US-Iranian Relations

US-Iranian Relations and the Hostage Crisis

In the Persian Gulf region, Iran was an important ally of the United States. The two nations had common interests relating to the oil industry and security matters evolving from Soviet expansion in the area.

However, the regime of the shah of Iran, Mohammed Reza Pahlavi, was repressive and corrupt. Large numbers of devoted Shiite Muslims were vigorously opposed to the Western-oriented rule of the shah and were determined to remove him from his throne and establish a fundamentalist Islamic republic.

After World War II began, Britain, the United States, and the Soviet Union became allies to prevent Germany from taking over Iran. Their interest in protecting Iran was not only for Iranian oil, but Iran was also a direct route to the Soviet Union, to which the United States was sending war supplies. In the late summer of 1941, both the Soviet Union and Britain invaded Iran, and the shah was driven into exile. When the United States entered the war in late 1941, it also occupied Iran. The exiled shah, who died in South Africa in the summer of 1944, was replaced as ruler of Iran by his 22-year-old son, Mohammed Reza Pahlavi, and ruled at the consent of the occupying Allied powers. The young shah began to court the United States, which favored an independent postwar Iran.

After the war, Great Britain and the United States both withdrew their military forces from Iran, but the Soviet Union at first refused to leave the northern provinces, in attempts to get that area to secede from Iran and join the Soviet Union.

During the war, an Iranian politician named Mohammed Mossadegh had gradually risen to power, and became prime minister of Iran in 1951, heading a nationalist party that wanted to end all foreign interference in Iranian affairs. As Mossadegh became more and more dictatorial, he soon was competing with the shah for control of Iran. For support, the shah relied more and more firmly on the United States. It was not long before many Iranians began complaining about the United States having too much influence in Iranian affairs. What the Iranians did not know was the extent the United States was supporting the shah.

In the spring of 1953, the Central Intelligence Agency (CIA) made plans to topple Mossadegh from power, claiming the Iranian prime minister was scheming to let the Soviet Union’s communists regain much of the old Russian control within Iran. The CIA’s plan for getting involved in Iran’s internal political affairs was called Operation Ajax.

In the spring and early summer of 1953, CIA agents hired mobs of Iranians to stir up trouble throughout the country. The CIA sponsored uprising against Mossadegh and his nationalists began in mid-August, and on August 19 he was forced to flee. He was arrested in flight, and was sentenced to three years in prison.


While the shah seemed to have triumphed, the strong current of anti-Americanism grew as word began to leak out about the secret role played by the United States in keeping the shah on his throne. The shah ignored any misgivings his subjects might have had about American intervention. Instead he seemed more determined than ever to stamp out any opposition to his leadership that might remain among his people. The shah further protected his dictatorial reign by signing oil agreements with several European countries as well as the United States.

These agreements assured Iran of more than sufficient income to create economic prosperity. Unfortunately, most of this money was used by the shah, his aides, and other wealthy Iranian businessmen before the poor could benefit from any of it.


Meanwhile, the shah and the United States continued to expand their friendship. Both military and economic aid were extended to Iran by the Eisenhower and Kennedy administrations. When Johnson took over as President, the shah made it clear that Iran would protect American interests in the Persian Gulf region. To aid Iran in this role the United States sent a military mission as well as continued the military aid. This eventually led to further misunderstanding between many Iranians and the United States.

In 1964, the Iranian legislative assembly passed an extremely controversial law that gave American military personnel serving there the same immunity from Iranian law that all foreign diplomats enjoyed. This meant that American troops and their officers, as well as their families, could not be tried for any crimes they may have committed in Iran.

Its passage increased the resentment the average Iranian citizens felt toward all Americans. They felt they were being discriminated against, and that once again a foreign power was in at least partial control of their government.

One of the people who was most outspoken in opposition to this agreement was the Ayatollah Rhuollah Khomeini. He accused those who promoted the agreement as traitors, and this accusation included the shah. Because Khomeini was a well-known Muslim religious leader, the shah could not risk having him imprisoned.

what he could and did risk was having Khomeini deported from the country and sent into exile in Turkey on November 4, 1964. Khomeini made public his vow to one day even the score not only with the shah but also with the United States. Indifferent to the threats of Khomeini and his followers, the shah continued to maintain control of the country well into the 1970s.

