10 February 2009

Early Bird summary
Tuesday’s Early Bird leads with stories about the president’s news conference Monday night, topped by a report from the New York Times stating that President Obama took his case for his $800 billion economic recovery package to the American people on Monday, as the Senate cleared the way for passage of the bill and the White House prepared for its next major hurdle: selling Congress and the public on a fresh plan to bail out the nation’s banks.
Warning that a failure to act “could turn a crisis into a catastrophe,” Mr. Obama used his presidential platform — a prime-time news conference, the first of his presidency, in the grand setting of the White House East Room — to address head on the concerns about his approach, which has by and large failed to win the Republican support he sought.
Story No. 2 on the EB slate, from the Washington Post, reports that President Obama yesterday ordered a 60-day review of the nation's cybersecurity to examine how federal agencies use technology to protect secrets and data.
Former Bush administration aide Melissa Hathaway will head the effort to examine all the government plans, programs and activities underway to manage large amounts of data -- including passport applications, tax records, personal tax returns and national security documents. A failure or attack on that infrastructure could harm the country by, for example, shutting down the nation's airlines or shutting down the stock market.
The Washington Post also reports that President Barack Obama said Monday he is considering whether to overturn a Pentagon policy that bans the media from taking pictures of the flag-draped coffins of U.S. troops returning from the battlefield.
A leading military families group says the policy, enforced without exception during the administration of former President George W. Bush, should let survivors of the dead decide whether photographers can record their return.
At his first prime-time news conference as president, Obama said his administration is reviewing the policy with Defense Department officials. He noted that he was informed Monday that four U.S. soldiers were killed in Iraq, making the question timely.
No more than an estimated 30,000 additional troops will be sent to Afghanistan as the U.S. ramps up forces there, the nation's top military officer told soldiers Monday, according to an article in the Chicago Tribune. Joint Chiefs Chairman Adm. Mike Mullen also called U.S. efforts in Iraq a success, even though "we're not done."
Mullen, speaking to fresh-faced soldiers and war-weary military wives, sought to boost morale and soothe concerns at the Army base that has seen a constant revolving door of troops sent to Iraq and Afghanistan over the last eight years.
"I don't see us growing a force well beyond the 20,000 to 30,000 for Afghanistan — American soldiers, sailors, airmen, Marines — beyond that 30,000 or so," Mullen told about 800 soldiers and specialists gathered for a town hall meeting.
Other noteworthy items in today’s Early Bird:
 The Guardian (UK) reports that the Taliban have been able to engineer a "strategic stalemate" in Afghanistan, the foreign secretary said yesterday, as an opinion poll showed a decline in support for British and other foreign troops among the Afghan people.
David Miliband said he accepted that the number of Afghan civilians killed in Nato airstrikes and other operations was likely to have eroded support for the troops' presence. "When an international force is supporting a democratically-elected government but ends up causing civilian casualties, of course that is a drain on support," he told the BBC.
A survey of more than 1,500 Afghan men and women throughout 34 provinces shows increasing pessimism about the country's prospects, as well as scepticism about both President Hamid Karzai and the foreign troops he permits to remain.
The poll, the fourth carried out by the BBC, ABC and the German broadcaster ARD, shows that while only 4% of Afghans surveyed say they want the Taliban to rule Afghanistan, almost a fifth of people think Karzai's government is doing a poor job, against just 8% in 2007, when the previous survey was done
 The Ottawa (CAN) Citizen reports that the British foreign minister described Afghanistan as a “stalemate,” and U.S. President Barack Obama’s new super envoy to the region called it a “mess.”
But Canadian Defence Minster Peter MacKay said yesterday that real progress is being made in Afghanistan — allowing only that it is not coming as quickly as some might like.
Mr. MacKay also told the Commons defence committee the mission will cost an extra $331 million this year, a figure that had the Bloc deriding Afghanistan as a fiscal “black hole” and the NDP questioning the escalating cost of the war as the world wages another battle against a sagging global economy.
 The New York Times reports there is growing concern among American military and intelligence officials about different militants’ havens in Pakistan that they fear could thwart American military efforts in Afghanistan this year.
