As the United States conducts major naval exercises off the Iranian coast, ABC News reports that President Bush has authorized the CIA to conduct a covert action campaign to destabilize the Iranian government. It is an unwise and potentially disastrous scheme. A far better strategy would be to engage the Iranian regime in an effort to create domestic pressures for it to reform.

One can understand the temptation to undermine the Iranian government, since it is one of the more odious political and social systems on the planet. But a U.S. covert action program is almost certain to be counterproductive. While a growing number of Iranians (especially young Iranians) are fed up with the repressive rule of the mullahs and want a more open society, U.S. sponsorship of a resistance campaign could be the kiss of death for those factions.

Moreover, millions of Iranians have not yet made up their minds about whether to support the current ruling elite or back reformers.

Many of those moderates seem increasingly disillusioned with the mullahs, but they are not necessarily fond of the United States.

Moreover, populations the world over almost universally resent pressure and interference from foreign powers. The typical reaction is to rally around the incumbent regime and reject opposition figures tainted by foreign influence.

Popular resentment against a covert U.S. campaign of destabilization is even more likely in Iran than in other nations.

Most Iranians remember that the United States interfered once before in their country’s internal affairs, and the outcome was not a happy one. It was a coup orchestrated by the CIA in 1953 that ousted a democratic government and restored the autocratic Shah to power. His corrupt and repressive rule for the next quarter century paved the way for the Islamic fundamentalist revolution. Any hint of U.S. meddling today would probably cause Iranian moderates to make common cause with the ruling religious elite.

Even a covert campaign to force the existing regime to change its behavior — which some anonymous administration officials insist is the real purpose of the new effort — is likely to backfire. Proponents contend that such covert action is an alternative to war with Iran.

But instead of being a substitute for war, it could easily become a prelude to war.

The Iranian regime is not likely to tamely accept U.S. actions directed against it. That is especially true if such actions include Washington’s apparent support for Sunni Muslims based in Pakistan who have already launched terrorist attacks against urban targets in Iran.

If Tehran retaliates by sponsoring new terrorist missions against American interests in the Middle East (as seems all too probable), there will be potent cries in the United States for military action against Iran.

Rather than go down the counterproductive and dangerous path of covert action, the United States should try exactly the opposite approach: engagement, leading to the normalization of diplomatic and economic relations with Iran. The Iranian leadership would likely be enticed by the carrot of normalized relations with Washington — and the considerable economic benefits that it would ensue. In the long run, though, normalization would undermine the power of the clerical regime. For authoritarian systems, engagement is a poisoned carrot.

Engagement would unleash insidious medium-and long-term economic and political trends. Ever since the Islamic revolution in 1979, Iran’s economy has been a chronic underachiever. A restored economic relationship with the United States would create a host of new trading and investment opportunities. That, in turn, would produce a rapidly growing middle class.

As we have seen in countries as diverse as South Korea, Chile, Mexico and Taiwan, the emergence of a large, prosperous middle class creates powerful domestic pressures for more open — ultimately, fully democratic — political systems. That process would likely occur in Iran as well. For millions of Iranians pursuing their economic dreams, the dour and restrictive mullahs would be an increasingly unacceptable obstacle. And there would be real centers of economic power to challenge the incumbent political elites.

Covert warfare would drive millions of moderate Iranians into the arms of the mullahs and increase the danger of an armed conflict between the United States and Iran. Engagement is almost certain to produce a better outcome, and it’s a better way to achieve our objectives.