Iran was defeated by Iraq in a brutal eight-year war that ended in July 1988. Thirty months later Iraq was defeated by the United States and its allies in Operation Desert Storm. Iran's military leaders have carefully examined the reasons for their defeat and the allies' victory. The country has now embarked on a major rearmament program that has alarmed it neighbors and caused great concern in Washington. Shahram Chubin analyzes Iran's rearmament program and its strategic implications for the region.