Diplomacy has failed, it is argued, so it is now time to get tough with Iran. But has diplomacy really been tested? Whether or not the Iranian nuclear crisis is referred to the United Nations Security Council, the best way to stop Iran from developing nuclear weapons is to pursue revived negotiations with a broadened agenda that addresses security issues - not to impose economic sanctions.

The nuclear negotiations between Iran and the European Union were based on a bargain that the EU, held back by the US, has failed to honour. Iran agreed to suspend its uranium enrichment efforts temporarily pending the outcome of discussions on a permanent enrichment ban. The EU promised to put forward proposals for economic incentives and security guarantees in return for a permanent ban but subsequently refused to discuss security issues.

The language of the joint declaration that launched the negotiations on November 14 2004, was unambiguous. "A mutually acceptable agreement," it said, would not only provide "objective guarantees" that Iran's nuclear programme is "exclusively for peaceful purposes" but would "equally provide firm commitments on security issues".

Working groups on political and security issues were to report back in three months. But the US has proved unwilling to co-operate with the EU in formulating concessions to Tehran relating to its security concerns.

In the impasse since 2004, Iran has elected a demagogic president, Mahmoud Ahmadi-Nejad, and it may be too late for productive negotiations. Before abandoning dialogue and seeking UN sanctions, however, the US and EU should signal readiness to reactivate the working groups on political and security issues in a last-ditch effort to dissuade Tehran from starting actual enrichment operations. If the EU is unwilling to resume negotiations, Kofi Annan, UN secretary-general should convene new negotiations under UN auspices or should appoint a special representative to mediate between Iran, the EU and the US.

Iran's principal concern is the possibility that the US, egged on by Israel, will sooner or later pursue a policy of "regime change" in Tehran, starting with covert support for disaffected ethnic and religious minorities such as the Khuzestani Arabs, the Baluch and the Azeris. Meaningful security guarantees in return for an enrichment ban would have to affirm respect for Iran's territorial integrity and rule out pre-emptive military action. The US would have to join directly in such assurances.

Not surprisingly, Iran fears growing US military encirclement, focusing on reported US plans for permanent military bases in Iraq, Afghanistan and Central Asia in addition to existing military installations in the Middle East and Persian Gulf. Some 18,000 US troops are already in Afghanistan and a projected new Afghan base in Herat would be big enough to house another 10,000 troops. The US has also been pressing Pakistan for the use of a Pakistani air base at Khuzdar in Baluchistan, just over Iran's eastern border.

In addition to security guarantees, linked to an enrichment ban, the negotiations should seek to establish a regional security framework embracing Iran. But defining the scope of such a framework would not be easy. When Iran first proposed negotiations in September 2004, it called for discussions on "security in the region including the Persian Gulf, Central Asia and the Middle East". A more realistic approach would be to start with a transformation of the existing six-nation Gulf Co-operation Council from an organisation designed to contain Iran to one that pursues confidence-building, arms control and economic co-operation measures with Iran.

Russia, China and India would be likely to support a revived and broadened diplomatic initiative, but are likely to resist the application of potent sanctions, such as an oil embargo, in order to protect their economic and political interests in Iran.
Beyond the present crisis, it is clear that the central problem facing the global non-proliferation regime lies in the failure of the original nuclear powers that signed the Nuclear Non-Proliferation Treaty to live up to Article Six, in which they pledged to phase out their own nuclear weapons. Until the US, Russia, Britain, France and China take the lead in pursuing global nuclear arms reductions that embrace all the existing nuclear weapons states, would-be nuclear powers such as Iran will feel entitled to join the nuclear club.