"We Engaged"

By Ed Magnuson

For the first time in the ever widening conflict in the Persian Gulf, Iranian and American gunners aimed their weapons at each other and pulled the triggers. Iranian speedboats, which fired first, missed an unarmed U.S. Army observation helicopter. Two U.S. gunship choppers reacted with lethal swiftness, sinking one of the attacking boats and setting two others ablaze. A fourth escaped. Although hardly a major military clash, the fiery exchange on a moonlit night in the gulf last week ratchetted the hostilities yet another notch toward a real but undeclared state of limited war.

The Reagan Administration dismissed the incident as what one senior official called merely a "dustup" with Iran, another demonstration of U.S. determination to protect shipping in the gulf. "We have told them that if they shoot at us, we shoot back," he said. "It's perfectly consistent with the rules of engagement." But with the U.S. and Iran embraced in an increasingly deadly minuet, the Ayatullah Ruhollah Khomeini's fanatical regime seems determined to ignore American rules and warnings.

The shooting in the gulf climaxed a series of bluffs and threats from Iranian naval forces in the wake of the Sept. 21 seizure of the Iran Ajr, which was disabled by U.S. helicopters as it was laying mines. Although the Iranians have come under increasing diplomatic pressure and have been bloodied in recent confrontations with the U.S., they "are bolder and more belligerent than ever," says a Bahrain-based Western diplomat. Previously the diplomat thought Iran would not dare to attack American ships. Now he says, "We're headed for a confrontation."

Sources in Israel report that Western intelligence services have mounted a cooperative effort to head off retaliation by Iran. The services are tracking suspected terrorist squads that have been detected gathering information on U.S. diplomats and facilities as well as American civilians around the world, particularly in Europe. So far, the intelligence agencies have not learned of any specific plans, but they are convinced Iran means to strike if it can.

At the same time, some Iranians may again be trying to play a double game with the U.S., privately assuring the Reagan Administration of their moderation while publicly proclaiming their hostility to the West. Sources in both Tehran and Washington say the U.S. has been approached on several occasions over the past three weeks by intermediaries who claim to represent senior Iranian officials, including Speaker of the Parliament Ali Akbar Hashemi Rafsanjani.

The back-channel contacts that persuaded the Administration to sell weapons to Iran in 1985 and 1986 used a similar approach. This time the purported moderates are asking for American restraint in the gulf while they try to convince Khomeini that he should back away from a confrontation. The U.S. is not buying. "We have enough experience with the Ayatullah," says a senior Administration official. "We won't let him play off his men against ours and wiggle out of this one."

If Rafsanjani wants an accommodation with the U.S., he disguises it well. At an Oct. 2 prayer meeting in Tehran, the parliamentary speaker all but predicted a conflict with American forces in the gulf. "With great likelihood," he said, "we will get involved in a new front in the southern part of the country in the not too distant future." U.S. officials argue that America is already showing considerable restraint. "It is not our policy to confront Iran," says Sam Zakhem, the U.S. Ambassador to Bahrain. "Our actions are a direct result of Iran's policy of intimidation and its attacks on innocent shipping."

$ The latest incident in the gulf added to the running debate in Congress over whether the President must invoke the 1973 War Powers Resolution, which would give Congress the right to review the dispatch of U.S. military forces into a situation where they face "imminent hostilities." Declared Florida Democrat Dante Fascell, chairman of the House Foreign Affairs Committee: "Hostilities in the Persian Gulf can no longer be called imminent. We are in them."

Beyond resisting what it considers an unconstitutional infringement on Executive authority, the Administration argues forcefully that the War Powers Resolution would arouse new uncertainty about the U.S. commitment, undermining a policy that has been gaining international support. "That would be extremely dangerous," contended a senior Reagan official. Ironically, the President could undoubtedly win a vote in Congress on the U.S. presence in the gulf. But each new military skirmish raises concern about where the American involvement is headed -- and on that question, no one in either branch of Government has a clear answer.

The flare-up at sea last week was preceded by several standoffs. Before the clash with the U.S. helicopters, the Iranians had massed a flotilla of up to 60 small gunboats near Kharg Island, their main oil terminal in the northern gulf. They moved ominously toward Khafji, a joint Saudi Arabian and Kuwaiti oil facility some 110 miles across the open sea from Kharg. Alerted by U.S.-Saudi AWACS surveillance planes, Rear Admiral Harold Bernsen, commander of the U.S. Navy Middle East Force, ordered his flagship, the La Salle, to interrupt its tanker-escort duties and race toward the flotilla.

Jet fighters from Saudi Arabia then swooped over the gunboats, which prudently turned back toward their base. If the boats had tried to attack the oil terminal, they would have been easy pickings for Saudi aircraft on the long run homeward. Some gulf diplomats assumed the Iranians were trying to scare their Arab neighbors and test the Saudi response.

