WASHINGTON– A more stable Iraq could counter negative trends in the region from the Middle East to southern Asia, but political ties and the rising influence of Iran complicate the situation, the new director of national intelligence said in congressional testimony.

The region, known as the “arc of instability,” is the center of many of the challenges facing the United States, and the roots of terrorism and other problems run deep, Dennis C. Blair told the U.S. Senate Select Committee on Intelligence on Feb. 12.

“In the Middle East, the revival of Iran as a regional power, the deepening of ethnic, sectarian and economic divisions across much of the region, and looming leadership succession among U.S. allies are shaping the strategic landscape,” Blair said in prepared testimony.

Iran continues to see regional developments, such as the removal of Saddam Hussein and the Taliban and the increased influence of Hamas and Hezbollah, as opportunities for it to pursue its goal of becoming a regional power, Blair said. The government in Tehran has focused on expanding ties in Iraq, Afghanistan and Lebanon to better influence and exploit regional political, economic and security developments, and continues to pursue nuclear weapons capability.

Specifically in Iraq, Iran seeks to prevent the emergence of a threat, either from the Iraqi government or the United States, Blair said. To achieve this, he said, Iran has supported Shiia elements fighting the coalition in an effort to limit U.S. engagement in the region and to ensure the United States does not maintain a permanent military presence in Iraq or use its military to pressure or attack Iran.

In Afghanistan, Iran has provided political and economic support to the government and opposed the Taliban’s return to power, but continues to work to limit Western influence, Blair said.

Iran’s government also is very active in Lebanon, where it supports groups such as Hezbollah and Hamas, which it views as integral to its efforts to challenge Israeli and Western influence in the Middle East, Blair said. Lebanon and the Palestinian Territories are two places where the regional ties are most pronounced and most dangerous, he said. Hamas and Hezbollah, both nonstate actors, play prominent roles, while individual states that oppose U.S. interests, such as Iran and Syria, also are prominent.

“In both these countries, we worry about worsening conflict and the potential for growing violent extremism,” Blair said.

Despite all these challenges, a more stable Iraq could counterbalance the negative trends in the region, Blair said. “Extremists in Iraq have been largely sidelined by coalition and Iraqi operations and dwindling popular tolerance for violence, and their attacks are no longer a major catalyst for sectarian violence,” he noted.

Violence among Iraqis is at its lowest sustained levels since Prime Minister Nouri al-Maliki’s government came to power, giving the government the opportunity to assert authority in more areas of the country, Blair added. Meanwhile, the rise of citizen-security groups and Iraqi security forces gains, in combination with coalition operations, has weakened al-Qaida in Iraq by forcing it out of strongholds.

To preserve these gains, the Iraqi government must resolve issues like disputed internal borders and spending priorities amid declining oil revenues, Blair warned. Also, he said, Iraq must be wary of policies that may be perceived as repressive of the country’s sectarian groups and of increased foreign support to insurgent groups.

Blair predicted that Syria and Iran both will work to expand ties with Baghdad and gain leverage in Iraq. However, he said, Iraqi nationalism and expanded security capabilities will keep that influence in check.

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