This is a partial transcript from "The Journal Editorial Report," August 12, 2006, that has been edited for clarity.

PAUL GIGOT, HOST: Iran's Supreme Ayatollah Ali Khamenei ordered Muslims across the world this week to support Hezbollah in its ongoing battle against Israel.

He praised the group's jihad against the Jewish state, describing Israel's offensive in Lebanon and Palestine as a bitter phenomenon, and warnings other Islamic nations that they could meet a similar fate.

Martin Kramer is a fellow at the Washington Institute for Near East Policy. He joins me now from Tel Aviv.

Mr. Kramer, thank you for being on the program. We often hear that Iran and Hezbollah are very closely linked. Just how close are they? Can Hezbollah act independently on something like Lebanon without Iran's approval?

MARTIN KRAMER, FELLOW, WASHINGTON INSTITUTE OF NEAR EAST POLICY: Well, the link is very intimate. And it goes back a very long way, even to the first days of the Iranian revolution.

The Iranians at the time, Ayatollah Khamenei, sent his emissaries throughout the Muslim world, especially among the Shiites to win support.

There was a strong push back in many of the other states because the regimes opposed it. But in Lebanon, there was a civil war at the time and no one to oppose it.

So Iran built up Hezbollah really from scratch. And although there have been ups and downs in the degree of intimacy of the relationship, I think it has actually gotten more intimate, of late, as Iran approaches a possible crisis with the West over its nuclear capabilities.

GIGOT: Do you believe that Hezbollah would have struck Israel the way it did without Iran's approval?

KRAMER: I think Iran had given a blanket approval for operations along Israel's border in order to keep that on a simmer. Now, the precise modus vivendi in any given situation, when to attack, when to strike, was pretty much left to Hezbollah.

I think that actually, in this respect, it might have been an Iranian mistake to have not corrected their standing instructions to Hezbollah because they effectively provoked Israel into launching a large scale offensive, which from Iran's point of view, is badly timed.

I think Iran wanted to use the capabilities of Hezbollah that you see on display now, the rockets and the guerrilla fighters, at a later time, and a mega-crisis over Iran's nuclear capabilities.

But Israel chose the time for this war, not Hezbollah, effectively. And so, to some extent, it's been a strategic step back for the Iranians.

GIGOT: But there's some people who said that the timing was actually appropriate for Iran. That they would have liked it to happen when it did because of the G-8 summit, which was going on and focused on Iran's nuclear program.

And this attack has really changed the world's discussion about the Middle East for the last month or so. Wasn't the timing helpful for Iran?

KRAMER: I think that in the scale of things, it would have been much more advantageous for Iran to have had this kind of war in the very midst of tremendous U.S. pressure, perhaps even U.S. military action against Iran.

And that's exactly what Saddam Hussein tried to do. He tried to turn a confrontation over his WMD into a general conflagration in the Middle East.

I think that would have been Iran's goal, in the midst of a crisis to say, here, it's not just the United States and the Arab state against us. We're going to undercut the Arab states by bringing up popular support for resistance to Israel.

So in a way I think it made sense for Israel to say, look, we want to split this campaign against Iran into its parts. First, deal with Hezbollah. And later, at another stage, deal with Iran, and not have those two campaigns waged together.

GIGOT: All right, well, this conflict has now been going on for roughly a month. There doesn't seem to be a clear-cut military victor, although Hezbollah's been damaged militarily. We don't know when it will end.

What lessons do you think Iran is taking from the conflict so far? Do they feel more assured in their nuclear ambitions or maybe a bit more cautious?

KRAMER: Well, as in any conflict, it's a mixed picture. I think, from the point of view of public relations and their stature in the Muslim world and Arab world, Iran has gained. There is a lost of hailing of Iran helping Hezbollah to be the only Arab-Muslim force standing up to Israel.

But as Iran knows, deep down inside, you can't take the Arab street to the bank. There's not a lot you can do with the Arab street in the midst of a crisis. Saddam Hussein discovered that. Yasser Arafat knew it. Even Nasser knew it. So there is a PR game.

I think, in the longer term, though, they have to wonder whether a card has been taken from their hand. Because even if it's not a decisive defeat, an elimination of Hezbollah from the Lebanese landscape, the new regime is going to put in place on the Israeli-Lebanese border, and perhaps even deeper within Lebanon, which will make it much more difficult for Iran to mobilize and play the Hezbollah card in a bigger crisis.

So I think that what Iran is going to do in the aftermath of this is say, well, if we can't do it in Lebanon, where else can we do it? And I would not be surprised to see Hezbollah bolster its support. For example, from Muqtada al Sadr and the extreme Shiites in Iraq, is another card to replace the Hezbollah card.

GIGOT: All right, Martin Kramer, thank you for those very interesting insights.

Content and Programming Copyright 2006 FOX News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2006 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, Inc.'s and Voxant Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.