Mahmoud Ahmadinejad, a conservative former Mayor of Tehran, is beginning to make his presence felt as the new President of Iran.
As well as installing known hardliners in key Government posts, he has also signalled his intention to continue with Iran's nuclear programme, despite gathering international opposition.
While the European Union three of Britain, France and Germany quickly condemned Iran's decision to resume uranium enrichment last week, the United States continues to position itself as the enforcer that will put a stop to Iran's nuclear programme if diplomatic negotiations with the EU fail.
In an interview on Israeli TV, United States President George W. Bush said that "all options are on the table" when it came to dealing with Iran.
His comment was immediately criticised by German Chancellor Gerhard Schroeder who urged him to "take the military option off the table", adding, pointedly, that "we have seen it doesn't work".
Certainly, for all of Washington's thinly veiled or transparent talk of military action, the calculus for the war on terror in Iran is very different from Iraq.
Iran is physically larger and more populous than the recently occupied Iraq. With the US military already severely stretched by the continuing violence in that country and in Afghanistan, a full-scale invasion is most unlikely.
Even the more limited option of US air strikes combined with special force actions on the ground has begun to seem decidedly risky. Not only does Iran have close access to many American military targets for possible retaliation, it could choose to use its levers of influence in the Shia community in Iraq and beyond, to create even greater turmoil.
Complicating matters further, the US-supported Government of Iraq recently signed an agreement to co-operate with Iran on military matters.
None of which is to say that an American military strike against Iran will not happen. The Bush Administration, sometimes described as the "faith-based presidency", has shown its willingness to follow its political "instincts" in foreign policy. And the instinctive belief among the neo-conservatives in Washington is that the war against terrorism cannot be won without ending Iran's nuclear ambitions.
The Administration also worries about its key Middle East ally, Israel.
Already bristling at the knowledge that Iran has ballistic missiles capable of hitting Tel Aviv and Jerusalem, Israel has indicated it will not accept the possibility that these missiles could one day be armed with nuclear warheads. Israel has the capability to launch its own attack against Tehran, and could well use the threat of action to spur on US efforts.
But if the EU's diplomatic engagement with Iran was seen as an alternative, this option now appears to be faltering. Ahmadinejad's Government has treated the Europeans' carrots with almost as much disdain as it has American sticks.
Whether or not Iran is seeking the shortest route to nuclear armament - and the jury remains out on this issue - its motives to acquire a nuclear arsenal are strong, and getting stronger.
Ironically, the deployment of the technologically sophisticated US military presence in neighbouring Iraq will only increase Iran's desire for a nuclear arsenal. There is also solid support for such weapons on the Iranian street, influenced no doubt by the state-dominated Iranian media, but real nevertheless.
The Iranian nuclear crisis is complex and evolving - but it may also have been avoidable.
In 2002, with the international system still in a profound sense of flux following the shock of September 11, there were many signs that Washington and Tehran might finally find enough common ground upon which to build a rapprochement.
For a start, they have a shared antipathy to al Qaeda. The latter espouses a religious ideology that is markedly different to that of Iran's Shia Islam.
Although heterogeneous in their political beliefs, most of the al Qaeda core adhere to a form of Salafism - an ultra-fundamentalist distillation of the faith, which takes its name from the Arabic for "method of the early Muslims".
Unlike Pakistan and Saudi Arabia, Iran had a mostly combative relationship with al Qaeda and its erstwhile hosts, the Taleban. In September 1998, the Taleban killed eight Iranian diplomats and a journalist in Mazar-e Sharif, triggering a massive deployment of Iranian troops on the border with Afghanistan and threats of direct military intervention to put a stop to Taleban excesses.
Since September 11, Iran claims to have arrested more than 1000 members of al Qaeda. Many analysts have directly linked this action with a desire to have bargaining chips in any negotiations with the US.
But although there were signs that Washington and Tehran might be ready to co-operate, the Bush Administration - not for the first or last time - chose a different path. In early 2002, Iran was unceremoniously assigned to the "Axis of Evil", along with Saddam's Iraq, and Kim Il Jong's North Korea.
There are certainly aspects of the Iranian state that are deeply troubling to the West, and it would be wrong to suggest that making up with Iran would be an easy thing to do. Rapprochement has eluded many American presidents before George W. Bush.
Iran's sympathy, and sometimes support, for violent groups such as Hezbollah and Hamas, and its solidarity with the repressive regime in Syria has done little to boost its international standing.
Further, the regime in Tehran is not averse to imprisoning and sometimes killing its opponents. Freedom of the press is also strictly limited.
At the same time, Iran is in a different category from its Axis of Evil stablemates. Indeed, when Iran is placed next to other regimes in the Middle East, it is difficult not to avoid the conclusion that it is one of the more democratic systems on offer.
Iran's democratic process has strict Islamic parameters, embodied by the Council of Guardians, which determines whether any electoral candidate is sufficiently Islamic to stand for office. But although Iran's June election put a hardliner into power, the process that put him there was relatively democratic by the standards of the region - this is shown in the high voter turnout, and a strikingly open political discussion of the issues at stake.
There is certainly widespread dissatisfaction with the system among Iranians, but it is of a different order of magnitude than is often represented in Washington. The alienation that many people feel - particularly urban Tehranis - has not yet grown into anything resembling a counter-revolution.
The hope that airstrikes, Special Forces, and exiled opposition groups will stimulate regime change in Tehran is likely to prove illusory.
Such threats could serve to boost domestic support for Ahmadinejad's hardline Government, and undermine international support for the Bush Administration in the war on terror.
The Bush Administration would do well to remember that the threat of force works best when it is combined with diplomacy. Having missed an opportunity to establish a dialogue with Tehran after September 11, Washington now finds dangerously itself short of options as the Iranian nuclear crisis deepens.
* Jeremy Hall completed an MA thesis on Iran's unconventional weapons programmes at the University of Otago. Robert G. Patman is an Associate Professor in the university's department of political studies.
<EM>Jeremy Hall and Robert G. Patman:</EM> Missed opportunity for dealing with Iran
Opinion
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