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MUTUALDlSTRUST; SDMETIMESITSEE~~THA ~\~FLltT IS NATURAL TDTHEAMERICAN-IRANIAN RELATlDNSHIP

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.ft.~ 1 ~V fa -offWlthAmenca 16 Hugo, scarytogether 33 C.lIIA;Why China booms BUSINESS: Backward German

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~:::;""-~ven without mIe oflaw 26 banks facea big bang 34 . ,., INDONESIA: The president is a TECH: Phone makers

wishy-washysurprise 30 seekname designers,

. desperately 40

CULTURE: The evolution of American boomer humor 42 ARTS:Japan's new art center institutionalizes the fleeting 50

J udging from the headlines, Iran and the United States are trending toward war. A second US. Navy aircraft carrier is steaming toward the region, and Iranhas beentesting missiles in the Persian Gulf. But a NEWSWEEK investigation fmds a history of secret dealings with Iran, in recent years, that may Jet oirer

hope for détente. Page 16

GaVER: Photomontageby NEWSWEEK. Photographby MohammadBerno-DOCUMENT IRAN-ATLAS PRESS (Ahmadinejad), Photographby CharlesOmmanney-GETTY IMAGES FOR NEWSWEEK (Bush).

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DEPARTMENTS

PERISCOPE 4

PERSPECTIVES 5

WORLDVIEW 15

THEGOODLlFE 55

THELASTWORD 58

Vol. i::xux, No. 8. February 19, 2007@2007 by NEWSWEEK,Inc., 251 West 57th Street, New York, NY 10019. Printed by RotoSmeets, Weert, Netherlands. Ali rights reserved. Registered at thePost Officeas a newspaper.Copyright under the International Copyright Convention. Copyright reserved under the Pan American Convention. Registered in the Philippines Patent Office. ln the U.S.A.:

Postmaster:

send address

changes

la NEWSWEEKINTERNATiONAL,251

West57th Street, NewYork,NY10019; periodicalpostagepaidat NewYork,N.Y.,andat additionalmailingoffices.NEWSWEEK INTERNATIONALiswritten andedited fora

worldwideaudience and ispublished weekly,except occasionallytwo issues are combined into one expanded issuewhich counts as Iwo subscription copies, in the U.K. byNEWSWEEK,Inc. (JSSN0163-7053). To or- der reprints (minimum orderrequired:500copies) orrequest permissiontarepublish a NEWSWEEKarticle pleasecali 1-212-445-4870 or fax 1-212-445-5764. Dir.Resp.ltalia Marco Provasi; rappr.IMD sri, via G.

daVelate 11-20162 Milano;aut.Trib.MIN.453dei12/06/87 sped.Abb.Post.

45% art. 2 comma

20/b Legge23/12/96n. 662 Milano;Repr.pourla France:E.M.D.France S. A.,B.P.1029-59011 LilleCedex-

Tel 03.20.30.03.02. Le Directeur de la Publication: Alan F.Bone-C.P.P.A.P.No. 0708 C 83393. Ce numéro comprend un encart de deuxpages (abonnement) situé entre lesfolios2 et 55. Editeur responsable pour la Belgique:Freddy Degroux, Youth &. MediaUnk, De Witteslraat2, B-2600 Berchem.

NEWSWEEK FEBRUARY 19, 2007 3

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