Briefing Book

Losing at the IMF

The Obama administration set out to reform the international financial system, but now finds itself on the defensive. What went wrong?

TOKYO - For the first time in recent memory, this week's big annual meeting of the International Monetary Fund will not be about saving the world from imminent financial collapse. With the most acute phase of the European crisis either behind or ahead of us (depending on your view) and the U.S. "fiscal cliff" still looming several months away, the major takeways from these Tokyo-based meetings will be more strategic and nuanced than in recent years. But, while the issues are more subtle, they are no less crucial. In fact, the IMF is more important to the global economy than ever, and this week's meetings may represent a more important directional step than is widely recognized. More importantly, the United States' influence at the fund is at risk of even greater decline than is generally believed. Here's why:

IMF governance: IMF governance issues are tedious, complicated and pedantic -- even to seasoned fund watchers. And generally, it isn't worth the effort to consider the implications of a shift in 0.02 percent voting power at an organization that most often takes decisions on the basis of consensus. But this year, governance issues are actually significant. And, that's too bad, because the United States doesn't come out looking very good.

These issues, colloquially known as "shares and chairs," involve the composition of the executive board of the fund, which manages the institution day to day, and the voting rights of the fund's 188 members. The IMF, created in the shadow of World War II, has been slow to recognize the global shifts that have taken place over the past decades and is seen by many as being too wedded to the past. In particular, even before the euro crisis dominated the fund's recent focus, Europeans held disproportionate sway, with between eight and 10 of the board's 24 chairs and, by tradition, the managing director position. Emerging markets, in particular the BRICs, are woefully underrepresented both at the board and in voting ("quota") shares -- and they're not happy about it.

To address this, and to take on charges that the fund was an institution looking to protect status quo interests, the Obama administration led an effort in 2010 for sweeping governance reform of IMF board representation and voting, with the specific goal of reducing European influence, including an explicit commitment by advanced European countries to reduce their board representation and to increase the voice and vote of emerging markets.

These hard-fought reforms gained the United States no friends in Europe, which had repeatedly promised to voluntarily reduce its influence over time, but had failed to do so. But they were seen as a sincere attempt to benefit non-European emerging markets without any direct benefit to the United States in terms of voice or vote. The idea was to gain political goodwill for taking the lead in redressing an unfair structure that undermined the credibility and legitimacy of the IMF -- an institution that the United States rightly saw as a positive benefit to itself and the world.

But, in spite of the U.S. success in forcing though governance reform at the board and engendering the ill will of our European allies, the effort looks likely to backfire. Not only did the Europeans cleverly find a way to propose a two-seat board reduction that actually increases their overall influence, but the United States itself has now become the impediment to implementing the broader reforms, as they cannot be finalized without U.S. approval and the administration has yet to even propose them to Congress -- the crucial missing step to overall ratification.

So, at the annual meetings this year, which Managing Director Christine Lagarde has themed "Keeping Promises," it is America that will be blamed for the most glaring promise not kept -- our failure to make long-fought for reforms a reality, thereby incurring not only the ire of the Europeans, but also the finger-pointing of the BRICs and other emerging countries -- precisely those countries we sought to benefit for broader strategic purposes.

IMF financial resources: The U.S. failure to embrace the governance reforms we ourselves championed represents a missed opportunity. On its own, this failure might do little to reduce U.S. influence around the world or even at an institution, which is, after all, housed only a few blocks up the street from the White House and the Treasury. But dropping the ball on governance reforms, when combined with U.S. unwillingness to participate in the bolstering of the fund's financial resources earlier this year, leads to the rise of an unhealthy narrative that the United States is simply not committed to the IMF itself.

In January 2012, Lagarde publicly warned of the enormity of the risks to the global economy and pleaded that the fund's then-current resources were inadequate to address them. She then embarked on a high-profile fundraising effort across the globe, seeking to reinforce the IMF's financial resources to ensure that, should the worst case develop, the fund would be adequately prepared to stand between teetering nations and global economic Armageddon.

But, perhaps deferring to a skeptical Congress that was seen as more likely to withdraw existing commitments rather than pony up additional ones, the United States argued that while Europe's problems were big, they were not too big for wealthy Europe to handle by itself, and the administration made it clear that it would not be participating in any new fundraising effort.  While this analysis was undoubtedly correct on its face, it missed the broader strategic argument that a continuing role for the IMF would enable the United States to indirectly, but meaningfully, retain influence over the direction and outcomes of Europe's crisis response. Given the strategic, political, trade, and financial interlinkages between Europe and the United States, and the strong, built-in financial protections over IMF member finances, this might well have been a trade worth making.

So when Largarde announced in April that 30 countries had committed to more than $450 billion in new resources for the IMF, America was glaringly absent. Perhaps as important, the United States ensured that this new infusion of cash didn't buy those countries any increased "shares and chairs" at the fund.

While some might argue that this was a deft move by the United States -- "leading from behind," if you will -- that is not likely to be the case.  While the United States will undoubtedly retain its de jure veto over official decisions, it is likely that increasing de facto influence will be exerted by contributor countries who naturally expect to have their voices heard, in spite of stalled governance reform and a dominant shareholder that contributed not a penny to the latest round of financing.

As in any large complicated institution, influence can be felt and exerted through a variety of means, and not simply in the board room. With an outdated governance and operating structure, U.S. failures mean that U.S. influence may be significantly diminished and that more IMF policy influence and decision making will take place outside of the established governance structure. That's not good for the United States.

IMF role: As far its global influence is concerned, the IMF has taken a roller-coaster ride over the last few years from "searching for relevance" to "indispensable actor." But the fund's future role is still evolving, and while it is likely to remain integral to the world's economic system, the specifics of how it goes about this role are in flux. Decreased U.S. influence may not only be seen in individual policy and program decisions, but also in its ability to influence the fund's overall direction as it seeks to define and refine a new role on the world stage.

In addition to its most familiar role, in providing troubled countries with financial assistance in return for commitments to abide by the strictures of the so-called Washington consensus or its European "troika" equivalent, in the wake of criticisms that the fund failed to spot and prevent the 2008 financial crisis, the IMF has sought to enhance its role in pre-emptive surveillance of the world's economy. Over the past year, the IMF has taken on a series of new roles in analyzing and monitoring the global economy and in highlighting potential risks of contagion and spillovers from one country or region to others and for the financial system as a whole.

