As Iran faces increasing hostility from the United States and rising anti-Shia sentiment, now may be a good time it to reach out and engage with its Arab neighbours and show them they have nothing to fear from Tehran.

To some degree, the two threats may be related: certainly Washington seems to be encouraging the Gulf States to pressure Iran by keeping down the price of oil. It may then be in Iran’s best interests to launch a new diplomatic initiative in the region – and one, moreover, that addresses external concerns over both the nuclear issue and also the charge that Tehran has been associated with terrorism.

Many observers here believe that Iran should have moved quickly in the early days of its nuclear programme to gain the trust and support of its southern neighbours. Unlike the Arab leaders, many people in the mythical Arab street would look favourably on Tehran, given that it already faces a potential threat from Israel.

Some political analysts argue the Islamic Republic’s policy towards its Arab neighbours has been no different from the Shah’s. Rather than develop serious relationships in the region, the Shah chose to establish strong ties with the US and the West. While borrowing nothing from his policies, the Islamic Republic has maintained the tradition of regional disengagement for ideological reasons, and has provided support for a number of militant groups that have campaigned against local Arab leaderships. In short, the Islamic Republic has concentrated on the people of the region rather than on their states.

As a first step towards a change of policy, Iran might look at the possibility of engaging with the Gulf Cooperation Council, GCC, the group of six Arab Gulf states set up to promote economic, scientific and cultural links. The council was established in 1981 as a regional response to the Iran-Iraq war. In the current climate, Iran is unlikely to be invited to join any time soon – and yet forging links with it could potentially be a way for Tehran to re-engage in the region. The PGCC has a combined population of 33 million people, a territory of 2,476 million square kilometres, and a combined annual GDP of 370 billion US dollars. With an average per capita income of 15,000 dollars and annual growth working out at 5.7 per cent, the council would obviously make a very strong and capable economic and political partner for the Islamic Republic.

The Persian Gulf has long been one of the most strategically important areas for the US, and it became even more so after 9/11 and the invasion of Iraq. Washington works consistently and vigilantly to consolidate its military, economic and political ties with regional states and to provide incentives for these countries and their leaders to maintain and protect these links.

The Gulf states enjoy a reciprocal relationship with the US. Just as America needs the oil, they too need to maintain the revenue and sufficient political stability to spend and enjoy it. Both sides thus have a vested interest in ensuring stability and security in the area.

The biggest threat is now Islamic fundamentalism – the emergence of transnational terrorism and stateless entities whose pursuit of radical ideologies now add greatly to the complexity of the region.

Ultimately, confronting terrorism without regional cooperation is simply not possible, which leaves Iran with an opportunity to win the trust of its neighbours by playing an active role in promoting regional security. Indeed, now is a good time for Tehran to help reduce regional and international tensions – and, in return, to gain support and credibility among the Arab states. The added bonus would be that this would simultaneously reduce US political and military interference in the region.

According to Elham Aminzadeh, a member of parliament who sits on the Commission for National Security, “The initiation of a security conference between Iran, Jordan, Syria, Saudi Arabia and Iraq can lead to more regional cooperation. The questions of security can be debated and the links between terrorists and freedom fighters can be ended.” Aminzadeh maintains that a serious regional attempt to address and define terrorism – what it is and what it is not – will both help limit outside interference and address the issue of national and regional security.

Moreover, Aminzadeh argues that Iraq, Jordan, Saudi Arabia and Syria could improve their own self-esteem if they found optimal security solutions in their own back yard, here in the Middle East. For instance, Syrian president Bashar al-Assad’s recent visit to Tehran was probably designed in part to allow him to encourage Arab states to develop better relations with Tehran. This may even have been the idea behind his trip.

All the while, however, US strategists, and the neo-conservatives in particular, continue to identify Iran as the main security problem in the region. They promote America’s own strategy by exaggerating the Iranian threat to the Persian Gulf. One only needs to look at the ongoing military exercises and manoeuvres involving the US and its regional allies to demonstrate the success America is currently having in meeting its objectives.

According to Hussein Fallah-Nejad, another member of the Commission for National Security, “Since the invasion of Iraq, our country has faced numerous problems. The US accuses us of terrorist activities and claims that the Iraqi insurgency receives support from Iranian officials. The arrest of Iranian diplomats on the pretext of counter-terrorism, and accusations that Tehran has supplied weapons for use against American forces have added to these problems.”

Western leaders, their officials and public relations people have meanwhile begun talking up the threat of a “Shia Crescent” as a way both of scaring Sunni-led administrations and of reducing Arab-Israeli tensions.

The concept of a “Shia Crescent” arose in US policy circles because of the penetration of Hezbollah into Lebanon’s political fabric, as well as the emergence of a Shia-led government in Iraq. A special committee has already been established by the American Council for Foreign Affairs to look at the rise of Shia power, anti-American sentiment among Sunni Arabs, the unequal balance of power in Iraq, and the lack of a coherent American policy in the region.

The council’s recommendation seems to be to establish a political triangle consisting of America, Israel and some Arab states to limit the power and influence of Iran in the region.

The notion of a “Shia Crescent”, which assumes a major change in the balance of power in the region, may well lead to increased anti-Iranian and anti-Shia policies. However, while the idea may seem popular among some Arab leaders, it is not necessarily one that is endorsed by ordinary people.

Lebanon’s experience indicates that Shia policies are proving more effective than those of the Sunni political community in the realm of both politics and society.

With all the above in mind, Iranians should think about employing “soft power” to built a new relationship with their neighbours. The best way forward is for Tehran to embark on a process of engagement so as to win trust and a positive reputation among its Arab neighbours.