... As part of a new partnership with Nicaragua's Sandinista President Daniel Ortega, Iran and its Venezuelan allies plan to help finance a $350 million deep-water port at Monkey Point on the wild Caribbean shore, and then plow a connecting "dry canal" corridor of pipelines, rails and highways across the country to the populous Pacific Ocean. Iran recently established an embassy in Nicaragua's capital.

In feeling threatened by Iran's ambitions, the people of Monkey Point have powerful company. The Iranians' arrival in Nicaragua comes as the Bush administration and some European allies hold the threat of war over Iran to force an end to its uranium enrichment program and alleged help to anti-U.S. insurgents in Iraq.

What worries state department officials, former national security officials and counterterrorism researchers is that, if attacked, Iran could stage strikes on American or allied interests from Nicaragua, deploying the Iranian terrorist group Hezbollah and Revolutionary Guard operatives already in Latin America. Bellicose threats by Iran's clerical leadership to hit American interests worldwide if attacked, by design or not, heighten the anxiety.

"The bottom line is if there is a confrontation with Iran, and Iran gets bombed, I have absolutely no doubt that Iran is going to lash out globally," said John R. Schindler, a veteran former counterintelligence officer and analyst for the National Security Agency.

"The Iranians have that ability, particularly from South America. Hezbollah has fronts all over Latin America. That is not new. But it's certainly something we're starting to care about now."

American policymakers already had been fretting in recent years over Tehran's successful forging of diplomatic relations, direct air routes and embassy swaps with populist South American governments that abhor the U.S., such as President Hugo Chávez's Venezuela, Bolivia and Ecuador. But Iran's latest move places it just a few porous borders from Texas, where illegal Nicaraguan laborers routinely travel...

... Few Nicaragua observers believe Iran seriously plans to follow through on any of its $500 million promises or has any obvious need for trade ties with one of Latin America's poorest countries.

Opposition politicians say they understand why Iran might want relations with oil-rich Venezuela and Bolivia but wonder aloud if Iran really is so interested in Nicaraguan bananas as their return on investment.

Those who view Iranian intentions with suspicion point to the new Iranian diplomatic mission in Managua as one reason for all the promises.

"They use their embassies to smuggle in weapons. They used them to develop and execute plans," said Oliver "Buck" Revell, who served as associate deputy director over FBI intelligence and international affairs. "Diplomats have immunity coming and going. It is a protected center for both espionage and, on occasion, for specific operations. So an embassy in Managua is definitely an area that will be of concern to our national security apparatus."...