This new foray is significant. It represents a new role for the fund and one that is likely to evolve and expand over time. While complicated, it basically involves an expansion of the fund's role from assessing individual countries' economic policies under a fairly rigid set of criteria to one in which the IMF assesses the broader impact of a wide range of policy choices on its neighbors and on the rest of the world.

In the past, the United States stridently sought to have the IMF include a determination in its annual country assessment as to whether a country was manipulating its exchange rate to the detriment of others and global economic stability -- a means to challenge China's foreign exchange policy without doing so directly. But the United States has been far less inclined to allow the fund to assess whether a country's domestic policies more broadly have a similar spillover impact across borders. Earlier this year, after years of contentious debate, the IMF voted to take on this new mandate, and has now embarked on a new series of multilateral surveillance projects. U.S. resistance to this effort was largely born of the potential risks to the country being accused of causing far-reaching harm, given the size and scope of the U.S. economy and financial system.

Just as China fought desperately for years to avoid having its currency being classified as being in "fundamental misalignment," America may now find itself seeking to ward off accusations that the country's financial sector, fiscal cliff, and tax policies are not only fodder for domestic debate, but potentially international condemnation as well.

The end of the IMF-G-20 tandem? In the autumn of 2008, the G-20 rose from relative obscurity to become the premier economic and political forum in which global leaders and finance ministers grapple with the most daunting issues of the day in an organized and structured forum. The official communique at the close of the Pittsburgh G-20 summit in September 2009 declared that "the G-20 [is] to be the premier forum for our international economic cooperation." This represented a shift from the previous focus on the G-7, where China, India and other rising powers were notably absent. The United States was an early leader at the G-20, however unwieldy it may be, and embraced its newly central role.

But the G-20, while it did not lack for lofty aspiration, lacked just about everything else. It had no secretariat, staff, offices, or resources. To get anything actually done, the G-20 needed to look elsewhere for follow-up and implementation of its mandates and pronouncements. In many cases, the G-20 has looked to the IMF to effectively play these roles. Major post-financial crisis G-20 initiatives are now undertaken in large part by the IMF.

Over the past several years, the G-20 finance ministers' meetings coincided with those of the IMF. IMF biannual meetings posed a perfect opportunity to hold virtually simultaneous gatherings, with decisions and discussions in one forum often spilling over into the other. Both entities benefitted from the overlap, as G-20 requests could be agreed, clarified, and refined in real time with its implementation arm -- the IMF.

But this week's Tokyo meetings will not include a contemporaneous G-20 meeting. This is not, to be sure, because the world's economic problems have been solved, but rather because in 2012, Mexico held the rotating chair at head of the G-20 and, for its own domestic political reasons, accelerated the G-20's annual leaders' summit to June, instead of the usual November time, leaving an effective vacuum for the rest of the year. And, with a belligerent Vladimir Putin-led Russia scheduled to take over the leadership of the G-20 at the commencement of 2013, it is a safe bet that the golden days of IMF/G-20 cooperation are behind us.

In London and in Pittsburgh, the United States and the British presided over G-20 meetings that succeeded in demonstrating to the world that there was, at a time of absolute crisis, a will and a forum for the world to come together and agree a response. The IMF played a central role in both formulating and implementing that response. Now, four short years later, the G-20 has effectively lost its central role on crucial economic issues, and may, in fact, revert to virtual irrelevance. In its stead, a new, bolder IMF may seek to enhance its independent role. Not only does the IMF have financial and human resources to bring to bear, it also has legitimacy that the G-20, representing a small sub-set of the world's countries, lacks, with all 188 members having at least some representation.

With the Tokyo meetings this week, we are likely to see the continuing evolution of the IMF at a pace and in a direction that may enhance its role in an interconnected world increasingly dominated by macroeconomic issues. At the same time, U.S. influence over the institution is at risk of broad decline.

To be clear, this decline is both of our own doing and still reversible. Promised governance reforms and requested financial commitments are in our interests. The administration's failure to try to educate Congress as to the benefits of these initiatives may have been tactically and politically safe, but may well turn out to be a strategic error.

There are serious risks to U.S. interests emanating from what the Eurasia Group's Ian Bremmer calls "a G-zero world" -- an international system without clear leaders. In anything even approaching that world, the IMF will provide much-needed ballast. It will be a shame if the United States finds itself losing influence at an increasingly powerful institution for no good reason.

VINCENZO PINTO/AFP/Getty Images

National Security

Eight Ways to Deal With Iran

The Iranian nuclear program is a complex threat to international peace and stability. In this ambitious paper, former national security advisor Stephen J. Hadley says that stopping it requires an equally complex and sophisticated strategy.

The Iranian nuclear program poses one of the most pressing national security challenges confronting the United States today. After years of increasing economic sanctions and diplomatic pressure -- backed by the threat of force -- under both Republican and Democratic administrations, the United States and the international community have still not achieved an acceptable outcome that prevents Iran from using its existing nuclear program for achieving a nuclear weapon. Meanwhile, Iran is dangerously approaching the threshold of a nuclear weapon capability as its centrifuges continue to produce a growing stockpile of enriched uranium that could be converted into material for a nuclear bomb. We have reached the point where all options -- economic, political, diplomatic, and military -- must be carefully examined and substantively debated in the public domain.

The purpose of this article is not to advocate a particular course of action, but to contribute to the public debate by setting out the full range of plausible approaches to resolving the confrontation between the international community and the Iranian regime over its nuclear program -- a program that virtually the entire international community believes is a vehicle for achieving an advanced nuclear-weapons capability if not a nuclear bomb itself. Eight options are described below -- from negotiations through use of force to containment -- along with potential benefits and costs in each case.

These should be viewed as a set of "nested" options that could lead sequentially from one to another. They should be seen not in two dimensions, with the task being to pick one of the options from among the list, but in three, as a family of options through which the policy of the United States and the international community could move over time depending on the success or failure of prior options -- and the choices made by the Iranian regime.

Why conduct a review of Iran options now?

Partly because of the American experience in Iraq. The U.S. military action there was not, as many suggest, either a war of choice or a war of preemption. It was, rather, a war of last resort. After 12 years of diplomacy, 17 U.N. Security Council resolutions, increasingly targeted economic sanctions, multiple international inspection efforts, no-fly zones over both northern and southern Iraq, the selective use of U.S. military force in 1998, and Saddam Hussein's rejection of a final opportunity to leave Iraq and avoid war, the United States and the international community were out of options. The choice was either to capitulate to Saddam Hussein's defiance of the demands of the international community or to make good on the "serious consequences" promised by the United Nations for such defiance. The United States and its international partners on Iraq chose the latter course.