American officials are increasingly focusing on the Pakistani city of Quetta, where Taliban leaders are believed to play a significant role in stirring violence in southern Afghanistan.
The Taliban operations in Quetta are different from operations in the mountainous tribal areas of Pakistan that have until now been the main setting for American unease. But as the United States prepares to pour as many as 30,000 additional troops into Afghanistan, military and intelligence officials say the effort could be futile unless there is a concerted effort to kill or capture Taliban leaders in Quetta and cut the group’s supply lines into Afghanistan.
 The Christian Science Monitor reports that The United States appears willing to accept the reality of North Korea as a nuclear power – a measure of credit that Washington has refused to give since Pyongyang exploded a nuclear device in 2006.
The potential shift in US outlook comes as Pyongyang ratchets up tensions and the new US administration formulates its policy on North Korea. Secretary of State Hillary Clinton plans to visit the region next week.
 Meanwhile, Pacific Stars & Stripes reports that the top U.S. military commander in South Korea called for North Korea to quiet talk about testing nuclear missiles and instead agree to an open dismantling of its nuclear weaponry.
"We call on North Korea to stop provocations and act like a responsible country," Gen. Walter Sharp, commander of U.S. Forces Korea, said at a luncheon with reporters in Seoul.
Sharp’s statements were part of a continued response from the United States in recent days after North Korea scrapped military agreements with South Korea and threatened to test another nuclear missile, as it did in 2006.
Media summary
1. Leading newspaper headlines: The New York Times and USA Today lead with, and everyone else fronts, President Obama's efforts to sell his massive stimulus package directly to the American people with a town hall-style meeting in Elkhart, Ind., and his first prime-time news conference held in the East Room of the White House. (Slate Magazine)
2. Obama warning on Pakistan haven: U.S. President Barack Obama said his administration will not allow havens for militants in Pakistan. (BBC)
3. Afghan people ‘losing confidence’: Is Afghanistan going in the right or wrong direction? (BBC)
4. ‘Last stand of Fox Company’ puts you in the throes of battle: The battle for Fox Hill began on a frigid November night in 1950 in the rugged mountains of North Korea. It ended Dec. 2 and instantly became, like Iwo Jima, a "signature" event in U.S. Marine Corps history. (USA Today)
5. U.S.-Iran: Dialogue of the deaf?: President Barack Obama offered to "extend a hand" of diplomacy if the Islamic Republic's leaders would "unclench their fist." (BBC)
Leading newspaper headlines
The New York Times and USA Today lead with, and everyone else fronts, President Obama's efforts to sell his massive stimulus package directly to the American people with a town hall-style meeting in Elkhart, Ind., and his first prime-time news conference held in the East Room of the White House. Stating that the country faces a "profound economic emergency," Obama warned that failing to do anything "could turn a crisis into a catastrophe." The president acknowledged that the "plan is not perfect," but he pushed Congress to come to an agreement quickly. "We've had a good debate," Obama said. "Now it's time to act."
The Washington Post leads with new details on the administration's plan to rescue the financial industry that officials estimate could commit up to $1.5 trillion in public and private funds. (The WSJ says $2 trillion.) For now, the administration has no plans to ask for more than the $350 billion that is left over from the original package. The Los Angeles Times leads locally with the tentative ruling issued by a panel of three federal judges that says California must reduce its state prison population by as much as one-third, or about 57,000 people. The judges said the state prisons are so overcrowded—they were designed for 84,000 inmates but currently hold 158,000—that inmates can't receive the level of health care to which they are entitled under the Constitution.
Obama's hourlong news conference came a few hours after the Senate voted 61-36 to cut off debate on the stimulus package. A final vote is expected today, which will send the bill into negotiations between the House and the Senate to reconcile their different versions of the measure. The NYT notes that the news conference "was the centerpiece" of an intense effort by the administration "to wrest control of the stimulus debate from Republicans and reframe it on Mr. Obama's terms." But even as he tried to launch a new offensive, "Obama sounded less like a political gladiator fighting for his first big initiative than a schoolteacher trying to calm overwrought children," declares the LAT.
