A leading British think tank has concluded that Iran has been the chief beneficiary of the war on terror in the Middle East and that Iran now wields more influence in Iraq than the United States. The report from Chatham House said Iran had gained from the defeat of two of its most immediate regional rivals, Saddam Hussein in Iraq and the Taliban in Afghanistan. The war in Lebanon has also strengthened Iran’s regional influence. The report comes as tensions are increasing between Iran and the United States. On Tuesday Iran said it was willing to engage in serious talks with Western nations over its nuclear program but it rejected a UN security council ultimatum to give up uranium enrichment. The Bush administration criticized Tehran’s response.

• White House Deputy Press Secretary Dana Perino: “… We acknowledge that Iran considers its response as a serious offer and we will review it. The response, however, falls short of the conditions set by the Security Council which require the full and verifiable suspension of all enrichment-related and reprocessing activities. We are closely consulting with the other members of the Security Council on the next steps.”