Amid the Bluster, Iran and the United States Might Just Give Diplomacy a Chance

A rare meeting to include both American and Iranian officials brings a glint of optimism.

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Few in the U.S. or Israeli military establishments doubt that Iran would retaliate, probably with missiles as well as through militants in Iraq and elsewhere. But the test-firings produced both success and embarrassment for Iran, including assessments that Iran had doctored a photo to mask the failure of one missile and had shot off mostly old inventory from its arsenal. Iran, Burns said recently, "is not 10 feet tall."

Still, the defiant tone surrounding the missile tests could serve as a classic platform from which to enter negotiations. Tehran, analysts say, may feel it has a relatively strong hand with oil topping $130 a barrel and the United States tied down in Iraq and Afghanistan. It has also been watching the Bush administration's ongoing compromises on the North Korean nuclear issue. And Tehran may well regard a U.S. attack as less likely after hearing the chairman of the Joint Chiefs of Staff, Adm. Michael Mullen, disparage the idea of opening a "third front" for stretched U.S. forces.

Iran also has an incentive to take the steam out of efforts, particularly in Europe, to keep ratcheting up economic sanctions. Iranian capital has been flowing out of the country—where unemployment already is high—and inward investment has been shrinking out of fear of a clash with the West. The French oil giant Total has just backed away from a key Iranian natural gas-field development deal, and the EU has slapped penalties on state-owned Bank Melli.

By showing some flexibility, the Iranians may be trying to sow the seeds of a split between Europe and Washington, some analysts believe.