By Mark Hosenball | NEWSWEEK Published Oct 18, 2008 From the magazine issue dated Oct 27, 2008

For reasons that remain unclear to the Bush administration and its allies, the level of violence attributable to Iranian-backed insurgents in both Iraq and Afghanistan is falling. Pentagon press secretary Geoff Morrell says the trend dates back to an Iraqi-government assault last spring on militants in the Basra region of southern Iraq. After the crackdown, Iranian-supported insurgents (known to U.S. officials as “special groups”) fled into Iran, where they have since been cooling their heels. Still, according to one U.S. counterterrorism official, who asked for anonymity when discussing sensitive information, some reports suggest that Iraqi militants are still actively being trained inside Iran for attacks on U.S. forces.

Meanwhile, in Afghanistan, intelligence reports last year indicated that Iran was also supplying terrorist-style arms to anti-American militants there. But the latest intelligence indicates that the level of bombing technology used by the Taliban in recent IED attacks is far less sophisticated than the devices used by Shia militants in Iraq-evidence that Iran is exercising restraint in its dealings with Afghan insurgents.

The question is, why? Another U.S. official, who also requested anonymity, said that Iran may be turning down the heat on American forces in the region in anticipation of a Barack Obama victory in the presidential election. According to this theory, Iran’s theocrats fear an Obama presidency would greatly improve American esteem among European governments; the Iranians believe these leaders indulge Tehran now chiefly because of their disdain for President Bush.

A drop in Iranian-instigated paramilitary attacks does not mean that Tehran has ceased making mischief in the region. Recently, Morrell says, Iranian operatives have been actively pressing Iraqi politicians to oppose U.S. efforts to reach a new “Status of Forces Agreement” with the Iraqi government regarding the continued presence there of American troops. He said Iranian efforts have included trying to orchestrate anti-U.S. demonstrations in Shia neighborhoods and funding attempts to bribe Iraqi politicians.