Many people have argued that before making this fateful decision, U.S. policymakers should have stepped back and conducted one last searching examination of possible alternative courses of action. If that is the case, then it is now time -- and perhaps almost past time -- to make such an effort with respect to Iran. For there is a better than even chance that sometime next year the United States and its international partners will find themselves similarly out of options -- and face the choice of either military action against Iran or accepting an Iran with a clear path to a nuclear weapon. So if there are alternatives to these two grim choices, now is the time to find them -- as well as to think through carefully the military options available.

The problems posed by the Iranian regime

The international community in general, and the United States in particular, has a broader set of grievances and concerns regarding the behavior of the Iranian regime. They would like to see an Iran that:

1. Does not pursue weapons of mass destruction of any kind;

2. Does not support terrorists;

3. Does not intervene in the internal affairs of its neighbors;

4. Respects rather than infringes upon the freedom and human rights of the Iranian people; and

5. Respects the right of the Iranian people to chart their own future through democratic means.

The United States needs a comprehensive strategy for seeking to advance these objectives. This paper, however, will focus primarily on the eight major options for dealing with the immediate confrontation over the Iranian regime's nuclear program. This is only "primarily" the focus for two reasons: First, because among the considerations in evaluating each of the options described below will be the extent to which it could contribute to or detract from the achievement of these broader objectives. And second, because there are measures that the United States and the international community are to some extent already taking -- and could significantly expand -- that would both enhance the prospects of resolving successfully the confrontation over the nuclear issue and, at the same time, make progress on these other issues more likely.

These measures include:

1. Strengthening our diplomatic, economic, security, and military ties with friends and allies in the region;

2. Accelerating the fall and departure of the Assad regime and its replacement with a cross- sectarian regime that can both unify Syria and will be less friendly with and beholden to the Iranian regime;

3. Weakening -- to the extent we can -- the ties between the Iranian regime and China and Russia;

4. Pushing back hard against any Iranian attempts to expand its influence in the Gulf, Afghanistan, or Iraq and its support of international terror and terrorists;

5. Continuing sanctions that have set back the Iranian economy and government revenues; and

6. Making clear to the Iranian people that the United States and the international community have no quarrel with them, that their current economic hardships and international isolation are the result of the policies of the Iranian regime, that a change in those policies will bring dramatic benefits, and that, should that occur, the whole world will welcome Iran with open arms as a respected member of the international community.

THE OPTIONS

Option 1: Seek an interim 'stop the clock' agreement

The United States and the international community would seek to negotiate with the Iranian regime an interim agreement that would seek to prevent further Iranian progress toward a nuclear weapon capability (and to freeze at current levels the risk of a covert breakout to a nuclear weapon) in order to buy time for the longer negotiation that would be required to reach a permanent settlement of the nuclear issue. Neither side would be asked to concede its current position on the core of the nuclear issue (i.e. uranium enrichment): Iranian enrichment at the 3.5 percent level would continue (and Iran would retain its stockpile of this low enriched uranium) and the existing sanctions regime would remain in place. Because of these unresolved issues, each side would have an incentive to continue negotiations to reach a more permanent agreement.

The basic bargain underlying the interim agreement could look something like this:

1. Iran would agree under intrusive International Atomic Energy Agency (IAEA) inspection and verification procedures to: (a) cease any enrichment beyond 3.5 percent (i.e. cease its 20 percent enrichment and ship its 20 percent stockpile out of the country), and cease further expansion of operations at its deep underground Fordow enrichment plant (whether by increasing the number or upgrading the quality of the centrifuges); and (b) commit that during the period of the interim agreement it would not take any further steps toward developing a nuclear weapon capability so long as the United States and the international community continued to abide by the agreement.

2.    The United States and the international community would agree to provide: (a) fuel for the Iranian medical research reactor (the Tehran Research Reactor or "TRR"), medical isotopes, and civilian aircraft spare parts; and (b) commit not to impose any additional sanctions (although they would be free to continue implementation and enforcement of existing sanctions) during the period of the interim agreement so long as Iran continued to abide by its terms (including that the Iranian regime would not take any further steps towards developing a nuclear weapon capability).

According to press reports, the Obama administration has already proposed something along these lines that the Iranian regime has so far flatly rejected. While willing to suspend enrichment at the 20 percent level (and perhaps ship its current 20 percent enriched inventory out of the country), the regime's negotiators flatly rejected anything having to do with Fordow and insisted on Iran's right to enrich at the 3.5 percent level. In return, the Iranian negotiators wanted a complete lifting of sanctions and a long list of other things.

While the Iranian negotiators may come around, especially as Iran begins to feel the bite of the additional U.S. sanctions on the Iranian Central Bank and the European Union's Iranian oil embargo/insurance ban that became effective July 1, 2012 the outlook is not bright.

Potential benefits of Option 1:

  • Would freeze in place on an interim basis the most obvious avenues for enhancing Iranian nuclear-weapons capability and entering the "zone of immunity" of concern to Israeli officials (i.e. where Israel's ability to stop the program by military means becomes in doubt).
  • Is nonetheless a fairly minimalist agreement of a confidence-building nature intended to build trust and lead to a negotiated resolution of the overall confrontation over the nuclear issue.
  • Buys time for sanctions and other pressure measures to have effect, giving the Iranian regime an incentive to move beyond an interim "stop the clock" agreement to negotiate a permanent resolution.

Potential costs of Option 1:

  • The "minimalism" that is its primary attraction is also its limitation -- it leaves centrifuges in operation at both Natanz and Fordow, which arguably allows the Iranian regime to continue to develop a nuclear-weapons capability (i.e. by improving centrifuge operations and by developing more advanced centrifuge designs) and provides time for Iran to strengthen the defenses around its nuclear infrastructure and make it more immune to military action (e.g. by moving underground).
  • Is contingent upon Iranian authorities allowing -- and the IAEA imposing -- intrusive inspection and verification measures to ensure Iranian compliance with the interim agreement.
  • Israel could view the interim agreement as insufficient in meeting its security interests, potentially leading to an Israeli military strike that dissolves the unity of the international sanctions effort and moves Iran to an explicit decision to develop a nuclear weapon.