Iranian dissidents lashed out not only at the shah’s regime but also at the United States. In the early 1970s, several American military men were assassinated, and in the mid-1970s, three American civilians were killed in Teheran. An unsuccessful kidnap attempt was even made on the U.S. Ambassador to Iran, Douglas MacArthur II. Bomb threats were also made against various American installations, and the offices of the U.S. Information Service and the Peace Corps were actually bombed.


When Richard Nixon became president, he not only continued, but increased the flow of military aid. When Jimmy Carter took office in 1977, the shah made some effort to install a more liberal government in Iran. He did so due to the increasing unrest among his people, especially among the Shiite Muslims. In addition, the shah had been informed by his doctors that he was suffering from possibly incurable cancer.


This diagnosis made the shah more concerned about the future of the Pahlavi reign. The teenage heir apparent could not rule effectively without the full support of the Iranian people, not merely the forced acceptance of yet one more dictatorial head of a police state.


The shah’s attempts at political reform included holding elections more often and giving more underprivileged people government jobs. But such efforts were perceived as “too little, too late.” By that time, the religious opposition to his oppressive reign gave every indication of developing into a revolution. Carter and his administration gave full support to the shah, but massive Muslim religious demonstrations made it clear that American support would probably not be enough to keep the Pahlavi regime in power. During 1978 and into early 1979, riots against the shah’s regime took place in several Iranian cities. The distant leader of this revolutionary overture was the Ayatollah Khomeini, who had been exiled by the shah and was now living in Paris, France.Exile did not silence Khomeini.


He issued proclamations calling for the downfall of the Pahlavi regime and demanding a revolution by the poor and oppressed Iranians. These proclamations were distributed throughout Iran and soon the exiled ayatollah became a legendary folk hero to his people. In his attacks of the shah, the ayatollah simultaneously attacked the United States for its support of the Iranian police state. Sensing defeat, and a potential bloodbath of a civil war, the shah and his wife and family and a small group of aides boarded the royal Iranian Boeing 707 aircraft on January 16, 1979, and flew out of the country, never to return. The self-exiled shah had hoped to seek refuge in America, but President Carter made it clear that the United States would not welcome the shah. Consequentially, the shah had to find temporary homes in Egypt, Morocco, the Bahamas, Panama, and Mexico. Once the shah fled the country, the Iranian revolution became a full-blown affair.


In the midst of the revolutionary chaos the Ayatollah Khomeini returned and became the nation’s new leader. American interests in the Persian Gulf region were clearly threatened. Quickly the United States lost access to Iranian oil and saw the cancellation of $7 billion of uncompleted arms contracts. Within Iran, anti-American tempers continued to erupt. On Valentine’s Day 1979, revolutionary forces in Tehran overran the United States embassy, seizing seventy employees for more than two hours. On February 26, the State Department announced the evacuation of the families of all embassy personnel and urged any Americans remaining in Iran to leave as soon as possible.

The Carter administration hardly knew what to make of the ayatollah. Accustomed, like its predecessors, to thinking exclusively in terms of the Cold War, it was unable to adjust to a fundamentalist religious revolution that denounced the United States and the Soviet Union equally, and therefore feared that Khomeini would allow a Soviet penetration of Iran, and eventually, the entire Middle East.

That fear was heightened by the United States’ surrender of sensitive listening posts along the Iranian border with the Soviet Union, used to monitor Soviet Missiles.


