It has been one year since we wrote of the threat posed by a nuclear Iran. And Yogi Berra is still right: It is "déjà vu all over again."

President Bush, Vice President Cheney and key members of the National Security Council are unflagging in their declared intent to confront and derail Iran's quest to join the Middle Eastern-Asian nuclear club. The U.S. government, with the help of public policy advocates like the American Enterprise Institute, is propagandizing the American public with a focused public relations and information operation clearly designed to build political support for possible military action.

Iran, under the madcap leadership of President Mahmoud Ahmadinejad, provides sufficient menace and craziness to persuade many Americans that military action, if it comes, will be justified. For example, Ahmadinejad's recent hosting of a conference denying the Holocaust did not build confidence or reassure nervous neighbors that the Iranians are playing with a "full deck" or are likely to be responsible citizens of the international community.

One thing that has changed since we wrote last year is that Iran, which already saw the United States as a hostile power intent on using military force, is more convinced now that it is targeted by the United States. Iran has paid close attention to the Bush Administration's saber-rattling. The Iranian leaders do not seem to inhabit the same fantasy world that comforted Saddam as the United States prepared to invade Iraq. Saddam, contrary to all the evidence presented, persisted to the end in the belief that the United States would not actually invade Iraq. The Iranians are not so foolish.

While the hawks agitate for military action against Iran in the United States, the political environment in Washington has grown more dangerous in the last year. The civilian cheerleaders in the Department of Defense who favored war against Iran are fewer in number now. Several of the biggest advocates for pre-emptive action-Donald Rumsfeld, Paul Wolfowitz and Douglas Feith-are gone. So far, there are no signs that Robert Gates shares his predecessor's enthusiasm for a new military venture in the region while he is trying to work out what to do about Iraq. Nevertheless, we must remember that the same President Bush who essentially rejected the recommendations of the Iraq Study Group (ISG) chose Gates for his new job.

And then there is the matter of the Democratic Party's control of the House and Senate. The Congress clearly "rubber-stamped" the president's appeal for force authorization in late 2002. But the new Congress is likely to subject Bush's policies and plans to intense scrutiny. Barring a unilateral Iranian attack on U.S. assets, the Democrats will certainly not sign a blank check giving Bush the green light to start a new war. In fact, there will be calls for renewals of the 2002 authorization, which will contain limiting language.

We are heartened that more politicians and pundits appear willing now, as compared to last year, to weigh the costs and evaluate our nation's ability to pay the bill if President Bush decides to attack Iran. Unfortunately, there is little evidence that enthusiasm for military action against Iran has waned among those who were eager for war in Iraq.

Iran, as we expected, has not waited quietly to see if we will attempt to crush its defenses and nuclear program. As rhetorical threats have increased in Washington, the Iranian military leaders have responded with increased defensive measures and have begun re-positioning and dispersing their forces. Even neoconservative pundits who favor a military solution recognize this reality.

Writing in Commentary in November 2006, Arthur Herman reports that this past April:

Iranian armed forces staged elaborate war games in the Gulf, test-firing a series of new anti-ship missiles capable of devastating any tanker or unwary warship. In the boast of one Iranian admiral, April's "Holy Prophet war games" showed what could be expected by anyone daring to violate Iran's interests in the Gulf. A further demonstration of resolve occurred in August, when Iran fired on and then occupied a Rumanian-owned oil platform ostensibly in a dispute over ownership rights; in truth, the action was intended to show Western companies-including Halliburton, which had won a contract for constructing facilities in the Gulf-exactly which power is in charge there.

Another advocate for extreme military action against Iran, Kenneth Timmerman, wrote in March of 2006 that Iran has a thirty-page contingency plan:

which bears the stamp of the StrategicStudiesCenterof the Iranian Navy, NDAJA. The document appears to have been drafted in September or October of 2005. The NDAJA document was just one part of a larger strike plan to be coordinated by a single operational headquarters that would integrate Revolutionary Guards missile units, strike aircraft, surface and underwater naval vessels, Chinese-supplied C-801 and C-802 anti-shipping missiles, mines, coastal artillery, as well as chemical, biological and nuclear weapons.