Option 2: Seek an interim "medium for medium" or "more for more" agreement

This option could be attractive in itself or as a place to move in the event that the more minimalist "stop the clock" option (Option 1 above) does not succeed -- especially if U.S. officials conclude that Option 1 simply does not offer the Iranian regime enough to make that option attractive. Under Option 2, the United States and the international community would seek to negotiate an interim agreement that requires greater concessions from both sides but still stops short of a final agreement -- and still does not force either side to concede on the core issue of Iran's right to enrich.

The basic bargain could look something like this:

1. In addition to providing: (a) fuel for the Iranian medical research reactor (TRR), medical isotopes, and civilian aircraft spare parts; and (b) committing not to impose any additional sanctions, the United States and the international community would agree to alleviate some of the existing sanctions as Iran comes into compliance with its obligations under the interim agreement (e.g. a renewable 90 or 180-day suspension of the EU Iranian oil embargo/insurance ban).

2. In addition to agreeing under intrusive IAEA inspection and verification procedures to cease enrichment beyond 3.5 percent (i.e. ceasing its 20 percent enrichment and shipping its 20 percent stockpile out of the country) and to cease further expansion of operations at its Fordow enrichment plant (whether by increasing the number or upgrading the quality of the centrifuges), Iran would be required to ship most of its 3.5 percent enriched stockpile out of the country (maintaining a stockpile in the country of no more than approximately 800 kg of 3.5 percent enriched uranium -- arguably less than that required to make a nuclear weapon even if further enriched to the 90 percent-plus level required for a weapon). But Iran's enrichment at the 3.5 percent level could continue.

If additional elements were required to get an agreement on a "more for more" basis, they could be drawn from the list of elements -- from both sides -- contained in the description of the Final Agreement option (Option 3) below.

Potential benefits of Option 2:

  • Would freeze in place on an interim basis the most obvious avenues for enhancing Iran's nuclear weapon capability and for entering the "zone of immunity" of concern to Israeli officials.
  • Would reduce Iran's stockpile of 3.5 percent enriched uranium to low levels and increase the presence of international inspectors, making it more difficult for Iran covertly to break out and pursue a nuclear weapon.
  • Could build trust and confidence while still leaving enough unresolved issues to give the two sides an incentive to seek a permanent negotiated resolution to the confrontation over the nuclear issue.

Potential costs of Option 2:

  • Leaves centrifuges in operation at both Natanz and Fordow, which arguably allows the Iranian regime to continue to develop its nuclear-weapons capability (i.e. by improving centrifuge operations and by developing more advanced centrifuge designs) and provides time for Iran to strengthen the defenses around its nuclear infrastructure and make it more immune to military action (e.g. by moving underground).
  • May take too long to negotiate (leaving Iran free in the interim to move forward with its nuclear program) and would in any event be contingent upon Iranian authorities allowing -- and the IAEA imposing -- intrusive inspection and verification measures to ensure Iranian compliance with the interim agreement.
  • If the Iranian negotiators were to stall on moving beyond an interim agreement, it could make it much harder for the United States and the international community to increase the pressure or to shift to one of the other options described below.

If an interim agreement is reached, a deadline for finalizing a permanent agreement or an expiration date might be included in the interim agreement to try to force negotiations to a conclusion. But such devices are difficult to enforce in the face of pressure to continue negotiations. To have any chance of having its intended effect, the United States and the international community would have to commit in advance to imposing new sanctions if the deadline is missed -- recognizing that trying to impose new sanctions could be used by the Iranian regime as a pretext for further movement toward a nuclear weapon capability.

Option 3: Seek a final agreement that resolves the nuclear issue

Achieving an interim agreement under Option 1 or 2 above buys time for an effort to achieve a broader, final agreement that resolves the nuclear issue. Alternatively, the effort to achieve either interim agreement described above might fail for reasons that do not necessarily discredit seeking a negotiated resolution -- for example, because neither interim agreement offers enough benefit to either side to be worth the effort.

In that event, U.S. and international negotiators might move to a "big for big" approach and seek an agreed final resolution of the nuclear issue in a single negotiating step. The problem, of course, is that a final agreement is likely to take substantial time to negotiate, and without an interim agreement in place, the Iranian regime would be free to move forward with its nuclear program during the period of negotiations.

If a final agreement could be achieved, there would be enormous pressure from substantial parts of the international community to declare victory, unwind the sanctions and other elements of the existing pressure effort, and resume normal relations with the Iranian regime. Should the Iranian regime then begin eating around the edges of the agreement -- testing the international community, perhaps as part of readying a creep-out strategy to develop nuclear weapon capability covertly or even as part of an overt sprint to the bomb -- it may be very difficult to reestablish the existing sanctions and pressure regime in anything like a reasonable period of time. For this reason, part of any final agreement resolving the nuclear issue needs to be a prior agreement -- announced publicly and enshrined in a U.N. Security Council Resolution if possible -- that both automatically reestablishes the existing sanctions/pressure regime and authorizes "all means necessary" -- including military force -- in the event of any substantial violation of the agreement by Iran.

The sticking point, of course, will be who decides that a substantial violation has occurred. Though risky, the best approach could be to develop a list of "substantial violations" (e.g. resuming nuclear weaponization research or other weaponization activities, enriching over 3.5 percent, failing to cooperate with the IAEA or throwing out its inspectors, opening any new enrichment or reprocessing facility, discovery of a covert nuclear facility) and include them in a Security Council resolution (although this virtually invites Iranian violations just short of this list). The application of the "all means necessary" clause must be automatic -- not dependent upon either further IAEA action or another Security Council vote.

The basic bargain underlying the final agreement could draw substantially from this list of elements:

1. The United States and the international community could agree that as the Iranian regime implements its undertakings under this agreement and thereby reestablishes the confidence of the international community in its compliance with its Non-Proliferation Treaty (NPT) obligations -- in a phased implementation process, to be developed jointly by the two sides, matching action for action -- the United States and the international community would:

a.  Provide Iran diplomatic, financial, and engineering support in developing a truly peaceful civilian nuclear power program;

b. Undertake a number of steps to resuscitate, revitalize, and reform the Iranian economy including investment in Iran's dilapidated oil and gas infrastructure, assistance with food and oil subsidy reform, and technology transfers and financial support for Iran's struggling industrial sectors;

c. Encourage businesses, universities, and charitable foundations to establish technical training centers in Iran to train Iranian youth in the skills of the 21st century;

d. Establish robust exchange programs with Iranian students, business leaders, university faculty, and civil society;

e. Commit to no new nuclear-related economic sanctions and gradually to reducing existing nuclear-related sanctions as Iran implements its obligations under the phased implementation plan developed by the two sides;

f. Reestablish diplomatic relations over time;

g. Include Iran as a full partner in an international nuclear reprocessing and enrichment center located in the region but not in Iran (and without giving Iranian participants access to critical technology);

h. Consider adding: After Iranian acceptance and implementation of the IAEA Additional Protocol and under full and intrusive IAEA inspection and monitoring, accept limited nuclear enrichment up to 3.5 percent at Natanz provided that excess 3.5 percent uranium beyond its own domestic needs is shipped out of the country. At no time could Iran have more than 800 kg of 3.5 percent enriched uranium in its possession outside of nuclear fuel rods in Iranian domestic nuclear power reactors under full IAEA monitoring and verification.

