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If anything this just shows how Iran has little ability to fight a conventional war. Remember Saddam's whole gig was to pretend his bite was really as bad as his bark, and Iran is in a similar position.
They are playing a dangerous game though. Saddam didn't seem to believe we would really take him out, and one could assume that Iran doesn't really believe we would attack either.
The upcoming election in Iran will be very telling. Their economy is in the gutter and few (including the Mullahs who really run the show) are happy with their President's rantings. It's quite likely that he will be tossed from office and replaced with someone more moderate.
Then you do have a real situation where diplomacy in the form of both carrots and sticks could go a long way towards reducing tensions. A peace deal in Palestine, which is looking like could be a reality, would really change the dynamic over there as well.
-spence
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