Iran has changed course in its missile development program.

Middle Eastern and Western defense sources said the Iranian Defense Ministry appears to have slowed down development of its intermediate- and long-range ballistic missiles amid delays by Russia to transfer required components and technology. The sources said the Iranian focus has turned to the development of short- and medium-range missiles with Chinese and North Korean help.

"Iran's regime wants to lower tension, particularly in the Gulf," an Arab diplomatic source, who confirmed the suspension of the Shihab-4 program, said. "The Iranians are confident and feel that if they wait they will control the entire Persian Gulf without a fight. So, they want to assuage such countries as Saudi Arabia and Kuwait, the most important players in the Gulf Cooperation Council."

The new policy has been confirmed by Iranian defense sources. They told the London-based A-Sharq Al Awsat daily that the Iranian Defense Ministry has been ordered to redraw its priorities regarding missile development and production.

The orders to the ministry were to reduce the intermediate- and medium-range missile programs such as the Shihab-3 and Shihab-4 and focus on shorter-range missiles. The directives were attributed to foreign and domestic considerations, particularly the fears the Shihab-class programs have sparked in the Arab states of the Persian Gulf.

Western defense sources said the cutback in the Shihab missiles began earlier this year when Russia reduced its help to several programs. The move hurt the Shihab-4, a missile planned for a range of 2,400 kilometers and based on the Russian SS-4.

The sources said Russia came under heavy U.S. pressure by both the outgoing Clinton administration and the incoming Bush administration to end the flow of technology to Shihab-4. Even in Israel, which had expressed alarm over Russian help to Iranian missile programs, leading officials acknowledged a change in policy by Russian President Vladimir Putin.

"There are some steps being done by Russia to establish central control," Israeli Deputy Prime Minister Natan Sharansky said. "But it is far from satisfactory."

The result, the sources said, has been a freeze in the Shihab-4, which was planned for completion in 2002. Money allocated to the Shihab-4 was redirected to shorter-range missiles, particularly the solid-fuel Fateh-110 rocket.

The future of the Shihab-3, however, is less clear. A U.S. defense source said the missile, based on North Korea's No-Dong, continues to be plagued by engine problems.

But Iranian sources told A-Sharq Al Awsat that a Shihab-3 test last September was successful in proving that the missile can achieve its range of at least 1,200 kilometers.

Iran, however, continues to develop missiles with increased help from China and North Korea, the Western sources said. They said Iran has obtained Chinese help to produce the C-802 missile, with a range of 90 kilometers. The missile is meant to protect Iran's coast and deter enemy ships in the Straits of Hormuz.

Last week, the Bush administration acknowledged that China, despite a pledge issued last year, continues to sell missile components and technology to Iran. The issue was discussed by U.S. Secretary of State Colin Powell in his visit to Beijing last week.

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