So what’s our Iran policy right now?

I blogged in the spring about my puzzlement and confusion regarding U.S. foreign policy towards Iran. On the one hand, it was clear that certain elements of the Bush administration were not big fans of either direct or indirect dialogue. On the other hand: [E]ven if this skepticism (towards negotiations and incentives) is warranted, exactly what is the hawkish set of policy options on Iran? Is there any coercive policy instrument that is a) publicly viable; and b) would actually compel Iran into compliance without negotiations? I'm even more puzzled today. First, Bill Gertz has a Washington Times exclusive that is clearly designed to torpedo one diplomatic option: Iran is close to an agreement that would include a suspension of uranium enrichment but wants the deal to include a provision that the temporary halt be kept secret, according to Bush administration officials. Javier Solana, the European Union's foreign policy chief, has been working with Iranian nuclear negotiator Ali Larijani on the enrichment-suspension deal that could be completed this week..... According to the officials, the suspension of uranium enrichment by Iran would be for 90 days, so additional talks could be held with several European nations. Many U.S. officials are opposing the agreement as a further concession to Iran, which continues to defy a United Nations' call for a complete halt to uranium enrichment. A Security Council resolution had given Iran until Aug. 31 to stop its enrichment program or face the imposition of international sanctions. Tehran ignored the deadline, but diplomacy has continued. Some in the State Department are supporting the deal, which they view as a step toward achieving a complete halt to uranium enrichment. However, other officials said that keeping any suspension secret would be difficult and that it would drag the United States into further negotiations with Iran. The officials opposed to the deal want any agreement on uranium suspension to be announced publicly. Also, any suspension of enrichment would require International Atomic Energy Agency (IAEA) inspections to verify that work has stopped at Iranian facilities. The inspections would likely be disclosed, exposing any secret arrangement with Iran on suspension. Failing to publicly announce the suspension also would be a face-saving measure for the Iranian government. Officials said President Bush is not happy with the secrecy demand, although he continues to support the use of diplomacy to solve the problem. I have to wonder if Gertz asked his editors to headline his article, "A Story That By Its Very Existence Will Alter The Facts Reported In Said Story." OK, so clearly diplomacy is not the policy du jour of this administration when it comes to Iran. How about sanctions? Here we come to Condoleezza Rice's comments to the Wall Street Journal editorial board: QUESTION: What do you think about a gasoline embargo on Iran? SECRETARY RICE: Well, I just ? I don?t think that it was anything that you have to look at it in the near term and I?m not sure that it would have the desired effect. One of the problems that we have is if indeed you would like not to have a situation in which you reinforce the leadership?s desire to make their people feel that America is anti-Iranian people, then you want to stay away from things that have a bad effect on the Iranian people to the degree that you can. You know, we?ve talked ? people have talked for instance about barring Iranian students or barring Iranian ? there was at one point the World Cup, you know, bar them from the World Cup or something like that. The Iranian regime has been pretty insistent on a line of reasoning that this is not between the United States and the Iranian regime; this is between the United States and Iran, the culture, the people, its great national pride. And that?s something we really do have to fight against and some believe a gasoline embargo might play into that. If you read the whole interview, it's clear that Rice favors financial sanctions ("Iran is not North Korea. It?s not isolated and it is pretty integrated into the international financial system. And that actually makes its potential isolation more damaging to Iran than for instance North Korea which, as you notice, has not been too thrilled with even the rather modest financial measures that we?ve taken against North Korea."). That said, rejecting the gasoline embargo strikes me as a huge mistake. Iran is also not like North Korea in that there's actually a middle class in Tehran and environs that like their cheap gasoline very much, thank you. I concede that the possibility of a nationalist backlash is there -- but just because Ahmadinejad is painting the conflict as a civilizational one does not mean that Iranians are buying it. There's a decent possibility that of a lot of Iranians taking out their economic frustrations against Ahmadinejad's government -- especially after Iran's government spends so much on Hezbollah. So, to review: there are administration efforts to sabotage the available diplomatic option, and the most powerful economic sanction has been rejected in the near term. I don't think financial sanctions will bite as much as the secretary, in part because it always takes a long time to implement and after the 1979 asset seizures the Iranians have moved down the learning curve on evading those kind of strictures. What's left in the policy tool kit besides force? Anyone? UPDATE: Fareed Zakaria offers some suggestions that I am quite sure will be ignored by the Bush administration.