The 24 November IAEA meeting in Vienna did not refer Iran's case to the Security Council. But, the US has not ruled out military action against Iran. The lack of unanimity in referring Iran to the Security Council has highlighted that it is the US, along with Israel, which is obsessed with the Iranian nuclear programme.

Russia and China have the veto in the UN Security Council and can stop any resolution being adopted against Iran. In fact, China has invested millions of dollars in Iran to safeguard its energy security. Iran has reportedly bought 29 mobile air defence systems from Moscow in a deal worth more than $700 million. Hence, the US is planning sanctions outside the ambit of the Security Council to scuttle Iran's trade with the European Union and Japan, Iran's major trading partners.

Iran says a planned meeting later this month with Britain, France and Germany would be crucial for negotiations on the crisis. The European Union should offer Iran greater incentives to give up its nuclear ambitions. What must Iran do to assure the international community about its nuclear weapons programme? What is the role of the IAEA vis-?-vis Iran? And what must the US do to make the region more stable?

Mohamed ElBaradei, head of the International Atomic Energy Agency (IAEA), urged the Americans to place US security assurances on the table with Iran as they had done in negotiations with North Korea. US security guarantees are crucial for Iran with American troops operating in two of its neighbours - Iraq and Afghanistan. Iran feels encircled by the American presence. The case against Iran's regime is hard to dismiss because it claims that its uranium-enrichment program is meant for producing electricity. The question is whether the program will be modified to prevent the making of bombs. Under the NPT, a country is allowed to enrich uranium to make fuel for nuclear power generation. Most countries get their fuel from a few suppliers under strict regulations. The key problem is that the same technology can be used to enrich uranium further to make nuclear weapons. There are fears that Iran might do this, either in secret or by developing the technology under safeguards and then withdrawing from the treaty to make bombs openly.

The US has said publicly that it will not permit Iran to develop nuclear weapons. President Bush has said that he wants diplomacy to resolve this problem, but that nothing is ruled out. There are fears of a military crisis. The Israeli perceptions regarding the Iranian nuclear programme also matters alongside US concerns. Israel has been threatened by inflammatory speeches made by the Iranian president, Mahmoud Ahmadinejad, calling for its destruction. Israel has not ruled out an attack on Iran. Given Israel's geopolitical location and its small size the threats posed are understandable. American officials have also assured the Israelis that the US will not give Iran any security guarantees in return for cooperation on the nuclear issue and that the US believes it is essential to keep the pressure on Iran until it provides full compliance with the demands of the international community. There are press reports that Israel, which bombed an Iraqi reactor in 1981, has begun planning a similar operation. Like the US, however, Israel says diplomacy has priority.

Washington fears that the potential for a nuclear breakout among other West Asian states would increase if Iran acquires a nuclear capability, which will add to the risks of such technologies reaching terrorists and thus creating a proliferation nightmare and making the region more volatile. Tehran's rapid progress on its ballistic missile programme is a major cause of concern now for the US, which has its bases in the Persian Gulf and Central Asia.

But, Iran fears continued isolation from the US and the international community. Iran's nuclear programme has been conditioned by a narrower but more pronounced set of threats. Historically, the need to negate the American and Iraqi threats has been Iran's primary motive after the Iran-Iraq war. Nuclear weapons for Iran are a weapon of deterrence, not one of power projection. Consequently, political observers warn that Iran is next on the US list of direct targets, which enhances the strategic utility of nuclear weapons to Iran and validates its claim that the Islamic Republic requires this capability to ensure both regime survival and territorial integrity.