A couple of excerpts:
Since 1991, the United States has replaced Iraq as threat number one for Iran. The Iranian military's reference threat scenario is a massive U.S. military action against Iran, aided by U.S. allies in the region including the Gulf States and Israel, which they see as an outpost of the United States.
The Iranians are realists. They don't aim to win a set piece battle against the United States. They know it's impossible. Their policy is to deter the United States and its allies by threatening a war that will cause such damage at such a price that this option will become unacceptable to the United States. With this perspective, they are not focusing their efforts on renovating their quite large armed forces. Rather, they are investing very smartly in deterrence enhancers and force multipliers. Replacing obsolete equipment has secondary priority.
In 2006, the Iranian political leadership seems to have moved beyond the needs of self-defense and is now talking about global power projection. At a recent conference in Berlin, one of the deputies to Iran's foreign minister called upon the world to recognize that Islam comprises 25 percent of humanity and should occupy its rightful place in decision-making in world affairs and in the allocation of the world's resources. Statements like this are not about self-defense.
Mahmoud Ahmadinejad has stated that Islam should roll back 300 years of Western ascendancy. He was speaking in the name of Islam, not in the name of Iran. At the same time, there is talk about the greatness of Iran, with its 6,000-year-old civilization. The Iranians are trying to retrieve the old glory of the empire and at the same time become the leaders of world Islam. The development of long-range missiles is a key element in building up Iran's power to assume such a leadership position.