The pretext is a protest at the Danish embassy in Iran over the Muhammad cartoons:

Meanwhile, the Iranian newspaper Hamshari is holding a Holocaust-mocking cartoon contest. Yes, thank you–another opportunity to show how the civilized world, unlike the contest organizers and participants, does not react by waving swords and placards endorsing decapitation and annihilation.

And: Iran halts trade with Denmark.

Melanie Phillips at Real Clear Politics points to Iran’s deeper agenda–as raised by David Conway at Civitas: Attempting to bully Denmark over the International Atomic Energy Agency’s decision to report Iran to the UN Security Council for continuing with its nuclear research program. The chairmanship of the council is passing to Denmark. Writes Conway:

Suddenly, the pieces fall into shape. The rumpus suddenly escalated, complete with fabricated offensive cartoons, to so enflame Muslim opinion that Denmark could be intimidated directly through a threatened Muslim boycott of its goods, or indirectly by the EU fearful of a wider boycott, into voting in favour of Iran…

The latest on the Iran/IAEA face-off:

Iran has begun restricting U.N. International Atomic Energy Agency inspections of its nuclear program and wants seals and surveillance cameras removed from key sites by midmonth, a confidential IAEA report said Monday.

The Iranian decision will drastically inhibit the most effective international mechanism for monitoring Iran’s work on uranium enrichment and ensuring that it’s used only for producing fuel for power plants and not for nuclear weapons.

Moreover, it will be much more difficult for the IAEA to answer crucial questions about the Iranian program, including whether it purchased a blueprint for a nuclear warhead from a Pakistani-led black-market smuggling ring.

“This is Iran escalating,” said David Albright, a former IAEA inspector who directs the Institute for Science and International Security, an independent research center that closely tracks the Iranian nuclear program.

The decision by Iran, the world’s fourth-largest petroleum producer, wasn’t unexpected, but it still sent international oil prices higher, before they settled back to more than $65 a barrel.

It came two days after the 35-member IAEA board of governors overwhelmingly voted to report Iran to the U.N. Security Council for failing for three years to disclose all aspects of its nuclear program to agency inspectors.

The Security Council can impose economic and political sanctions, but it won’t consider what action to take until next month, providing an opportunity for Iran to reach a diplomatic resolution.