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As the deadline for the E3+3 (Britain, France, Germany + US, Russia and China)nuclear talks with Iran draws near, the chances look rather bleak that an agreement will be reached by July 20. According to sources close to the negotiators, “substantial differences” remain and the capping of enrichment capacities is likely to be the toughest nut to crack. As the Vienna negotiations enter their final week, the question is whether to extend the talks beyond the July 20 deadline. With the clock ticking on a permanent deal between the E3+3 and Iran, now is the time to take a step back and to look at what is at stake.

US Secretary of State John Kerry is right. In a recent Washington Post op-ed piece, he maintained that the E3+3 and Iran face a historic opportunity to end an intransigent conflict, which has kept the international community on edge for more than a decade. However, the significance of a permanent agreement goes far beyond ending the diplomatic tug of war over Tehran’s contested atomic programme. It is about unlocking the potential for engagement between Iran and the West as well as improving relations between the Islamic Republic and its regional neighbours. With the post-Ottoman order in the Middle East gradually falling apart, the region is in for a protracted period of instability and violence. At such a critical juncture in regional history, it would be short-sighted and potentially costly to keep an important actor like Iran out in the cold.

Few analysts would question the claim that the Islamic Republic’s influence in the region is on the rise. The geostrategic changes that have taken place over the past decade have strengthened Tehran’s hand. Much to the chagrin of Saudi Arabia, Iran’s primary regional rival, Iran has succeeded in expanding its sphere of influence deeply into the Levant. This prompted Sunni Arab leaders to warn against an Iran-led “Shiite crescent”. From an Iranian point of view, even the latest Jihadist onslaught in Iraq, which Tehran’s top echelons of power perceive as a serious threat (nobody in Iran wants to be dragged into another costly operation in addition to Syria), may have its positive aspects. Growing concerns in Washington and other western capitals about an acute security threat emanating from a jihadist “Caliphate” in eastern Syria/western Iraq have turned the Islamic Republic into a potential partner in the fight against a common enemy.

On the regional level, Tehran can use the Islamic State of Iraq and the Levant (Isil) as a bete noire to rally the support of Shiite coreligionists in the Levant as well as on the Arab Peninsula. If Iran were to be seen as a “knight in shining armour”, that had come to the rescue of Iraq’s beleaguered Shiites, this would tremendously boost the popularity of the Islamic Republic in the Shiite-Arab world. A fragmentation of “Iraq as we know it” into a Shiite rump state as well as a Sunni and a Kurdish area — a scenario which is becoming more probable by the day — will not necessarily run counter to Iran’s interests either. For Tehran, it will be much easier to exert influence on a Shiite mini-state that was largely dependent on its big eastern neighbour than to control a strong independent Iraq.

Iran’s geopolitical gains in the region, its vast human resources (the Islamic Republic is the most populous country in the region with a population of more than 75 million), its millennia-old culture, its long-standing tradition of statehood and its ample energy reserves imbue Iran with the confidence — some would say hubris — of a regional power “in waiting”. There is no doubt that Tehran has a lot of assets at its disposal when it comes to assuming a predominant role in the region. However, the million dollar question remains: If and when sanctions on Iran are lifted, can we expect Tehran to become a constructive, stabilising force for good rather than the perpetual trouble-maker of the region? There are those who argue that “removing sanctions would strengthen Tehran’s ability to project malign influence in its near-abroad”.

While this is a possible scenario that nobody should exclude, a plausible case can also be made for the opposing scenario. If one were to name the most characteristic feature of President Hassan Rouhani’s foreign policy so far, it would be pervasive pragmatism. The pragmatic realists close to Rouhani have long realised that neither the confrontation with the West nor the enmity between Iran and some of its Arab neighbours, especially Saudi Arabia, serve Tehran’s interests. “Rouhani’s foreign policy towards [Iran’s] neighbourhood will be much more in sync with pragmatic realism than with ideology”, says Walter Posch, Iran expert with SWP and participant at Korber Foundation’s 156th Bergedorf Round Table in Tehran.

Rouhani and his team are seeking to transform Iran into a regional energy and transport hub. A regional climate of instability and conflict is not at all conducive to this goal. Therefore, Iranian decision-makers have a strong incentive to reduce rather than fuel intra-regional tensions. Rouhani’s outreach to the Gulf Cooperation Council (GCC) as well as the rare appointment of an ethnic Arab as Secretary General of the Supreme National Security Council should be read as efforts to mend fences with the Gulf monarchies. As a Shiite aspirant to regional leadership in a Sunni-majority region, Iran is well aware that it is best served not only by maintaining good neighbourly relations with the GCC, but also by putting the genie of Sunni-Shiite sectarianism back into the bottle. While the Islamic Republic itself is no stranger to instrumentalizing sectarian sentiments for political purposes, the current flare-up of sectarianism contradicts its long-term interests. Ultimately, Rouhani’s vision of Iran as the economic and political powerhouse of the region can only come true if the Islamic Republic is recognised as a legitimate and constructive regional power by the international community and Iran’s neighbours in the region.

For now, the key to ending Tehran’s isolation and to bringing it back to the international fold is solving the nuclear conflict. All parties to the Vienna talks should bear in mind that the rare opportunity formed by current negotiations needs to be seized, as it may not come again. For the West, Iran has much to offer as an energy provider, as a trade partner, and even as a potential guarantor of regional security. However, what is true for other emerging powers is also true for the Islamic Republic: “With great power comes great responsibility.”

If Tehran is to become a partner for the West, it must wield its power responsibly. Rouhani’s conciliatory gestures vis-a-vis the GCC are positive, but more confidence-building is needed, particularly between Tehran and Riyadh. Eventually, Iran and Saudi Arabia will have to reach a common understanding that the cost of confrontation outweighs its benefit. Iranians and their neighbours on the Arab Peninsula tend to mistake geographical proximity for a profound understanding of each other.

In reality, however, the mental walls are very strong. To bridge this gulf in the Gulf region, “a little help” from extra-regional friends may be needed. In close cooperation with their US allies, the Europeans could provide the framework for a Saudi-Iranian dialogue. In a regional environment characterised by zero-sum thinking, rather than by win-win patterns, this is easier said than done. However, constructive engagement between Tehran and Riyadh may be the best hope we have of preventing the region from collapsing into even deeper chaos.

Nora Muller is a Programme Director at the International Affairs Department of Korber Foundation.