Iran: US options limited

This week, the IAEA publishes a highly controversial report into aspects of Iran's past nuclear activities.

The report comes amid rumours that IAEA staff are unhappy with top-level decisions to declare issues 'resolved' without what they see as adequate explanations from Tehran. 

Thereafter the UN Security Council is likely to vote on a third round of sanctions.  These have been considerably watered down to secure the support of Russia, China and other key UN members.  The draft merely requires states to 'exercise vigilance' over the activities of Iranian banks, especially Bank Melli and Bank Saderat.  Washington is pushing the EU to go beyond the draft resolution and ban the two banks from operating on its soil. 

Such US unofficial financial sanctions -- and pressure on other states to follow suit -- are having far more effect on the Iranian economy than the UN sanctions.  However, Tehran is likely to withstand even these.  With the recent NIE assessment rendering a military strike politically untenable, US options seem to be limited to engagement with Iran -- anathema to the Bush administration -- or kicking the issue into the long grass for the next president to deal with.  The fact that the next round of US-Iranian talks in Iraq may start this week does not of itself suggest any moves on the engagement front, despite the constant chatter on the subject.