columbia University's Teachers College in New York City, Rosen told RFE/RL he'll never forget the screams and cries of political prisoners that punctuated his days in the Tehran prison: "Our chief guard would put on music in order to soften the blow of those screams."

And, recalling his days as a prisoner representing the "Great Satan" that Iran's revolutionaries considered America, Rosen says it "bothers him to hell" that the U.S. government now opposes the hostages. He sees the move determined by Washington's bid to build better ties with Tehran: "I just think it's a short-term gain, long-term loss. I think what State is trying to do is to curry favor with Iran at this moment, trying to build a relationship with Iran, and it does not want to see this compensation situation face them in the long run when it has to deal with U.S.-Iran relations."

Officially, the U.S. government says it must respect the deal it agreed to in 1981. That deal, which Rosen calls "extortion," allowed the hostages to go free provided Iran's frozen assets were released and the hostages could not later sue Tehran for compensation.

A Justice Department lawyer, James J. Gilligan, has been quoted as telling a Washington, D.C., district court last 15 October that the U.S. "is not seeking intervention here to defend the interests of Iran, but to defend the obligations" of that agreement.

But Rosen and other plaintiffs argue that the accord was overruled by landmark legislation passed by the U.S. Congress in 1996 that allowed the victims of terrorism to seek compensation from nations on the State Department's list of terrorist sponsors. Iran is currently number one on that list.

Although there is disagreement over the interpretation of that 1996 law, some American victims of terrorism have already used it to win compensation, including $65 million awarded to three U.S. hostages held by Iranian-backed guerillas in Lebanon.

The former hostages seek to recover damages from seized Iranian assets that are tied up in claims cases pending in international court at The Hague in the Netherlands. There is also, according to "The Washington Post," some $25 million accrued from the rental of Iran's former U.S. embassy.

Analysts say that another U.S. government concern is the example that might be set if American victims of terrorism are compensated by seizing the frozen assets of other countries. They say that those countries or others in the future might be tempted to freeze American assets abroad in retaliation.

The State Department has also said that compensating victims with frozen assets undermines the president's leverage with terrorists -- that the U.S. must keep those funds in order to be able to influence terrorist-sponsoring states.

Still, Rosen says he is struck by how the government, since 11 September, jumped into a case it completely ignored when it opened last August: "I just think that as 11 September rolled around, State and Justice, but mainly State, said that this was too important an issue and that we're moving to an accommodation with Iran and we need to stop what's going on here and that we will abide by the 1981 accord."

Since then, the U.S. and Iran have made subtle overtures toward one another, including Tehran's strong condemnation of the attacks and a historic handshake at the United Nations between Secretary of State Colin Powell and Iranian Foreign Minister Kamal Kharrazi.

The chief American diplomat in charge of Afghanistan -- Richard Haass -- recently praised Iran's part in a UN-sponsored deal that gave Kabul a post-Taliban interim government.

But improving relations with Iran, as the hostage case shows, is very much a taboo among some people in both countries. Washington still accuses Iran of seeking weapons of mass destruction, missile-technology proliferation, sponsoring Palestinian terrorism, and undermining Middle East peace.

For that reason, analysts say, the Defense Department and others -- especially those concerned about the threat to Israel posed by Iranian-supported terror groups -- oppose any talk of lifting current U.S. economic sanctions on Iran.

But Robert Ebel, a senior analyst with the Center for Strategic Studies, a think tank in Washington, says the State Department has a slightly different view. Ebel says State is seeking to build bridges with Tehran to encourage its nascent reform movement as well as to gain influence: "It's being done very quietly and behind the scenes. You don't want to be too overt at this time. There are hard-liners in this country and there are hard-liners in Iran: those who in Iran are opposed to any improvement in relations with the U.S., and similarly in the U.S. there are those who are against any improvement with relations in Iran. So you have to be very careful, very quiet."

For Rosen and the other former hostages, however, the question is: How quiet?

The presiding judge in their case is not expected to issue a decision for another few months. But they hope the American judge, if not government, will send out a message that state sponsors of terrorism will be held accountable -- regardless of the latest turns in international diplomacy.