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Following the U.S. invasions of Iraq and Afghanistan, the Iranian threat to U.S. interests has taken on seemingly unprecedented qualities of aggressiveness and urgency. Added to its provocative positions on the nuclear program, support for non-state militants, and development of threatening military capabilities is the sense that Iran is trying to effect far-reaching changes on the regional and even global stage. Within this context, this report aims to provide policy planners with a new framework for anticipating and preparing for the strategic challenges Iran will present over the next ten to fifteen years. In an analysis grounded in the observation that although Iranian power projection is marked by strengths, it also has serious liabilities and limitations, this report assesses four critical areas — the Iranian regime's perception of itself as a regional and even global power, Iran's conventional military buildup and aspirations for asymmetric warfare, its support to Islamist militant groups, and its appeal to Arab public opinion. Based on this assessment, the report offers a new U.S. policy paradigm that seeks to manage the challenges Iran presents through the exploitation of regional barriers to its power and sources of caution in the regime's strategic calculus.

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The research described in this report was sponsored by the United States Air Force and conducted by RAND Project AIR Force.

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