It was almost universally believed in Iran that the CIA would attempt a repeat performance of 1953. Actually, Carter had no intention of trying to restore the shah, and formally recognized the new Islamic government. The Iranians, however, could not believe that the United States would abandon the shah, and as long as he was alive, they anticipated another CIA coup. Several influential political leaders were able to persuade President Carter to allow the shah to enter the country — for humanitarian reasons — to be treated for his cancer. It had been argued that it was disgraceful that the United states had turned its back on one of her oldest and closest friends. Carter’s primary concern was the safety of the American embassy. Fearing another assault, Carter decided to permit the shah entry after the Tehran government indicated it would take no retaliatory action if he came only for medical treatment. The shah entered the United States on October 22, and survived the gall bladder surgery on October 26. Iranian students poured into the streets to protest, demanding that the United States return the shah, and his multimillion dollar fortune to Iran. At first these protests seemed to be no more than what had been going on since Khomeini’s return, but on the morning of November 4, 1979, exactly one year before the United States Presidential election, a mob of around 3,000 students stormed the embassy’s gate, overran the guards, and took the sixty-six people inside hostage, in the name of Khomeini. The civilian government responded to Carter’s immediate protest by assuring him that they would do everything in their power to secure the release of the hostages unharmed. But the fact was that they had no power beyond that which Khomeini allowed them to exercise, and he was quick to support the students, who had become overnight heroes in Iran.


News of the embassy takeover caused an instant sensation in the United States. Television newscasts were filled with on-the-scene pictures of the dramatic event which was virtually unprecedented in American history. The media, by giving the crisis an extremely high level of coverage, including nightly TV “specials” on the situation, added to the emotional response of the American people, and showed huge mobs of crazed Iranians in Tehran chanting “Death to America, Death to Carter, Death to the shah.” Representations of Uncle Sam and Carter were burned and numerous American flags were spat upon trampled, and burned in the street. More importantly,American television audiences were shocked to see blindfolded members of the United States Marines embassy guard, with their hands tied behind their backs, as they were paraded before TV cameras. Everywhere the American public demanded that the government take some sort of retaliatory action. Several hundred people gathered in front of the Iranian embassy in Washington D.C. shouting “Go Home” and “Let our people go!” Their rage, their very presence seemed to be saying “We’ve had enough!” The D.C. police had roped off the sidewalk, ironically providing the Iranian building the very protection the embassy in Iran lacked. Sales of Iranian flags went up across the nation and Americans burned them in protest. Meanwhile, throughout the United States, Iranian students demonstrated in support of their country, denouncing the White House and demanding the shah’s immediate extradition.


These demonstrations prompted a violent backlash across the nation as anger and frustration had risen as the days passed and the hostages were not released. The crisis instilled a new sense of patriotism as Americans supported the President. Iranian-Americas faced problems that hadn’t been seen since Japanese-Americans had been interned during World War II: some were booted out of their jobs; others had their property vandalized; and their children were taunted in school.


While the nation poised for action, the administration worked to soothe public passion, fearful the demonstrators might precipitate a riot, which would have been highly publicized in Iran, and might have caused Americans to be harmed in retaliation. News from Iran had already indicated Khomeini’s intent to have the hostages tried as spies.
President Carter ordered the Pentagon to prepare a contingency plan for military action to rescue the hostages. The greatest problem was the inaccessibility of the American embassy compound - located more than 600 miles from the nearest operating aircraft carriers and deep within the heavily populated urban center of Tehran.


He also ordered the fifty thousand Iranian students in the United States to report to the nearest immigration office. Carter also suspended arms sales to Iran, froze Iranian assets in American banks, and announced an embargo on Iranian oil, which obviously did not help the Energy Crisis.
More important than his actions, were Carter’s public statements which had the effect of enormously enhancing the value of the hostages to the Iranians. The President made it clear to the Iranians and the world that the lives of the hostages were his first priority. He met repeatedly with the families of the hostages; he confessed to reporters that virtually his every waking moment was spent worrying about the fate of the captives; to the great frustration of Senator Edward Kennedy, Carter refused to campaign in the early months of the election year, adopting a “Rose Garden” strategy that limited his public appearances so he can devote his full time to the hostage crisis; he allowed the crisis to dominate American foreign policy for the remainder of his administration.The only concession the demonstrators made was to release all of the non-American hostages as well as all the blacks and most of the women. The blacks were released, the Muslims said, because they were victims of American oppressors. The women were freed because the Muslims did not wage war against women. During this period of early confusion, six Americans — four men and two women — escaped from the embassy by simply walking out and making their way to the Canadian embassy. The number of hostages was down to 52, but these people will be held, their captors claimed, until all their demands were met. These demands, announced in February 1980 were the return of the shah to Iran for trial, the return of the shah’s wealth to the Iranian people, an admission of guilt by the United States for its past actions in Iran, plus an apology and a promise not to interfere in Iran’s affairs in the future. These were clearly unacceptable demands, especially the first one, as the shah had left the United States in December to take up residence in Panama. In response to the demands, Carter threatened new sanctions against Iran unless some progress was forthcoming.