In a news analysis inside, the NYT says that Obama made it clear "that he had all but given up hope of securing a bipartisan consensus" on the stimulus package, emphasizing that it is far more important to pass the measure quickly. He wasn't shy about taking on Republican critics of the bill, saying that the GOP doesn't "have a lot of credibility when it comes to fiscal responsibility." In its own analysis, the LAT points out that Obama is trying to "shape the public view" of Republicans. Several times yesterday, Obama "painted his GOP adversaries as well beyond the mainstream" and he not-so-subtly suggested that his opponents just want to watch the economy decline without doing anything.
While the economy was the dominant issue in the news conference, the president also touched on other topics but didn't really make any news. He said he was "looking at areas where we can have constructive dialogue" with Iran and criticized Afghanistan's government, declaring that it "seems very detached from what's going on." He was also asked about the next phase in the bailout plan to help ailing financial institutions, but he refused to give any details and said he was not able to estimate quite yet how much money it would take to thaw the frozen credit markets. Treasury Secretary Timothy Geithner is scheduled to outline today how the administration plans to use the second installment of the $700 billion bailout package.
The general outline of the new phase in the rescue program had already been reported, but the papers have some new interesting details today. The Treasury will offer low-cost financing to entice investors into purchasing the toxic assets held by banks and hopes to accomplish this by initially raising $250 billion to $500 billion in public and private funds. Before the administration decides which banks will receive another injection of cash, it will carry out "stress tests" to figure out how much money the financial firms need and, according to the WP, "whether these firms could withstand a downturn even worse than the current one." Surprisingly, Geithner won't mention any plans to help distressed homeowners avoid foreclosure. Officials said that plan is still in the works and could be unveiled next week but it's expected to be a $50 billion initiative, which is at the low end of what everyone was expecting. The WSJ reports that the administration is retiring TP's favorite acronym of the day, TARP, since it will be renaming the Troubled Asset Relief Program as the Financial Stability Plan.
The WSJ notes that the first attempts to sell the plan to Congress "got off to a rocky start" in briefings with House and Senate staffers because of the lack of detail provided. There seems to be a general feeling that the highly anticipated outline of the plan will turn out to be underwhelming because the whole thing is still very much a work in progress. Indeed, the NYT says that becuase of internal debates within the administration "some of the most contentious issues remain unresolved."
The NYT details that Geithner's fingerprints are all over the new bailout plan. Many administration officials, including some of Obama's top aides, wanted to impose more stringent conditions on the financial institutions that would get help, but Geithner resisted and "largely prevailed." While the plan will required that all banks submit detailed plans on how they intend to use the government money to improve their lending programs, Geithner was adamant that the plan might not work if the government tried to get too involved in running the financial companies. In the end, "the plan largely repeats the Bush administration's approach of deferring to many of the same companies and executives who had peddled risky loans and investments at the heart of the crisis," declares the NYT.
Everyone reports that the Obama administration appeared to surprise federal appeals judges yesterday when it invoked the same "state secrets" privilege that the Bush administration used. The case involves five men who say they were abducted by U.S. operatives and taken to countries where they were tortured. They are suing a Boeing subsidiary for allegedly providing the aircraft that the CIA used in its "extraordinary rendition" program. Yesterday, Justice Department lawyers said the case shouldn't be allowed to proceed because state secrets and national security interests could be threatened if the issue is discussed in court. "This is not change," ACLU's executive director said. "This is definitely more of the same."
USAT goes across its front-page with, and the NYT off-leads, baseball superstar Alex Rodriguez admitting that he used performance-enhancing drugs from 2001-03. "I was young. I was stupid. I was naive," said the 33-year-old, who is the highest paid player in baseball. The WSJ provides a stark example of how much it has changed since it was purchased by News Corp. by placing a huge picture of Rodriguez in its front page.
The LAT points out that one of the few moments of levity in Obama's news conference came when he turned his vice president "into a punch line." When asked what Joe Biden meant when he said there was still a "30 percent chance we're going to get it wrong," Obama said he didn't "remember exactly what Joe was referring to." And then added: "Not surprisingly." Although the two men seem fond of each other, this was the latest episode that suggests "the mutual admiration may have its limits," notes the LAT.






