VZCZCXRO4184
RR RUEHBC RUEHDE RUEHDH RUEHDIR RUEHKUK RUEHTRO
DE RUEHYN #1662/01 2551411
ZNY SSSSS ZZH
R 121411Z SEP 09
FM AMEMBASSY SANAA
TO RUEHC/SECSTATE WASHDC 2751
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEHAE/AMEMBASSY ASMARA 0694
RUEKDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC

S E C R E T SECTION 01 OF 04 SANAA 001662

NOFORN
SIPDIS

DEPT FOR NEA/ARP AMACDONALD, NEA/IR CDEJUANA, INR SMOFFATT
NSC FOR KMAGSAMAN

E.O. 12958: DECL: 09/07/2019
TAGS: PINR PREL PGOV ECON ENRG EIND IR YM
SUBJECT: IRAN IN YEMEN: TEHRAN's SHADOW LOOMS LARGE, BUT FOOTPRINT IS SMALL (c-ne9-01257)

REF: A. STATE 86584
¶B. SANAA 1628
¶C. SANAA 876

Classified By: Ambassador Stephen Seche for reasons 1.4(b) and (d).

¶1. (S/NF) SUMMARY. Despite repeated ROYG accusations of
Tehran's material and financial support to the Houthi rebels
in Sa'ada and increasingly belligerent media exchanges
between Yemen and Iran, Iranian influence in Yemen has thus
far been limited to informal religious ties between Yemeni
and Iranian scholars and negligible Iranian investment in the
energy and development sectors. While Iran has good
strategic reasons to involve itself in Yemeni affairs -
including Yemen's proximity to Saudi Arabia and the presence
of a large Zaydi Shiite population ) the only visible
Iranian involvement remains the Iranian media's proxy battle
with Saudi and Yemeni outlets over support for the Houthis.
Significant gaps exist in post's knowledge of Iranian
activities in Yemen due to the sensitivity of the subject and
post's very limited access to events in Sa'ada. Post
believes that while documented influence is limited, Iran's
strategic interests in Yemen merit close monitoring in the
future. END SUMMARY.

Iran-royg relations
-------------------

¶2. (S/NF) After two high-profile Iranian official visits to
Sana'a in early 2009, the formal bilateral relationship has
rapidly deteriorated as a result of renewed fighting in
Sa'ada governorate. Iran maintains an embassy in Sana'a
headed by Ambassador Mahmoud Zada. According to DATT
sources, Iran is not providing any military training to the
Yemenis, and there have been no announced military sales
between the two countries in recent years. Iranian Speaker
of Parliament Ali Larijani visited Yemen in May 2009 to
discuss Iranian investment in Yemen's energy and
infrastructure sectors and the bilateral relationship.
During Iranian Foreign Minister Manouchehr Mottaki's June
visit to Sana'a, his second in two years, both nations
maintained at least a public appearance of normal bilateral
cooperation. Mottaki told local media at the time, "Iran is
pursuing an honest and friendly approach towards Yemen. Iran
wants progress, security and prosperity for Yemen."

¶3. (S/NF) With the August onset of the sixth war in Sa'ada,
however, the ROYG has reverted to its previous position that
Iran is intent on meddling in Yemen's internal affairs.
Ministry of Foreign Affairs (MFA) Chief of Protocol Abdullah
al-Radhi, who spent over a decade in Tehran as a student and
diplomat, including a tour as Yemen's ambassador to Iran,
echoed the near-unanimous attitude of ROYG officials when he
told the DCM on August 23 that he believes Iran wants a
strong political card to play in Yemen similar to Hizballah
in Lebanon. He said that Yemen tried to normalize the
relationship with the visits of Larijani and Mottaki, but
Yemen "cannot accept" Iranian attempts to convert the Yemeni
Zaydis to Twelver Shiism. (Note: The ROYG views Zaydi
Shiites as less extremist and closer in practice to Sunnis
than the Twelver Shiism predominant in Iran. End Note.)
Radhi also said that the Iranians are still upset about
Yemen,s support for Iraq during and since the first Gulf War.

Iran and the houthis
--------------------

¶4. (S/NF) Although the ROYG maintains that Iran is providing
material and financial support to the Houthi rebels in
Sa'ada, little evidence has surfaced to date that supports
this claim. President Saleh told General Petraeus in a July
26 meeting that the National Security Bureau (NSB) had a DVD
showing Houthi rebels training with Hizballah uniforms and
tactics. (Note: In a follow-up conversation, NSB Deputy
Director Ammar Saleh claimed no knowledge of the DVD. End
Note.) In an August 17 meeting, Saleh told Senator McCain
that Iran was working against Yemeni stability because it
believed that a weakened Yemen would hurt the U.S. and Saudi
Arabia, both traditional enemies of Iran. In the same
meeting, NSB Director Ali Mohammed al-Ansi claimed that the
ROYG had arrested two separate "networks" of Iranians in
Yemen on charges of espionage in connection with the Houthis
and that one of the accused admitted to providing $100,000
every month to the Houthis on behalf of the Iranian

