Analysis by Trita Parsi*

WASHINGTON, Sep 21 2006 (IPS) — After a tense week with several U.S. allies breaking ranks with the George W. Bush administration on Iran, an agreement has been reached to give diplomacy a bit more time.

Realising the futility in pushing for sanctions against Iran in the Security Council with Russia, China and France objecting, Washington has made virtue out of necessity and agreed not to complicate the EU-Iranian dialogue.

Continued efforts by Washington to impose sanctions on Iran would have left the impression that the U.S. wanted the discussions between Javier Solana, high representative for the European Union’s Common Foreign and Security Policy, and Iran’s National Security Advisor Ali Larijani to fail.

By agreeing to stall action in the Council until early October, Washington has avoided that scenario while the Europeans have shown their ability to pressure the Bush administration to compromise, at least on the issue of deadlines.

Europe’s new-won resolve in pressing the Bush administration is rooted both in the realisation that the sanctions path leads to a lose-lose situation and a slippery slope to war, but also in the emergence of a higher profile for Italy and Spain within the EU’s internal deliberations. As two of Iran’s greatest trading partners in the EU, Italy and Spain enjoy warmer ties to Tehran and have consequently also more to lose from sanctions.

Italy in particular has been active in giving diplomacy a boost. Italian Prime Minister Romano Prodi, who is a strong proponent of dialogue, was the first EU head of government to meet with Iranian President Mahmoud Ahmadinejad at the U.N. this week. “It’s amazing in such a serious situation to see that many of the main protagonists of the matter have never talked to each other,” he told Reuters Wednesday.

Italy also participated in the meeting of the great powers discussing the October deadline, turning the P5+1 group (the five permanent members of the Security Council plus Germany) effectively into P5+2.

This manoeuvre puts the ball back into Iran’s court. Tehran had previously floated the idea of “freeze-for-freeze”, arguing that Iran would refrain from advancing its programme any further while the P5 nations would abstain from taking action in the Security Council.

The EU, in contrast, suggested a parallel track to reach an agreement on the specifics of a suspension of uranium enrichment. This track would be independent of any Security Council action, however, meaning that Europe could not guarantee that the U.S. would not push for U.N. sanctions while talks were proceeding.

By agreeing to halt Security Council action for another two weeks, a critical step has been taken to bridge the gap between the Iranian and European formulas and agree on the specifics of suspension, even though only limited time has been provided to do so.

Though the parties have taken a critical step towards finding a peaceful resolution to the nuclear stand-off, initiating negotiations in which both Iran and the U.S. are at the table is only the first phase of diplomacy.

The next and crucial phase is to – through negotiations – narrow the positions of the key states on the substance of the issue of enrichment, rather than on procedural matters. Here, again, a significant gap exists between the Russia, China and some EU states, on the one hand, and the U.S. and Britain on the other.

Increasingly, EU states are coming to terms with the idea that while depriving Iran of domestic enrichment capabilities may be desirable, it is simply not a politically feasible objective. More and more officials are concluding that a limited enrichment programme on Iranian soil – under the strictest inspections by the International Atomic Energy Agency – seems to be the best outcome the West realistically can pursue.

And time may not be working in the favour of the West. A few months from now, convincing Tehran to settle for a deal that grants Iran only a small-scale enrichment programme may become out of reach.

Washington, however, seems poised to oppose any compromise along these lines. While the Bush administration has shown flexibility on deadlines and procedural issues, it adamantly insists on maximalist objectives when it comes to substantive matters. Washington’s position continues to be that the only guarantee that Iran does not use its civilian uranium enrichment programme for military purposes is for Iran not to be permitted any enrichment on its own soil to begin with.

So while factions in Tehran debate how to respond to the new October deadline and the idea of suspending enrichment temporarily in order to permit negotiations to begin, a critical question the Iranians likely are asking themselves is whether the EU can deliver the U.S. on substance as well as on deadlines and procedural matters. Can the EU convince Washington to agree to solutions short of its zero-enrichment goal?

If neither the U.S. nor Iran show readiness to compromise on substantive issues, the negotiations will ultimately fail and make the triumph of starting them in the first place irrelevant.

*Dr. Trita Parsi is the author of “Treacherous Triangle – The Secret Dealings of Israel, Iran and the United States” (Yale University Press, 2007).