BAGHDAD — The Islamic government in neighboring Iran watched with trepidation in March 2003 when U.S.-led troops stormed Iraq to overthrow Saddam Hussein's regime and start remaking the political map of the Mideast.
In retrospect, the Islamic Republic could have celebrated: The war has left America's longtime nemesis with profound influence in the new Iraq and pushed it to the apex of power in the region.
Emboldened by its new status and shielded by deep oil reserves, Tehran is pressing ahead with its nuclear program, daring the international community to impose sanctions. Iran is a Shiite Muslim nation with an ethnic Persian majority, and the blossoming of its influence has fueled the ambitions of long-repressed Shiites throughout the Arab world.
At the same time, Tehran has tightened alliances with groups such as Hamas, which recently won Palestinian elections, and with governments in Damascus and Beijing.
In the 1980s, Iran spent eight years and thousands of lives waging a war to overthrow Hussein, whose regime buffered the Sunni Muslim-dominated Arab world from Iran. But in the end, it took the U.S.-led invasion to topple Iraq's dictator and allow Iranian influence to spread through a chaotic, battle-torn country.
Now Iraq's fledgling democracy has placed power in the hands of the nation's Shiite majority and its Kurdish allies, many of whom lived as exiles in Iran and maintain strong religious, cultural and linguistic ties to it. The two groups sit atop most of Iraq's oil, and both seek a decentralized government that would give them maximum control of it. A weak central government would also limit Sunni influence.
The proposed changes have aggravated ancient tensions between the two branches of Islam, not to mention Arabs and Iranians. Neighboring countries have historical and tribal links to Iraq's Sunnis.
"A weak Iraq is now sitting next to a huge, mighty Iran. Now the only counterpart to Iran is not a regional power, but a foreign power like the United States," said Abdel Khaleq Abdullah, a political analyst and television host in Dubai. "This is unsustainable. It's bad for [Persian] Gulf security. It's given Iran a sense of supremacy that we all feel."
Fear of a Shiite Iraq has helped shape the Sunni Arab world's view of the insurgency in that country. Although many revile the violence, there is also a quiet sense that the insurgents are fighting on behalf of Sunnis, standing up for their sect in the face of American and Iranian attempts to dominate Iraq.
Some Sunni extremists, jihadis from Yemen to Morocco, have been drawn to Iraq to attack symbols of Shiite power.
"When they attack the Shiites, they think they are attacking the Iranian influence," said Mustafa Alani, a counter-terrorism expert at the Gulf Research Center in Dubai. "They think they're attacking Iranian agents. To them, it's a legitimate target."
Though Iran owes much of its newfound strength to the war in Iraq, that's not the only event that has benefited it. The U.S. eliminated another foe, the Taliban regime in neighboring Afghanistan, in 2001.
Meanwhile, hard-liners in Tehran centralized their power and quashed dissent after winning control of the government in elections that brought President Mahmoud Ahmadinejad to office last year. U.S. Secretary of State Condoleezza Rice asked Congress this week to increase 2006 spending on promoting democracy in Iran, to $85 million from $10 million.
Rising oil prices have deepened Iran's value as a strategic partner and dramatically increased its assets.
Keenly aware that it is playing with a strong hand, Iran is working to establish itself as a power to be reckoned with beyond Iraq. The government's increasing confidence can be seen in its aggressive insistence on the right to a nuclear program.
In 2003, when the secret program first became an international controversy, Tehran sought to calm concerns with a conciliatory, soft-spoken tone. Now talks with three European powers have failed, and it is pressing ahead with uranium enrichment and even hinting that it might pull out of the Nuclear Nonproliferation Treaty. It also has sharpened its rhetoric.
At a news conference in January, Foreign Ministry spokesman Hamid Reza Asefi unleashed a torrent of sarcasm and taunts at Europe. British Foreign Secretary Jack Straw was "ignorant," he said, and French President Jacques Chirac "doesn't understand democracy."
The possibility that Iran will develop nuclear weapons is another worry for the Sunni-dominated Arab world.
When Jordan's King Abdullah II warned a year ago with uncharacteristic bluntness that the emergence of a new government in Iraq could create a "Shiite crescent," Shiites in Iraq reacted angrily and Jordanian officials insisted the king had been misunderstood.