Source: Carnegie

A Nuclear crisis is forming in the most volatile region on Earth.

The International Atomic Energy Agency has demanded that Iran give a full and final accounting of its nuclear activities by Oct. 31, or risk action by the U.N. Security Council. Iran's eastern neighbor, Pakistan, and Pakistan's traditional rival, India, have already tested nuclear weapons. India's neighbor and rival, China, has been a nuclear power for many years. Next door to China, the insular, unpredictable and even maniacal regime in North Korea is reportedly assembling components for nuclear bombs. If Tehran pursues nuclear arms, then, for the first time since the advent of nuclear weapons, several volatile, contiguous states would possess them. Unless Iran and North Korea are stopped, and Pakistan and India engage in nuclear arms-control negotiations, we could be headed for a nuclear showdown.

The most immediate challenge comes from Iran. Earlier this month, the country's chief delegate to the IAEA stormed out of a meeting with agency officials and denounced the agency as part of Washington's drive for "confrontation and war." The IAEA's recently circulated report on Iran concluded that Tehran had a large, sophisticated program for developing nuclear weapons within the decade. In February, Tehran publicly declared its intention to become a "self-sufficient" nuclear state but claimed that its program was for peaceful purposes. Pakistan had also made similar promises before testing a nuclear device in 1998, soon after India publicly joined the nuclear club.

Iran is even more likely to break its nonproliferation promises. Just as Pakistan's pursuit of the atomic bomb was driven by its insecurity vis-a-vis India, Iran's leaders feel that their country must achieve nuclear parity with Israel, Pakistan and India.

According to the IAEA report, Iran began enriching uranium in mid-August at 10 of the 160 centrifuges it has built at a pilot facility in Natanz. It is also constructing two huge underground facilities to house 50,000 centrifuges. Iranian officials say they are simply enriching uranium for reactor fuel, but the same machines and technologies can produce weapons-grade uranium. When completed later this year, the pilot plant could produce enough fissionable material to make one bomb a year. Planned larger-scale facilities, when completed in 2005, could create enough fuel to construct 15 to 20 nuclear weapons a year.

The most difficult part of building nuclear weapons is producing the enriched uranium or plutonium that goes in them. If Iran can solve this financially and technically demanding part of the equation, the design and construction of nuclear devices should not pose a significant problem.

The IAEA report documents the conflicting stories that Iranian officials repeatedly gave agency inspectors. They claimed, for instance, that they had built the centrifuges without any outside help, and that the officials had not tested the devices with uranium before scores of them had been built. This way, Iran would not violate its treaty obligation to declare the existence of such facilities before introducing nuclear materials into them. But when agency swipes detected the presence of uranium, and IAEA experts concluded that the technology was far too sophisticated to have been developed solely from open-source information and computer simulations, as the Iranians claimed, Iran changed its story. Tehran then said it had bought the centrifuges and that the original suppliers must have contaminated the equipment.

That explanation raises a troubling question: Who sold Iran the centrifuges? Several reports have pointed the finger at Pakistan. Islamabad denies any link to Iran's nuclear program. It claims that freelance scientists from the former Soviet Union assisted the Iranians. But U.S. intelligence sources and even official Pakistani statements have suggested that Pakistan has not always adhered to its commitment to not share its nuclear know-how.

Despite its denials, Islamabad reportedly swapped nuclear technology with North Korea, which helped Pakistan develop its ballistic missile program. Because Pakistan is a key U.S. ally in the war against terrorism, Washington has tended to overlook Islamabad's possible nuclear misconduct. It's worth remembering that Pakistan was able to develop a nuclear program because Washington wanted to use the country as a staging ground for the moujahedeen in Afghanistan in the 1980s.

But we can't continue to ignore nuclear proliferation out of fear that allies will be offended or upset. Each nation in the new nuclear arc represents serious policy problems for the United States. Iran's clerical regime has consistently sought preeminence in the world of Islam, especially in the Middle East and Central Asia. Pakistan remains an unstable state and spawning ground for terrorists. Its confrontation with India has led to three wars and several military stand-offs. India seeks recognition as an international power, possibly with a permanent seat in the U.N. Security Council, and has often bullied its weaker neighbors.

The experience of India and Pakistan further teaches us that once a country acquires nuclear weapons, crisis management becomes more difficult. Nuclear weapons have not created the "stability" of deterrence in South Asia. Rather, they have increased the chances for low-level conflicts that could escalate into nuclear confrontation.

The addition of Iran to the region's nuclear club would heighten instability and the risk of conflict in a region abutting the Persian Gulf, Central Asia and China.

The U.S. administration rightly retreated from its original demand that the Security Council sanction Iran, which paved the way for a unanimous IAEA resolution that Tehran comply with all its treaty obligations. But there's no sign that the Bush administration knows what to do next. Nor does it have a clear policy for the other countries in the nuclear arc.

Here's what the Bush administration needs to do:

• Free up its diplomatic resources to focus on the coming nuclear crisis. It cannot let disputes over Iraq split the U.S. from its allies and monopolize high-level attention.

• Convince Iran that its future would be far better without nuclear weapons. This should include efforts to forge a new, more positive relationship with Tehran. Sanctions without continued engagement failed to deter Pakistan and India from becoming nuclear powers and may prove to be of equally limited value against Iran. In interviews with U.S. journalists last week, Iranian Foreign Minister Kamal Kharrazi offered to work with Washington on a range of issues, including Iran's nuclear activities. The administration should aggressively pursue his offer.

• Consider Pakistan not just as an ally in the war on terrorism but also as a serious problem in the struggle to stop the spread of nuclear weapons. Anti-terror concerns should not trump antinuclear ones. The U.S. should help Pakistan overcome its security anxieties about India. But it should not allow Pakistan's military leaders to feel they are free to resist democracy and develop their nuclear arsenal as long as they chase down members of Al Qaeda.

There is nothing inevitable about nuclear proliferation. Weapons programs have been successfully blocked in several nations. Stopping the spread of these deadly arsenals, however, requires the United States to put its diplomatic muscle behind its policy pronouncements.

Time is running out.

Joseph Cirincione is a senior associate and director of the Non-Proliferation Project at the Carnegie Endowment for International Peace. Husain Haqqani, a former ambassador and advisor to Pakistani prime ministers Ghulam Mustafa Jatoi, Nawaz Sharif, and Benazir Bhutto, is a visiting scholar at the Carnegie Endowment.