A Somber Holiday Vigil

By Edward E. Scharff

Iran's "finalanswer"is "unreasonable"

"God willing, we shall soon no longer have the hostage issue." With those words, Iranian Prime Minister Mohammed Ali Raja'i aroused fresh sparks of hope last week that the 52 Americans in captivity might be freed. Just possibly, said Raja'i, it could happen as early as "the feast, or the birthday, or whatever they call it."

For a brief time, U.S. officials hardened by months of false signals from Iran dared to believe that the hostages might be home for Christmas. The optimism ebbed when Iran's latest bargaining statement, labeled a "final answer" by Iranian leaders, arrived in Washington early Friday, the 412th day of the hostage ordeal. The message was "unreasonable," said Secretary of State Edmund S. Muskie, because it "would require us to do things which we cannot do legally." It also, he added, made it very difficult to resolve the matter before the inauguration.

The final answer, according to government sources in Tehran, contained three principal demands: >That the U.S. make certain unspecified "modifications" in its pledge not to interfere in Iranian affairs, a pledge that President Carter and Muskie have both repeated on several occasions.

> That the U.S. make a "guaranteed deposit" in the Algerian Central Bank. Then, said the Iranians, "whatever amount of the Shah's wealth is cleared up we will take from that deposit." The Iranians also spoke of "procedures" to locate and secure the Shah's estate.

> That the U.S. also deposit the "gold and confiscated wealth" of Iran (a reference to the $13 billion in Iranian assets now frozen in U.S. banks) with the Algerian bank.

The two demands for guarantees of money in the amount of $23 billion presented the most difficulties, according to senior U.S. officials. For example, it was unclear what portion of the frozen $13 billion must be transferred to an escrow account in the Algerian Central Bank as a guarantee of good faith. Some $7 billion of those assets is subject to litigation by American companies that had contracts in Iran before the revolution. U.S. officials had hoped Iran would understand that Carter does not have legal authority to expatriate those funds. The implication was that the demand exceeded the amount Carter might legally deliver.

Despite the disappointment, the Administration found reason for some encouragement in the week's events. Along with Raja'i, Ayatullah Ruhollah Khomeini himself seemed ready to resolve the dilemma. The Ayatullah personally approved Iran's answer before it was transmitted to the U.S. by Algerian intermediaries. Muskie speculated that Khomeini's involvement signaled a "new phase" in the negotiations. Another hopeful sign seemed to lie in the fact that the Iranians were no longer talking in terms of a possible phased release of their captives, a notion the U.S. has flatly rejected.

No one was more guarded about the hostages' fate than the President. At the annual ceremony to light the Christmas tree on the Ellipse behind the White House, Carter bowed to a request by the hostages' families: except for a bright star of hope at the top, he left the 24-ft. spruce dark as a somber "vigil of remembrance." Said Carter: "Our American hostages have not yet come home. But most of our prayers have been answered. They have stayed in touch with their families. So far as we know, they are safe, and their lives have been spared."

There could no longer be much doubt that the Iranians were anxious to be rid of their American prisoners. In a brief Tehran radio interview Wednesday, Prime Minister Raja'i said of the hostage question, "It is a dead issue now. It has no more political value." He was only admitting the obvious. For Iranians, it is the war with Iraq that has become the overriding issue in the power struggle between the right-wing clergy and moderate President Abolhassan Banisadr. To the clergymen's dismay, Banisadr has emerged as a popular hero. As commander-in-chief of the armed forces, he has received much of the credit for Iran's surprising resistance in the war.

To compete with him, the conservative mullahs and their Islamic Republic Party feel that they must demonstrate an ability to improve relations with foreign governments, an obviously difficult task so long as the hostages remain in Iran. Ironically, no one sounded more eager to send the Americans home last week than I.R.P. Leader Ayatullah Seyyed Mohammed Beheshti, who had previously been instrumental in prolonging the crisis. Said Beheshti: "The U.S. has to a large extent met our demands. There is now no basic catch in reaching a final solution."

Some observers believed Raja'i and the mullahs are now positioning them selves to appease public opinion at home.

If the hostages are released, the clergy's biggest problem will be to portray any compromise made with the U.S. as an unqualified victory for Iran. That could explain why Raja'i seemed to mix sugar-coated language with a bit of bile. He declared that once Iran's new message was in American hands, "the U.S. can decide how and when it wishes to take out its spies." The remark was interpreted as yet another threat that Tehran still had it in its power to try the hostages on espionage charges.

At week's end the hostages' where abouts were still secret and their fate uncertain. Diplomats in the State Department's Hostage Task Force were intent on pursuing a quiet, parallel set of negotiations: to arrange religious services for the hostages' second forlorn Christmas Day.

-- By Edward E. Scharff. Reported by Roberto Suro/ Washington

With reporting by Robert Suro

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