In a small victory for European diplomacy and constructive engagement, the International Atomic Energy Agency recently verified that Iran has suspended its uranium enrichment activities. It did so in accordance with an agreement reached with Britain, France and Germany (known as the EU3), which held out the prospect of expanded trade and investment in return for Iranian cooperation.

The Iranian-EU3 agreement has derailed for now an effort by the Bush Administration to isolate and sanction Iran for its alleged nuclear weapons activities. But the Administration has made clear that it is not about to join the European effort to engage Iran, and it issued a barrage of statements designed to discredit the agreement. The State Department claimed it had information that Iran was adapting missiles to carry nuclear warheads, and the White House pointed to reports that Iran had accelerated the production of uranium hexafluoride, a gas used in the production of nuclear weapons.

In putting out such statements–based in large part on unverified information from a single source whose reliability is questionable–the Administration shows that it either has no idea of its credibility problem or doesn’t care. Worse, it seems determined to pursue a hard-line approach regardless of whether it has a chance of succeeding. The Administration does not have a viable military option against Iran, with US forces tied down in Iraq and with Iranian nuclear facilities dispersed to avoid preventive strikes.

Moreover, it surely knows that an effort to punish and isolate Iran is bound to fail without full cooperation from Europe, Russia and China, and it should know that such an effort is likely to accelerate whatever covert nuclear-weapons program Iran is pursuing in the hope of being able to deter future US intervention. Confronting Iran at this time does not make sense, given the overwhelming problems the Administration has created in the region. The United States needs Iran’s continued cooperation in helping to stabilize both Afghanistan and Iraq, and in de-escalating the cycle of Israeli and Palestinian violence. For the most part, Iran has thus far been willing to oblige, by being supportive in Afghanistan and by encouraging moderation among the Shiites in Iraq. According to one report, it even offered to curb its backing for Hamas and Islamic Jihad in exchange for renewed US-Iranian relations.

Our European partners acknowledge that Iran may have long-term nuclear weapons ambitions. Indeed, it would be naïve to think otherwise, given Tehran’s often-stated desire to be a stronger regional player and the fact that other countries in the region already have nuclear weapons, not to mention Iran’s understandable fears of a US-dominated Iraq and the history of US and Iraqi aggression against it. But the EU3 are also right to believe that diplomacy is the only way to avoid a destabilizing nuclear breakout that would foreclose a more stable, nonnuclear regional order in the long term.

The EU3-Iranian agreement buys time for further constructive diplomacy–time to maintain some international oversight, through the IAEA, of Iran’s nuclear program and to test Iran’s interest in further moderating its behavior as well as in helping shape a regional order based on principles of common security. Washington has nothing to lose and much to gain by being supportive of European diplomacy and by opening up its own avenues of communication with Iran–in order to gain more information about Iran’s weapons program, its internal politics and how domestic forces see its future role in the region.

Ultimately the problem of Iran’s nuclear ambitions can be solved only by offering the outlines of a larger regional bargain. That bargain would make Iran a partner in stabilizing and modernizing the Middle East and it would put all the weapons systems in the region on the table, including Israel’s and America’s. The Administration’s track record of unilateralism alternating with threats and confrontation does not bode well for the future of such a bargain. But it is really the diplomatic goal best worth pursuing, and the European approach is an essential first step on the way.