Take him up on it: Iranian President Ahmadinejad suggested Iran would be willing to have Western firms enrich uranium on Iranian soil. Courtesy United Nations

The United States, Britain, France, Germany, Russia, and China are now brandishing the threat of U.N. Security Council sanctions in an effort to stop Iran’s march toward a full-scale nuclear program. Unless Iran and the powers reach a negotiated agreement, the path apparently leads either to economic sanctions or military action—deeply problematic options for all involved. Lost in the debate over options for containing Iran’s nuclear ambitions is potentially the most effective one—Iran’s proposal to set up a nuclear fuel fabrication consortium on its own soil, in exchange for the transparency of intrusive inspections by the International Atomic Energy Agency (IAEA). Trust but verify.

Rhetoric about the dangers of inaction is everywhere. Germany chancellor Angela Merkel compared Iranian President Mahmoud Ahmadinejad’s Iran to Nazi Germany. Not to be outdone, Israeli officials have said that today’s Iran is the most dangerous state since World War II. Presidential aspirants in the United States sound the alarm that the only thing worse than a military invasion of Iran is a nuclear-armed Iran.

These warnings bear an uncomfortable resemblance to those heard in the summer of 2002 that compared the dangers of military action in Iraq to the dangers of inaction. Few members of the international community then were proposing inaction. And few today are advocating a nuclear-armed Iran. The choice is not between military action and submission. There are more sensible options for resolving the crisis. Unfortunately, alarmist rhetoric is starting to drown them out.

One good option will be the subject of bilateral discussions in Moscow between Iran and Russia beginning February 16. The potential deal would allow Iran’s nuclear reactor fuel to be manufactured in Russia, thereby eliminating any possibility of Iran moving from fuel production to bomb production.

A problem for Iran is that this option would put them in the position of relying on the Kremlin to be a reliable fuel supplier, the same predicament from which European nations are now seeking to extricate themselves. But if Iran nevertheless accepts, and if the deal includes intrusive IAEA inspections to ensure that Iran pursues no secret parallel program to produce weapons-grade uranium, this outcome would be best for all.

Another option—proposed by Iranian president Ahmadinejad at the U.N. General Assembly in September 2005—is to set up a reactor fuel fabrication facility in Iran with the help of Western companies. If Iran rejects the Russian option, it would be wiser for the powers to accept this proposal, provided it is tied to intrusive IAEA inspections, than to impose sanctions or take pre-emptive military action.

Iran’s proposal poses some risks. Its scientists might try to use the expertise acquired from these firms to produce weapons-grade uranium at a secret facility. To avoid this danger, the proposal must be tied to a program of intrusive IAEA inspections, authorized by Iran, to inspect at will the consortium’s facilities, Iran’s management of plutonium at the end of the fuel cycle, and anything else the inspectors want to see. The West should also insist that any facilities constructed with its assistance be made vulnerable to destruction from the air, to protect against Iran’s wilful default on the deal.

No inspections program, of course, can reduce the risk of cheating to zero. Experts, not politicians or pundits, should tell us how large the risks of a secret program are. In the run up to the U.S. invasion of Iraq, the IAEA said the chance of failing to detect a secret Iraqi nuclear weapons program was negligible. Politicians and pundits disagreed. We now know who was right. Even if Iran eventually stopped cooperating with the IAEA, the powers would be in a better position than today to take military action—they would know better where the nuclear targets in Iran are, and pre-emption would have increased international legitimacy.

Only full-scale military occupation can guarantee a non-nuclear Iran. But that extreme measure is unlikely to result in the emergence of a popular government friendly to the West. No one should expect Iran’s mullahs to be replaced by a pro-American, anti-nuclear regime. Demanding the right to produce nuclear reactor fuel, after all, is the most effective way for Iranians to defy America. The only way for the powers to counter this reality is to quiet Ahmadinejad’s bluster by lavishing his people with trust—and with verification.