This is a partial transcript of The Big Story With John Gibson, August 13, 2004, that has been edited for clarity.

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IRANIAN CIVILIANS AT RALLY

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JOHN GIBSON: Those are thousands of Iranians in the streets today, protesting our troop's presence in the Iraqi holy city of Najaf.

Is Iran actually encouraging the violence and the insurgency? And if so, how should Washington deal with it?

Nixon Center (search) Vice President Cliff Kupchan (search) joins me now from Washington. He met with the Iranian leadership a few months ago. The big question, Cliff: is Iran stoking the situation in Iraq?

CLIFF KUPCHAN, NIXON CENTER VICE PRESIDENT: I think the short answer would be no. Iran does not have an interest in Iraq falling apart. Iran has an interest in a stable and integral Iraq.

GIBSON: Doesn't Iran have an interest in sort of linking up with the Shiites in the South and having essentially an Iraqi client state?

KUPCHAN: There are 70 million Shiite Iranians living next door to Iraq. They certainly want influence in the country. After that, it gets much more complicated.

The Shiite community is not homogeneous in Iraq. Some want nothing to do with the Iranian bureaucracy as a model of government.

GIBSON: OK, but we have the suspicion that whatever the grand game is the Iranians are playing, the least day-to-day game is that they're putting their people across the border in places like Karbala and Najaf where the Shia population is high and that a guy like al-Sadr has strings that lead back to Iran.

KUPCHAN: Part of that's true, and part of that I would take issue with.

The part of that that's true is that Karbala and Najaf have recently been opened to the Iranian population after many, many years of being closed. There's a huge pilgrimage business, and there are certainly some bad guys going across the border, certainly some bad guys, going across the border with the pilgrims.

Now, on the other hand, there is no evidence that al-Sadr has been receiving direct support from the Iranians.

GIBSON: You're sure of that?

KUPCHAN: In the public press — there are links that his father was very good friends with Grand Ayatollah Haeri, who was a very powerful ayatollah within Iran. But in the public domain, there is no information that indicates a direct military link between al-Sadr and Iran.

GIBSON: Right, but wouldn't you suspect — I mean, wouldn't you naturally suspect that some of the trouble Americans are getting there are being stirred up by Iranians, because why not? Why not give the Americans trouble? It doesn't cost you anything, and you get an awful lot of great benefit of giving the Americans trouble.

KUPCHAN: Well, I guess there's a couple points. The first is that Iran has an interest — Iran's sitting in a very strong position right now. They have a weak Iraq and they have the United States that's tied down in Iraq; so they're sitting pretty.

Secondly, it's really important to recognize the nature of the Iranian government. It's a set of semi-autonomous institutions in my view, and there are certainly elements of it, like the Revolutionary Guard, that are probably playing a negative role in Iraq, and I would agree with you on that count.

GIBSON: And you don't think that the mullahs, themselves, are feeling like they need to act out in Iraq?

KUPCHAN: Depends what you mean by the mullahs. Certainly the leader, Ayatollah Khomeini denounced the U.S. attack yesterday and the day before. Now, I think what gets much more tricky is there are very powerful ayatollahs including itself that have links, family links, financial links with the Shiite community in Southern Iraq, and there's where I think suspicion is warranted.

GIBSON: All right, Nixon Center Vice President, Cliff Kupchan. Cliff, thanks very much, appreciate it.

KUPCHAN: Sure.

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