On August 11, Iran intensified the nuclear crisis when it rejected an EU package of proposals, restarting uranium conversion and enrichment, and snubbing the latest resolution by the International Atomic Energy Agency (IAEA) board that insists the Middle Eastern nation halt all uranium conversion.

Teheran has been taking a tough stance, but it will not go too far. Negotiation is still the only option.

The crisis has been an outlet for Teheran's discontent. First the EU did not submit the proposals on time. Last November Iran suspended all nuclear activities, following an IAEA resolution, and began talks with three EU members that had lasted several months.

According to an agreement reached in Paris, the EU was due to submit a document in July or early August.

The unexpected defeat of former president Akbar Hashemi Rafsanjani in Iran's recent election caught the EU by surprise. Under pressure from Teheran, Brussels submitted a formal document on August 5. But Teheran was not satisfied. It saw the delay as deliberate and disrespectful.

The EU proposal has shattered Teheran's nuclear dream. It acknowledges Iran's right to nuclear energy for peaceful applications and promises security with a view to improving political and economic cooperation.

But the proposal is clear in its restrictions in terms of developing and producing nuclear fuel, stating that all fuel to be used at future civilian nuclear facilities must be supplied by other countries.

Freedom to develop nuclear fuel is a point Teheran will not give up in the negotiations.

But Iran has so far not violated IAEA rules and the international community has no evidence to prove otherwise. This gives Teheran the justification to stand up and protest.

Of course the US and the EU do not want an escalation of the crisis. The US has been taking a softer approach, with President George W. Bush refraining from using strong language and openly supporting EU negotiation with Iran. For one thing, the US cannot extract itself from Iraq, even as the new constitution of that country is due, with a referendum and national election to come.

The Taliban in Afghanistan and Saddam regime in Iraq, which the US has removed, were enemies of Iran. Democracy in Iraq, which the US is trying to install, put the Shiites in power, strengthening Shiite-dominated Iran.

Iraqi Prime Minister Ibrahim Al-Ja'fari led a large delegation on a visit to Iran in July, making the US uneasy. Who would have thought the Americans needed the cooperation of Iran to deal with the situations in Afghanistan and Iraq, and maintain long-term stability in the region?

Any sanctions or military action against Iran would not be welcomed. Teheran has cleverly played the oil card, pulling all of the big powers, save Washington, into its oil and gas market. Iran is also in control of the Strait of Hormuz in the Persian Gulf, with the military power to cut off the oil supply. With this kind of power and oil prices rising on the international market, no one wants to see chaos in Iran.

The EU has less incentive to change its policies. Since the September 11 terrorist acts and especially the war in Iraq, as a result of US unilateralism, the rift across the Atlantic Ocean has grown wider.

Clearly it is the EU that has taken the initiative in an attempt to resolve the Iranian nuclear crisis, which is a testament to the special "EU model" that provides a counterweight of soft power to strengthen its international stature. The EU's failure to resolve the crisis thus far means it may lose out to the US. That is why the Europeans have mobilized a massive diplomatic front.

Even though Iran has opened its main uranium conversion facility, talks covering incentives have not yet been started. The EU has claimed that if Iran rejects the IAEA's proposal, it will refer the matter to the United Nations Security Council. But the EU is just exerting pressure. Privately EU members have expressed their reluctance to pursue this path and are ready for high-level communication with Iranian negotiators.

Although Iran has some room to maneuver in regional politics, international relations and energy control, it is clear that the leading global powers oppose any nuclear weaponry aspirations if it would have. Besides, Iran has promised that as long as negotiations continue it is obliged to halt all uranium conversion. With all eyes on its nuclear facilities, it would be difficult to make substantial progress.

Iran's new president, Mahmood Ahmadinejad, and his conservative allies have been the target of international suspicion and mudslinging. To improve the country's international image, he has expressed willingness to keep talks alive.

The US has responded by saying it will not prevent the Iranian president from attending the UN Convention in New York in September.

(China Daily August 17, 2005)