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The mounting tension over Iran's nuclear program is also highlighting increased Israeli and U.S. involvement in the Caucasus. Apart from everything else, this has to feed President-elect Vladimir Putin's paranoia about U.S. efforts to become an active player in what Russia considers its own backyard.

But, of course, it's the Iranians who are the most upset and who in the short run have the most to lose. Tehran believes that Mossad has established a base in neighboring Azerbaijan from which the largely successful plots to assassinate Iranian nuclear physicists were initiated. The border between Azerbaijan and Iran is quite permeable. The 16 percent of Iranians born in Azerbaijan can travel visa-free between the two countries.

Not only has Tehran accused Baku of allowing Israeli intelligence to operate freely in Azerbaijan, it has launched counterstrikes such as the recent, unsuccessful assassination plot against the Israeli ambassador to Baku, Michael Lotem.

Upping the ante considerably, in late February Azerbaijan agreed to buy $1.6 billion in advanced weaponry from Israel, including drones and anti-aircraft and anti-missile systems. The official Azeri defense budget for 2012 is $1.7 billion. The sale will be spread out over several years.

Arms sales, both those made and those cancelled, have played a pivotal role in the development of events connected to Iran. Russia deserves thanks for not selling the formidable S-300 anti-missile and anti-aircraft system to Iran even though it had contracted to in 2007 in a sale worth close to $1 billion. Needless to say, Russia extracted concessions from that cancelled sale, including the United States not rearming Georgia after the Russia-Georgia war of 2008.

If the Iranians had already taken delivery of the S-300s, it would probably be too late for the Israelis to attack without significant U.S. help. And if the Iranians were currently awaiting delivery of the S-300s, Israel would be in countdown, its window of opportunity shrinking by the hour. Unless otherwise persuaded by the United States, Israel would feel compelled to strike.

As for Israeli arms sales, Stratfor wrote in a recent report: "It is difficult to believe that the United States and Israel are not coordinating their activities in the Caucasus. … It can be assumed that the United States has approved the initiatives."

Directly or indirectly, Russia and the United States have been bumping up against each other in the Caucasus region where Russia is resurgent. Moscow got its lease on military facilities in Armenia extended to 2044, and its lease in the breakaway formerly Georgian republics of Abkhazia and South Ossetia by 49 years. Russia's $22 million-a-year lease on the Gabala radar station in Azerbaijan that can track Iranian missiles runs out in December. Azerbaijan, which also provides routes for gas and oil that compete with Russia's, is the one place in the former Soviet Caucasian territories where Russia has problems exerting its will.

Partially that is because of U.S. influence and presence, with U.S. medical evacuations from Afghanistan operating out of Azerbaijan. U.S. aid to Azerbaijan is now exactly equal to that given to its arch foe Armenia ($2.7 million), despite the fact that the Armenian lobby is strong in the United States, while the Azeri lobby is nearly nonexistent.

All these complex tensions will lessen only when the Iranian crisis is resolved one way or another. A former Azeri counterintelligence officer has likened today's Baku teeming with spies, arms dealers and assassins to "Casablanca during World War II." Let's at least hope it has a Rick's Place.

Richard Lourie is the author of "The Autobiography of Joseph Stalin" and "Sakharov: A Biography."

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