Executive Summary

The ongoing promotion of coercive diplomacy, based on a "carrots and sticks" framework, and the continuing threats of military action against Iran - "all options remain on the table" -- have failed to achieve their stated objectives, which is to change Iran's behavior in areas such as uranium enrichment, support for "terrorism," opposition to Middle East peace and human rights violation. These policy approaches are based on false assumptions about Iran, an incomplete understanding of the Islamic Republic, and a problematic definition of issues standing between the two governments. They also fail to realize that, as long as Washington remains hostile to Tehran, the best option of the Islamic Republic in relations to the U.S. is to maintain the prevailing "neither-peace nor-war" status quo.

More importantly, these approaches, official and proposed, fail to map out a U.S.-Iran relationship that the United States should want to emerge at the end of successful negotiations over these problem areas. Will the U.S. be satisfied with an Iran that has changed its "behavior" in all these "problem" areas to the U.S. satisfaction but has at the same time forged a strategic alliance with American future rivals for global and regional leadership, such as Russia or China? Does Iran have a strategic value for the U.S. as one of the largest and oldest nations in the region, and one that sits in the middle of the world's most energy-rich regions, namely, the Caspian Sea and the Persian Gulf? Does Iran have any strategic value for the U.S. as a nation of talents and culture, a regional magnet, a major oil producer, and a large market?