2) Consistent with the phased implementation process, Iran could agree that it would:

a. Forego nuclear reprocessing, disband all its existing facilities for that purpose, and agree not to construct, maintain, or operate any such facilities;

b. Forego enriching uranium beyond 3.5 percent (e.g. 20 percent) and give over to the IAEA all stocks of such enriched uranium;

c. Shut down and dismantle its uranium enrichment facility at Fordow (and Natanz, if subparagraph f. is not added) and agree not to construct, maintain, or operate any unauthorized uranium enrichment facility overtly or covertly;

d. Accept and implement the IAEA Additional Protocol and full IAEA inspection and monitoring of all its nuclear activities;

e. Resolve past issues with the IAEA regarding its nuclear activities and agree that it will at no time undertake further nuclear weaponization research or other weaponization activities;

f. Consider adding: After Iranian acceptance and implementation of the IAEA Additional Protocol and under full and intrusive IAEA inspection and monitoring, accept limited nuclear enrichment up to 3.5 percent at Natanz provided that excess 3.5 percent uranium beyond its domestic needs is shipped out of the country. At no time could Iran have more than 800 kg of 3.5 percent enriched uranium in its possession outside of nuclear fuel rods in Iranian domestic nuclear power reactors under full IAEA monitoring and verification.

g. If subparagraph f. is included: Agree to end its support for terrorist activities, cooperate with the international community in the struggle against terror, and respect the sovereignty and territorial integrity of its neighbors.

Potential benefits of Option 3:

  • Would resolve the nuclear issue on terms acceptable to both sides and provide an effective mechanism for enforcement of the agreement.
  • Would establish a framework of relations that could advance progress in dealing with the other grievances and concerns that the United States and the international community have with the behavior of the Iranian regime as well as the concerns of the Iranian regime.
  • Would open opportunities for greater interaction between the international community and the Iranian people and other constituencies within Iran, which could enhance processes of political, social, and economic pluralism and openness in Iran.

Potential costs of Option 3:

  • Would dramatically draw down the leverage and incentives that the United States and the international community have for changing the behavior of the Iranian regime, leaving little capital available for reaching agreements and understandings on the remaining grievances and concerns about the behavior of the Iranian regime.
  • Acceptance of any uranium enrichment on Iranian soil could allow Iran to perfect its enrichment capability and would be seen by many as an abject capitulation by the United States and the international community (which have made suspension of enrichment until confidence has been restored in Iranian intentions -- if not the total elimination of any Iranian enrichment and reprocessing capability -- the touchstone of their position in the nuclear confrontation with Iran).
  • Would enhance the legitimacy of the Iranian regime and would not satisfy those who believe that the problems with Iran stem from the nature of that regime -- and will not ultimately be resolved until it is changed.

Option 4: Embrace the de facto status quo

This option aims to establish a de facto status quo acceptable to the United States and the international community based on a set of redlines. The purpose would be effectively to freeze the Iranian nuclear weapon program at its current level -- preventing the expansion of Iranian capability to produce a nuclear weapon but without really rolling back the program. Under this approach, the United States and the international community would still have sufficient time to detect and respond to an Iranian covert or overt effort to "make a run for the bomb."

This approach could be adopted as an alternative to a negotiated settlement (especially if one believes that the Iranian regime is too wedded to its hostility and opposition to the United States to accept any negotiated arrangement) or if negotiations break down for one reason or another. In either event, especially if the United States and the international community are unwilling to use military force, this option or Option 5 below (Long-Term Isolation and Pressure) would become the principal remaining options.

To be effective, the United States and the international community would have to make clear and credible threats that they would take action against the Iranian nuclear program if these redlines were crossed -- either additional sanctions (described in Option 5 below) or military action (as described in Option 6 or 7 below) or both. The approach could see the United States and the international community unilaterally declaring redlines about Iranian activity backed by the threat of force, with either: (i) the United States and the international community declaring their willingness to respect presumed Iranian redlines, or (ii) with Iran declaring its own redlines about U.S. and international-community actions. The arrangement could be private between the two sides, public, or a mix of both (the most likely approach).

1. For the United States and the international community, the redlines would be similar to the "substantial violations" described in Option 3 above but with the addition of constraints on Fordow:

  • Resuming nuclear weaponization research or other weaponization activities;
  • Enriching over 3.5 percent;
  • Failing to cooperate with the IAEA or throwing out its inspectors;
  • Opening any new enrichment or reprocessing facility;
  • Discovery of a covert nuclear facility; or
  • Failure by Iran to freeze if not cease activity at Fordow.

2. Any redlines declared by Iran are liable to be fairly extreme and the question will be whether the regime would accept a more limited set of redlines either explicitly or implicitly (i.e. by tacitly accepting a U.S./international community statement of the Iranian redlines they would be willing to respect). Such redlines might be:

  • No new U.N. Security Council resolutions on the Iranian nuclear program;
  • No new nuclear-related sanctions by the United States or any other member of the international community;
  • Cessation of any clandestine actions within Iran; or,
  • The IAEA dropping further efforts to resolve questions about past Iranian activities.

Even this list would likely be a daunting one for the United States and the international community to accept. To operationalize a mutual approach (with redlines on both sides), there might have to be secret contacts between representatives of the P5+1 -- the permanent five members of the Security Council plus Germany -- and elements of the Iranian regime (such as, for example, CIA Director David Petraeus meeting clandestinely with Qassem Soleimani, the powerful head of the Qods Force, the expeditionary wing of Iran's Islamic Revolutionary Guard Corps, the IRGC).

