TEHRAN (Reuters) – Iran wants to send a message to the new U.S. administration and Arab governments that it is a power to be reckoned with in the region by championing the cause of its Palestinian ally, Hamas, in its fight with Israel.

President Mahmoud Ahmadinejad, expected to seek re-election in June, may also have found a cause to muzzle criticism of his economic management and tumbling oil revenues, analysts say.

But Tehran’s outspoken support for Hamas and criticism of the response by some Arab states could backfire if it wins over the Arab public but, in doing so, pushes wary Arab governments closer toward the United States in its dispute with Iran.

Washington accuses Tehran of seeking a nuclear bomb, which Iran denies. The row is likely to be near the top of President-elect Barack Obama’s foreign policy in-tray, though Gaza may now trump it bringing another benefit to Iran from the crisis.

“The message from the Iranians (to Washington) is there is give and take. We can help you in Afghanistan, we can help you in Iraq, we can help you with Lebanon and Palestine, if you have good relations with us,” said Iranian analyst Baqer Moin.

“We are a regional power and you have to acknowledge that and talk to us on that level if you want us to be cooperative on issues where you need us,” the London-based analyst said.

Gaza’s plight — more than 560 Palestinians have been killed in the Israeli attacks — has drawn sympathy from Iranians frustrated like many other Muslims at what they see as a limited international response to end fighting.

But hardliners have been most vocal backing the Palestinian cause, a pillar of the Islamic Republic since the revolution and a way Iran has fashioned itself a leader of the Muslim world although it is mainly Shi’ite and most Muslims are Sunni.

INFLUENCE

Israel accuses Iran of stoking the violence by supplying arms to Hamas. Tehran, which does not recognize Israel, says it gives moral and financial support to the group that has been isolated by much of the Arab world and international community.

Analysts say it is not clear whether Iran encouraged Hamas not to renew its truce with Israel in December or pushed it to fire the rockets that Israel says it is trying to stop.

But, whatever Iran’s role, the violence has set back peace moves between Israel and the Palestinian Authority and Syria — initiatives, analysts say, Iran fears may undermine its allies.

“They feel the way to maintain influence in this region is by having a strong Hezbollah and strong Hamas,” said one Western diplomat, adding that if either Hamas’s or Hezbollah’s conflict with Israel were resolved “it would be a strategic catastrophe (for Iran).”

Iranian officials compare the battle Hamas is waging to Hezbollah’s resistance to Israeli attacks in 2006. Iran claimed victory after the Lebanese group emerged battered but in tact.

Moin said the conflict in 2006 “must have encouraged Iranians that if Hamas stay put … they are not going to lose.”

Iran’s top authority, Supreme Leader Ayatollah Ali Khamenei, who wears a Palestinian scarf, has criticized some Arabs for not doing enough and urged Muslims to do what they can to help.

Hardline Iranians have demonstrated outside the Jordanian and Egyptian missions. Both have peace treaties with Israel.

‘RISKY GAME’

But criticizing Arab governments carries risks. Tehran may win over an Arab public frustrated at their own governments, but it may make Arab leaders even more wary of Tehran.

“They wanted to use this (cause) to prevent any Shi’ite- Sunni rift in the region, and to put some pressure on Sunni governments not to be too antagonistic to Iran. You could argue that the result is the complete opposite,” said the diplomat.

An Iranian analyst said: “It is a very risky game. Arab governments would realize they have to take Iran very seriously but at the same time it could push them toward the United States if they gradually … lose support of their own people.”

The Gaza crisis has offered a diversion for Ahmadinejad whose government is likely to have to cut spending in this presidential election year after oil prices fell from $147 a barrel in July to below $50, slashing Iran’s main source of revenue.

“You see how radicals and Ahmadinejad are using this to divert attention from the economic situation to prevent critics from opposing the government,” said the diplomat.

Tehran University professor Hamidreza Jalaiepour said Israel’s actions were playing into the hands of hardliners in Iran and the region, pushing moderates “to the margins.”

But he said falling oil earnings could, in the longer run, push Iran to moderate its foreign policy because it will have less cash to splash out on its favored regional causes.

“Reducing revenues of a state would certainly influence foreign policy, especially those countries that have policies … based on slogans and populism,” Jalaiepour said.