Richard N. Haass, president of the Council on Foreign Relations, says if he still directed policy planning for the State Department, he would propose a three-part "diplomatic package" to halt Iran's nuclear development.

"First, it would let the Iranians know what was being required of them, for example, no enrichment or conceivably some very limited enrichment with all sorts of intrusive inspections," Haass says. "Secondly, the package would make clear what was being offered to the Iranians in the way of economic benefits, perhaps the removal of certain sanctions, and certain limited security guarantees. And thirdly, it would make clear what could or would happen to Iran if it were to fall short of what was being asked."

These consequences would include possible sanctions, "and conceivably military force, which wouldn't necessarily be used but would not be precluded." He warns, though, that military action against Iran would hold many pitfalls for the United States.

Iran and its nuclear program have been steadily in the news. CFR held a conference on this topic last week. And there seems to be a crescendo of reports suggesting U.S. policymakers are very seriously considering some kind of military action against Iran to head off its ability to process uranium for possible nuclear weapons. What do you think about these reports?

Well, two things. One is I'd be surprised if the military and the intelligence community were not looking at this question; they should be. They should get a sense of its feasibility and what it would entail. Secondly, what's interesting is that we have all these reports. It's possible that it's just a coincidence, but it's at least as possible that this has been authorized to some extent. These reports add some muscle, or some military backdrop, to the diplomacy, and this sends an obvious message to Tehran. But it also sends a message to the Europeans, the Chinese, and the Russians, that it is in their interest to see this resolved diplomatically.

The head of the International Atomic Energy Agency (IAEA), Mohamed ElBaradei, is going to Tehran to try to persuade the Iranians to again halt their nuclear enrichment processing. I thought it was interesting at the Council [on Foreign Relations] meeting last week that nobody really argued Iran was only interested in peaceful uses of nuclear energy.

That's true, I don't know anyone who thinks that. I don't know anyone who looks at Iran's energy situation, with all its oil and natural gas, who finds plausible Iran's professed claim that this is all about nuclear power for electricity generation.

If you were still in the State Department and you were asked to draw up a policy approach, what would you propose?

I would put together a diplomatic package that would essentially do three things: First, it would let the Iranians know what was being required of them, for example, no enrichment, or conceivably some very limited enrichment with all sorts of intrusive inspections. Secondly, the package would make clear what was being offered to the Iranians in the way of economic benefits, perhaps the removal of certain sanctions, and certain limited security guarantees. And thirdly, it would make clear what could or would happen to Iran if it were to fall short of what was being asked. This would include, for example, political sanctions, economic sanctions—including no international investment in their energy industry—and conceivably military force, which wouldn't necessarily be used but would not be precluded.

[Former National Security Council official] Flynt Leverett, in an interview recently, said Iran had offered to hold a series of talks back in 2003, shortly after the Iraq war started. I don't see that still on the table, in part because there's a new, more anti-American president in Iran, Mahmoud Ahmadinejad. Would direct talk by the United States have any impact at this point?

It's hard to know, because you don't so much deal with one Iran as you deal with several Irans simultaneously. And I never thought we'd reach this day, but we may well have reached a point when the clerics are less radical than the elected politicians. It's conceivable that talks would be possible. The Iranians have expressed a willingness to have limited talks over Iraq, and it's quite possible they would be open to broader talks. A lot of this is based upon two things. One is an assessment of what Iranian politics can handle. And just as important, it's a reflection or an assessment of what Iran's priorities are. And if you, like me, believe that the priority for many Iranians is one of economic betterment and economic growth—they don't want to be sanctioned, they don't want to be economically isolated from the world—then there is the possibility through incentives and sanctions to possibly—I don't want to exaggerate the chances—move things in the direction we want.

But if their president is really still a Revolutionary Guard and wants to increase their influence beyond their borders, how do you deal with that one?

Well again, as we've seen historically, the elected president of Iran does not call the shots. We saw that in the previous era when former President Mohammad Khatami could not deliver on his so-called more moderate policies. So, although the current president of Iran is espousing all sorts of radical lines, in particular about Israel and about the Holocaust, it's not clear to me that he's in a position to deliver. What I would say from my own experience with Iran and Iranians is that there is a desire to be treated with a degree of what you might call public respect. And if the United States, and more broadly, the international community, were to make clear that the purpose of diplomacy is not to humiliate Iran and not to alienate the Iranian people, but to get the Iranians to give up or dramatically scale back their nuclear ambitions, it could work.

Now, Seymour Hersh in his New Yorker article writes that the ultimate goal of this administration is really to get regime change in Iran, not so much to end the nuclear program in itself. Does that sound right to you?

I believe that's correct, in the sense that for five years this has been the dominant school of thought in the administration, and as recently as the president's State of the Union address several months ago, regime change was emphasized. Even subsequent to that, when the secretary of state testified before Congress, she was talking about spending seventy-five or eighty million dollars to promote domestic change within Iran. What's ironic about what we're now hearing is that some of the policies being talked about work against regime change. The unwillingness to engage Iran directly, I believe, works against regime change. History elsewhere suggests that isolation reinforces hardliners. And secondly, if military force were ever to be used against Iran, I fear what you might describe as a rally-around-the-flag effect: that it would strengthen the hands of those people in Iran who see the world in radical or apocalyptic terms, and it could very well weaken the hands of those who are arguing for a more reformist path that would involve them more with the United States and the West.

What has led the Bush administration to have this strong desire for regime change?

Well, some of the impetus came from 9/11, when one of the analyses widely reached was that terrorists were more likely to emanate from societies where there isn't economic opportunity, where there isn't political opportunity, where there isn't a degree of openness. That said, some of the impetus stems from years before, and it represents a logical—although I would call it quite radical—approach to foreign policy, which essentially says you cannot establish acceptable relations with certain countries if their societies are based upon tenets that you find objectionable and obnoxious. In some ways, you can almost understand it as the radical version of the "democratic peace" theory, which suggests that democracies are more likely to be good international neighbors and citizens, so tyrannies are more likely to be bad neighbors and bad regional and international citizens. The problem with this school of thought is that it ignores a good deal of history which suggests you can have acceptable, even if not ideal, relations with regimes or societies with whom you're not similar. And second, it ignores the risks and the costs, as well as the difficulties, of carrying out a foreign policy that's based upon trying to bring about fundamental change.

Coming back once more to military force, it's said that Arab states led by Sunni Arabs have no great love lost for Iran. Will a military intervention by the United States worsen or improve U.S. standing in the Arab world?

What you said is true. There's no great love lost between many of the Sunni societies or countries and Iran. That said, I believe if there are images on al-Jazeera and elsewhere of American weaponry leading to a loss of Muslim life, I do think it would on balance hurt America's image or reputation in the Arab and particularly Muslim world. But beyond that, there are many other repercussions we need to think through. Iran would not simply accept or swallow an American use of force and not respond. We would have to expect Iranian retaliation in Iraq, in Afghanistan, possibly using terrorism. We would have to expect a price of oil that could well increase by between 50 [percent] and 100 percent. We could also expect that Iran would probably then look for ways to reconstitute its nuclear program. We've learned in Iraq that an initial use of military force will neither be decisive nor the end of things. It tends to be more a chapter rather than the entire work.