This de facto status quo approach is likely to work (and be acceptable to the United States and the international community) only if Iran would accept very intrusive IAEA inspections and verification as part of the de facto arrangement. This option would involve tacit acceptance of Iranian enrichment at 3.5 percent -- but would try to freeze the Iranian nuclear program at its current level -- short of a nuclear-weapons capability.

To pressure Iran to accept this de facto status quo approach, the United States and the international community could speak more publicly about the additional sanctions they are capable of levying. These additional sanctions could include:

  • Targeting front companies in Europe and Asia that supply Iran with dual-use components for the nuclear program;
  • Targeting banks that process any financial transactions with the National Iranian Tanker Company;
  • Targeting certain petroleum resource development joint ventures outside of Iran if the Iranian government is a substantial partner or investor in the joint venture; and
  • Blacklisting Iran's entire energy sector and labeling Iran a "zone of proliferation concern" to prohibit completely international businesses from dealing with Iran's petroleum sector.

Under this approach, the existing sanctions would remain in place to keep pressure on the regime to respect the redlines, but the United States and the international community would almost certainly have to give up the prospect of increasing those sanctions.

This option could also come into play after a use of military force -- particularly a limited military strike under Option 6 below -- which would have somewhat restored deterrence and made the U.S. setting of redlines more credible, and hence more likely to be respected by the Iranian regime.

Potential benefits of Option 4:

  • Seeks to freeze the Iranian nuclear program at its current level short of achieving a nuclear weapon capability while allowing enough time to detect and take action if Iran were overtly or covertly to make a run to develop or obtain a nuclear bomb.
  • Allows both the United States and the Iranian regime to bypass the domestic political costs associated with a formal negotiation process and to avoid the downsides of military action.
  • Puts the Iranian regime's claim that it does not seek a nuclear weapon to the test while providing the Israelis with declared redlines as to when the United States would be willing to initiate military action against Iran.

Potential costs of Option 4:

  • If the de facto status quo arrangement does not include a freeze (if not a cessation of activity) at Fordow, it will not stop Iran from entering into the "zone of immunity" about which the Israelis are so concerned.
  • Because it is not the result of a formal negotiating track, it might be difficult under this approach to obtain Security Council authorization for military force in the event of Iranian violation of any of the redlines -- and the United States would have to contemplate using military force without such authorization.
  • Would leave Iran free to take action just short of U.S. redlines that could still contribute to improving its nuclear-weapons capability.

Option 5: Long-Term Isolation and Pressure

Under this option, the United States and the international community would undertake a long-term strategy of isolating and pressuring the Iranian regime. The goal of this effort would be to get the Iranian regime either to abandon unilaterally its effort to obtain nuclear-weapons capability (and verifiably dismantle the instruments of that effort, such as reprocessing and enrichment) or to engage in serious negotiations to resolve the dispute.

This option could be attractive if the United States and the international community were to decide that the Iranian regime is simply unable or unwilling to enter into a negotiated settlement or in the event of an actual breakdown of negotiations. In either case, this approach could be viewed as an alternative to military action under Option 6 or 7 below (and an alternative to the de facto status quo approach of Option 4). This option could also be adopted after the execution of a military strike under Option 6 or 7 -- especially if such a strike did not result in a unilateral Iranian cessation of its nuclear efforts or the start of productive negotiations.

Under this approach, the existing vehicles of pressure and sanctions would have to be maintained and strengthened. Potential additional measures could include:

  • Targeting front companies in Europe and Asia that supply Iran with dual-use components for the nuclear program;
  • Targeting banks that process financial transactions with the National Iranian Tanker Company;
  • Targeting certain petroleum resource development joint ventures outside of Iran if the Iranian government is a substantial partner or investor in the joint venture;
  • Blacklisting Iran's entire energy sector and labeling Iran a "zone of proliferation concern" to prohibit completely international businesses from dealing with Iran's petroleum sector.
  • Joint military exercises with Gulf and regional allies;
  • Expanded U.S. military assistance and cooperation with regional states; and,
  • Greater emphasis on interdicting arms and funding flowing to and from Iran.

At the same time, the United States and the international community would need to come up with creative ways to engage broader elements within the regime and within Iranian society as a whole (including Iranian leaders in business, civil society, and the arts) in order to encourage widespread rethinking of the regime's policies.

The effect of all these measures would -- hopefully -- cause debate, division, and even dissension within the Iranian regime and lead over time either to a change in its nuclear weapon policy or to a transformation of the regime itself (which might aid resolution not only of the nuclear issue but also the other grievances and concerns that the United States and the international community have with the current regime).

The time horizon for this effort, however, could be a long one, comparable potentially to the long struggle to isolate, pressure, and transform the Soviet Union in the Cold War period. In the interim (even should a favorable outcome ultimately emerge), not only would the regime be proceeding with its nuclear program but the United States and the international community would also have to deter, prevent, and manage what are likely to be increasingly aggressive and dangerous efforts by the Iranian regime to "break out of the box" of increasing pressure and isolation. Such actions could include:

  • Increasing financial and material support to terrorist organizations;
  • Inciting violence through proxy groups in Iraq, Afghanistan, Syria, and Lebanon;
  • Destabilizing international oil markets by attempting to close the Strait of Hormuz or taking other active measures to disrupt the flow of oil; and,
  • Increasing the threat to Israel.

Potential benefits of Option 5:

  • Avoids capitulation to the Iranian pursuit of a nuclear weapon capability.
  • Offers the possibility of a positive resolution of the nuclear issue (and potentially other issues as well).
  • Could encourage the ultimate transformation of the Iranian regime to one more cooperative with the United States and the international community (and one providing greater benefit to the Iranian people).

Potential costs of Option 5:

  • Would require an enormous U.S. and international commitment that may simply not be sustainable over the long term and may not succeed in any case.
  • Would increase the risk of disruptive and dangerous behavior on the part of the Iranian regime, threatening U.S. and international interests in Israel, Lebanon, Iraq, Afghanistan, Syria, the West Bank, and potentially even the U.S. homeland.
  • Would likely over time turn the Iranian people against the United States and the international community while the Iranian regime continued to advance its enrichment capability -- and could lead Iranian leaders to conclude that the United States is really seeking regime change, thus prompting them to "go for" a nuclear weapon as a means of trying to guarantee regime survival.

