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I will jump back in the pitch for another comment on this story and try to make an analogy why the Middle East is like the proverbial Tar Baby - you get stuck harder the more you push.
If you negotiate with Iran - you legitimize the government there and "betray" the aspirations of the educated. If you try to fight them - the "national card" gets played and you end up alienating everyone. God help you if try anything covert - the memories of the 50's CIA coup get trotted out in every discussion as the greatest crime against Iran. So, what do you do?
The first thing you do is realize that there is not (for the foreseeable future) going to be any "western liberal solution" to this area. This is the Middle East and the culture is primarily Islamic - so any government there is going to be more conservative that perhaps the West would prefer. The second thing you realize is that the best offense against Iran at this point is more of a theological battle for control of the Shia mind. Devolution of ideological powers away from Qum to Najaf (in Iraq) that would have more long reaching effects that any other on destabilizing the authority of the ruling clergy in Iran.
The third is a world recession that will drive the price of oil down and drain the coffers of the governments in the area. Let them go broke building atomic bombs - and then let them try to feed their people.
Negotiations with this group (normalizing relationships) would be nice - but it is not going to happen more than the level of a cold peace. And frankly, the educated people there know what the West is all about - let them have something to strive for instead of handing it to them on a silver platter.
The more you fight, the more you lose. Just let it ride and keep an eye on them (the nuclear program). Don't make mischief on them and at the same time smack down where they make mischief in Lebanon and Iraq. The system there is rotten inside, if you are just patient, it will eventually collapse of its own weight.
