I really can’t explain the Obama Iran policy. On Monday, Defense Secretary Leon Panetta conceded the obvious: Sanctions haven’t “worked.” The Associated Press reports:

U.S. Defense Secretary Leon Panetta acknowledged Monday that increasingly stiff international sanctions have yet to compel Iran to give up its nuclear ambitions. But he argued that more pressure eventually would lead Iran to “do what’s right.”

These sanctions are having a serious impact in terms of the economy in Iran,” he told reporters during a visit to the North Africa American Military Cemetery, where 2,841 U.S. servicemen killed in the North Africa campaign against Nazi Germany in 1942-1943 are buried.

“And while the results of that may not be obvious at the moment, the fact is that they have expressed a willingness to negotiate (with the U.S., Britain, France, Germany, Russia and China) and they continue to seem interested in trying to find a diplomatic solution,” he said.

Those on-again, off-again negotiations have not come close to resolving a problem that U.S. Republican presidential candidate Mitt Romney has cast as one of the biggest failures of the Obama administration. Romney was in Israel this week showing support for Israel and asserting that if he were president Iran would never get the atomic bomb.

Well in that regard, Panetta, Mitt Romney and Israeli Prime Minister Benjamin Netanyahu (who declared the sanctions haven’t affected Iran’s nuclear program “one iota”) are finally in sync.

Given that the current sanctions haven’t worked, you would think the Obama administration and Democrats in the House and Senate who have talked down the military option would be chomping at the bit to ratchet up the pressure. You’d be wrong.

Josh Rogin reports on apparent agreement between the House and Senate on new sanctions:

The bill does not contain proposed language offered by Sen. Mark Kirk (R-IL) in the Senate and Reps. Ted Deutch (D-FL) and Robert Dold (R-FL) in the House that would expand energy-sector sanctions on Iran by declaring the country a “zone of proliferation concern,” thus barring any businesses or service providers from dealing with the Iranian petroleum sector in any way. Instead the bill includes a non-binding “sense of Congress” that Iran is a zone of proliferation concern.

The bill also omits sanctions that would have expanded from the Central Bank of Iran to “all financial institutions.”

Outside sanctions experts told Right Turn the bill certainly could have been stronger. One such expert who agreed to speak only on background explained: “The bill doesn’t comprehensively prohibit the actual purchase of Iranian natural gas by targeting the buyer. Iran has the second largest natural gas reserves in the world. It has become a small net exporter of natural gas. If it was able to export significant volumes via pipeline, it would translate that into significant leverage over Europe and Turkey — and even Asia if it could liquefy and ship the gas.” He noted that this is “just an example of a sanctionable transaction that seems to be missing and would have been caught by a blacklisting of the entire energy sector as a zone of proliferation concern.”

Meanwhile, the State Department wasn’t very effective in conveying any sense of urgency at its briefing on Monday:

QUESTION: Well, what is the next step? Because it seems to me that it’s all about stalemated at the moment. There aren’t talks going on. Nothing’s happening.

MS. NULAND: Well, as you know, after the last round, there was a technical discussion to try to understand each other’s positions, after which [EU foreign minister Lady Catherine] Ashton’s deputy met with [chief Iranian negotiator Saeed] Jalili’s deputy, and the next step is for Cathy Ashton and Jalili to have a conversation as well. I don’t think that that’s been scheduled. I would refer you to the EU.

But the Secretary, as you know, last week or the week before when we were in Egypt, laid down a very strong marker that the proposals we’ve seen from Iran so far are complete nonstarters, that they really need to go back to the drawing board and make a fundamental choice. So that’s what we’re looking for. We’re looking for Iran to decide is it serious about making diplomacy work.

QUESTION: And have you had any indications from Tehran yet that they are doing so?

MS. NULAND: Well, again, we will look to this next meeting between Ashton and Jalili, or this next conversation, to see how the conversations we’ve had have been absorbed in Tehran.

Ask the Brits. We’ll have a technical meeting. No wonder Netanyahu thinks he’s on his own. He is.

And just to top off “how wimpy can the Obama crew be,” the State Department once again would identify the capital of the Jewish state (“administrations of both parties have had the same position, which is that the status of Jerusalem has to be solved through negotiations. So that is the position of the administration. It’s been the position of the United States across party lines since 1967.”). But in fact, while the borders of Jerusalem will be a final status negotiation, there is no “problem” identifying it as Israel’s capital. (Hint: It is where the national government resides.)

Nathan Diament of the Orthodox Union, who has personally been very supportive of the administration and has been invited to a number of administration “outreach” sessions with other Jewish leaders, did not hide his views in a blog post yesterday:

Last week, the White House press spokesman would not acknowledge that Jerusalem is Israel’s capital.

Today, the State Department spokesman seems to compelled to do the same.

How far we have fallen.

In 2008, then-candidate Barack Obama made a much more (in our view commendable) assertive statement: “Jerusalem will remain the capital of Israel, and it must remain undivided.”

This generated howls of protest from the Arab world and, unfortunately, a “clarification” from Mr. Obama.

Now, Mr. Romney acknowledges the simple fact that Jerusalem serves as Israel’s capital – without any explicit statement that it must remain so for eternity or remain undivided, and the Arabs protest and the U.S. Administration suggests it a gaffe.

Facts are fact. Jerusalem is Israel’s capital.

Moreover, as far as the United States is concerned, for more than a decade, the duly enacted law of the United States has stated, as a matter of official policy, that:“(1)Jerusalem should remain an undivided city in which the rights of every ethnic and religious group are protected; (2) Jerusalem should be recognized as the capital of the State of Israel.” (This statement of policy stands on its own, irrespective of whether the U.S. Embassy to Israel is relocated from Tel Aviv to Jerusalem or not.)

The White House should actually listen to Diament next time he’s invited in.

For reasons known only to the Obama crew, it can’t manage to display seriousness about sanctions nor to speak plain truths about the Middle East. No wonder the United States has alienated friends and encouraged foes in the region and become a laughingstock among foreign policy gurus across the ideological spectrum.