A US think tank has warned that diplomacy would not stop Iran's nuclear program and that harsher sanctions against Tehran should be adopted, a move that could drive a wedge between the White House and Germany.
Iranian President Mahmoud Ahmadinejad says nuclear enrichment is Iran's right
US President-elect Barack Obama has vowed to "do everything that is required" to prevent Iran from obtaining a nuclear weapon, including harsher sanctions and, if necessary, military action.
"The diplomatic path is not promising," Middle East expert James Phillips of the conservative US Heritage Foundation wrote, according to the DPA news agency. A carrot-and-stick policy towards Iran holds little hope, he added, because "for Iran, a nuclear weapon is the biggest carrot."
Phillips warned Obama against meeting with Iranian leaders, and said he believed Tehran would use the event for propaganda and delay tactics. He said Iran was not interested in dialogue and reconciliation with what it calls "the Great Satan."
Iran's real Achilles' heel, he said, was its economy, adding that if hurt by harsher sanctions, the rule of Iran's fundamentalists could be seriously challenged.
But a new round of sanctions risks magnifying the diverging interests between the US and its allies such as Germany, which still has firm financial connections with Iranian banks and which continues to do business with the Islamic republic of around 70 million inhabitants. In fact, some 75 percent of all medium and small businesses in Iran use German-made equipment.
Germany has so far come to the table in passing sanctions against Iran
Such trade elements are not specifically forbidden under UN Security Council sanctions, which only limit the sale of technology that could be used in the weapons industry.
In November, the German-Iranian Chamber of Commerce met in Hamburg to discuss the UN sanctions and how they could affect German firms doing business in the Islamic country. Some of the advice included ways of obtaining German government guarantees for trade with Tehran, according to Iran's Fars news agency and other media reports.
The reaction to this in the US has been one of growing anger, particularly in the conservative press.
"Germany loves Iran," the Wall Street Journal said in a commentary by editorial writer Dan Schwammenthal. He pointed out that German-Iranian trade had increased 14.1 percent in the first seven months of 2008.
Germany, he said, was less worried about an Iranian nuclear bomb than it was about tighting sanctions that could negatively affect trade between the two countries.
German Chancellor Angela Merkel has repeatedly emphasized Germany's special responsibility to protect Israel. She insists that Germany is only obliged to obey the UN sanctions and will not undertake any further unilateral action against Iran at this time.
Thus, Iranian banks such as the government-owned Melli and Saderat banks -- which have been accused by Washington of funding terrorists and weapons research -- do flourishing business in Germany.
Analysts are split over whether diplomacy or military action are the best way forward
This, despite Germany having joined the five veto-wielding UN Security Council members in trying to convince Iran to drop its nuclear enrichment program.
Uncertainty over enrichment solution
With such vested interests, it is a matter of debate among conservative thinkers as to whether a peaceful solution can be found to the Iranian question.
Phillips, the Middle East expert, noted the years-long efforts by Europeans as part of talks involving Germany, Britain and France have showed that negotiations bring nothing. He added that the situation was not helped by the fact that, for example, the German government still undertook credit guarantees for Iranian business.
Richard Haass, president of the Council on Foreign Relations, said however that direct and unconditional negotiations with the government of Iranian President Mahmoud Ahmadinejad were the only way forward, even though "diplomacy is not guaranteed to work."
Military action against Iran, he said, may gain time but would not solve the nuclear enrichment question and would likely trigger retaliatory attacks by Iran against US facilities in Iraq and Afghanistan. He said such measures would also undoubtedly push up oil prices.
As for the role of the Europeans in a new sanctions effort, many US analysts believe that they are more worried about keeping the US from invading Iran than they are about Iran's development of nuclear weapons.