The High Stakes of U.S.-Iran Talks
Should diplomacy collapse, Washington and Jerusalem would be positioned to justify military action as a last resort.
Since U.S. President Donald Trump’s unexpected Oval Office announcement that talks with Iran would take place in Oman, diplomacy sceptics on both sides of the Atlantic have described a range of scenarios, from bad to worse to apocalyptic.
Critics warn that even initiating dialogue could backfire. Talks could embolden Tehran or allow its Islamic Revolutionary Guard Corps (IRGC) space to take covert action against the United States. The possible consequences of a failed negotiation are also important to consider. The likelihood of military strikes against Iranian nuclear facilities and military targets may have diminished, but the option remains firmly within the realm of near possibility. The recent uptick in U.S. force posture across the region—including increased activity at the Diego Garcia base—underscores that the military option is far from shelved.
The Iranians are walking into the talks from an indisputable position of weakness. Israel’s multi-front military offensive since the October 7 attacks has systematically degraded both the symbolic power projection of Iran-affiliated proxies in the region, such as Hamas and Hezbollah, as well as their military strike capabilities and material assets. The Houthis in Yemen are also under intensified aerial strikes. These are just the most recent losses. Iran suffered a major setback in 2020 when a U.S. drone strike killed its top IRGC general Qassem Soleimani at a Baghdad airport.
Regional dynamics have also shifted dramatically since 2015, when the JCPOA was agreed under the Obama administration. The Saudi-Iran rapprochement, brokered by China in March 2023, was a watershed moment that opened up new diplomatic avenues for the region and has been a key driver behind de-escalation. By agreeing to talks with Washington (the delicate optics of direct or indirect format aside), Tehran is finally reckoning with this new reality.
But while Iran’s forward defense doctrine, which relies on asymmetric military capabilities exercised through a network of regional proxies, has buckled, Iran retains substantial conventional military capabilities. Its ballistic missile program and naval force retain the ability to disrupt the Persian Gulf. Iran may be down but not out.
Complex negotiations require flexibility and a degree of deliberate ambiguity. Israeli prime minister Benjamin Netanyahu has argued that only the complete dismantling of Iran’s nuclear program can amount to success. However, this “Libya model,” in which Tehran voluntarily gives up its nuclear program, will be a non-starter for the Iranian regime.
The perception that the other side is changing the provisions of a deal or changing their position could sabotage the diplomatic process. It is not clear what the negotiating parameters are at this stage—arms control or full disarmament? What about ending Iranian support for armed groups that are ideologically fixated on attacking American, Israeli, and Western interests in the region?
President Trump made his endgame clear on April 9 when he said, “I’m not asking for much..they [Iran] can’t have a nuclear weapon.” He has also taken steps to limit Tehran’s possible attempts to drag out negotiations, which could allow time to accelerate its nuclearization. Reportedly, Trump’s letter offered a two-month window for negotiations.
A protracted period of negotiations could allow Iran to assert pressure during the talks or take dangerous steps, such as transferring enriched material to undisclosed locations. At the same time, the Trump administration’s “maximum pressure” policies, including new sanctions against Iranian oil exports, its “shadow fleet,” and other sanction-evasion mechanisms such as small Chinese refineries, have not yet had sufficient time to impact the Iranian economy. The U.S. Treasury Department also issued new sanctions targeting Iran’s nuclear program, particularly centrifuge production.
Iran’s options are limited. In a bid to create credible deterrence, Iran has continued to threaten to attack U.S. military bases in the Gulf, U.S. allies, or any country that may support a strike on Iran. Tehran has also pursued disinformation operations in recent weeks. First, there were reports that Iran was withdrawing its advisors to the Houthis, followed by claims that Shia militias in Iraq (the Popular Mobilization Forces) were considering disarmament to avoid an American offensive. This information operation was likely choreographed to lay the groundwork for negotiations with the United States and create a sense of distance between Iran and the designated foreign terrorist organisations within its so-called “axis of resistance.”
At the same time, Iran is deploying a hybrid pressure campaign, mixing conciliatory signals with hard military threats. Last month, it was reported that the IRGC deployed new missile systems on three strategically vital islands in the Gulf, on Greater Tunb, Lesser Tunb, and Abu Musa—near the crucial Strait of Hormuz. On April 9, The Times reported that Iran had secretly transferred long-range ballistic missiles to Iraq, in contrast to earlier reports about militia disarmament.
In principle, the gap between what counts as success for either side must narrow enough for an agreement to be seen as the least costly outcome. In the end, an acceptable agreement will likely be a phased one, offering conditional and incremental U.S. sanctions relief in exchange for time-bound mechanisms that require Iran to open up its facilities to international monitoring. With goodwill and trust already depleted, getting to that point will be a challenge.
Should the talks fail, the United States has indicated it would support an Israeli strike on Iran’s nuclear sites, or potentially execute unilateral strikes. However, the latter option seems less likely. Agreeing to the talks has granted credibility to the Trump administration’s willingness to give a deal a chance. There is little to lose by talking with the Iranian regime, because the United States still has options in its military and economic warfare toolbox.
Should diplomacy collapse, Washington and Jerusalem would be positioned to justify military action as a last resort, having demonstrably pursued—and exhausted—the diplomatic track. Any escalation would carry profound consequences for regional stability, triggering a chain reaction across already volatile fault lines. Yet, in such a scenario, key U.S. partners in the Gulf may prove more permissive toward targeted strikes on Iranian assets—particularly if Tehran is perceived as the spoiler that sank the talks. Strategic tolerance for escalation, once constrained, could expand under the banner of diplomatic failure.
Burcu Ozcelik is a Senior Research Fellow in Middle East Security at the Royal United Services Institute in London. She holds a PhD from the University of Cambridge.
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