How to Isolate Iran

By Elaine Shannon

Iran's resumption of uranium enrichment last week could not have come at a better time for the Bush Administration. The U.S. sees Iran's defiance--which came as European Union foreign policy chief Javier Solana landed in Tehran to offer incentives in exchange for the suspension of suspect nuclear activities--as new ammunition in its battle to persuade the European powers, Russia and China that only harsh sanctions can impede Iran's quest for the Bomb. If, as U.S. officials anticipate, Iran refuses to suspend enrichment and return to the negotiating table, Secretary of State Condoleezza Rice will demand sanctions from the U.N. Security Council. Russia and China have pledged not to veto if Iran refuses to cooperate.

Meanwhile, the U.S. has pursued another diplomatic track, building a "coalition of the willing" to isolate Iran. U.S. officials say they are finding some success, especially with Japan, which, because of its dependence on oil from the Middle East, has long maintained neutrality there. According to senior U.S. sources, Japan, the top buyer of Iran's oil and a nonpermanent Security Council member, was closely consulted on the incentives package. On the day Iran restarted its enrichment activity, Japanese Foreign Minister Taro Aso called his counterpart in Tehran to urge acceptance of the package.

Japan's uncharacteristically venturesome moves reflect growing global consensus on isolating Iran. U.S. diplomats say Italy, another of Iran's top trading partners, has been "very supportive," as have the governments of several Persian Gulf states where Iran does much banking. The U.S. is also seeking private- sector support: Treasury officials are talking with international financial institutions about what a top U.S. diplomat calls the "reputational risks" of handling funds for Iran. The tactic seems to be working: European diplomats report that letters of credit that facilitate Iran's foreign trade are drying up.

With reporting by Jim Frederick