02/22/2012 05:27 pm ET Updated Apr 23, 2012

The Iran Diplomacy Puzzle

Iran has expressed willingness to resume talks over its nuclear program, but blocked access to a military site suspected of hosting covert nuclear weapon research for visiting inspectors from the UN nuclear agency, the IAEA, this week. The two sides also failed to reach any agreement on unresolved issues related to Iran's nuclear program, the IAEA said. These gestures follow developments that have deepened the standoff between Tehran and the West: claims of nuclear advances; fresh threats of economic retaliation; and allegations by Israel that recent bombings in New Delhi, Tbilisi, and Bangkok were part of Iran's plot to target Israeli diplomats. Iran denies any involvement in the bombings.

What's at Stake

Concerns over Iran's nuclear program have peaked since a November 2011 IAEA report warned of its possible military dimensions and Iran made a decision to enrich uranium up to 20 percent levels, bringing it closer to weapons-grade uranium. Iran repeatedly claims its nuclear activities are for peaceful purposes. The United States, the EU, and other countries such as Canada have ratcheted up economic sanctions to target Iran's oil sector, the regime's largest source of revenue. Washington hopes this will bring Iran back to the negotiation table.

A failure to reach a diplomatic solution carries huge costs: The United States has said a nuclear Iran is "unacceptable" and has left military options on the table; a military strike on Iran's nuclear facilities by Israel remains a real threat; and tensions between Iran and the West continue to rise in what some have called a "shadow war" or an "economic war."

The Debate

Sanctions are hurting the Iranian economy, which is struggling with inflation and a downward spiraling rial. Some analysts say Iran's escalating rhetoric and the attacks attributed to it are desperate moves by a regime feeling squeezed by tightening economic sanctions.

A significant part of the Iranian public "blames government actions for incurring sanctions that hurt the economy," says Patrick Clawson of the Washington Institute for Near East Policy. A new Gallup poll surveying 1,000 Iranians found nearly two-thirds of the responders believed recent sanctions will hurt their livelihoods. And this, some analysts say, is why Iran is ready to talk.

But some Western policymakers worry that Iran's latest move to negotiate may be an attempt to buy time as it forges ahead with its nuclear ambitions. Internal political divisions in Iran, in particular between President Mahmoud Ahmadinejad and Supreme Leader Ayatollah Ali Khamenei, also make any talks tricky. It is unclear if Khamenei, who holds the final word, is ready to make a deal. Former U.S. diplomats William H. Luers and Thomas R. Pickering write that Khamenei "is convinced that the United States will not work with Iran until his regime is gone," and therefore, Washington must convey, both through messages and actions, that covert action against Iran has been halted to give diplomacy a chance.

Policy Options

Even as many analysts argue that "a negotiated solution remains the best way to resolve the nuclear crisis with Iran," what this would involve remains uncertain. Tehran would likely seek an easing of sanctions and a right to continue uranium enrichment. But views among the major powers in the P5+1 group -- permanent members of the UN Security Council, plus Germany -- onnegotiating with Tehran are divided.

France says Iran can't maintain any enrichment capability, even though as a member of the Nuclear Nonproliferation Treaty, Tehran is allowed to enrich under IAEA safeguards. Russia favors a step-by-step approach in which sanctions would be eased in return for verifiable steps by Tehran to limit its nuclear program. U.S. and Russian officials have held meetings on the plan, but the latest U.S. position on it is unknown.

Background Materials

A group of scholars on international relations and security studies answer this question posed by CFR's Micah Zenko: How would nuclear weapons affect Iranian foreign policy?

How do Iranian internal politics work and what is the scope of the country's nuclear program? This interactive CFR Crisis Guide explores these and other questions and possible policy responses.

This article first appeared on