Reagan Bid to Free U.S. Hostages Held Unlikely : Administration Reportedly Decides Against Iran Initiative in Last Months; Shultz Opposition Told

The Reagan Administration has decided against a diplomatic initiative with Iran during its final two months in office to free nine American hostages held by pro-Iranian extremists in Lebanon, U.S. sources say.

Nations that have served as intermediaries between Tehran and Washington during the last decade of hostility have encouraged the United States recently to provide a signal or gesture that would allow the Islamic republic to save face while reversing its disdain for the “Great Satan,” according to European sources.

Although senior Administration officials have probed the options, sources say that Secretary of State George P. Shultz in particular has opposed any initiative, insisting that Iran must make the first move.

“It would be unseemly for us to be seen chasing them,” said a State Department official, who asked not to be named.

“That means they’re abandoning the hostages,” charged a relative of an American captive.

Hostage families, Middle East analysts and other interested parties long had anticipated that the transition to the Administration of President-elect George Bush would provide a “window of opportunity” during which both sides could lay the groundwork for better relations by negotiating freedom for some or all of the hostages.

“I would think President Reagan would want to put this behind him before he leaves office,” said Peggy Say, sister of hostage Terry A. Anderson, who has been held longer than any foreign hostage in Lebanon. “I would think he would be ashamed to do otherwise.”

Anderson, chief Middle East correspondent for the Associated Press, marked his fourth Thanksgiving in captivity this week.

“Do you think the United States would do the same if 100 lives were at stake?” Say asked. “Nine American lives apparently are not enough to cause anyone major discomfort.” She referred to resolution of the hijacking of TWA Flight 847 in 1985, when 39 Americans were held hostage in Beirut for 17 days. Intense U.S. mediation led to their release.

Several Mideast analysts contend that the United States may be missing an opportunity at a crucial juncture.

The momentum on both hostage releases and bettering relations with the West has been building since May, when the last French hostages held in Lebanon were freed. Diplomatic ties between Iran and both France and Canada were restored during the summer.

Britain reached final terms for resumption of relations earlier this month. London hopes the release of three British hostages, including hostage mediator Terry Waite, will follow.

Iran also recently has improved relations with Kuwait and other Persian Gulf Arab states that were Iraq’s prime financial and political supporters during its eight-year war with the Tehran regime.

Part of the momentum stems from the belief--among Western and Arab governments as well as key Iranian leaders--that major policy changes must take place before the death of the aged and ailing Ayatollah Ruhollah Khomeini, who is believed to be 88.

Khomeini’s support for any controversial policy reversal is vital to prevent those issues from fueling an intense power struggle after his death and causing potentially lengthy delays, according to R. K. Ramazani, a University of Virginia government professor and specialist on Iranian foreign policy.

“Iran’s foreign policy cannot be divorced from its domestic policies or problems,” Ramazani said. “And we would make a great mistake if we fail to explore the potential or possibilities of establishing a dialogue.

“Even at the height of the hostage crisis between 1979 and 1981, there would have been no accord or resolution without indirect communication between the two nations.”

Iran has increasingly signaled a readiness to move, Mideast analysts say. On the Nov. 4 anniversary of the seizure of the U.S. Embassy, normally a time of rhetoric and bravado in Iran, one of Iran’s most fundamentalist newspapers wrote, “The Islamic republic should start a new chapter in its foreign policy with all countries of the world.

“It is extreme pessimism, shortsightedness and lack of confidence to take any kind of relation with the West as compromise, surrender and the beginning of dependency. We can have reasonable, conventional and rational relations with the superpowers,” said the newspaper Jomhori Islami (Islamic Republic), which repeatedly specified the United States.

The release in Beirut last month of hostage Mithileshwar Singh, an Indian national with U.S. residency, was also viewed in the Reagan Administration as a signal of new Iranian interest. Through German envoys, Tehran alerted the United States about the release by Singh’s Lebanese captors at least two days in advance.

An Iranian Foreign Ministry official subsequently said Tehran was angry that Washington refused to acknowledge Iran’s role in Singh’s release. Reagan Administration officials said at the time that they saw no obligation to thank a government that had supported the original abductions.

U.S. sources say they are not ruling out hostage releases before the Jan. 20 inauguration of President-elect George Bush. But they contend that the ball is entirely in Iran’s court.

Explained a senior Administration official familiar with U.S. counterterrorism policy: “It’s not us missing an opportunity. It’s Iran.

“We continue to be interested in the possibility of resolving our problems,” the official said. “We continue to make the point that we’re ready for an authoritative meeting, if they will send an authoritative figure to negotiate.

“But so far, there hasn’t been any motion,” he added.

State Department officials point out that the United States also has sent indirect signals to Iran. Recent moves include condemnations of Iraq’s use of chemical warfare and the scaling back of the U.S. naval escort operation in the Persian Gulf.

After the 1986 Iran-Contra revelations, President Reagan has at least twice said that the United States is prepared for better relations. And last year, Khomeini said that only two countries were off limits diplomatically--Israel and South Africa. The United States once headed the list.

The shift in the Iranian leader’s position has frequently been cited by Iranian officials and in press editorials.

But Middle East specialists claim that Iran’s deeply divided leadership cannot afford to make the first move.

“After the abrupt change in war policy (in which Iran agreed to peace talks), Iran needed a quick agreement with Iraq to show its supporters that diplomacy works,” said one analyst. “But the delays at the Geneva peace talks have so far only proved otherwise.

“A second reversal so soon after the first would be very dangerous for those who most want relations with the West strengthened,” the analyst continued.

One Administration source said that Shultz, the only ranking foreign policy official to survive the Iran-Contra scandal, has an “almost visceral resistance” to breaking the ice.

Shultz, a former Marine, also holds Iran responsible for the 260 American deaths in the bombings of the Marine compound and two U.S. Embassy buildings in Beirut, the source said.

Others say that a major constraint is public opinion.

“The American public is not ready for something unilateral with Iran,” said one State Department official. “Iran is still seen as a pretty despicable place.”

Since the arms-for-hostage swap with Iran, analysts say, the Reagan Administration has hoped that Iran will recognize that the costs are higher than the benefits of allowing their Lebanese allies to keep the hostages.

“The issue is not just freedom for these nine, but preventing the abduction of future hostages,” said an Administration source. “We have to end the whole phenomenon by proving it doesn’t work.”

Responded Say, Anderson’s sister: “It’s gone beyond what the American people should find acceptable. It’s a page in our history that I hope will someday haunt us all. But apparently not enough people care.”