Iran, despite its ritualistic denials, appears to be accumulating technology and expertise for the construction of nuclear weapons. Unlike events in Iraq, the Iranian situation has produced a consensus position among the United States and its European allies -- namely, relying on the International Atomic Energy Agency (IAEA) to defuse Iran's nuclear challenge. There is only one problem with this strategy: It may just ensure that Iran becomes the next member of the nuclear club.

As a watchdog organization, the IAEA focuses on preventing states from acquiring the technology necessary for nuclear weapons. By conducting inspections, limiting Iran's access to proscribed technologies and invoking prospects of economic sanctions, the IAEA seeks to curb Iran's appetite for nuclear arms. But none of these procedures addresses the core of Iran's motivation for the bomb.

While it is convenient to dismiss Iran's quest for nuclear arms as a product of radical Islamic doctrine, this dangerously misconstrues the genesis of the Iranian program. Rather than religious dogma, Iran's nuclear ambitions are born of the compulsion -- crystallized by the bitter experience of its eight-year war with Iraq -- to craft an impregnable deterrent capability. In the post-Sept. 11 period, the massive projection of American power on Iran's periphery and the Bush administration's shrill "axis of evil" rhetoric have further enhanced the value of nuclear weapons in the clerical cosmology.

Despite these dire developments, no one should presume that the perennially fractious Iranian theocracy has settled on its course. Within the corridors of clerical power, a subtle yet significant debate regarding the strategic utility of nuclear weapons is going on. For while all of Iran's contending factions are united on the need to sustain a vibrant nuclear research program, the prospect of actually crossing the nuclear threshold has generated vigorous disagreement. Through bilateral diplomacy involving direct negotiations between Washington and Tehran, the United Sates can still affect Iran's nuclear deliberations.

The primary exponents of a nuclear breakout option are hard-line clerics closely associated with the supreme religious leader, Ayatollah Ali Khamenei. A fundamental tenet of the hard-liners' ideology is the notion that the Islamic republic is in constant danger from predatory external forces, necessitating military self-reliance. This perception originates in a revolution that sought to refashion regional norms. The devastating war with Iraq, in which Saddam Hussein employed chemical weapons against Iran with impunity, reinforced such views. Given its paranoia and suspicions, the Iranian right does not object to international isolation and confrontation with the West. Indeed, for many in this camp such a conflict would be an effective manner of rekindling popular support for the revolution's fading elan.

In contrast to the hard-liners, a coalition of pragmatic conservatives and reformers that questions the strategic value of nuclear weapons has gradually emerged. Moderate conservatives such as the powerful secretary to the Supreme National Security Council, Hassan Rowhani, and President Mohammad Khatami's reformist allies in the foreign policy bureaucracy are pressing for restraint. This cohort challenges the hard-liners' central argument by suggesting that the possession of such arms would actually accentuate Iran's vulnerabilities. Should Iran cross the nuclear threshold, the Persian Gulf states and the newly independent Iraq would probably gravitate further toward the American security umbrella. Moreover, such a brazen act of defiance would probably trigger debilitating economic sanctions and estrange Iran from its valuable European and Japanese commercial partners.

Iran's moderates are increasingly drawn to the North Korean model: Pyongyang has adroitly managed to employ its nuclear program to extract economic and security concessions from the international community. Through a similar posture of restraint and defiance, threats and blandishments, perhaps Iran can also use its nuclear card to renegotiate a more rational relationship with its leading nemesis, the United States. Iranian Foreign Ministry spokesman Hamid Reza Asefi alluded to this stratagem by claiming, "We are ready for discussions and negotiations, but we need to know what benefits the Islamic Republic would get from them."

The United States, by relaxing its economic sanctions and granting Iran a voice in the postwar Persian Gulf deliberations, could disarm clerical hard-liners who require American belligerence for perpetuation of the nuclear program. In exchange, Iran would have to accept verifiable restraints on its nuclear activities. Indeed, an Iran whose strategic environment is stabilized and enjoys expanding economic ties with the United States is likely to be a more constructive interlocutor on issues ranging from terrorism to human rights.

This is a case where neither the unilateralism of the Bush administration nor the multilateralism espoused by the president's critics will provide a durable solution. Rather, bilateralism, a deal between the United States and Iran, is what's needed -- much more than relying on the IAEA and economic and military threats. In the end, such nuanced diplomacy is the best way to stem another proliferation crisis in the Middle East.

The writer is a senior fellow at the Council on Foreign Relations.