Sanaa 00001662 002 of 004


government. Ansi told Deputy National Security Advisor John
Brennan on September 6 that the ROYG was unable to share the
evidence from this case because it was still in the courts.
(Comment: Since the outbreak of hostilities in 2004, the ROYG
has used many different arguments, including the Houthis'
alleged ties to Iran and Hezballah, to attempt to convince
the USG to declare the Houthis a Foreign Terrorist
Organization (FTO). In 2008, the ROYG gave post a dossier of
information purporting to show ties between the Houthis and
Iran. Post passed on the file to the inter-agency community
in Washington. Analysts agreed that the information did not
proove Iranian involvement in Sa'ada. End Note.)

¶5. (S/NF) ROYG spokesman Hassan al-Lawzi has repeated
statements throughout the three weeks of fighting in Sa'ada
accusing Iran of supporting the Houthi rebels. On September
1, Foreign Minister Abubakir al-Qirbi publicly warned Iran
that interference in the Sa'ada conflict would have a
negative impact on bilateral relations and that, if such
interference continued, Yemen could be forced to make "hard
decisions," according to media reports. Qirbi also lodged an
official complaint with the Iranian Embassy in Sana'a
detailing Yemen's displeasure with Iranian support for the
Houthis. Director for External Financial Relations at the
Ministry of Finance Fouad al-Kohlani told PolOff on August 19
that the Houthis' level of organizational sophistication and
military successes against government forces indicate a
higher level of financial resources than the Houthis could
attain on their own. He speculated that because of its
strategic interest in gaining a foothold near Saudi Arabia,
Iran was likely the Houthis' financial backer. The Iranians,
for their part, continue to deny any interference in Sa'ada.
On August 23, the Iranian Embassy in Bahrain stated that Iran
had no connections to events in Yemen and "supports any
movement that works to unify the ranks of the Yemeni people,"
according to Bahraini media. The Iranian Embassy in Sana'a
repeated these statements on September 7, Yemeni media
reported.

¶6. (S/NF) Media reports on August 22 cited ROYG officials
claiming to have uncovered six storehouses of Houthi-owned,
Iranian-made weapons ) including machine guns, short-range
rockets and ammunition ) near Sa'ada City. In an August 25
meeting, however, Ministry of Defense Chief of Staff Major
General Ahmed al-Ashwal told the OMC Chief that a limited
number of weapons "of Iranian manufacture" were found in the
area, but would not provide information on the quantity or
type, and avoided a direct request from EmbOffs to view the
weapons. In June, ROYG military contacts told the DATT that
relations between the two countries were "strained" because
of Iran's support for the Houthis, and denied that the ROYG
was either communicating or in cooperation with Iranian ships
conducting counter-piracy missions in the Gulf of Aden.
(Note: GRPO reporting confirms ROYG refusals to allow Iranian
vessels access to Aden harbor, reportedly over ROYG concern
that Iran was using Eritrea to ship weapons to the Houthis.
End Note.) According to xxxxx, however, the
Houthis do not need to receive weapons from outside of Yemen
because they can easily capture or purchase them from the
Yemeni military. xxxxx, who communicates on a daily basis with Houthis and
other Sa'ada residents, agreed that the Houthis' weapons came
from the Yemeni military ) either through capture or
abandonment on the battlefield or via black-market arms deals
by corrupt military commanders - and not from an external
source such as Iran.

¶7. (S/NF) The general consensus among civil society is that
Iranian government influence in Sa'ada is minimal, but the
Houthis might receive some financial support from Iranian
groups or individuals. xxxxx, who travels to Sa'ada
frequently, told PolOff on August 26 that Iran had not been
involved historically in the conflict in Sa'ada, but with
changingdomestic circumstances in Iran, might have become
involved in the latest round of fighting. He addd, however,
that he has no knowledge of any Iranian nationals in Sa'ada
in recent years. (Note: The ROYG used to grant Iranians
living in Yemen hajj visas to travel overland to Mecca, but
stopped issuing the visas some time ago because the ROYG was
uncomfortable about Iranians traveling through Sa'ada into
Saudi Arabia. End Note.) xxxxx speculated that Iranian groups are likely giving

Sanaa 00001662 003 of 004


money to the Houthis, but he does not know to what extent.
With that money, the Houthis buy weapons from corrupt
elements of the Yemeni armed forces that sell weapons and
munitions, xxxxx alleged. Civil society actors, however,
were also unable to provide any concrete evidence of the
involvement of any Iranian nationals in Sa'ada.

