Iran's rejection last week of the Obama administration's proposal for a deal over uranium wasn't the end of nuclear negotiations with that nation. But it was a serious setback to diplomats who have been trying to solve the Iranian nuclear problem - and it raises doubts about whether the regime is even capable of striking a compromise with the outside world.
Here's what happened. Last month in Geneva, the United States and other big powers (including Russia and China) proposed what should have been an attractive swap: Iran would ship most of its known stockpile of low-enriched uranium - material that could be processed into a bomb - to Russia; in exchange, Iran would get reprocessed uranium for a medical research reactor.
That deal wouldn't have resolved the West's nuclear confrontation with Iran. It was merely an attempt to buy time. If Iran shipped out its low-enriched uranium, the nation's ability to produce a nuclear weapon would be postponed by about a year, during which time negotiations could continue without so many nerve-rattling threats of military action by Israel.
The proposal was a test of Iran's willingness and ability to cut a deal. Last week, the Islamic regime failed the test.
For the moment, the U.S. and its allies are keeping the door open for a change of heart in Iran. Obama administration officials say they still hope Russia, France and other countries can bring the Iranians around. But Iran's behavior during the discussions didn't give them much hope. Initially, negotiators appointed by Iranian President Mahmoud Ahmadinejad appeared to embrace the idea of a uranium swap - but as soon as the idea reached the capital, Tehran, it turned into a political football in Iran's domestic fray. Hard-liners criticized Ahmadinejad for going soft; the speaker of Parliament said the West was trying to cheat Iran; and even some members of the democratic opposition, burnishing their nationalistic credentials, said they were opposed.
The underlying problem, said Ray Takeyh of the Council on Foreign Relations, is this: "There's been a breakdown in the country's foreign policy machinery. Iran doesn't have a foreign policy right now. It has domestic politics, and its foreign policies are just a sporadic expression of that. It's not sinister; it's not duplicitous; it's just incompetent."
If he's right, the negotiations were doomed almost from the start - which is what some officials in the Obama administration have been saying all along. Talking with Iran was worth a try, they claimed, but it was mostly just a necessary step in the process of persuading Germany, Russia and China to support tougher sanctions.
What happens now? The United States and its allies are giving Iran a second chance to accept the uranium swap - but not for long.
"We've got a matter of days," an official who has been involved in the talks told me. "It's time to move on."
The nuclear clock, in other words, is still ticking. If Iran keeps its low-enriched uranium, independent experts estimate that it could build a nuclear weapon in about 18 months. There's no evidence that Iran is taking the next steps in that direction - but it hasn't convinced the rest of the world that it won't.
So the Obama administration will escalate its attempt to forge a world consensus to impose what U.S. Secretary of State Hillary Rodham Clinton calls "crippling sanctions" on Iran. That won't be easy. China, Russia and Germany all have important trade relationships with Iran.
By themselves, sanctions aren't going to reverse the Iranian regime's behavior. But they can have some effect - especially if they are married to a third step: More open and more consistent support for democracy and human rights in Iran.
Over the past two months, as negotiations got underway, Iranian democrats watched with suspicion and concern: Would the U.S. and its allies sell them out in exchange for a nuclear deal? That's how the Obama administration's conciliatory tone toward the regime was taken in Tehran - as a sign that the United States didn't really care about democracy. And that had a deflating effect on Iranian dissidents.
"People are worried about the 'Libya Syndrome' - that if the regime makes a deal with the United States on nuclear weapons, it will get a free pass to continue its repression at home," Stanford University Iran expert Abbas Milani said.
The administration tried to walk a narrow line on this issue. In the Geneva talks, U.S. diplomat William J. Burns brought up human rights with Iranian negotiator Saeed Jalili - but only briefly and not harshly enough to risk disrupting the talks. President Barack Obama tried to signal where his heart lay by mentioning the martyred Iranian student Neda Agha-Soltan in his acceptance remarks for the Nobel Peace Prize, but it was only in passing.
"We want the debate in Iran to be about Iran, not about the United States," explained the administration official I spoke to.
But the time has come to stop handling Iran's leaders with kid gloves. It wasn't becoming, they didn't deserve it and - worst of all - it didn't produce results.
Iran's democrats need to hear from Washington, D.C., that their fate is not up for bargaining and that the United States - and, it is hoped, its allies - consider Iran's domestic political evolution as important as its nuclear program.
McManus is a Times columnist. He can be reached at email@example.com.