Iran’s efforts to secure its stake in Iraq’s future continued last week when it offered the government in Baghdad a billion-dollar line of credit and locked down a host of contracts and trade agreements for Iraq’s reconstruction.

Not bad for a nation with a $181.2 billion gross domestic product. Proportionally, it is like the United States extending a $74 billion credit line. It was a telling sign of Iran’s determination to increase its leverage over its destabilized neighbor.

Iraqi President Jalal Talabani’s visit to Iran last week was quite productive. Over three days of talks, Talabani—already having strong connections to Tehran through his years of traveling there while serving in opposition to Saddam Hussein—said he enjoyed “complete agreement” with Iranian leaders and promised Iraqis would soon see “the fruitful result of this trip.”

Fars News Agency reported, “Under the agreements, Iran will help rebuild schools, hospitals, pipelines and power plants” in what Iran’s foreign minister described as “hundreds of millions of dollars” in no-bid contracts and trade agreements for Iraq’s reconstruction.

Iran’s stated intention to help rebuild Iraq matches similar promises it has made to Afghanistan. November 11, two prominent Afghan members of parliament visited Tehran and received assurances from Iranian President Mahmoud Ahmadinejad that Iran would support its reconstruction and development efforts.

It appears Iran is savoring the opportunity to pose as the power ready to “fix what the United States broke” in both states.

These developments come at an interesting time—just as pressure is increasing on Washington to solicit Iran’s help in stabilizing Iraq. To this point, President Bush has instead approached Iraq’s Arab neighbors—Jordan, Saudi Arabia, Egypt and others—for help in containing the Iraqi insurgency, foregoing direct talks with Iran (although there is much evidence pointing to back-channel talks between the U.S. and Iran having taken place for years). But with Democrats coming to power over Congress in January, the search for fresh solutions to what many see as a quagmire in Iraq is taking on a desperate pitch.

In looking at which foreign power appears to have the most to offer Iraq in the future, the contrast is growing more vivid. On the one hand, the U.S. is openly conflicted and befuddled over how to withdraw from a difficult situation without completely reneging on its responsibilities to a nation whose government it destroyed. On the other, Iran is extending its tentacles deeper and deeper into Iraq, anticipating the inevitable day when the U.S. will withdraw and it will secure an oil-rich ally that will firmly support its position as king of the Middle East.