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Obama warning on Pakistan 'haven'

Mr Obama said a regional approach was needed to fight terrorism
US President Barack Obama has said his administration will not allow "safe havens" for militants in Pakistan's tribal region bordering Afghanistan.
Mr Obama's comments at his first White House prime-time news conference came as his envoy to the region, Richard Holbrooke, arrived in Pakistan.
Mr Holbrooke, who said he was there to "listen and learn" about the region, began key meetings on Tuesday.
Mr Holbrooke earlier said the situation in Pakistan was "dire".
Financial concerns
Mr Obama said Mr Holbrooke would convey his message to Islamabad.
"My bottom line is that we cannot allow al-Qaeda to operate," he said. "We cannot have those safe havens in that region."

I'm not going to allow al-Qaeda or Osama bin Laden to operate with impunity, planning attacks on the US homeland.

Barack Obama
Mr Obama added: "We're going to have to work both smartly and effectively, but with consistency in order to make sure that those safe havens don't exist."
The US president said he had appointed Mr Holbrooke as a special envoy for Pakistan and Afghanistan to give a new focus to dealing with terrorism.
"I've sent over Richard Holbrooke - one of our top diplomats - to evaluate a regional approach," he said. "We are going to need more effective coordination of our military efforts with diplomatic efforts, with development efforts, with more effective coordination with our allies in order for us to be successful."
Mr Obama said he had no schedule for the withdrawal of US troops from Afghanistan.
"I do not have yet a timetable for how long that's going to take. What I know is... I'm not going to allow al-Qaeda or Osama Bin Laden to operate with impunity, planning attacks on the US homeland."

Security tops the agenda for Mr Qureshi and Mr Holbrooke
Mr Holbrooke met Pakistani Foreign Minister Shah Mehmood Qureshi on Tuesday and will later meet President Asif Ali Zardari and Prime Minister Yusuf Raza Gilani.
The BBC's M Ilyas Khan in Islamabad says the main Pakistani focus will be trying to squeeze more money out of the US, particularly for reconstruction in the tribal areas and the revival of a US bill pledging long-term assistance that has been gathering dust in Washington.
Mr Holbrooke will be well aware of his financial leverage, our correspondent says, and will be pushing to devise mechanisms that will minimise the role of the Pakistani security establishment in charting the country's geo-political strategies.
The envoy is likely to restate the need for Pakistan to do more to tackle militants and express concern over the recent release of disgraced nuclear scientist AQ Khan from house arrest.
Pakistan in turn has repeatedly criticised US drone attacks on militants in its territory.
The fallout from the Mumbai (Bombay) attacks will also be on Mr Holbrooke's agenda.
Mr Holbrooke will stay in Pakistan until Thursday and is due to visit Afghanistan and India.






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Afghan people 'losing confidence'



Many Afghans are worried about security, violence and corruption


By Ian Pannell
BBC News, northern Afghanistan

Is Afghanistan going in the right or wrong direction?
After more than seven years of blood spilt, sweat poured and billions of dollars spent, it is not an unreasonable question.
This latest poll by the BBC indicates that Afghans are now evenly divided on the issue.
Of those questioned, 40% said the country was going in the right direction, down from nearly 80% just three years ago. Most would interpret that as a cause for real concern.
Publicly, the Afghan government and the international community have long insisted that things have been getting better. There is plenty of evidence to say that.

