United for Peace of Pierce County, WA - We nonviolently oppose the reliance on unilateral military actions rather than cooperative diplomacy.

AFP reported Wednesday that "The United States has played down any prospects of war with Iran or any immediate dangers from its nuclear drive but warned that the world was ready to confront its 'provocative' policies."[1] -- But "[t]he confrontation between Iran and the United States seemed to sharpen on Thursday as Iran said it tested missiles for a second day and Secretary of State Condoleezza Rice said the United States would defend its allies and protect its interests against an attack," the New York Times reported.[2] -- Michael Schwirtz and William J. Broad quoted Charles P. Vick, an Iranian rocket program expert at GlobalSecurity.org, who said of Iran's missile tests: "It’s basically a demonstration of all the weapon systems they bought from Russia, China, or North Korea over the last decade." -- According an overview by the Federation of American Scientists produced several years ago, "Most of the Iranian missile development industry is located in Karaj, outside Tehran. Iran's missile infrastructure also includes a Chinese-built missile plant near Semnan, larger North Korean-built plants at Isfahan and Sirjan which can produce liquid fuels and some structural components, and missile test facilities at Shahroud and the Shahid Hemat Industrial Group research facility just south of Tehran. Historically Iranian missile 'production' consists primarily of assembling imported ballistic missile kits. -- In an effort to decrease their dependence on foreign entities, Iran is seeking to develop an indigenous missile and weapons production capability infrastructure. Iran's ballistic missile production facilities program is located in two underground tunnels between (Kuh-e-parbl) Bandar Abbas and Bushehr. It began to become a reality as early as 1996. However, the Scud B/Shahab 1 system is now said to be in production using a significant portion of locally manufactured components. -- Current Iranian missile inventories are very speculative . . ." -- GlobalSecurity.org says: "Progress on indigenous missile production is often reported by one source or another in Teheran, perhaps falsely, to demonstrate that Iran is a growing power against Israel and to intimidate its other enemies in the region. However, Iran continues to rely primarily on limited North Korean missile production capacity." -- UPI reported Thursday that Iran was exaggerating the purport of its activities Thursday: "Iranian media reported the country's military conducted a second day of test-firing missiles, but the U.S. military official told CNN U.S. radar and satellite imagery don't support the claim. . . . [T]he source talking to CNN said one missile failed to launch and the Iranians fired it the following day."[3] -- But Iran's announcement, combined with "the apparent end of a cease-fire in Nigeria," was enough to push oil prices back over $140 a barrel, CNN Money reported.[4] ...

WASHINGTON -- The United States has played down any prospects of war with Iran or any immediate dangers from its nuclear drive but warned that the world was ready to confront its "provocative" policies.

Iran's test firing of a medium-range missile that it said could reach Israel drew anger in Washington but U.S. Defense Secretary Robert Gates said the United States and Iran were not close to war.

Asked if the two countries were closer to a military confrontation in light of the escalating rhetoric, Gates said, "No, I don't think so."

"The reality is there is a lot of signalling going on, but everybody recognizes what the consequences of any kind of a conflict would be," he said.

"And I would tell you that this government is working hard to make sure the diplomatic and economic approach to dealing with Iran and trying to get the Iranian government to change its policy is the strategy and is the approach that continues to dominate," said the defense chief.

Iran's missile launch Wednesday came a day after an aide to Iranian supreme leader Ayatollah Ali Khamenei warned Tehran would "set fire" to Israel and the U.S. Navy in the Gulf in response to any American attack over its nuclear program.

The missile launch is "very disturbing, provocative, and reckless," said William Burns, the top official handling Iranian issues at the U.S. State Department.

But Under Secretary of State Williams played down any imminent dangers from Iran's uranium enrichment despite fears among world powers fear the sensitive nuclear program could be used to make a nuclear weapon.

"While Iran seeks to create the perception of advancement of its nuclear program, real progress has been more modest," he told Congressional hearings on the "strategic challenge posed by Iran."

Iran has not yet mastered uranium enrichment, thanks to three rounds of sanctions imposed on Tehran by the U.N. Security Council for not suspending the nuclear program, he said.

"It is apparent that Iran has not yet perfected enrichment, and as a direct result of U.N. sanctions, Iran's ability to procure technology or items of significance to its missile programs, even dual use items, is being impaired," Burns said.

In addition to limiting Iran's access to proliferation sensitive technologies and products, Burns said key officials involved in Iran's procurement activities had been "cut off" from the international financial system and restricted from travel.

Iran's banks were also being pushed out of their normal spheres of operation, he said.

Burns also told Iran to seriously reconsider its "provocative" and "threatening" policies and move towards a "cooperative and constructive" path.

"Until that time, however, the U.S. and the international community remain committed to meeting the challenges posed by Iran," he said.

U.S. lawmakers meanwhile expressed concern over the Iranian nuclear drive and missile tests and urged the administration of President George W. Bush to step up diplomatic efforts to end Iran's defiant nuclear drive.

"Iran daily inches closer to the point where it can produce enough weapons-grade uranium to make a nuclear bomb," said Howard Berman, the chairman of the House of Representatives foreign affairs panel.

