Obama pelted with advice on Iran, no easy options

By Alistair Lyon, Special Correspondent - Analysis

BEIRUT (Reuters) - President-elect Barack Obama wants to reshape U.S. dealings with a nuclear-ambitious Iran, but should he offer unconditional talks or get tougher first?

These two broad options emerge from the welter of advice to Obama from U.S. politicians and academics on finding better ways to tackle Iran than those pursued by President George W. Bush.

But unpicking three decades of confrontation and mutual hostility will be no easy task, even if the prospect of a U.S. or Israeli strike on Iran's nuclear sites has already receded.

"With Obama, one of the joker factors is out, which is that the Bush administration might do something completely insane," said Trita Parsi, director of the National Iranian American Council (NIAC), which advocates mutual understanding.

"The rest of the structural situation is identical to what it was before," he added. "And without negotiations, the two countries will gravitate toward conflict."

The Islamic Republic, whose regional stature grew after U.S. wars in Afghanistan and Iraq removed its two main foes, has so far shrugged off U.S. and U.N. sanctions to curb its nuclear program, which it says is for electricity not bomb-making.

In its last year the Bush administration has set aside any idea of bombing Iran and has told Israel to stand down too.

Israel now hopes tumbling oil prices will force Tehran to give ground. "Iran's economic troubles make it more vulnerable to sanctions," said a senior Israeli government official, who asked not to be named. "In our view, there is now a nine-month window for stepping up the sanctions and getting real results."

GET LEVERAGE FIRST

Some U.S. voices, such as the authors of a report by the Bilateral Policy Center in September, also say it is vital to "build leverage" by increasing military readiness and preparing harsher sanctions in concert with world powers to ensure that America enters any talks with Iran from a position of strength.

In contrast, a panel of 20 experts assembled by the American Foreign Policy Institute (AFPI) has called for unconditional negotiations, not just more economic or military coercion.

Even in Israel, a debate hitherto dominated by weighing military options against more forceful sanctions to halt Iran's atomic activities has broadened since Obama's election win.

"Dialogue with Iran while at the same time insisting on clear and defined parameters for stopping the Iranian nuclear program is not necessarily negative," Israel's military intelligence chief Major-General Amos Yadlin said Monday.

So how should Obama proceed when he takes office on January 20, six months before Iran's presidential election -- and how might the Iranians respond?

Ali Ansari, director of the Institute for Iranian Studies at St Andrews University in Scotland, said he expected a cautious approach by Obama and a degree of confusion in Tehran -- with both sides initially focused on domestic economic woes.