Khomeini's hatred for Saddam was understandable. It was the Iraqi dictator, worried the exiled Ayatollah would rally the Shi'ite majority in his country, who threw him out. But what was not apparent at that point was Khomeini's vision of a Shi'ite revolution across the Middle East.

Hypothetically speaking, had Khomeini been alive today, he would have been proud of the strides made towards the realisation of his Islamic vision: Saddam has been eliminated; Iraq's new rulers are not only Shi'ites, but many of them belong to groups that sheltered in Iran during the Saddam years; Iran has also cultivated many of the militias battling Iraqi insurgents. It would only be a matter of time before Iranian Revolutionary Guards moved in to tighten Tehran's hold, once the occupation forces leave. The Iranian regime would never have dreamt that Iraq could come under its sway so easily.

More than territorial lust, it was primarily this fear of the neighbouring Shi'ite revolution filtering into Iraq that sent Saddam into a debilitating eight-war with Iran. And it was also the innate distrust of Shi'ite Iran, and Saddam's Sunni-Muslim cause, that made neighbouring Gulf countries with significant Shi'ite populations like Saudi Arabia and Kuwait pour some US$25 billion (Bt850 billion) into the war. Arab leaders also distrusted Saddam and were wary of his ambitions. He was a bully, no doubt, but he was also seen as a bulwark against Iran.

Part of Islam's problem in the Middle East has been the intra-religious divide between Shi'ites and Sunnis, which began with the dispute over the inheritance of Islam's leadership after Prophet Muhammad. There has been little serious effort to bridge this ideological gulf. The schism, deepened by historical factors over the years, has only been widened by territorial disputes, symbolised by Iran's takeover of islands claimed by the United Arab Emirates, its claims to Shi'ite-majority Bahrain, its bitter relations with Iraq, and the accusations of Iranian involvement in destabilising Kuwait. But Tehran's defiance of the international community over its nuclear ambitions, despite the threat of UN sanctions, points to a newfound confidence in its stature and status as a regional power. This is largely because of the dividends it has earned for its efforts over the last couple of decades to transport the revolution.

Even as the powers in Washington were conjuring up a democratic Middle East, Iran has been quietly chiselling out a power bloc of Shi'ite states that would act as its buffer in the region. In that sense, the overthrow of Saddam's regime by the US-led coalition was an unexpected bounty for the Islamic regime.

For long, Shi'ites have been an economically and politically deprived lot in the region despite being in sizeable numbers in many of the countries. But, inspired by Iran, that seems to be changing rapidly. After shying away from elections for many years, Shi'ites, who comprise about 75 per cent of the population in Bahrain, and have never liked having a Sunni head of state, are now making strides. The tiny emirate had been a part of the Persian empire in the 17th and 18th centuries. From time to time, Iran had made claims to Bahrain, and it was only around 1975 that the Shah of Iran changed the policy. But the Islamic revolution revived the dreams of expansionism. In elections to the national parliament late last year, the main Shi'ite party took some 40 per cent of seats in parliament despite accusations of fraud. Shi'ites are also making political headway in Kuwait where they comprise about 30 per cent of the population.

In a demonstration of changing times, Kuwait, which had often accused Iranian intelligence agents of plotting bomb blasts, actually moved towards closer relations with the Islamic republic last year. The new bonhomie was born after Kuwait apologised to Tehran for having backed Saddam in the eight-year war, although it did attribute Kuwait's position in the 1980s to the Iranian role in attacking its oil facilities and even plotting to assassinate the emir.

Since the early 1980s, Iran has been, through overt and covert means, trying to carve out its influence in the Gulf region, the Mediterranean and North Africa. Iran was widely suspected of trying to export its revolution through a network of agents controlled by the Intelligence Ministry and guided by foreign missions. Tunisia snapped diplomatic ties in 1987, accusing Tehran of inspiring a fundamentalist overthrow of the government, while the Iranian Embassy in Tunis was accused of subversive activities.

Lebanon would qualify as Iran's greatest success story in exporting the revolution, through its proxy, the Hizbollah. It was in 1982 that Khomeini, despite being bogged down in the war with Iraq, made a strategic move by dispatching some 1,000 Iranian Revolutionary Guards to fight the Israeli invasion of Lebanon. The move, which also included setting up training centres, not only made the Hizbollah a potent power, but is now tilting the political scales in its favour, especially after its successes against Israel last year. The demographic balance favours a gradual empowerment of Shi'ites in Lebanon, where they comprise some 45 per cent of the population, ensuring a significant Iranian role in its affairs.

Iran's mounting influence in the region, and in particular its nuclear programme, are a source of worry for the six Gulf Cooperation Council countries - Saudi Arabia, Bahrain, UAE, Qatar, Oman and Kuwait. A nuclear Iran would alter the power balance in the region and could also send Arab countries on a nuclear mission. For many of the Gulf states, who depend on desalinated water, it is an existential issue. But the issue is more complicated as it also involves local demography. Many of the Gulf states have significant Shi'ite populations.

It was probably this worry that Egyptian President Hosni Mubarak expressed in an interview with the Abu Dhabi-based al-Arabiya TV station some months ago: "There are Shi'ites in all these countries, significant percentages, and Shi'ites are mostly always loyal to Iran and not the country where they live."

In the long run, Iran hopes to be the entity that would be the region's powerbroker instead of local states banking on the US or other Western states for security. Nearly all the Gulf states host US or British defence bases, an issue that rankles in Tehran. In the past, Iran has been open to considering a security arrangement, conditional on a purge of US and British military presence.

But the extent of Iranian influence in the region will be determined by the state of affairs in Iraq. In an indicator of what Iraq means to Tehran, a leading minister said some months ago: "That which is presently being heard in Baghdad and other Iraqi provinces is the echo of the [1979 Islamic] revolution and the messages of Imam Khomeini".

Having counted Iran in the "Axis of Evil", along with the Saddam-led Iraq and North Korea, it could prove to be one of the biggest foreign policy fiascos for the US, should Iraq slide towards a full-scale civil war, or become an Iranian client state.

Kumar Krishnan is a deputy managing editor of The Nation.

Kumar Krishnan

The Nation