Option 6: Launch a limited, and preferably clandestine military strike

Military options could come under consideration in the event that:

1. Negotiations break down;

2. The Iranian regime violates an interim agreement (Option 1 or 2) or a final agreement (Option 3);

3. The Iranian regime, even in the absence of an agreement, takes further steps toward a nuclear weapon capability;

4. The Iranian regime violates the terms of a de facto status quo agreement (Option 4), crossing U.S. and international community redlines; and/or,

5. The United States and its partners embrace limited strikes as part of a longer-term strategy of putting increasing pressure on the regime to change its behavior (Option 5).

Depending on the circumstances, the objective of military action could be:

1. To persuade the Iranian regime to return to negotiations;

2. To induce the Iranian regime to return to compliance with the agreement(s) it has negotiated;

3. To seek to dissuade or prevent the regime from taking further steps toward a nuclear weapon capability;

4. To enforce redlines; and/or,

5. To bring about a change in the behavior and policies of the Iranian regime over the longer term.

By its very nature, any military action would raise the stakes in the confrontation over the nuclear issue and risk setting off unforeseen and uncontrollable consequences. The downside of any military action is that it could actually increase the likelihood that the Iranian regime would move further toward a nuclear weapon capability, cause division within the United States on the Iranian issue, and erode international support for curbing Iran's nuclear weapon efforts after the strike. If possible, the result of any military strike should be just the opposite.

This means that any use of military force must be carefully prepared and undertaken in a context where it is viewed as a reasonable and necessary response to Iranian intransigence or unacceptable behavior. For this reason, it would be preferable if prior to any use of military force it could be established that:

1. The negotiating track has been pursued to the point where it has clearly failed due to Iranian unreasonableness;

2. Iran has violated an interim agreement (Option 1 or 2) expressly proscribing further Iranian steps toward developing nuclear weapons capability;

3. Iran has violated a final agreement (Option 3) and an accompanying Security Council resolution authorizing "all means necessary" if the Iranian regime commits one of the listed "substantial violations" of the agreement; and/or,

4. Iran has violated a declared U.S./international community redline and thereby moved closer to a nuclear-weapons capability.

To best achieve its objectives:

1. Any military action should be clearly focused on the nuclear issue and not be perceived as pursuing other objectives (such as regime change by force);

2. Any military action should limit as much as possible any collateral damage so as not to look like an attack on the Iranian people; and,

3. As much as possible, any military action should not be clearly attributable to the United States or its ally Israel so as to make it harder for the regime to justify publicly a military response, and thus reduce the risk of Iranian retaliation, and make it harder for the regime to use the attack as a rallying point.

A limited, clandestine, hard-to-attribute military action best meets these criteria. It could be focused on one or more of the following:

1. Any new facilities or operations undertaken by the Iranian regime that violate any interim or final agreement and/or U.S./international redlines;

2. The deeply buried enrichment facility at Fordow but not the more vulnerable enrichment facility at Natanz (which would largely halt Iran's movement into the "zone of immunity" but still signal U.S./international willingness at least to consider allowing limited nuclear enrichment at Natanz);

3. The enrichment facilities at Fordow and Natanz and the heavy water reactor under construction at Arak (since these are the critical elements on the path to an Iranian nuclear weapon capability); and/or,

4. A very small number of facilities that provide critical support to these enrichment and reprocessing sites.

A word on "hard to attribute." It is not that a military strike would not be detected by the Iranians -- of course it would. And the Iranians would undoubtedly believe that the United States or Israel was responsible. But the United States would want to conduct the strike in such a way as to make it as hard as possible for the Iranian regime to establish U.S. responsibility publicly. Although U.S. officials would not publicly deny responsibility for the strike, they would not acknowledge it either -- they would just refuse to comment. This is what was done by U.S. and Israeli officials with respect to the Israeli strike on the Syrian nuclear reactor in 2007. It allowed Syria's President Bashar al-Assad to decide not to retaliate and, hopefully, would in this case make it harder for Iran to justify a major retaliation -- and give Iranian-supported groups like Hezbollah a reason to reject Iranian pleas to conduct retaliatory terrorist attacks on U.S. or Israeli targets.

On balance, any resort to military force would be better undertaken by the United States than by Israel, for these reasons:

1. Leaders of both U.S. political parties have made clear that an Iranian nuclear weapon capability would be unacceptable to United States -- that such a capability is not just an Israeli problem that Israel must fix;

2. The United States has been the leader of the international effort to deal with this problem -- and with that leadership role comes the responsibility to take the hard decisions;

3. The United States has capability to conduct a military operation, whether overt or clandestine, that is superior to Israel's;

4. The United States is a much harder target for any Iranian retaliation (and to protect Israel from any Iranian retaliation, the United States could privately inform Iran that Israel was not responsible for the strike and that Iran risks a major U.S. military response for any attack against Israel);

5. An attack from the United States would likely generate somewhat less of a rally-round-the-flag effect within Iran than an Israeli strike;

6. Israeli military action -- particularly if viewed as in defiance of international efforts to resolve the nuclear confrontation -- would result in severe criticism of Israel and its diplomatic isolation; and,

7. A U.S. strike would make it easier to hold the sanctions coalition together post-strike.

If Israel refuses to defer to the United States and takes military action on its own, the United States would want to work with Israel to deter or prevent Iranian retaliation against Israel. For the United States to launch its own military action against Iran as part of that deterrence/prevention effort would of course be a separate and very serious matter, potentially involving the United States in a war with Iran.

The United States could use the prospect of a military strike to enhance the effectiveness of its diplomacy -- and increase the chances of a negotiated settlement -- if it would reveal publicly that it is both preparing the ground diplomatically and developing operational plans for a military strike should it become necessary (rather than its current approach of playing up the risks of military action while still keeping "all options on the table").

A limited military strike will need to be well prepared diplomatically and operationally so that it does not splinter or undermine international support for the current Iran policy. If a limited military strike is to have its desired effect of setting back Iran's nuclear program and making it harder for the Iranian regime to get the bomb, it must be followed by increased pressure on Iran (including additional sanctions), not international disarray and defections from the effort. This is especially true if the Iranian regime were to use the strike as a pretext to declare explicitly that it is pursuing a nuclear-weapons capability.

A limited strike would send a message to the Iranian regime that the United States and the international community meant what they said -- that they have the will and the capability to "prevent" (to use President Obama's words) the regime from obtaining a nuclear weapon -- and that the Iranian regime risks further military strikes if it continues to pursue those efforts.