"No one knows precisely when that will happen, but most experts say it will be soon," he said. "Some predict as early as the end of this year."

Senate foreign affairs panel chairman Joseph Biden called on the Bush administration to hold direct talks with Iran similar to those with North Korea that led to commitments to end the hardline communist state's nuclear weapons drive.

Iran insists its nuclear activities are aimed solely at generating energy but the West fears [they] could be aimed at making an atomic bomb.

The United States has never ruled out military action against Iranian atomic facilities.

Burns said Washington would pursue "tough-minded diplomacy, maximizing pressure on the Iranians at multiple points to drive home the costs of continued defiance of the rest of the world, especially on the nuclear issue."

RICE WARNS IRAN THAT U.S. WILL DEFEND ALLIES
By Michael Schwirtz and William J. Broad

MOSCOW -- The confrontation between Iran and the United States seemed to sharpen on Thursday as Iran said it tested missiles for a second day and Secretary of State Condoleezza Rice said the United States would defend its allies and protect its interests against an attack.

Ms. Rice was speaking in the former Soviet republic of Georgia at the end of a three-day tour of Eastern Europe. Shortly after she spoke, state-run media in Iran began reporting the new missile tests, which it said included a relatively new torpedo.

Iranian state television showed a missile blasting off in darkness. The television reports said the new tests took place during Wednesday night and into Thursday. A commander in Iran’s Revolutionary Guards had said earlier that night missile maneuvers would take place but did not give details.

“Deep in the Persian Gulf waters, the launch of different types of ground-to-sea, surface-to-surface, sea-to-air, and the powerful launch of the Hoot missile successfully took place,” Iranian state radio said, referring to the torpedo whose name means whale in Iranian. The latest tests came a day after Iran said it test-fired nine missiles, including one that Tehran said had the range to strike Israel.

At a news conference in Georgia with President Mikheil Saakashvili, Ms. Rice said, “We will defend our interests and defend our allies.”

She also said, “We take very, very strongly our obligations to defend our allies and no one should be confused of that.”

The remarks came amid tense exchanges between Iran and the United States over Iran’s civilian nuclear program, which Washington and many Western governments have warned could be used to cloak the development of a nuclear weapon, a charge Tehran has repeatedly denied. The Bush administration has refused to rule out a military option, and last month Israel’s air force rehearsed what American intelligence officials described as a possible strike on Iranian nuclear facilities.

Israel has vowed to keep Iran from becoming a nuclear power, and on Thursday it joined the battle of words, according to Reuters. Defense Minister Ehud Barak said that he favored diplomatic pressure and sanctions, but that, “Israel is the strongest country in the region and has proved in the past it is not afraid to take action when its vital security interests are at stake.”

Adding to tensions, this week the United States and the Czech Republic signed an accord to allow the Pentagon to deploy part of its contentious antiballistic missile shield, which Washington maintains is intended to protect in part against Iranian missiles.

Meanwhile, American and British warships are engaged in maneuvers in the Persian Gulf. A private group of scientists in the United States interpreted the situation as a battle of exaggeration waged by both the Iranians and the Bush administration, Iran overstating the strength of its missiles and the United States overstating the need for missile defenses.

“Iran frequently exaggerates the capability of its missiles, and it appears it is continuing that tradition with this week’s tests,” said Dr. David Wright, a physicist with the Union of Concerned Scientists. “Meanwhile, the Bush administration is using Iran’s missile tests to promote the U.S. antimissile system in Eastern Europe that has never been shown to work in a real-world situation.”

Dr. Wright said that the range of Iran’s biggest missiles appeared to be significantly less than Tehran routinely claimed.

Charles P. Vick, an Iranian rocket program expert at GlobalSecurity.org, a research group in Alexandria, Va., said that what appeared to be two large Shahab missiles lifting off Wednesday within seconds of each other turned out to a Shahab and a Scud-C, the range of which is far less. In a telephone interview on Thursday, he said that Iran seemed to be testing a few new systems, like the Hoot, but mostly clearing out old inventory.

“It’s basically a demonstration of all the weapon systems they bought from Russia, China, or North Korea over the last decade,” he said.

Iran claimed to have first tested the Hoot in April 2006. A senior military official at the time described the missile as a sonar-evading torpedo capable of traveling about 230 miles per hour, about three times the speed of Western torpedoes. Military analysts have said that the Hoot resembles a Russian rocket-propelled torpedo called the VA-111 Shkval, a limited-range weapon used in close-proximity combat.

--Michael Schwirtz reported from Moscow, and William J. Broad from New York. Alan Cowell contributed reporting from Paris.

TEHRAN -- A U.S. military official says Iran fired only one missile Thursday, not a full round, based on U.S. intelligence assessments.

Iranian media reported the country's military conducted a second day of test-firing missiles, but the U.S. military official told CNN U.S. radar and satellite imagery don't support the claim.

The military official said it was possible that Iran tested short-range missiles.

