NEWS ANALYSIS : Analysts Believe Iran Wants to Normalize Relations While Keeping Eye on Iraq : Cautious Arab Regimes Waiting to See Who Seizes the Power in Tehran

The death of the Ayatollah Ruhollah Khomeini and the changes his passing may eventually bring to Iran are certain to have a profound impact in the Arab world, which has greeted his demise both with anxiety and a quiet sense of relief.

Because the internal political situation in Iran remains highly volatile, with rival Iranian factions engaged in a behind-the-scenes struggle for power that is expected to intensify over the coming months, these changes and the effects they will have on the region at large remain extremely difficult to predict.

The uncertainty over what happens next in Iran helps to explain the stony silence that most Arab regimes have maintained in the wake of Khomeini’s death Saturday at the age of 86. Apart from pro forma cables of condolences, most Arab governments have sought to remain publicly aloof from current events in Tehran. Only Syria, Iran’s isolated ally in the Arab world, and tiny Oman, which sits too close to Iran to risk antagonizing it, sent delegations to Khomeini’s funeral Tuesday.

Nevertheless, many analysts believe that most if not all of these regimes are also looking for opportunities to begin normalizing their relations with Iran, both in order to ease tensions in the Persian Gulf and, because things have a way of moving full circle in the Middle East, as a means of checking Iraq’s emergence, in the wake of the Persian Gulf War, as the region’s strongest Arab military power.

Iraq, for its own part, sent what appeared to be a strong signal to Iran earlier this week that it does not intend to jeopardize its 10-month-old truce with Tehran by exploiting the political confusion there in the wake of Khomeini’s death. The official Iraqi media, while denouncing Khomeini as a tyrant, said his death “opens the door” to the possibility of peace between Iran and Iraq. More significantly, the Iraqis quickly snapped a muzzle on the propaganda machine run by the Baghdad-based Iranian opposition group Moujahedeen, or Peoples’ Holy Warriors.

On Sunday, within hours of the announcement of Khomeini’s death, the Moujahedeen was loudly predicting the disintegration of the Islamic regime in Tehran and proclaiming its readiness to march in and take over. On Monday, after what diplomats widely assume was an Iraqi crackdown, it announced it was shutting down its television station and suspending publication of its magazines.

Most analysts now believe that the Moujahedeen’s future is only slightly less uncertain than the political situation in Tehran itself. Iraqi President Saddam Hussein “will keep the Moujahedeen around for insurance, but on a short leash,” one analyst said. “If and when there is real peace with Iran, he will dispense with them.”

In a wide-ranging review of foreign policy on Thursday, Iran’s Speaker of Parliament, Hashemi Rafsanjani, said Iran would make no concessions to get a treaty with Iraq. The current cease-fire condition of “neither peace nor war could continue for some time,” he said.

Rafsanjani added that he hoped for better ties with other Arab nations now that the fighting is over.

The conflict with Iraq aside, the main question for the Arab world now is whether Iran will finally be ready to abandon what, under Khomeini, assumed the dimensions of a holy crusade to spread its violent and vengeful Shiite Muslim vision of an Islamic empire throughout the world, starting with the orthodox Sunni Muslim states of the Persian Gulf.

As long as Iran remains a theocracy, this goal is not likely to be renounced, but it could be relegated to the background, to the point where it is paid only lip service, if the so-called moderate factions in Tehran are able to consolidate their control over the hard-liners.

In this respect, many Arab analysts believe, the principal challenge facing Iran as it enters the post-Khomeini era is not whether the revolution can survive, but how it can be brought to an end--how its leaders can make the transition from a revolution running on conflict and chaos to a functioning and orderly regime, theocratic or otherwise.

Arab officials and Western analysts based in the Middle East are guardly optimistic following early signs that Rafsanjani, the leader of the “moderate” faction in Tehran, has improved his political fortunes through the appointment of a key ally, President Ali Khamenei, as Khomeini’s spiritual successor.

If the Rafsanjani faction emerges on top of things, “the impact on the region as a whole will be enormous,” a senior Cairo-based diplomat said. “Rafsanjani doesn’t have Khomeini’s religious legitimacy. His legitimacy will have to be based instead on being the one who provides food and jobs, and for that he will need good relations with everyone,” the diplomat added.

Bodes Ill for Lebanon

Until the outcome of the in-fighting in Tehran becomes clear, the big concern in the Arab world is that things could still get considerably worse before they get better, especially in that most unfortunate battleground for regional conflicts, Lebanon.

Along with Syria, Lebanon is liable to feel the most immediate impact of Khomeini’s death.

Iran’s defeat in the gulf war was a tremendous blow to Syria, not only because it increased its isolation as the only Arab state to have backed the losing and non-Arab side in the war, but because it freed Iraq to resume its long war of mutual subversion with Damascus. Syria, Iran and now Iraq are all deeply involved in a bitter and bloody contest for influence in Lebanon.

Many analysts think Iraq may now take advantage of Iran’s preoccupation with its domestic affairs to press its proxy war against the Syrian presence in Lebanon.

Yet another view holds that Iran, because of its domestic problems, will feel obliged to step up the stakes in Lebanon. “Rafsanjani will have to appease the hard-liners as he maneuvers for control, and one obvious way of doing this is to send more Revolutionary Guards units to Lebanon,” a Western diplomat said.

Either way, the outlook for Lebanon seems pretty grim to those who would argue that the Lebanese should be left alone to fight their own battles.

Lebanon aside, Khomeini’s death constitutes a setback for Syria because it undermines one of the key arguments it has used to extract badly needed financial support from the gulf states.

“The Syrians,” one diplomat noted, “have always claimed that they are the only ones who can protect the gulf states from Khomeini. Now, with Khomeini gone, it will be harder for them to play that double game.”