Iran builds rockets to arm Hezbollah, deter sanctions

Aug. 4 (Bloomberg) -- Many of the rockets Hezbollah is firing into Israel are made in Iran, demonstrating the Islamic republic's success in copying Chinese and Russian technology to build its own weapons industry.

The Shiite Muslim group's arsenal includes Iranian-built portable Katyusha rockets, Israeli Reserve Brigadier General Yossi Kuperwasser said. Hezbollah struck an Israeli ship on July 14 with an Iranian-made C802 Noor guided missile. The militia also has Iran's Zelzal rocket, with a range of 120 miles, enough to reach Tel Aviv from south Lebanon, said Yaakov Amidror, a retired major general who ran Israel's National Defense College.

The conflict, which began three weeks ago, provides the first test for Iranian-made weaponry, giving the country an opportunity to show it can retaliate if attacked. The fighting comes as Iran faces the threat of economic sanctions if it doesn't accept United Nations Security Council trade incentives to stop its nuclear program by the end of this month.

"The success of Hezbollah reflects well on the regime in Iran" in military terms, said David Schenker, a senior fellow at the Washington Institute for Near East Policy. "It adds a deterrent in terms of making the West think twice about putting damaging economic sanctions against Iran, and it will make people in the West think twice about the military option."

To supply Hezbollah, Iran flies arms to Syria, where they're loaded on trucks and shipped into Lebanon under Syrian supervision, said Yiftah Shapir, editor of the "Middle East Military Balance," an annual survey published by Tel Aviv University's Jaffee Center for Strategic Studies.

Homegrown Arms Industry

Since the start of the conflict, Hezbollah has hit Israel with 1,978 rockets, killing 56 people and wounding 580, Israel's army said yesterday. The Muslim militia, designated a terrorist organization by the U.S. and Israel, captured two Israeli soldiers on July 12, sparking the hostilities.

Israeli attacks have killed more than 900 people and injured 3,000, Lebanese Prime Minister Fouad Siniora said yesterday.

Iran developed its homegrown arms industry in response to shortages experienced during its 1980-1988 war with Iraq, said Vali Nasr, an Iran expert at the Naval Postgraduate School in Monterey, California.

With Saddam Hussein sidelined, Iran has "every intention of becoming a major regional power," William Cohen, secretary of defense under U.S. President Bill Clinton, said in an interview in Washington. "They've been testing a variety of missiles," said Cohen, a former Republican senator from Maine who founded the Cohen Group, a Washington-based lobbying and consulting firm.

`Earthquake' Missile

Iran no longer relies on imports from China, Russia and North Korea for its weapons, said Guy Ben-Ari, a fellow at the Center for Strategic and International Studies in Washington. Instead, state aerospace and defense industries are copying and even improving on those countries' technologies, he said.

"The Iranians are at a stage now where they can build most of these weapons themselves locally," Ben-Ari said. There have been sightings of Iranian military air transports landing at Syria's main airport in Damascus, he said.

The Zelzal, which means "earthquake" in Arabic, contains a 600-kilogram (1,322-pound) warhead, said Doug Richardson, editor of Jane's Missiles and Rockets, published in Coulsdon, England. That compares with the 90- and 175-kilogram warheads on the shorter-range Fajr-3 and Fajr-5, which Hezbollah also has, Richardson said. The Fajr-5 is based on China's WS-1, according to a Web site run by the Federation of American Scientists.

Weapons of Terror

The Noor missile is modeled after China's C802, which has a radar-jamming device that gives it a 98 percent hit rate, according to the Web site.

The Israeli ship that was hit by a Noor missile didn't have its defense system turned on because "the truth is we didn't know Hezbollah had that specific missile," said Kuperwasser, who until two months ago was head of the assessment division in a military intelligence unit. "It was a surprise," he said by telephone from Tel Aviv.

While other weapons Iran supplies to Hezbollah aren't very sophisticated, they are effective at provoking fear, said Andrew Brookes, an analyst at the International Institute for Strategic Studies in London and a former Royal Air Force pilot.

"Obsolete technology can be used as terror weapons," he said.

Hezbollah may have even more deadly weapons in its arsenal, said Schenker, formerly a Middle East adviser at the Pentagon. "It raises the specter that Iran has provided Hezbollah with other capabilities," he said.

Iran still gets some military equipment from China and sources around the world, according to the U.S. government. Several people and companies have been accused or convicted in the U.S. of selling sensitive technology to Iran and Hezbollah.

