No decision has been made to go ahead with the strikes.
The evidence Iran was behind the deaths of 19 American servicemen and the wounding of 500 others in the 1996 attack is compelling enough to justify military retaliation or at least some form of diplomatic or legal action against Iran, reports CBS News National Security Correspondent David Martin..
That evidence has been in hand for two years, according to Pentagon officials, but the Clinton administration did not act on it. That despite a promise by President Clinton that those behind the attack "must not go unpunished."
The evidence points not to the government of Iranian President Mohammad Khatami, but to radical ayatollahs who operate an independent terrorist network and view the United States as the "great Satan."
Khatami was re-elected with 76.9 percent of the vote last week, surpassing the 70 percent groundswell that carried him to office four years ago.
Khatami's victory was spearheaded by an overwhelming bloc of young voters, seeking change in the Islamic republic, where the supreme leader, Ayatollah Ali Khameini, has veto power over all decisions.
In Khatami's first four-year term, Islamic hard-liners blocked him at every turn, keeping a firm grip on the institutions of power, including the judiciary and military and large parts of the economy. Last year, the hard-liners closed down some 40 publications, most of them pro-democracy newspapers, and jailed dissidents and liberal journalists.
AS part of his reform program, Khatami seems genuinely interested in mending relations with the U.S. A military srike might do more harm to his ability to govern than to the ayatollahs' ability to instigate terrorist attacks.
Khatami's electoral mandate, however, doesn't mean he has the power to stop Iran's support for terrorism.
According to an assessment by the Defense Intelligence Agency, terrorism will continue to be part of Iran's foreign policy for as long as the ayatollah's can get away with it.
The sanctions law, which is set to expire in August, was approved by Congress in 1996 to deny Iran and Libya the money to pay for what the United States feared were government-sponsored terrorist activities.
Iran remained one of the seven countries listed as state sponsors of terrorism in this year's State Department report on global terrorist activities.
That report claimed that Iran's "Revolutionary Guard Corps and Ministry of Intelligence and Security continued to be involved in the planning and the execution of terrorist acts and continued to support a variety of groups that use terrorism to pursue their goals." That included assistance to Hezbollah, Hamas and other groups.
The Khobar Towers attack was actually the second bombing to hit Americans in Saudi Arabia in a year's time. In November, 1995, a 250-pound car bomb detonated outside a military office in Riyadh, killing five Americans and two others.
The Towers were about two-thirds of a mile from the King Abdul Aziz Air Base, where the planes that patrol the southern no-fly zone in Iraq are based. At around 10 p.m. local time on June 25, 1996, guards at the Towers saw two men park fuel truck about eighty feet from the building, and then drive away quickly.
According to a Defense Department report, the guards suspected a bomb, and began going door to door to evacuate the building. But they were only able to warn people on the top three floors to get out when the bomb estimated at 20,000 pounds exploded.
Nearly 100 FBI agents spent up to a year on the case, but were eventually recalled when U.S. officials complained of a lack of cooperation from Saudi Arabia.
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