The July 2006 war between Israel and Iran's client Hizballah provided a glimpse of what awaits the U.S. Navy in the Persian Gulf if we decide to attack Iran. An Israeli vessel, the Ahi-Hanita, was struck from Beirut by an Iran-made, radar-guided, shore-to-sea missile on July 17. Although the Israeli ship reportedly was outfitted with an advanced anti-missile system, it failed to stop the weapon.

Whether or not the Iranians participated in the event, it is certain that Hizballah briefed their backers in Tehran on the lessons learned from that attack.

Iran's political position in the region, particularly in Iraq, is stronger today than one year ago. The Shi‘a-led government on Iran's western border is favorably disposed toward Tehran. The politician with the closest ties to Iran, Abdul Aziz al-Hakim, visited with President Bush in late 2006 and appears to be mounting a challenge to the current Iraqi leader, Prime Minister Maliki. Until now, the Shi‘a militias have focused on killing their Sunni "tribal" enemies and have shied from direct confrontations with U.S. forces, but the "surge" of U.S. forces into Iraq which will take place this year will be, at least in part, aimed at reducing the influence of the militias. This "program" is likely to lead to U.S.-Shi‘a militia hostilities, especially with the Mahdi Army of Moqtada Sadr.

The U.S. military position in Iraq is weaker today than it was in 2005 and is going to become even more precarious when the United States steps up attacks against the Shi‘a militias. Although the United States has reduced the number of its bases in Iraq, it has increased the number of combat troops on the ground and is concentrating its forces in the Baghdad metropolitan region. This increase in the number of troops, coupled with increased attacks on Shi‘a militias and Shi‘a neighborhoods, is likely to provoke a Shi‘a retaliation targeted at vulnerable U.S. supply lines to the south of Baghdad.

The logistics providing U.S. soldiers and airmen food, water, fuel and bullets extend from Kuwait to the north through the Shi‘a heartland. The Shi‘a, since the U.S. invasion, have enjoyed massive support from Iranian intelligence agencies. They are well organized and control the country through which U.S. supply lines run. The supply lines can be easily cut by Islamic militants loyal to the likes of Hakim and Sadr. In fact, during 2006, the number of attacks against supply convoys increased from one in every twenty to one in every five.

Iran can also play the oil card. While Iran depends on oil as its economic lifeline, when faced with the threat of a U.S. attack, we believe its leaders are willing to risk the loss of their oil production. If Iran is attacked, the withdrawal of its contribution to the daily world oil market will have an immediate impact on price. But Iran will not be content to take the pain alone. They are likely to inflict similar suffering on their neighbors. They are better equipped than Iraq ever was in recent memory to shower Persian Gulf states and oil fields with missiles or to shut down exports with a variety of other military, terrorist or political methods. At a minimum, a U.S. air campaign, even if successful in wrecking the Iranian nuclear program, will severely disrupt oil markets for at least six months. Such a disruption will hurt the entire world economy, not just that of the United States.

There are countries sympathetic to Iran, such as Venezuela, that have indicated they are willing to cut off their oil supply to the United States. The United States could quickly find itself facing a 20- to 30-percent shortfall in oil imports. That estimate leaves Saudi fields untouched and assumes oil imports would continue to flow unimpeded from that source-which, given our previous discussion of Iran's naval capabilities, is an unwise assumption to make.

Finally, Iran can play the global terror card. Unlike Al-Qaeda, terrorist groups tied directly to Iran have robust capabilities and, over the short run, could cause a lot of trouble. Hizballah in particular has a significant presence in various parts of the world, including Africa and South America. U.S. commercial and transportation assets are certain to be targeted, further inflicting significant damage on the global economy.