The public was more supportive of Carter than it had been a few months earlier, but was becoming more impatient with each passing week because of the apparent impotence in dealing with international crises. Citizens of all ages who normally paid little attention to foreign affairs sat transfixed in front of their television sets, breathlessly following each new twist and turn of events — even when not much was happening, which was usually the case.


Television quickly domesticated the foreign scenes and characters by bringing them into the intimacy of our living rooms. During the first few months of the siege, about one-third of the three networks weeknight newscast time was devoted to the hostage story. ABC even created a regular thirty-minute nightly program The Crisis in Iran: America Held Hostage, which premiered on Day 5 of the crisis and promised to broadcast as long as the crisis lasted.


By March 1980, ABC executives responded to the early success of this news special at eleven-thirty P.M. by creating a regular news program, Nightline, which focused on major news events, including the hostage crisis. On Day 74, CBS anchor Walter Chronkite concluded his nightly news broadcast by announcing the number of days the hostages had been held captive, and maintained that practice until the end of the crisis. In December 1979, the wife of the senior foreign officer being held hostage, Penelope Laingen, tied a yellow ribbon around a tree on the lawn of her Maryland home. Yellow ribbons sprouted all over the country, and the song “Tie a Yellow Ribbon Round the Ole Oak Tree” was revived with a new meaning that helped unit the country against Khomeini.As the nation prepared to enter the fifth month of the crisis, President Carter’s frustration level grew from the inactivity in the release of the hostages. On April 7, he announced the severing of diplomatic relations with Iran, the implementation of a complete economic embargo against Iran, an inventory of financial claims against Iran to be paid from Iranian assets in the United States, and told Iran’s diplomats to leave the country within twenty-four hours. Carter also gave the approval for a military attempt to rescue the hostages. The fact that a small plane had successfully penetrated Iranian airspace and had examined a potential rescue staging site without being detected, convinced Carter that such a mission was feasible.



The top secret mission was called Eagle Claw, and began at about dawn on April 24, 1980, when eight helicopters were launched from the U.S. aircraft carrier Nimitz sailing in the Arabian Sea off the southeast Coast of Iran. At the same time, six transport aircraft took off from an undisclosed location for a rendezvous with the helicopters at a place in the Iranian desert called Desert One, several hundred miles southeast of Tehran. From Desert One, the combined rescue team was supposed to fly to Desert Two.


There, the raiders were to board trucks for a further 50-mile trip into Tehran. In Tehran, the raiders were to hide briefly near the US embassy where they were to be aided by several Iranians who had been hired by the CIA. The raiders were then to storm the American embassy, kill whoever tried to stop them, free the hostages, and board the helicopters to carry the freed prisoners to Desert One.

At Desert One, the freed prisoners would be flown out of the country on board the aerial transports. The actual storming of the embassy and freeing the prisoners was estimated to take only about two hours.
Unfortunately Operation Eagle Claw broke down in its early stages. Shortly after the helicopters took off from the Nimitz on their 600-mile flight to Desert One, one of the choppers was forced down by rotor blade trouble and a second chopper returned to the Nimitz after its pilot was blinded by a sandstorm.

The six remaining helicopters reached their rendezvous point with the transports, but one of the six had to be scrapped because of partial hydraulic failure due to the constant blowing of sand in the high desert winds. Apparently, the possibility of a sandstorm during the operation had not been taken into consideration. Because the plan called for six operating helicopters, the mission was aborted. During refueling for the return flight, the sandstorm continued, and three additional helicopters were declared inoperable.

