A nuclear offer Iran can't refuse?

Once again, the United States and its allies are readying an offer to Iran that supports the peaceful use of nuclear materials but denies Tehran the ability to build a nuclear bomb. The international community went through this a year ago and failed. Will this time prove any different?

Last October, the five permanent members of the United Nations Security Council, plus Germany, offered a fuel-swap deal that would allow Iran to send low-enriched uranium to other countries in return for more enriched nuclear fuel. The returned, upgraded fuel would serve medical research, but would not be able to be enriched for a weapon.

A tentative agreement was reached, but ultimately rejected by the country’s supreme leader, Ayatollah Ali Khamenei. This year’s offer, according to media reports, would require more uranium to be sent out of the country for processing because Iran has, in the meantime, produced more of it.

The potential game changer since last fall is a new round of sanctions against Iran that was approved by the UN Security Council in June. The sanctions, which targeted Iran’s military and nuclear programs, are starting to bite.

The United States, the European Union, Canada, Australia, and Japan added teeth to the sanctions by going after Iran’s energy sector. And the US Congress went a step further by making it much harder for foreign companies doing certain business with Iran to also do business with the US.

As a result, many international corporations have cut their ties with Iran, including Toyota, Daimler, Lloyds, and Allianz. Major fuel suppliers, such as Total, are cutting back shipments to Iran. Despite being an oil exporter, Iran lacks the refining capacity to meet its own needs. Now it’s having to divert fuel production to cover domestic demand. But that will be hard to sustain, because international investors in Iran’s oil and gas sector are pulling out.

Earlier this month, Iran’s currency, the rial, suddenly dropped. The central bank had to intervene. The country is having a hard time selling its currency abroad and gaining hard currency from its traditional suppliers.

US and European officials believe the sanctions are motivating Iran to come back to the negotiating table, possibly in November. The international vise on the regime is squeezing an already troubled economy burdened by inflation and severe unemployment. Tehran is being forced to cut back popular – but expensive – subsidies that help its citizens afford food and fuel.

But the last year has also seen change in Iran that doesn’t necessarily bode well for talks or a deal. The regime tightened the screws even further on moderates in its ranks and on the opposition “Green” movement, which staged massive protests against rigged elections in the summer of 2009.

Iran’s rulers haven’t been this hard-line since the 1980s. And the harder the line, the more one might expect Iran’s theocrats to react to this year’s sanctions like, say, the rulers of North Korea or Burma – that is, to be impervious to them. Remember that in the Iran-Iraq war of the 1980s, the regime sustained a far more serious blow than sanctions in terms of about 1 million lives lost.

It’s impossible to know how the differences of a year will play out in a new round of negotiations, if that comes about. But one thing for sure will be required of the international community: Its coalition must hang together if it is to have any hope of changing Iranian behavior before it develops a nuclear-weapons capability or Israel tries a military strike on Iran’s facilities.