Another tense encounter developed in the southern part of the gulf when one of Iran's few large navy vessels moved within a mile of the U.S. destroyer Kidd. Warned the American commander by radio: "Iranian warship, this is a U.S. Navy warship. You have locked your fire control radar on a U.S. warship. Secure it immediately. This is your only warning." The radar signals broke off, and the Iranian ship moved away, averting a likely U.S. preventive attack.

Sailors on the Iranian gunboats sailing southwest from Farsi Island on Thursday proved far less prudent. They had been under U.S. surveillance ever since their rendezvous off the island. One of the American observers tracking the quartet of vessels was an Army pilot in an unarmed OH-6 Hughes helicopter, running quietly at 800 ft. above the water and peering at the boats through an infrared night-vision scope. He had no trouble identifying the small craft. The largest was a 150-ft.-long Corvette, a steel-hulled boat that could carry a crew of 140. There was a Swedish-built Boghammar boat, 42 ft. long, and two smaller 30-ft. vessels, dubbed Boston Whalers by U.S. seamen because of their similarity to the American fishing boats.

Trailing only 300 yds. behind the observation chopper and flying slightly lower were two similar but fully armed AH-6s. They carried Gatling-like machine guns that could fire 4,000 7.62-mm bullets a minute. Their 2.75-in. rockets also carried a killing punch. The trio of choppers moved toward the tiny flotilla.

Suddenly, at 9:50 p.m. gulf time, the crews in all three helicopters were startled by an unexpected sight: the reddish flash of tracer bullets erupted from the boats below. There was no doubt that the choppers were being fired upon. And there was no hesitation in their response. The standing orders on gulf duty are clear: When attacked, defend yourself. They did. Radioed one pilot: "We engaged."

It was over in moments. The Boghammar blazed, then sank from view. The two small boats flared too, then drifted. The Corvette sped off toward Farsi. Arriving in two Mark III Sea Specter patrol boats, Navy SEAL commandos rushed to pluck survivors out of the water. They found six Iranian sailors, but three were badly injured and two of them died after being taken to the U.S.S. Raleigh, some 70 miles southeast of the wreckage site. The two small boats were taken under tow. Just how many Iranians were killed in the attack was not known.

The Iranians' official reaction was to deny that their gunboats had fired first. Once again Iran's leaders vowed to strike back at the U.S. Threatened the Islamic Republic News Agency: "The Americans will be the main victims of the heavy storm in the Persian Gulf."

So far this month, Iranian speedboats and frigates have attacked six unarmed ships in the gulf, including two Japanese tankers. That stirred Japan into offering modest help to finance the U.S. defensive operations in the international waterway, including some $10 million worth of advanced navigational gear. West Germany too offered indirect support, sending three warships into the Mediterranean to free other NATO vessels for gulf patrols. Britain, France, Italy and the Netherlands already have warships and minesweepers on duty in the gulf -- as does the Soviet Union, which has a dozen ships there and in the Arabian Sea.

Iraq has stepped up its air war on Iranian shipping, hitting 15 enemy tankers since Sept. 25. It even sent Mirage jets ranging far south to Iran's Larak Island oil terminal near the gulf's mouth, where they damaged the Liberian-flagged Seawise Giant, the world's largest tanker. Iran struck back, firing two long-range missiles at Baghdad.

Military experts do not believe the Iranian navy can do much more than continue to harass shipping with mines and hit-and-run speedboat attacks. Iran has some 800 small speedboats, and the Swedish-built Boghammers, highly maneuverable and fast (up to 60 m.p.h.), could be effective in suicide attacks. One Western diplomat views them as potential "human torpedoes." Iran may also have some potent U.S. Stinger missiles, parts of which were found on the captured Boston Whalers. Effective against helicopters as well as airliners, they reportedly were bought from American-aided rebels in Afghanistan.

So far, however, the U.S. operations in the gulf have been impressive in anticipating hostile action by Iran. As was demonstrated last week, U.S. surveillance blankets the area. American naval commanders are kept informed when ships leave Iranian ports; Admiral Bernsen even knows when an aircraft moves onto the taxiway at an Iranian airport. Yet no one is certain if this formidable American resolve would crumble if a Navy ship was lost and U.S. sailors were killed.

Democratic Congressman Les Aspin, chairman of the House Committee on Armed Services, expressed the restiveness of many Americans as the unpredictable conflict intensified. "The President is making a serious mistake" by not seeking congressional approval of the U.S. mission, he told TIME. He does not want the U.S. to withdraw, but sees the gulf region as "politically unstable" and Administration policy as "fragile." An open-ended, ill- defined commitment that led to U.S. deaths could create a sharp public reaction. It might result, said Aspin, in "pressures either to pull out or to get really tough. I don't know which." Neither does Iran, or America's allies, and this uncertainty leaves many uneasy as the stakes grow higher in a vital waterway.

With reporting by Dean Fischer/Bahrain and Bruce van Voorst/Washington