One of these damaged choppers accidentally collided with a transport. Both vehicles burst into flames, killing eight American servicemen. The survivors abandoned the scene, leaving the four remaining helicopters, with weapons, maps and a number of secret documents regarding the operation, and the dead bodies behind in the flaming wreckage. A few hours later, in the early morning, Carter went on national television to report to the American people on the disaster that had just occurred. The President behaved with great dignity; he made no excuses, sought no scapegoats, and accepted absolute personal responsibility.


Although initial reaction to the tragic mission was supportive of the President, the failure of the rescue attempt did more to undercut the Carter presidency than any other single event. even before this incident, the hostage crisis had become a political liability for the President. As details of the botched plan were revealed, it became another one of the many failures that Americans attributed to the President. There was little hope for another rescue mission, since Iran had put its guard up and dispersed the hostages to various locations in Tehran.

The fiasco of the rescue mission, however, provided Carter a convenient moment to abandon his Rose Garden campaign in favor of a more public candidacy.


An impasse in the hostage crisis had been reached, to continue through the summer of 1980. On July 27, the shah died of cancer, but any hope that his death would improve the hostage situation proved futile In September, Khomeini stated four conditions for the release of the hostages: the United States must return the shah’s wealth; cancel all financial claims against Iran; free Iranian assets in the United States; and promise never to interfere in Iranian affairs.

Notably absent was the earlier demand that the United States apologize for its past policies in Iran. Although negotiations were still required on all these points, their presentation offered the best hope yet that an end to the crisis was possible, even imminent. Chances greatly improved after September 22, when Iraq invaded Iran and full scale war began between the two countries. The war suddenly made the U.S. economic sanctions, especially the freeze on Iranian money in United States banks, painful for Iran because its military forces were largely American equipped.


The need for spare parts and the cash to buy them and other goods grew as oil production in Iran fell to almost nothing. A few weeks later, Iranian Prime Minister Mohammed Ali Rajai came to the United States to present Iran’s case against Iraq to the United Nations.

He said at a New York press conference that Washington now seemed ready to cooperate in resolving the hostage situation. Carter also received word that the hostages had been returned to the American embassy in Tehran and that there seemed to be a consensus among Iranian leaders that it was time to free the American captives.
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By the middle of October, the momentum of the campaign had shifted in Carter’s favor. Carter’s rivals realized they were at a tactical disadvantage. Although he was vulnerable on his handling of the hostage issue, Carter’s challengers had to be careful in their criticisms or risk being perceived as undercutting the president during a national crisis. They also faced the reality that the rescue attempt, despite its failure, had demonstrated that President Carter was prepared, under certain circumstances to take great risks to resolve the hostage crisis.

They worried that a sudden breakthrough in the negotiations, or some unexpected development concerning the hostages, could instantly divert public attention away from the campaign. The Republicans wanted to ensure that the Iranian hostage issue would not be used to promote the reelection of Jimmy Carter. They were particularly concerned about the possibility of an unexpected development, outside the control of the campaign, that might shift public support to the President.

If the sudden release of the hostages in Iran happened at a sensitive moment in the campaign, the elation of the American people could relieve doubts about Carter’s leadership and swing many voters to ensure Carter’s reelection. It was therefore crucial for the Republicans to adopt a comprehensive strategy to defend themselves against a possible release of the hostages prior to the election.


The Reagan-Bush campaign began to organize an extensive and sophisticated intelligence operation designed to penetrate key agencies of the United States government and to provide early-warning information to the campaign regarding any hostage developments. Many of them were angry, bitter, unemployed CIA covert-operations personnel, cut by Carter in the fall of 1977 in the wake of the worst scandals in the history of American intelligence. They volunteered to work with the Reagan-Bush campaign, especially given the addition of a former CIA chief as the vice-presidential candidate. In addition, there were individuals within the White House who were committed to the defeat of Jimmy Carter, and his replacement by Ronald Reagan.


