Greg Sheridan of The Australian writes this weekend about a larger problem than Wall Street-the Iranian nuclear threat. He gives a preview of a report on the Middle East to come out from The American Enterprise Institute later this week. Here are some excerpts:

The report is sobering and in some ways shocking reading. It begins badly: “A nuclear weapons capable Islamic Republic of Iran is
strategically untenable.”

It points to the disastrous consequences of an Iran with nuclear weapons: “Iran’s nuclear development may pose the most significant strategic threat to the US during the next administration.

“A nuclear ready or nuclear-armed Islamic Republic ruled by the clerical regime could threaten the Persian Gulf region and its vast energy resources, spark nuclear proliferation throughout the Middle East, inject additional volatility into global energy markets, embolden extremists in the region and destabilize states such as Saudi Arabia and others in the region, provide nuclear technology to other radical regimes and terrorists (although Iran might hesitate to share traceable nuclear technology), and seek to make good on its threats to eradicate Israel. “The threat posed by the Islamic Republic is not only direct Iranian action but also aggression committed by proxy. Iran remains the world’s most active state sponsor of terrorism, proving its reach from Buenos Aires to Baghdad.”

This report appears to be a must read document of the present situation with Iran. The next president will have to confront this problem because it appears the Bush administration will punt.

Israeli intelligence believes Tehran will have a nuclear device by the end of 2009. American intelligence puts the date between 2010 and 2015. Presently Iran could deliver a bomb anywhere in Europe. Interestingly, most of Europe, including Russia and China feel the world should learn to live with a nuclear-armed Iran. With a bomb Iran could easily load one onto a ship, drive it closer to the United States and easily lob it onto our shores.

Israel will not stand by. A couple of well placed bombs could wipe out their population. But their options could run out the closer Iran gets to full development of a weapon. Israel’s enemies are growing bolder and world opinion is changing. Nations could opt for a “peace” to maintain global security.

Many experts are saying Israel will have no option but to attack Iran with several days of air strikes to effectively knock out the nuclear program. Iran will respond with rocket attacks on Israel. If this happens it will be very nasty throughout the region.

Reports say that President Bush decided against attacking Iran because the cost would be too high. Iran would undoubtedly launch its troops against American forces in Iraq and Afghanistan tilting the balance and resulting in massive casualties. A few Iranian missiles could send oil tankers to the bottom of the Straits of Hormuz and close down all oil exports from the Persian Gulf. Gas prices in America would spike to more than $10 per barrel, sending the nation into a depression. It would be a high price to pay.

But all this could happen if Israel attacks Iran on its own. America is seen as the “Great Satan” supporter of Israel and would be attacked by extremist elements. It is a no-win situation. Barring a diplomatic solution we could see fireworks in the region in the coming months.