I don’t actually believe Iran is all that powerful, but it does have its allies, and they will almost certainly destabilize parts of Afghanistan and Iraq, which will mean a higher death toll for American soldiers and a political setback in those countries.

The Iranians do have some legitimate security concerns. They live in a neighborhood surrounded by nuclear powers—Israel, Russia, China, India, and Pakistan. The Bush administration did needlessly alienate Iran right after Tehran had cooperated with Washington to oust the Taliban and set up the Karzai government in Kabul. And it ignored any gestures or concessions made by the reformist government of Mohammad Khatami, further undermining an already weak president.

Those who rule in Tehran have created a closed, oligarchic economy that channels the country’s oil revenues into the coffers of its religious foundations (for compliant clerics) and the increasingly powerful Revolutionary Guard. They benefit from a closed economy that they can manipulate. An opening to the world, which would mean more trade, commerce, and contact with the United States, would strengthen Iran’s civil society, its trading class, its students, its bourgeoisie, and thus strengthen opposition to the regime.

The country is in a box and, if well handled, can be kept there until the regime becomes much more transparent and cooperative on the nuclear issue. To do so, we should maintain the current sanctions but should not add broad new ones like an embargo on refined-gasoline imports.