Iran has retained ties to the Supreme Council for the Islamic Revolution in Iraq, an anti-Saddam group that was based in Iran until Saddam's ouster. Iran also has links to the Dawa or Islamic Call party, another important Iraqi Shiite group, and to Ahmad Chalabi, a Shiite exile leader who has fallen out of favor with the Bush administration over allegations that he provided U.S. intelligence information to Iran. Iran has established clinics and schools in Iraq as part of a campaign of economic aid that competes with U.S. assistance.

Juan Cole, a Middle East historian at the University of Michigan, says Iran is "behaving like a Washington lobbyist who gives money to all the major candidates" to ensure that whoever emerges in power in Iraq is not hostile to Iran's leaders.

Iran's hopes of seeing a friendly government installed in Baghdad have been shaken by the selection of Ayad Allawi as Iraq's first post-Saddam prime minister. Allawi, although Shiite, is a former member of Saddam's Baath Party, and has backers in the Sunni Muslim countries of Jordan and Saudi Arabia. Allawi was based in Jordan in the 1990s and organized the Iraqi National Accord, an anti-Saddam group, with the financial support of the CIA.

"The Iranians are very afraid that the United States will find a way to maneuver an anti-Iranian government into power," Cole says. He says the Iranians fear elections will not be held or that Allawi will shut out pro-Iranian factions.