Potential benefits of Option 6:

  • Would give credibility to the vow by the United States and the international community to prevent Iran from getting a nuclear weapon while somewhat reducing the likelihood of Iranian retaliation (both conventionally and asymmetrically through terror attacks by groups like Hezbollah).
  • While giving the regime something with which to rally public support in the short run, in the longer term the limited strike could contribute to division and discord within the regime and the Iranian public about its nuclear weapon efforts -- and could result in a change in the regime's nuclear policy.
  • Could buy additional time (2-5 years) on the Iranian nuclear clock -- potentially setting back the time at which Iran would enter the "zone of immunity" about which the Israelis are so concerned and providing more time for negotiations or for pressure/sanctions to produce a change in Iran's nuclear policy.

Potential costs of Option 6:

  • Could push the Iranian regime to declare explicitly that it is pursuing nuclear weapons (while setting back the nuclear weapon program to only a limited extent) and cause the regime to do all it could to push up oil prices to damage economically the United States and its supporters.
  • Would be controversial within the United States and could shatter or erode the international support for U.S. Iran policy -- and actually reduce post-strike international pressure and sanctions on Iran.
  • Could rally Iranian public opinion around the regime and heighten public hostility to the United States and the international community -- making it harder to resolve not only the nuclear issue but also other grievances and concerns regarding the policies of the regime.

Option 7: Launch a major, overt military strike

The logic of this option is that the risks and costs of any military action are so great that the objective of the strike should be to do maximum damage to Iran's nuclear program and set it back as long and as far as possible. A major military strike would have to be overt and, because of the force requirements, could only be conducted by the United States and not Israel. While such a strike would also have to be carefully prepared diplomatically and operationally, a major strike would almost certainly put greater pressure on the existing international support for a robust Iran policy, be more controversial and divisive within the United States, and engender a stronger reaction from the Iranian regime and the Iranian people.

A major military strike would most probably focus on:

1. All facilities associated with a potential Iranian nuclear weapon capability (but should spare strictly civilian nuclear power facilities like Bushehr);

2. Iranian air defense facilities (so as to reduce the risk to American planes and pilots); and,

3. Iranian military aircraft, military airfields, and missile complexes (to reduce Iranian capability to retaliate against the United States, Israel, and U.S. friends and allies in the region).

The diplomatic predicate for a major strike would be more difficult to establish. It is likely that the mere failure of negotiations (as opposed to a clear effort by the Iranian regime to get the bomb) would not be viewed by either the international community or the U.S. public as justifying a major military strike. Enormous advance preparations would be required to try to safeguard the region's oil infrastructure, desalinization and water treatment plants, military installations, and population centers from Iranian retaliatory strikes, terrorist attacks, and sabotage -- and to try to insulate the world economy from a major potential disruption in the oil and gas markets.

Potential benefits of Option 7:

  • Would send an even stronger signal of resolve and would set back the Iranian nuclear weapon program even further than a limited strike.
  • Could raise questions in the mind of the Iranian regime about its own survival and thereby cause it to make a strategic shift in its nuclear policy toward compliance with the demands of the international community (and perhaps cause positive shifts on other issues as well).
  • Does maximum damage to Iran's conventional retaliatory capability -- and could deter the Iranians from initiating an asymmetric response.

Potential costs of Option 7:

  • As opposed to a limited strike, probably makes it more likely that the Iranian regime would explicitly declare its intention to seek nuclear weapons, that international support for the current Iran policy would erode, reducing the post-strike pressure needed to try to prevent Iran from getting the bomb, and that anti-American sentiment in the region, already substantial, would be further inflamed;
  • Could strengthen public support in Iran for the regime and public hostility toward the United States and the international community, increasing the risk of even more extreme regime policies; and,
  • Poses increased risk of escalating into a full-fledged conflict based on either a conscious decision by the regime to go to war with the United States or the errant action of a rogue IRGC commander provoking a U.S. response (e.g. deciding to target a U.S. naval vessel).

Option 8: Acquiesce in a Nuclear-Armed Iran

If efforts to resolve the confrontation over the nuclear issue fail, and the United States and the international community either decide to forego the military option or find that it does not achieve their desired objectives, they could elect simply to accept an Iranian regime with a clear path to a nuclear weapon -- and even with a nuclear weapon itself. This course of action would reflect a judgment that an Iran with nuclear weapons could nonetheless be "deterred" or "contained." The issue here, however, is what precisely is being "deterred" or "contained": Iranian use of a nuclear weapon, the proliferation of nuclear weapons to other states that feel threatened by a nuclear Iran, the increased hegemonic behavior of an Iran with nuclear weapons, its more aggressive support for terrorists and efforts to disrupt its neighbors -- or all of the above? One has to be skeptical that all or even most of these effects can be successfully deterred or contained.

Under this approach, the United States and the international community would:

1. Rely on traditional deterrence-through-threat-of-retaliation to deter the Iranian regime from using a nuclear weapon against the United States, Israel, or any other country;

2. Strengthen their military presence in the region and their defense relationships with -- and the conventional military postures of -- friends and allies in order to dissuade those states from seeking to offset Iran's nuclear weapon capability by developing their own (or, in the case of Israel, from resorting to military action against the Iranian nuclear capability); and,

3. Rely on intelligence sharing, cooperative interdiction under the Proliferation Security Initiative, and the threat to hold Iran responsible for the acts of any terrorists or other persons to whom it transfers nuclear weapon capability to prevent or deter the Iranian regime from sharing such capability.

Potential benefits of Option 8:

Could arguably lead to a more stable Middle East (see Kenneth Waltz in the July/August 2012 issue of Foreign Affairs).

  • Could avoid the costs and uncertainties surrounding military action against Iran.
  • Could open the door to a more positive relationship with the Iranian regime and ultimately to a resolution of other grievances and concerns (especially if one believes that the "coercive" approach of the United States and the international community has been a barrier to reaching reasonable agreements with the Iranian regime).

Potential costs of Option 8:

  • Would be viewed in many circles as a dramatic defeat and loss of credibility for the United States and the international community.
  • Would be viewed by many as a severe setback for the nuclear non-proliferation regime and could result in other states (both in the Middle East and elsewhere) pursuing at least their own nuclear enrichment capability and potentially the broader set of capabilities required for a nuclear weapon (including the weapon itself).
  • Israel might not accept this outcome and take unilateral military action against the Iranian nuclear program, which could result in Israel's international isolation, tensions with the United States, and a military conflict between the United States and Iran.

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