• This is a rush transcript from "The Journal Editorial Report," February 24, 2007.

    PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report," another U.N. deadline comes and goes as Iran continues to defy the international community. But as the U.S. ratchets up the financial pressure, are cracks emerging in the regime?

    Plus, what role is Tehran playing in the chaos in Iraq? We'll examine that evidence.

    A Hollywood heavyweight throws the democratic presidential nomination into turmoil with some choice comments about the Clintons.

    Those topics, plus our weekly "Hits and Misses," but first, these headlines.

    (NEWSBREAK)

    GIGOT: Welcome to the "Journal Editorial Report." I'm Paul Gigot.

    In a finding that clears the way for harsher sanctions against Tehran, the IAEA said late this week that Iran has expanded its uranium enrichment program instead of complying with the U.N. Security Council ultimatum to freeze it.

    But as the international community contemplates its next step the U.S. is ratcheting up the financial pressure, hoping to expose some cracks in the Iranian regime.

    Iranian author and journalist Amir Taheri joins me now from London.

    Amir Taheri, thanks so much for joining us.

    AMIR TAHERI, JOUNALIST AND IRANIAN AUTHOR: Pleasure.

    GIGOT: Mahmoud Ahmadinejad dismissed the U.N. deadline this week as meaningless. Do you think the Tehran government is feeling any pressure at all from U.N. sanctions?

    TAHERI: Yes, they are, in a number of ways. First, economically. Businesses have stopped doing deeds in Tehran. Money is leaving the country. The value of the Iranian currency is plummeting. And, of course there is a mood of uncertainty which is bad for business.

    GIGOT: Well then, why is the Iranian regime continuing to defy the international community and not coming to the table to try to remove the sanctions.

    TAHERI: Because they think that saving face is more important for them. This is a regime that has lost its legitimacy, it's revolutionary legitimacy, and wants to regain a new legitimacy as a regime that has stood up to great powers and won.

    GIGOT: The nuclear weapon that it is trying to gain is one way of achieving that kind of renewed legitimacy? Is that why you think they are pursuing the program?

    TAHERI: Yes, if they can defeat the United States, if they can defy the international community and force the Americans to leave the Middle East, of course, they will gain a new legitimacy not only inside Iran, but throughout the Middle East because they think they have an alternative to the American model of globalized system that we have now. They think their model is much better and they are the only power capable of standing up to the United States today.

    GIGOT: What do you the government strategy is in dealing with the U.N. and United States? Do you think it is a divide and conquer strategy where they are trying to pit the Europeans and the Russians and the Chinese on one side, who take a more dovish approach against the U.S.?

    TAHERI: Yes, because the collation is the Europeans and the Chinese and the Russians will not do anything really to hurt the Islam regime on the assumption that, if the Islamist regime becomes really dangerous and nasty, the Americans will deal with it anyway. So why should the Europeans, the Chinese and Russians do something now?