International Network

In May, a Singapore businessman was convicted by a federal jury in Brooklyn of obtaining U.S. parts for C-130 military transport planes and P-3 naval aircraft and diverting them to Malaysia for shipment to Iran, the Justice Department said in a statement.

The U.S. Treasury Department on June 13 froze the U.S. assets of China Great Wall Industry Corp. and three other Chinese companies after accusing them of supplying Iran with missile components or technology that can have military use. China Great Wall issued a statement denying any role in weapons proliferation.

China began selling ballistic and Silkworm cruise missiles to Iran during the 1980s, according to a 1999 report by the U.S. National Intelligence Council. It also sold gyroscopes and guidance systems to help Iran develop indigenous weapons based on its cruise missiles, the report said.

`Extensive Chinese Cooperation'

While the communist country can legally sell missiles to Iran under international law, any transfer to Hezbollah is illegal, said Ralph Cossa, president of Honolulu-based Pacific Forum CSIC, part of the Center for Strategic and International Studies in Washington.

"There is, no doubt, a very extensive Chinese cooperation with the Iranian ballistic missile program," John Bolton, U.S. ambassador to the United Nations, told a Senate hearing last week.

He said it's critical China adopt the same nonproliferation objectives as the U.S. because sales of such technologies and weapons "ultimately are threatening to them as a destabilizing force in the world as a whole."

China only sells weapons to sovereign states and requires that buyers pledge not to transfer technology to third parties, the country's Foreign Ministry said in a faxed statement responding to questions from Bloomberg News.

"China's weapons exports follow these principles: We only sell defensive weapons, exports will not destablize regional stability, and our exports will not cause internal stability," the ministry said.

Hezbollah's `Paymasters'

Hezbollah funds itself with direct transfers from Iran, and by creating front companies for currency counterfeiting, cigarette smuggling and other illegal activities, according to U.S. Treasury and State Department officials.

Iran's subsidy to Hezbollah is about $300 million a year, with $100 million for social programs such as schools and the rest for military purposes, said Ariel Cohen, a senior fellow at the Washington-based Heritage Foundation.

"Iran supports Hezbollah -- they really are the paymasters for Hezbollah," Henry Crumpton, the U.S. State Department's special coordinator for counterterrorism, said when presenting the 2005 Country Reports on Terrorism on April 28 in Washington.

Another large part of Hezbollah's funding comes from Latin America, said Rachel Ehrenfeld, author of "Funding Evil: How Terrorism is Financed and How to Stop It" (Bonus Books, 2003).

Hezbollah is involved in drug trafficking through an agreement with the Revolutionary Armed Forces of Colombia and makes counterfeit goods, including DVDs, in the "tri-border area," where Brazil, Paraguay and Argentina meet, she said.

Muslim Duty

Neither Hezbollah nor the Palestinian group Hamas would be able to launch missiles, train people or provide "the so-called social security to buy the loyalty of the population if they didn't have money," said Ehrenfeld, who is also director of the New York-based American Center for Democracy, a non-profit group. "If we were able to stop that money, this wouldn't happen."

Ayatollah Ahmad Jannati, the head of Iran's Guardian Council, said Aug. 1 that it was the duty of Muslim nations to give all kinds of aid to Hezbollah.

"It is expected of Muslim countries not to spare any kind of help, including weapons, medicine and food, to Hezbollah and the Lebanese," the cleric said, according to a report by the state-run Iranian Students News Agency. His institution can veto parliamentary bills and presidential candidates in Iran.

Syria

Ali Fayyad, a member of Hezbollah's Central Council, a policy-making body, said the arms Hezbollah uses "are available on the international weapons market." In response to a question on whether the group receives support from Iran and Syria, he said, "We have to seize every opportunity." He was speaking on his mobile phone from Lebanon.

A 220-millimeter rocket that ripped through the roof of a Haifa rail yard July 16 and killed eight workers was Syrian-made, according Israel's bomb disposal unit.

Syria's ambassador to the U.K., Sami Khiyami, said his country isn't supplying arms to Hezbollah.

"The only thing Syria is doing, it is telling the international community we have a constructive role to play but the aggression has to stop," he said.

Even if there is a political settlement soon, the fighting has longer-term global strategic ramifications, said Nasr at the Naval Postgraduate School.

"Just as Israel wanted to send a signal to Iran by the way in which it hit Hezbollah, the Iranians are sending their own signal back," he said. "The signal is that they have a lot more sophisticated weaponry than before. In addition to the conflict between Israel and Hezbollah, there is a larger posturing going on about Iran and the West in this war."