Warships from the much more powerful Gulf Cooperation Council faced down the Iranian vessels after Bahraini officials rejected the solidarity cruise as unwarranted interference in their country's internal affairs.
When demonstrations began in what has come to be called the Arab Spring, Iran exulted and claimed the movements were inspired by its own 1979 Islamic Revolution. Tehran saw the toppling of pro-U.S. autocrats in Tunisia and Egypt as a clear gain for its anti-U.S., anti-Israel resistance front.
But NATO intervention in Libya and the spread of demonstrations to Iran's ally, Syria, have challenged that narrative. Even analysts in Tehran are questioning their government's external performance at a time when internal political infighting is also undermining the regime.
The Iranian newspaper Mardom Salari editorialised May 17 that Iran has failed to take full advantage of a "golden opportunity to spread its relations and influence.
"Tehran's approach has not been as expected. Tehran chose to remain silent over the Libyan catastrophe and the revolutionaries instead opted for help from the West. The same is gradually happening in Syria, too. The failure to deal appropriately with the unrest in the country, which was magnified by Western media, is shrinking the ground for [Syrian President] Bashar al-Assad. Can Iran not play a more effective role in Syria? An opportunity is a chance which, if lost, can become a threat."
A conservative Iranian newspaper, Mellat-e Ma, suggested that "Iran could have played a better role in Middle Eastern events. Unfortunately our foreign diplomacy is confused in the midst of the events in the region. The orchestra of Iranian foreign diplomacy is playing the wrong notes. For instance, instead of playing a more effective role, we invited Jordan's king" – a recent invitation by President Mahmoud Ahmadinejad that was subsequently rescinded after it created an uproar in Tehran.
U.S. officials say Iran has sought to take advantage of recent unrest in Bahrain by deploying Iraqi and Lebanese Hezbollah intelligence assets there, although the protests began without Iranian involvement.
Taking the opposite tack in Syria, Iran has intervened on the government's behalf, sending crowd control weapons and sharing expertise developed in crushing its own popular opposition movement following disputed 2009 presidential elections.
That crackdown tarnished the Iran model and was cited by Obama on Thursday. Accusing Iran of "hypocrisy", he said the Iranian government says it stands "for the rights of protesters abroad, yet represses its own people at home".
Obama also sought to counter accusations of U.S. hypocrisy by urging Yemeni President Ali Abdullah Saleh to transfer power and criticising Bahrain for repressing popular unrest.
"We have insisted both publicly and privately that mass arrests and brute force are at odds with the universal rights of Bahrain's citizens," Obama said. "The only way forward is for the government and opposition to engage in a dialogue, and you can't have a real dialogue when parts of the peaceful opposition are in jail."
In a new report on Iran published Thursday by the Center for a New American Security, a Washington think tank, Marc Lynch, a Middle East expert at George Washington University scholar, wrote that "the changes sweeping the Arab world pose more challenges than opportunities to Tehran, undermining its appeal to empowered Arab publics and highlighting the costs of its own growing domestic repression."
According to Lynch, Iranian regional influence peaked in the middle of the last decade under the George W. Bush administration, when U.S. forces toppled Iran's chief rivals in Iraq and Afghanistan.
A more democratic Middle East, Lynch suggested, would be less vulnerable to Iranian influence.
"Arab regimes fear Iran not because they fear invasion, but because of Iran's political appeal to elements of their own populations, which could challenge their grip on power at home," Lynch wrote.
In fact, both the United States and Iran have lost influence in the Arab world as a result of the recent upheavals, which are creating homegrown models for democratic change. Obama's speech Thursday was an attempt to identify with those movements, but initial popular Arab reaction to the speech was lukewarm at best.
There has been some concern in Israel and the United States that Egypt, after Hosni Mubarak's fall, will no longer be a reliable ally. Already, Egypt's interim post-Mubarak government has brokered a unity deal between Fatah and Hamas, which rejects Israel's right to exist.
Egyptian officials have also suggested that they are ready to restore formal diplomatic ties with Iran. That would increase Egypt's stature as a power broker in the region but may not amount to much of a victory for Iran.
Ellen Laipson, head of the Stimson Center, a Washington think tank, wrote Thursday on the iranprimer.com that "Iran may well make some advances in formal state-to-state relations, but true alliances with major Sunni Arab states are not likely."
For the foreseeable future, Egypt will maintain its 1979 peace treaty with Israel to avoid jeopardising its relations with the United States – the source of two billion dollars in annual aid and, if Obama's pledges Thursday are implemented, two billion dollars more in loans and debt relief.