By October 1980, the Reagan-Bush campaign had organized an aggressive intelligence penetration of its own government. The agents who functioned in the most sensitive areas of the government — the Pentagon, the intelligence agencies, the State Department, the White House — were providing regular intelligence reports on the most highly classified policies and operations.


Beginning in early October and rising to a climax in the weeks before the election, news reports asserted that military equipment was being assembled or was actually on its way to the Middle East as part of a last minute attempt for the release of the hostages.


These and other similar reports were all characterized by a wealth of convincing details. In reality, nothing was moving and these reports were part of a deliberate program of disinformation fed to the media by credible anonymous sources as part of a propaganda campaign to keep public attention focused on a possible “October Surprise” by the Carter administration. This campaign strategy worked in its primary objective in keeping the Carter administration off-balance and on the defensive. The White House was reduced to issuing constant denials that never managed to catch up with the many leaks to the Reagan-Bush campaign and the media. This strategy also succeeded in planting the notion in the public mind that the Carter administration was preparing a maneuver to free the hostages just before the election. On October 7, 1980, it was announced in the New York Times the creation of an “October surprise committee” by the Republican campaign staff.


The purpose of this committee, comprised of ten foreign-policy experts, was to be alert for any last minute surprises, including the possible release of the hostages, and to develop contingency plans to deal with them. In reality, the committee itself was part of the contingency plan. By dramatizing the possibility of a sudden move by Carter just prior to the election, the creation of the committee planted the idea in the public mind that any such move should be viewed as a desperate attempt by Carter to hold on to the presidency.


As the campaign was in the final stretch, just two days before election day, Carter received word from Iran that the Iranian parliament had chosen to approve the four points which were compatible with what Khomeini had announced in September. Carter, after flying back to Washington from campaigning in Chicago, concluded that the differences were still quite significant, and could not accept their proposal without further discussions. In his announcement to the American people, he said that the proposal was a good and constructive move, and could lead to positive results. It was understood that the hostages would not be released before the election because of the intense negotiations required.

The Carter administration was also aware of the potential backlash against the president that this latest announcement would have, but remained optimistic that a breakthrough had been made in the hostage crisis, which would ultimately bring about the liberation of the Americans.
Hours before the polls opened, all three networks carried the latest news from Iran, stories from the campaign trail, with Carter and Reagan trying to avoid questions on the possible release of the hostages, and concluded not with stories about the Presidential election the next day, but with a commemoration of the anniversary of the captivity.

These included film clips of the President’s announcements of the embassy takeover, the failed rescue mission, and the outrage of the American people. All three networks took their viewers on an emotionally wrenching review of the past year. Rather than drawing the contrasts between the two men who wanted to be President, the news was a strong reminder of the Carter administration’s impotence in achieving an honorable release of the hostages.


On November 4, a majority of voters expressed their displeasure by rejecting the president’s bid for reelection. Reagan’s victory put additional pressure on Khomeini, who could hardly expect the incoming administration to offer as favorable deal as the outgoing Carter administration. After Carter’s defeat, he demonstrated that he was still president for the next ten weeks, and that he had an agenda to pursue regardless of the election results. News from Iran continued to be encouraging as Khomeini gave permission to the militants holding the Americans to turn them over to the Tehran government. Prime Minister Mohammed Ali Rajai appointed a commission to work out the terms for the release of the hostages, using Algeria as Iran’s intermediary with Washington. The negotiations were long and complex.

While the Tehran government wanted Washington to return the shah’s wealth, the president did not have the legal power to do so. December 21, Iran demanded $24 billion for the captives to be deposited into Algeria, which was reduced on January 6 to $20 billion, and another reduction a week later to $8 billion. On Carter’s last morning in office, the Iranians agreed to a deal that gave them $8 billion worth of Iranian assets that had been frozen, $5 billion of which was set aside to pay off Iran’s debts to American and European banks, in return for the release of the hostages, who flew out of Tehran that day. After 444 days, Khomeini was left with a bankrupt and divided country that was involved in a dangerous and expensive war with Iraq.