The nuclear negotiations between Iran and the West have had their share of dashed expectations, but even by this peculiar standard, the recent diplomatic roller coaster stands out. Brimming with hope in Istanbul, negotiators crashed to earth in Baghdad, a few weeks later. That was not unexpected, given inflated hopes, mismatched expectations and – most hurtful – conviction on both sides that they had the upper hand. But if negotiations collapse now, it is hard to know what comes next. Washington and Brussels seem to count on sanctions taking their toll and forcing Iran to compromise. Tehran appears to bank on a re-elected President Obama displaying more flexibility and an economically incapacitated Europe baulking at sanctions that could boomerang. Neither is likely; instead, with prospects for a deal fading, Israeli pressure for a military option may intensify. Rather than more brinkmanship, Iran and the P5+1 (UN Security Council permanent members and Germany) should agree on intensive, continuous, technical-level negotiations to achieve a limited agreement on Iran’s 20 per cent enrichment.

The optimism that greeted the Istanbul talks largely was illusory. Success was measured against a remarkably negative starting point – the absence of talks for the preceding fifteen months and a series of escalatory steps by all sides in the interim. The discussions themselves were largely devoid of polemics, but they also were largely devoid of substance. All were on their best behaviour because, tactically, all shared a common goal: to gain time and avoid a crisis that could lead to an Israeli military strike, risk further instability in the region, send oil prices soaring and thus complicate both Europe’s recovery and Obama’s re-election.

The problem is that the West and Iran interpreted the positive atmosphere differently. Officials from Europe and the U.S. were persuaded that Tehran’s agreement to come to the table and its non-belligerency once there stemmed principally from two realities: the devastating impact of sanctions that already have been imposed on the Iranian economy and the even more devastating impact of those that are soon to come on the one hand; and Israeli military threats on the other. The Islamic Republic also felt that it was in the driver’s seat, having strengthened its position over the preceding year by increasing its stockpile of low-enriched uranium, enriching at higher levels and completing its work on the underground nuclear facility at Fordow. With both feeling relatively strong, neither was in a mood to give in.

The two sides’ intensive efforts to increase their leverage had another paradoxical effect. The U.S. and European Union (EU) built a remarkable – and, not long ago, unthinkable – coalition of countries willing to punish Iran by hitting where it hurts most, the oil sector. To agree to any sanctions relief is made all the more difficult by the considerable effort and political capital invested in achieving them and by the knowledge that the first sign of rollback could prompt a far more comprehensive unravelling of the sanctions regime. In like manner, Iran paid a huge price for its decision to enrich at 20 per cent and forge ahead at Fordow – becoming the target of unprecedented economic penalties and losing vast amounts of money. Any retreat on these matters would have to be accompanied by momentous Western concessions lest the entire enterprise appear to be what many suspect it to be: a political and economic folly. The ironic end result is this: having accumulated precious assets that bolstered their hand in negotiations, both parties are now loathe to use the leverage they sacrificed so much to acquire.

Many predict that the current diplomatic process soon will come to a halt, with the expectation it will resume in the future. But time could be short. If negotiations collapse, precedent teaches that reciprocal escalatory steps are likely and that the hiatus will last longer than anticipated. Meanwhile, Israel – together with some influential U.S. politicians – will look at the clock ticking and Iran continuing to bolster its stockpile of enriched uranium. The clock metaphor is false – Iran is years away from acquiring a bomb, and the U.S. and Israel will have ample means, Fordow notwithstanding, to halt its nuclear program if they so choose – and one of the most damaging political images in recent history. But no matter. Senior Israeli officials believe it, and if they are persuaded that Iran is playing for time and Western nations are too spineless to do anything about it, they might act or convince Washington to act. The period until the U.S. November election is arguably the most perilous of all.

All this argues for a change in thinking. The Moscow meeting on 18 June should be used an opportunity to do just that. To begin:

• instead of periodic, one- or two-day high-level, higher-stakes meetings, Iran and the P5+1 should agree on uninterrupted talks at a somewhat lower level for several months;
   
• moreover, both sides need to drop some of their demands: there will not be significant sanctions relief at this stage, and it is equally unlikely that Iran will shut down Fordow – the only installation it possesses that could resist an Israeli strike.

Instead:

• Iran should be prepared to put on the table items that would seriously and realistically address the P5+1’s proliferation concerns: suspending its enrichment at 20 per cent; converting its entire stockpile of 20 per cent uranium hexafluoride into uranium dioxide pellets to be used for nuclear fuel fabrication; and freezing the installation of new centrifuges at Fordow, while agreeing to use the facility for research and development purposes alone and accepting more intrusive monitoring;
   
• the P5+1 should be willing to put on the table items that genuinely address Iranian concerns: accepting up-front the principle that Iran can enrich on its soil subject, until Tehran clarifies matters with the IAEA, to limitations on the level of purity and number of facilities; investing in a new research reactor and cutting-edge technologies related to renewable energies in Iran; and extending some form of sanctions relief, including one or more of the following: refraining from additional sanctions, postponing for a specified period entry into force of (or, if already in force, suspending) the EU oil embargo and/or ban on insurance for ship owners transporting Iranian oil; and easing pressure on Iran’s remaining oil customers.

The talks could well fail, and then the goal will be to avert all kinds of destructive steps, including military confrontation, the most destructive of all. But, before reaching that phase, there is much work to do to see if a deal can be reached and if what little optimism is left over from Istanbul can still be salvaged.

Washington/Vienna/Brussels, 15 June 2012