Yes, none of the options are attractive, just like Iraq.The Bush administration has yet to forge a clear strategy on how to deal with Iran, partly because of a lack of attractive options and partly because there is a debate under way between hard-liners and advocates of diplomatic engagement. But in another similarity with the Iraq situation before the war, Washington is in considerable disagreement with key allies over how to handle the threat.
Britain, France and Germany say Iran's nuclear program is unacceptable, but they also warn that a confrontation could backfire and that incentives as well as punishments need to be presented to Tehran. Threatening sanctions - a cutoff in oil purchases, for example - is not viewed as credible or likely to get much support, they say.
...which continues since Nobel Peace Prize recipient Yassir Arafat rejected Israel's offer of basically everything the Palestinians have ever wanted a few years back. After that little episode I think it is safe to say that the "impasse" will never be resolved.On the other side of the spectrum, some at the State Department say no solution is possible without a discussion of benefits to the Tehran government if it changes its behavior, or without progress in the impasse between Israel and the Palestinians.
As for the "behavior" of the Iranian government, what is the punishment if they are uncooperative? According to the article sanctions are viewed as being an ineffective tool.

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