Though we have lots of food, people can't afford it

Mazar-i-Sharif shopkeeper
I first visited Afghanistan during the American-led war against the Taleban in 2001.
Then it took us six days to travel from the north-east of the country to the outskirts of Kabul. Six days to travel a couple of hundred miles.
There were almost no paved roads and those that did exist were mined; there was no electricity, no telephones, no drinking water, few jobs, no investment and very little expectation that things would improve.
A recent road trip to the northern town of Mazar-i-Sharif took us through a very different country.
We drove along decent roads (albeit with some pot-holes), shadowing our every step were giant electricity pylons sending power to the capital. Market stalls were full of fruit and vegetables, there were new schools and hospitals and everywhere were large signs declaring areas cleared of landmines.
And this time it took six hours, not six days.
Endemic corruption
But Afghanistan is still one of the poorest, least developed nations on Earth.

Sayed Omar Shah dreams of being able to live "without fear"
Parents struggle to feed and clothe their children, a series of droughts has created terrible hardships, jobs are still scarce and subsistence farming is often the only thing that keeps hunger at bay.
Corruption is endemic and people are suspicious about where all the foreign aid money has gone.
A shopkeeper in the town bazaar expressed a common opinion, when he said: "Though we have lots of food, people can't afford it. If there were more opportunities, more jobs, then life would get better."
This BBC poll shows people have many concerns, but in the north they are primarily economic.
Another trader in the market, who wanted to remain anonymous, told me how he earns up to $6 (£4) a day but that he must give the police a $1 bribe. "Why can't the authorities stop this? I can't pay this bribe. Please make our voices heard."
Elsewhere in the country, in large parts of the south, east and west, people are worried more about security and violence.
US 'surge'
Maidan Shahr is the provincial capital of Wardak province. It is only half-an-hour's drive to the south of Kabul, but taking police protection along even for this short journey is advisable.

There has been a surge of violence in Afghanistan over the past three years
Like other surrounding provinces, it has become increasingly infected by a spreading insurgency and rising criminality.
Governor Halim Fedayi flicks his hand as if dismissing some annoying insect when I ask him whether control of some of the districts here has fallen to the Taleban.
"If it bleeds, it leads," he says, accusing the media of an obsession with bad news and a disregard for progress in Wardak.
But America has just deployed an additional 1,500 troops to Wardak, and a new security force - recruited from the local population - is being given a trial-run here.
Clearly, not everyone shares the governor's confidence, and a large-scale spring offensive is expected against the Taleban.
The local bazaar is just five minute's walk from the governor's office but it is tense and full of police.
"People are very worried. They want security. They want to be able to move freely from their homes and villages without fear, to be able to sleep in peace at night," one man tells me.
Another man talks about the growing antipathy to foreign forces, also revealed in the BBC survey.
"It's clear that Afghans don't want them in the country, no matter why they're here. Some people may support them because they're working closely with the government. But ordinary people don't like them."
Almost every year in the past three decades of civil conflict has been important for Afghanistan, but this year stands out.
Thousands of extra US troops are on their way here, a presidential election will be held in the summer and the pressure to produce better results is immense.
This opinion poll shows that Afghans are becoming increasingly pessimistic about the future.
There has been progress but unless the international community can produce real peace and prosperity, then its mission in Afghanistan is in serious danger of running aground.














