The two sides are expected to start ministerial-level talks next week in Brussels on nuclear, political and trade issues.

Hasan Rohani, Iran's chief nuclear negotiator, certainly has not been equivocal about his country's decision to halt uranium enrichment.

In the new understanding, there is nothing named or identified as complete and definitive suspension, as, from the outset, we had insisted and repeated that this is one of our red lines that cannot be discussed, he was quoted as saying by the official Islamic Republic News Agency.

In a Nov. 26 communique to Britain, France and Germany - known as the EU-3 - Tehran made it clear it had only agreed to a temporary, voluntary suspension of enrichment activities, effective only as long as negotiations proceed on a mutually acceptable agreement on long-term arrangements.

This, in addition to a clause in the International Atomic Energy Agency resolution that essentially recognizes Iran's right to atomic energy for peaceful purposes, appears to have given Tehran the cake and left the EU-3 and the United States with the crumbs.

The IAEA is the U.N. nuclear watchdog.

Kenneth Pollack, research director at the centrist Brookings Institution's Center for Middle East Policy, said conflicting hard U.S. and soft EU policies have allowed Iran to play the allies off each other.

We've allowed the hardliners in Tehran to have their cake and eat it too, he said at the Brookings Institution Thursday. Right now, the most important thing to those ruling in Tehran is the economy - Iranians are extremely sensitive to the threat of multilateral sanctions.

According to Pollack, balancing the threat of coordinated sanctions with the promise of comprehensive investment might help cure Tehran of its desire for nuclear weapons.

Tehran would prefer not to have to make (the) choice between a stable economy and a nuclear program, he said.

While Iran can certainly benefit from the prospect that increased foreign investment would help Iran develop its private sector, retard inflation and unemployment rates - both at 16 percent - and accelerate sluggish market reforms, analysts doubt whether Iran is willing to give up its nuclear guns, for more promises of butter.

Danielle Pletka, vice president of Defense and Foreign Policy Studies at the conservative American Enterprise Institute, Iran's negotiation tactics are a diplomatic strategy designed to out-flank U.S. attempts to build long-term consensus for hostile military or political action.

(Tehran) wants more than anything else to enter into a negotiation process - by which to discredit opponents to their regime, Pletka said in a telephone interview. Anyone who thinks Iran is desperate for investment from the United States - desperate for anything from the United States, does not know how the regime operates.

Ray Takeyh, Iran expert at the centrist Council of Foreign Relations, believes it unlikely the United States will be able to create a set of incentives in the Gulf that will lead Iran to restrain its nuclear ambitions. However, he said he believed U.S. willingness to play bad cop has successfully pressured the EU to take a stiffer stance in its negotiations with Iran.

Whether that position will translate into progress - from the EU perspective - with Iran remains to be seen. Nor is this good new for the United States, given the apparent skill with which Tehran has managed to stare down policy makers in Washington, and frustrate hopes its government might buckle under the pressure.

If we want to encourage the regime change option, we're faced with a real problem - we are right now in a place where Iran has dictated what our options are, Pletka told United Press International.

In addition, Tehran has proven quite capable of dodging significant moves toward internal reform, particularly after the election of President Mohammed Khatami in May 1997. Hailed as a moderate, Khatami has proves incapable of loosening the grip of the hard-line clerics with whom the real power rests. Pollack says despite the president's popularity, it is unlikely the hard-liners in Iran will cede power soon.

Iranians are sick of revolution - they want change, but they don't want a bloodbath, he said, adding regardless of any nascent democratic aspirations held by Iranians, the best the United States can do, is let them take care of it themselves. While he believes many Iranians are well-disposed toward the United States, any U.S. interference will be met with visceral opposition, by a society that continues to remember bitterly the Western-backed coup that installed the shah in 1953.

Hamstrung by extensive military commitments in Iraq and Afghanistan, and confronting a country with four times the land mass and three times the population of Iraq, Washington may have no choice but to wait and see what emerges from next week's talks between Tehran and the EU-3.

This is a case where the United States is working with our European friends, working with the international community, not acting in a unilateral manner, said Secretary of State Colin Powell about next week's upcoming talks, in an interview with France 3 Television. And this is the way we do most of our business.

Given the difficult position in which the U.S. and the EU find themselves regarding Iran's nuclear designs, this is probably their only option.

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