Twists and turns, and fears for what lies beyond the next bend

The waiting game is almost over. For nearly two years EU diplomats have been negotiating with Iran to try to persuade it to abandon its nuclear ambitions.

All the while Washington has looked on sceptically, keen in the past six months to be seen to be allowing the EU to have their way but never believing the mullahs would back down.

Now Iran's decision to resume the conversion of its uranium stocks, just 48 hours after its rejection of an EU package of incentives, has brought the issue to a head, just as many in Washington expected.

The difficulty for the Bush administration is that even if, as the leading EU nations insist, there will be a united front towards the mullahs, it is far from clear how they can best bend Iran to their will.

The election of the new ultra-conservative Iranian president, a former student leader in the Iranian revolution, has stirred bitter memories in America anew. For two and a half decades since the overthrow of their great regional ally, the Shah, Washington has been vexed by the Iranian question.

Fury at the taking of the hostages in the embassy and Iran's support for terrorism was tempered by the historical complications of intervening in the vast and hostile terrain that was ancient Persia. Until the overthrow of Saddam Hussain, a desire to play Iran off against that other regional bugbear for America, Iraq, also played a part in US caution.

President Bill Clinton, for example, tried conciliation only to see his overtures cast back in his face.

Now the nuclear question has made the need for an Iranian policy more pressing than ever. And yet still the Iranian desks of the key departments in Washington are uncertain how to advise, still less how to proceed.

When US Vice-President Dick Cheney warned on the day of President George W. Bush's inauguration in January, that Iran was at "the top of the list of potential trouble-spots'', the world quaked and saw it as a statement of hawkish intent.

His follow-up words that "everyone would be best-suited if we could deal with it diplomatically'' attracted rather less attention. But they, rather surprisingly given Cheney's record as a hawk's hawk, set the tone for the next six months.

Only last week Nicholas Burns, one of America's senior diplomats, said that Washington was behind the EU's offer of economic and political incentives to Iran to persuade it to abandon its controversial nuclear enrichment programme.

Rebuild ties

It is not that many in Washington or indeed, to be fair, many of the European officials involved in the initiative thought it would work. But after the trans-Atlantic rows of Bush's first term, he was keen to rebuild ties and at the very least show willing by not publically dismissing it.

To date the EU 3, as Britain, France and Germany, are known, have surprised Washington's hawks by the forcefulness of their comments about Iran. Their suggestion last week that Iran might end up before the UN Security Council if it pushed ahead with its threat to restart uranium enrichment struck the hawks in particular.

All this has been much to the frustration of Teheran, which had been hoping to drive a wedge between Washington and Europe.

Crucially it failed to appreciate that despite the still shaky relationship between Paris and Washington, France is and for a long time has been a hawk on Iran.

Now, however, in the eyes of many in the Bush administration comes the key test of the new EU-US rapprochement.

"This isn't just about Iran's nuclear programme it's about the credibility of the EU's diplomacy,'' said Michael Rubin, of the conservative think-tank, the American Enterprise Institute, and the author of a new book on Iran.

"Europe seized this issue to show engagement worked. Now they must show they are committed to use engagement to solve problems and not to avoid them.''

The recent meeting of the International Atomic Energy Agency (IAEA), the UN's nuclear watchdog, is expected to lead to a reprimand not a referral. That is expected at the earliest in another meeting in two weeks.

America would be keen for the UN Security Council to impose sanctions on Iran. Given, however, America's difficulty recent history with the UN that might not be a straightforward vote to win. Russia and China, which have close ties with Iran, might be tempted to wield their vetoes.

America's new UN ambassador, the outspoken John Bolton, would need a diplomatic wand that he is not known for waving.

Advocates of caution will also be seizing on a recent US intelligence assessment that said Iran is up to a decade, not five years, from having a nuclear bomb to urge patience.

"There have been a lot of twists and turns. But none of us really knows what is a bit further down the line,'' said a source close to the negotiations.

- The Telegraph Group Limited, London