Rice's Toughest Mission

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A former director of Chevron whose reading includes the financial press and oil- and gas-industry journals, she has personally overseen the Administration's campaign to persuade financial institutions in Europe and the Arab world to halt the flow of capital to Iran's oil sector. The idea is that through a combination of moves--projecting military muscle, squeezing Iran's oil lifeline and securing U.N. Security Council sanctions against Tehran's nuclear industry--the U.S. can drain Ahmadinejad's popular support and force the mullahs to bend to international demands to stop enriching uranium, the first step to a nuclear bomb.

"The point here is to get the Iranians to change their behavior, to get them to change their strategy, to get them to negotiate in good faith on their nuclear program," Rice says. "I've heard people say, 'Well, you're escalating.' Well, this is responding, really, to a series of Iranian moves that are dangerous for American interests and dangerous for the international system."

Whether Rice can steer the U.S. away from a military confrontation with Tehran is one of the two big challenges that will define the final years of her tenure--and the legacy she leaves for her successor. The other is even more daunting: making peace in the Middle East. Those who have spoken to her say her determination to seek a comprehensive settlement between Israel and the Palestinians is real. A senior Arab official says that on her trip to the region last month, Rice pledged to help set up a Palestinian state by the end of Bush's term. According to this same official, Bush phoned the Kings of Jordan and Saudi Arabia to tell them Rice was coming with a commitment to solve the Palestinian issue. "There is a shift. There is no doubt about that," says an Arab official. "But how deep, how strong this effort is going to be--it's too early to tell." The first test will come later this month, when Rice plans to convene a summit in Jerusalem between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas.

Rice's chances for success aren't great. Olmert's job-approval ratings are even more dismal than Bush's, and Abbas is struggling to prevent clashes among rival factions from escalating into civil war. And then there's the trouble with Rice herself. She did herself few favors in Arab eyes by failing to restrain Israel's bombing campaign against Lebanon last summer. Her refusal to negotiate with Syria baffles diplomats in the region, who believe the U.S. is missing an opportunity to peel Damascus away from its alliance with Iran. And Rice's relationship with Abbas, in particular, is frosty. A senior Palestine Liberation Organization official who has sat in on meetings between the two says, "She acts like a school headmistress, telling her student in a commanding tone to do this or don't do that."