[204] Subsequent executive orders heavily sanctioned Iran's oil industry and banned almost all trade between U.S. companies and the Iranian government. In February 1996, the Clinton administration agreed to pay Iran US$131.8 million (equivalent to $227.72 million in 2021) in settlement to discontinue a case brought by Iran in 1989 against the U.S. in the International Court of Justice after the shooting down of Iran Air Flight 655 by the U.S. Navy guided missile cruiser.[205] Following the 1997 election of reformist president Mohammad Khatami, the administration eased sanctions.

Iraq
In Clinton's 1998 State of the Union Address, he warned Congress that Iraqi dictator Saddam Hussein was building an arsenal of chemical, biological and nuclear weapons.[206]
Clinton signed the Iraq Liberation Act of 1998 on October 31, 1998, which instituted a policy of "regime change" against Iraq, though it explicitly stated it did not provide for direct intervention on the part of American military forces.[207][208] The administration then launched a four-day bombing campaign named Operation Desert Fox, lasting from December 16 to 19, 1998. 