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'Last Stand of Fox Company' puts you in throes of battl




ABOUT THE BOOK



The Last Stand of Fox Company: A True Story of U.S. Marines in Combat
By Bob Drury and Tom Clavin
Atlantic Monthly Press, 353 pp., $25




By Carol Memmott, USA TODAY
The battle for Fox Hill began on a frigid November night in 1950 in the rugged mountains of North Korea. It ended Dec. 2 and instantly became, like Iwo Jima, a "signature" event in U.S. Marine Corps history.
In The Last Stand of Fox Company, a gut-clenching and meticulously detailed account, writers Bob Drury and Tom Clavin take readers into the Nangnim Mountains, where an undermanned unit of the Seventh Marine Regiment — the 246-man Fox Company — suffered unimaginable hardships to keep open the Toktong Pass.
"No Marine unit — or any other unit — fighting in Korea in 1950 held a more strategic piece of land against more crushing odds," the authors write.
Consider their challenge. With nighttime temperatures dropping to 30 degrees below zero, Fox Company faced a near impossible task: keep the pass open so that 10,000 Marines surrounded by 100,000 Chinese soldiers near the Chosin Reservoir could use it as they fought their way south.
Fox Company, led by Capt. William Barber, began its fight against the Chinese from a rocky rise high above the pass. By battle's end, three-fourths of Fox Company would be dead, wounded or taken prisoner.
The Marines' sacrifices were great, and the battle conditions were savage. The men slept atop the ice and snow, they survived mostly on crackers and candy, firing pins on many of their weapons were frozen solid, tossed grenades didn't explode. Frostbite was rampant. As the battle continued, the Marines, many of them teenagers, scavenged for weapons and ammunition from the bodies of Chinese soldiers.
There were no antibiotics for the wounded, who were rotated in and out of medical tents because there wasn't room to accommodate all of them. Those tending the wounded had to warm frozen morphine syrettes in their mouths before they could be administered.
Using the journals, letters and memories of Fox Hill survivors, Drury and Clavin tell a story so realistic that many readers will have to stop and take deep breaths as the story unfolds.
The authors' ability to make individual Marines come to life makes their heroics and sacrifices all the more compelling.


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US- Iran: Dialogue of the deaf?
By Norma Percy
Series Producer, Iran and the West


Obama hopes to succeed where other US Presidents have failed
President Barack Obama offered to "extend a hand" of diplomacy if the Islamic Republic's leaders would "unclench their fist."
But can he succeed in improving relations when all previous attempts at talks between Iran and the West have ended as the dialogue of the deaf?
It is 30 years this week since the Shah of Iran was overthrown in a coup and the Islamic Republic of Iran was established under Ayatollah Khomeini.
Relations between Washington and Tehran took a disastrous turn at that time and the two sides have barely been on speaking terms ever since.
For Iran, the historical mistrust went back further. The last time the Shah had been deposed - in 1953 - the US and Britain staged a coup and returned him to power.
So when, soon after the 1979 revolution, President Jimmy Carter admitted the Shah, who had terminal cancer, to the US, alarm bells were already ringing in Tehran.

Ayatollah Khomeini's legacy still overshadows US-Iranian relations
Iran's former Foreign Minister, Ibrahim Yazdi recalls meeting President Carter's National Security advisor Zbigniew Brzezinski to explain the problem - that the action was provoking memories of 1953. "No matter what you say the Iranian people will never accept this - they cannot swallow it."
Days later, a group of students seized the US Embassy in Tehran, demanding the Shah be returned to face trial.
Their action was backed by Iran's new leader Ayatollah Khomeini - and US-Iran relations fell to a new low as more than 50 people were held hostage for a total of 444 days.
Iran-Iraq war
Such was the mistrust of Iraq's new regime, that in the 1980s the US and Britain backed Saddam Hussein's Iraq as a counter to Iran's influence in the region.
American actions have often seemed in Tehran to be designed to provoke. And perhaps the most remarkable example is the American response to Saddam Hussein's use of chemical weapons during the Iran-Iraq war in the 1980s.
"It was a violation of the Geneva Convention. But members of the Security Council did not see it as in their interest to cross Saddam Hussein," says Perez de Cuellar, UN Secretary General at the time.
The US and Britain continued to back Iraq militarily and politically to the closing days of the war.
"You want them to stop using the chemical weapons," George Shultz, then President Reagan's Secretary of State, explains.
"At the same time, you don't want to see Iran win the war."
'Goodwill' gesture
Mr Obama is not the first US President to turn his attention to Iran in the opening days of his presidency.



