Iran is closely watching the unfolding crisis between Israel and the United States over Israeli settlements – and Jerusalem clashes with Palestinians that injured more than 100 today – for ways to rejuvenate its diminished influence in the Middle East.

Public division between the US and its closest ally Israel – two arch-foes of Iran that have made curbing Iran’s nuclear ambitions a top priority – are a gift to the Islamic Republic, analysts say, as it tries to fend off US and Israeli efforts to forge a coalition against it. Hard-line officials will use it as a further example of the US as a lapsed superpower – a point they frequently affirm.

Iran has seen its reputation tarnished across much of the Middle East by weeks of violent street clashes after the June 2009 presidential election, which many Iranians believe was rigged.

“The Iranians are going to see an opportunity to improve their position in the region, to capitalize on Israel’s reduced standing vis-à-vis the US, to reduce the chances of an anti-Iran coalition being formed,” says Meir Javedanfar, an Israel-based Iran analyst.

“If the situation drags on – and especially if Israel continues to defy the United States – I think the Iranians will definitely take advantage, and will try to make an agreement, especially with the Persian Gulf countries,” not to gang up against Iran, says Mr. Javedanfar, coauthor of The Nuclear Sphinx of Tehran. “They would be able to say to them: ‘Look, the Americans are not even able to convince their friends to do what they want. They’re going to have much less chance to stand up to their enemies such as Iran.”

Why Israel helps Iran keep its 'revolutionary' status

Demonizing the US and Israel – sometimes referred to in Iran's ideological parlance as the "Great Satan" and "Little Satan" – has been a pillar of the regime since the 1979 Islamic Revolution.

After more than 31 years, chants of “Death to America!” and “Death to Israel!” and flag burning remain routine at pro-regime rallies. President Mahmoud Ahmadinejad often claims that Israel’s oppressive policies against Palestinians will cause the destruction of the Jewish state.

Such a result – were it ever to happen – would relieve Iran of a constant thorn in its side, but also deprive it of one of the perennial enemies it has used to maintain its “revolutionary” status.

Iran slams Israel over 1,600 housing units

Iranian officials kept up that pressure on Tuesday, taking Israel to task for its announcement to build 1,600 new housing units in East Jerusalem – made during Vice President Joe Biden’s visit last week – and for the rebuilding of an East Jerusalem synagogue that was destroyed in 1948.

“This wrong conduct by the illegitimate Zionist regime ... is intensely condemned,” Iran’s Foreign Ministry spokesman Ramin Mehmanparast said on Tuesday. “We think that these trips [by US officials] are intended to cover up the Zionist regime’s conduct and US authorities are largely incapacitated [in the face of] the Zionist regime’s crimes.”
Parliament Speaker Ali Larijani said on Tuesday that result indicated American weakness. Washington was not following through on promises of “respecting” the rights of Muslims, and that Israel had made an “insult against Islamic culture.”

“Despite the Americans coming and going to the area and discussing the matters with them, the Israelis and the Zionist regime apparently don’t pay any attention,” Mr. Larijani said at a press conference, according to the semi-official ISNA news agency. That result “can be analyzed as a serious threat against the Americans.”

Petraeus warns the US looks increasingly weak

The US-Israeli crisis has come to a head two months after US CENTCOM commander Gen. David Petraeus sent a team to the Pentagon to brief Joint Chiefs of Staff Chairman Adm. Michael Mullen about his rising concern over the Israeli-Palestinian conflict. According to a report published over the weekend in Foreign Policy magazine, Gen. Petraeus’ team reported “that there was a growing perception among Arab leaders that the US was incapable of standing up to Israel, that CENTCOM’s mostly Arab constituency was losing faith in American promises, [and] that Israeli intransigence on the Israeli-Palestinian conflict was jeopardizing US standing in the region…”

Such a high-profile US-Israeli disagreement “would be looked at with a smile” in Tehran, where Ahmadinejad is trying to position himself as a leader of all Muslims, says Massoumeh Torfeh, an Iran specialist at the School of Oriental and African Studies in London.

The Iranians “won’t feel it is the end of the line … just a little moment of disagreement between these two nations because they are so inter-connected.” But the Iranian reaction, she adds, “should be seen in terms of politics. They can see that they have a serious problem inside [Iran], so they really need to have a [bigger] role in regional and international politics.

How Iran can use Israel crisis to boost its clout among Arabs

The US-Israel flap is providing some space for that.

“The Iranians will try to use it as a tool in their box, to define Israel as a pariah state,” says Javedanfar. “Now more people on the Arab street will have more time for what Iran is saying – not Tehran’s streets [where anti-regime clashes have been episodic], but on the Arab street.”

Iranian officials have rarely strayed from triumphant criticism of US policy, in a narrative that portrays the US as a lapsed superpower. The deputy ground forces commander of the Revolutionary Guard, Gen. Abdollah Eraghi, replied to Petraeus, who told CNN on March 7: “I think you've heard it said by pundits that Iran has gone from a theocracy to a thugocracy."
“Unintelligent and shameless statements by the destitute and vanquished US military chief in the Middle East show how far the foreign policy of the United States has been degraded,” said commander Eraghi said last week, according to Fars News Agency. “The United States supports the most thuggish regime in the world, which is the Zionist regime.”