In May 2005, George Perkovich published a Policy Outlook, "Changing Iran’s Nuclear Interests," suggesting that intelligence agencies assess the possibility that Iran decided in 2003 to cease clandestine activities that violate its legal obligations under the Nuclear Nonproliferation Treaty. The Policy Outlook said:

Intelligence communities should test their data against the following scenario. From the late 1980s through 2004, Iran was secretly developing the full range of capabilities and knowledge necessary to have the option to build nuclear weapons. Many of these activities were undeclared. Most, but not all, were exposed between 2002 and 2004 as a result of revelations by Iranian opposition activists and subsequent investigations by the IAEA. This Iranian deceit and deception, and the intense international condemnation and scrutiny of it through the IAEA, surprised Iranian decision makers and embarrassed informed members of Iranian society. Many elements of Iran’s political class did not know anything about the now-documented illicit activities, and they concluded that the people responsible for getting caught had made stupid mistakes.

As more Iranian elites began to pay attention to nuclear issues, they learned about the rules of the nonproliferation regime, and they came to the conclusion that if Iran had played by the rules and not lied, it could have acquired capabilities to enrich uranium (and later to produce and separate plutonium). A declared nuclear program playing by the rules would give Iran nuclear know-how, material, and prestige sufficient to satisfy its interests for the foreseeable future, much as Japan has done with its nuclear program. Conversely, undeclared, illegal nuclear activities bring a risk of detection that badly damages Iran’s prestige, leads to its isolation, and buttresses its enemies. Therefore, Iran’s leaders could well conclude that, for the time being, the country should desist from illicit nuclear activities and play entirely by the rules.

If intelligence communities have not already done so, they should be tasked specifically to assess whether any inflection has occurred in data indicating clandestine nuclear activities. Does the case that Iran is clandestinely trying to build nuclear weapons rely heavily on activities occurring before 2003? Are there more or fewer data points indicating clandestine nuclear activities in 2004–2005 than there were in previous years? Is there reason to think that Iran has changed its nuclear strategy—activities and intentions—as a result of having been exposed and put under pressure not only by the United States but also by the European Union and the IAEA?

The unclassified National Intelligence Estimate released on December 3 essentially answers "yes" to these questions. Many apparent ambiguities or contradictions in the NIE will be sorted in coming days and weeks. At this point the implications are more mixed than either disappointed hawks or relieved doves might think.

• This NIE takes the "nuclear weapons program" label off Iranian activities, but uranium enrichment and plutonium production pose potential threats no matter how they are labeled. The NIE does not say that there should be any confidence that Iran's nuclear program is solely for peaceful purposes, as required under the NPT. Indeed, it says "Iranian entities are continuing to develop a range of technical capabilities that could be applied to producing nuclear weapons, if a decision is made to do so." It’s just that the key capabilities—uranium enrichment and plutonium separation—are not properly deemed nuclear weapon threats if they are not accompanied by clear evidence of nuclear weaponization work.

• The NIE exposes that the rules regulating nuclear technology need to be updated, but the NIE will help Iran resist being the first case for new rules to be applied. Under the NPT, countries may produce nuclear fuel and develop other capabilities that could put them within months of manufacturing nuclear weapons. Iran continues to pursue uranium enrichment and a plutonium production capability, even though it does not yet have a single operating nuclear power plant and there are other sources of fuel available. The NIE understandably and properly accepts the distinctions within current nonproliferation rules: something is not a "nuclear weapons program" unless there is proof of work being done on nuclear weapon design and weaponization. The circumstantial case that Iran's enrichment program at least began with the intention of fueling a nuclear weapons option is inadmissible in making a one-sentence judgment about the Iranian nuclear program. The reversal of U.S. intelligence assessments from 2005 and 2007 is so dramatic that Iran will be able to dismiss any effort to impose limits on its nuclear activities that go beyond the narrow interpretation of existing rules.

• The NIE takes U.S. military attacks off the table. The Bush Administration, particularly Secretaries of State and Defense Rice and Gates, and Admirals Mullen and Fallon, had been trying for months to dissuade the world that the U.S. was hell bent to attack Iran, but could never convey the position unequivocally. As long as Russians, Chinese, and perhaps most importantly IAEA Director General ElBaradei believed the Bush Administration planned to attack Iran, they would not follow Washington in escalating pressure on Tehran, for fear that this would lead ultimately to war. Had President Bush negotiated with Moscow, Beijing, and ElBaradei to "trade" a commitment not to attack Iran for greater support for sanctions, chances of obtaining some Iranian constraints on its nuclear activities would have increased. The NIE removes that negotiating option. Critics of the Bush Administration might celebrate, but this would be shortsighted. Leverage is still needed to persuade Iran to take measures necessary to reassure its neighbors and the world that it is not gaming the inadequate nuclear rules in ways that could enable it to change its mind, break the rules, and very quickly build nuclear weapons.

• Unilateral, U.S. congressional sanctions, such as HR1400, that are predicated on Iran having a "nuclear weapons program" become even more problematic. These sanctions tie the hands of the executive branch, alienate allies necessary to isolate Iran, and otherwise weaken U.S. policy. The NIE now renders them absurd: according to the U.S. government, Iran does not have the "nuclear weapons program" that is the predicate for the sanctions, and therefore Iran could not cease the program in order to relieve businesses and others who might be sanctioned. The approach could be pared down to requiring Iran to eliminate or permanently suspend its uranium enrichment program. However, given the NIE it would be extremely difficult for the U.S. to impose economic sanctions and possibly jail terms on European or other business executives dealing with an Iran that refused to shut down enrichment activities that the U.S. intelligence community does not say are weapon-related. 

• The U.S. and other members of the UN Security Council will be compelled to revisit the sanctions resolutions they already have adopted against Iran. Technically the case can be made that the sanctions are still valid because they stem from Iran’s inadequate cooperation with the IAEA in resolving the outstanding questions related to its past violations of safeguards requirements. The same can be said for the demand that Iran temporarily suspend its enrichment program. But politically, Russia, China, IAEA Director General ElBaradei and others who never wanted the issue referred to the UN Security Council, will now heed Tehran’s call to shift the Iran case to the IAEA and narrow it.

• The NIE will not lessen Iran’s Arab neighbors’ and Israel’s concerns over Iran’s nuclear capabilities and intentions, but it will make it harder to pressure Iran to change its behavior in ways that reassure the region.

In sum, Iranian leaders appear to have recognized that by staying within the rules they can acquire capabilities sufficient to impress their own people and intimidate their neighbors, without inviting tough international sanctions or military attack. The NIE, in a sense, says that Iran is playing the game so well that stopping it may not be possible within the rules. The question then arises: who can muster the international political will to change the rules?