I showed goodwill first - the Americans broke their promises


Former President of Iran, Hashemi Rafsanjani

President Bush Senior's words in his 1989 inaugural address, "Goodwill begets Goodwill" were addressed to Iran as the US was desperate to secure the release of American hostages - this time held in Lebanon by Hezbollah - and knew Iran could fix it.
Iran's new President Rafsanjani decided to take a huge risk. He sent the leader of the Revolutionary Guard to Lebanon and the Western hostages in Lebanon were duly released.
Mr Rafsanjani waited eagerly for the reciprocal "goodwill" which President Bush had promised. He got nothing.
Bruce Reidel, who was working for the CIA at the time, explains the American thinking: "The Iranians were now deeply engaged in other acts of terrorism that made it very, very hard to do anything to improve the relationship."
The US blamed Iran for the murder of a dozen Iranian exiles in the West and the destruction of the Israeli embassy in Buenos Aires and there was the fatwa from Iran's Supreme Leader ordering Muslims anywhere in the world to kill Salman Rushdie.


The Americans did not understand the situation in Iran - they destroyed the ground that had been prepared to re-establish ties

Former President of Iran, Mohammad Khatami
President Rafsanjani felt let down. "I showed goodwill first. The Americans broke their promises," he says.
For his remaining five years as president, he felt unable to risk public opinion at home and make any further attempts to open doors to the West.
Bomb controversy
So the next attempt at rapprochement had to wait for a new Iranian president. In 1997 President Mohammad Khatami announced: "I would like to talk to the people of America and, God willing, at the right time, I will."
Risking the wrath of Iran's dominant clerical establishment, he began cautiously with a "people to people policy", the visit of a US wrestling team to Iran.
The US saw the opportunity, but before President Bill Clinton could reciprocate, the FBI found evidence which they said proved Iran had been behind another terrorist attack - a truck bomb at Khobar Towers in Saudi Arabia which killed 19 US servicemen, a year before Mr Khatami was elected.
Mr Clinton's Secretary of State Madeleine Albright explains the problems this created in Washington: "The question was how to separate Khatami out from previous actions and not hold him responsible."
Mr Clinton wrote to Mr Khatami asking him to take action against the Iranians who were responsible.
But the attempt was doomed to fail. President Khatami could not act without the support of Iran's Supreme Leader, even if he had wanted to.
In fact, Mr Khatami still insists Iran had nothing to do with the bombing.
"The Americans did not understand the situation in Iran. They made big mistakes. They destroyed the ground that had been prepared to re-establish ties," he says.
Nuclear ambitions
But then came 9/11. In Afghanistan, Iran and the West suddenly had an overwhelming common interest. "The Taleban and their instrument, al-Qaeda were our enemy," Mr Khatami says.
"America now thought the Taleban was their enemy. So if they toppled the Taleban, Iran's national interest would be served."
"When the Taleban occupied Afghanistan they talked about an Islamic State, but they meant rule by a Sheik and an Emir, not a president. And they are narrow-minded about women in society. The Taleban believed and still believe that Iran is an enemy," Mr Khatami adds.
Iranian and American officials began meeting in New York and Geneva, to swap intelligence and coordinate policy.
One of the Iranian officials unfurled a map on the table and pointed to the targets the US needed to focus on, particularly in the North. It led to a swift victory in the US bombing campaign.
But America was not willing to proceed jointly on to the next common interest, Iraq.
Mr Obama says he is prepared to open talks with Iran without preconditions, declaring in his inauguration speech: "To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect."
Can it work? What are the lessons from the past? Obama's team need to understand what Iranians see as grievances - whether they are legitimate or not.

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