¶8. (S/NF) To date, Iran's most visible involvement in the
sixth war in Sa'ada has been the Iranian media's proxy battle
with Saudi and Yemeni outlets over Iranian support for the
Houthi rebels (Ref B). Continuing a tradition that dates
back to the earliest stages of the Sa'ada conflict, the ROYG
has accused Iran of financially and materially supporting the
Houthi rebels. For its part, Iran ) through state media
outlets including English-language Press TV and
Arabic-language al-Alam TV ) has claimed that Saudi Arabia
is directly involved in the military campaign against the
Houthis. The Sa'ada conflict has thus become a propaganda
war between Yemen, eager to enlist the support of its Sunni
Arab neighbors and the U.S., and Iran, allegedly seeking to
nurture a Shi'a proxy force on the Arabian Peninsula. On
August 24, Iranian al-Alam TV quoted rebel leader Yahya
al-Houthi as denying Iranian support for the Houthis.
Iranian media have consistently shown video footage intended
to embarrass the ROYG, including images of alleged soldiers
fleeing the fighting and Houthis dancing on top of abandoned
ROYG armored vehicles.

Iran and the south
------------------

¶9. (S/NF) Little evidence ) or even debate ) exists
regarding Iran's role with the Southern Movement. The
southern secessionist movement, which is formally a secular
organization that has among its ranks former Sunni jihadists,
has, to date, no established connections with either the
Houthis or Iran.xxxxx, told PolOff in May and July that the movement
had repeatedly rejected offers of collaboration with the
Houthis. xxxxx told PolOff on September 6 that the
movement's leaders wanted to continue peacefully advocating
for separation, rather than affiliating themselves with the
Houthis or external actors willing to advocate violence such
as Iran. Some limited evidence, on the other hand, indicates
that Iran might be a more willing partner with southerners
fed up with the current regime. According to DATT contacts,
the ROYG asked the then-Iranian military attache to leave
Yemen in 2008, purportedly because he had attempted to make
contact with separatists in the southern governorates. He
has not been replaced. Former Yemeni Ambassador to Iran
Radhi said that the Iranian Ambassador in Muscat had been
instructed to "study the south of Yemen," especially
Hadramout and Shabwa governorates.

Iran's soft power in yemen
---------------------------

¶10. (S/NF) Perceived Iranian influence in other arenas is
limited to informal religious ties between Yemeni and Iranian
scholars and negligible Iranian investment in the energy and
development sectors. Despite Yemen's 40% Zaydi Shiite
population, religiously-based interaction between Yemen and
the world's largest Shi'a country is limited, perhaps because
the form of Shiism Zaydis practice hews closer to Sunni Islam
than the Twelver Shiism of Iran. Ambassador Radhi, however,
told the DCM on August 23 that he believes there is a lot of
"coordination on Yemen" between Qom and Najjaf, with 40-50
Yemenis studying Islam in Najjaf, and some (NFI) studying in
Qom as well. (Note: Given that Yemen has over 9 million
Zaydis, it appears that the number of religious students
studying in Iraq and Iran combined is very small. End Note.)

¶11. (S/NF) Iranian direct investment in the Yemeni economy
is negligible, according to local Iranian businessmen xxxxx, 
and xxxxx.
The only recent significant Iranian commercial activity in
Yemen involves the ROYG,s tortuous experience hiring the
Tehran-based Parsian HV Substations Development Company to
build the substation of the Marib 1 power plant (Ref C).
ROYG officials at all levels told EconOff that the decision
to hire the Iranian firm was purely political, rather than
economic, stemming from a desire in 2005 to expand relations
with Iran. The delays caused by the technical incompetence

Sanaa 00001662 004 of 004


of the Iranian firm have resulted in hundreds of millions of
U.S. dollars in foregone savings from switching away from
expensive diesel and towards natural gas in the power sector.
(Comment: Post believes Iranian commercial activity will
remain limited in Yemen, absent future politically-driven
bilateral trade missions. End Comment.) The Iranian
government funds two hospitals in Sana'a that are among the
better medical facilities in the capital. The management of
the hospitals is Iranian, but the staff is largely local.

Comment
-------

¶12. (S/NF) Yemen's formal relationship with Iran is by all
accounts relatively fragile, and has continued to deteriorate
in recent months. Since the start of the Sa'ada conflict in
2004, Yemen has looked to pin the Houthis' strength and
resilience in fighting the ROYG on the Iranians. Despite
Yemen's seemingly heartfelt concerns that Iran is backing the
Houthi rebels and the ROYG's desire to convince its powerful
friends (the U.S. and Saudi Arabia) of Iran's nefarious
intentions in Yemen, it has to date been unable to produce
any concrete evidence of what it says is wide-scale meddling.
It is post's firm belief that if Yemen had any concrete
evidence that the Houthis had connections to either Hizballah
or Iran, it would have produced it immediately; the lack of
such evidence likely indicates that the ROYG lacks any real
proof of such links. On the other hand, Iran has clear
strategic interests in gaining a foothold in Yemen (Sa'ada)
and developing a proxy ally in the Houthis similar to
Hizballah in Lebanon. Post believes that, while it is worth
keeping an eye on Iranian activities in Yemen, Tehran's reach
to date is limited. END COMMENT.
Seche