This report discusses the reasons that Iran is considered a threat to U.S. security, including Iran's nuclear program, involvement with terrorist organizations, and involvement with neighboring countries' local governments. The report also discusses ways which the U.S. hopes to modify Iran's behavior with sanctions, and the effectiveness of these sanctions.

This report provides a general overview of Iran's economy, addresses related U.S. policy concerns, and discusses policy options for Congress. The purpose of this report is two-fold. First, it provides insight into important macroeconomic trends, policy reforms and objectives, key economic sectors, international trade patterns, and sources of foreign exchange. Secondly, in the context of U.S. economic sanctions imposed for national security and foreign policy reasons, it evaluates Iran's economic structure, strengths, and vulnerabilities.

Iran is materially assisting and attempting to influence, in most cases against the United States, major Shiite Muslim factions in Iraq, most of which have ideological, political, and religious ties to Tehran. The Administration asserts that Tehran is actively directing, training, and arming Shiite militiamen linked, to varying degrees, to hardline anti-U.S. cleric Moqtada Al Sadr. Some analysts see a virtual "proxy war" between the United States and Iran inside Iraq.