U.S. diplomatic and military officials said they believe Iran did fire seven missiles -- including one long-range Shahab-3 -- Wednesday, as it said. But the source talking to CNN said one missile failed to launch and the Iranians fired it the following day.

The Iranian exercises came a month after Israel conducted a military drill in the eastern Mediterranean. Tensions between Iran and Israel have been growing. Iran has accused Israel of trying to weaken Tehran while Israel hasn't ruled out a military strike against Iran's nuclear facilities.

Israel was expected to unveil an advance aircraft its military said is capable of spying on Iran. Israeli Army Radio told CNN the Eitam airplane is a "practical answer" to recent Iranian "threats."

** Oil settles $5.60 higher to $141.65 as Middle East tensions have investors on edge. OPEC reports that global demand will grow by 50% by 2030. **

NEW YORK -- Oil rallied late Thursday, settling more than $5 a barrel higher, as traders reacted to talk of further turbulence in Iran and Nigeria, raising new supply concerns.

Light, sweet crude settled $5.60 higher to $141.65 a barrel. Prices had soared as high as $142.04 just before the settlement.

Traders said rumors that Iran test fired more missiles and of the apparent end of a cease-fire in Nigeria pushed prices up at the end of the trading day.

When global supply is as tight as it is right now, traders do not wait to confirm rumors, said Neal Dingmann, senior energy analyst at Dahlman Rose & Co.

"People are shooting first and asking questions later," he said, especially when the rumors are concerned such oil-rich countries as Iran and Nigeria.

Iran media reported that Tehran had test-fired a series of missiles in the Persian Gulf for the second day on Thursday, putting investors on edge.

However, American radar and satellite data do not back the reports. A senior military source said that Iran launched only one missile on Thursday, not a full round of tests, according to the latest U.S. intelligence assessments.

Mark Waggoner, president of Excel Futures, said that tensions throughout the Middle East are pushing up the price of oil, but he said that the recent events in Iran are of particular concern today.

Waggoner and Dingmann both noted that there was talk that they may have been an end to a cease fire in Nigeria, and said those rumors could have pushed up prices as well.

If tensions in the Middle East were to subside, Waggoner said, "I would think you would get $10 off [the price] almost immediately."

With the market so sensitive, geopolitical unrest, especially in Iran, which sits on 10% of the world's oil supply, any news of instability is enough to push the price of oil higher, said Stephen Schork, publisher of the industry newsletter, The Schork Report.

"This is still a bullish market that is trading as much on psychology as fundamentals," said Schork.

Escalating tensions in Iran could shut down the Strait of Hormuz, a key passageway for Middle East oil, posing a big problem in transporting oil and putting pressure on global supply, said Schork.

The Organization of Petroleum Exporting Countries said Thursday in its "World Oil Outlook for 2008" that global energy demand will spike by more than 50% by 2030.

"Oil has been in the leading position in supplying the world's growing energy needs for the past four decades, and there is a clear expectation that this will continue," said the summary of the 214-page report.

OPEC also noted, however, that oil reserves, conservation and new methods of discovery mean that supply will keep pace with demand.

The summary that accompanied the report said that "the transportation sector will be the key to future oil demand growth." More than 4 billion people live in countries with fewer than one car for every 20 people, suggesting a growing global demand for vehicles.

According to the report summary, "there is certainly enough supply, and there is ample investment," which should lead to falling oil prices.

The summary cited the "significant weakening" of the greenback as one of the reasons that oil prices have been climbing. In addition, OPEC said that skyrocketing futures trading and "paper barrel" trading allows "unlimited and undetected speculation."

Crude prices slid more than $9 a barrel Monday and Tuesday after Iranian president Mahmoud Ahmadinejad said he did not expect a future armed conflict with Israel or the United States.

The unwinding of oil prices after came just after prices hit a fresh record high. Crude futures surged to $145.85 a barrel on the Thursday ahead of the three-day July 4 holiday, before settling at a record close of $145.29 a barrel.

"I think it is clear that while there is a bubble built into this marketplace," said Schork, he is expecting "a rebound and another run to $150," by the end of the summer.

Waggoner also anticipates that crude oil prices will continue to charge forward. "Ultimately, we are still in a raging bull market," he said. "I expect the market to go up to $152."

In addition to geopolitical tensions, oil prices are being sent higher on "the draws on crude oil combined with the dollar problems and the government doing nothing to support the dollar," said Waggoner.

On Wednesday, crude prices settled flat after a bigger-than-expected gain in gasoline supplies countered tensions in Iran.

A government report released Wednesday showed an unexpected climb in national gasoline stockpiles, which analysts say could indicate that drivers just aren't buying as much fuel.

Retail gas prices backed away from their record highs overnight, a daily survey by motorist group AAA showed on Thursday. The price of regular unleaded gasoline fell four-tenths of a cent to $4.104 a gallon.

Through the first half of the week, gas prices held at a record high of $4.108 a gallon. Gas prices have surged roughly 40% in the past year.

--CNN Pentagon correspondent Barbara Starr and CNN Senior Pentagon Correspondent Jamie McIntyre contributed to this report.