Four points you may not have noticed about the most recent nuclear talks between Iran and the 5+1 Powers….

THE PROCESS IS ALIVE AND WELL

Many in the media turned into pessimists last week when the fourth set of discussions on a comprehensive deal did not yield dramatic results. “No progress” was a common mantra, with more creative announcements of gloom such as “this was the ‘sticker shock’ meeting” — a reference to finding out the cost of that new car you really want.

There were a number of factors contributing to the downbeat conclusions. Both sides have agreed to keep silent about the details of the discussions, leaving the media scrambling for news. There was an inflated benchmark for “progress”, given the approach of the expiry of the interim nuclear agreement on July 20. There were former officials and unnamed “diplomats” ready to declare the “sticker shock”, in part to put pressure on the opposing side to make concessions.

The bottom line is the general summary put out by both Iran and the 5+1 (US, Britain, France, China, Germany, Russia): the talks are “difficult” but are proceeding in a “constructive atmosphere”.

These are not simple, sweeping agenda items such as “Iran Will Give Up Its Nuclear Program” or “Sanctions Will Be Lifted Immediately” — everyone knows that Tehran will have a program of some sort and that the removal of sanctions will be a staged process. Instead, the talks now have the task of measured, complex arrangements to provide reassurances to both sides of a lasting deal.

How many centrifuges for uranium enrichment can Iran continue to operate? Is there an alternative in measuring the enrichment by “work units”, getting around the gaps in numbers put forward by Tehran and the 5+1? Can the Arak heavy-water reactor be re-designed to cut its plutonium by-product while meeting Iran’s needs? At what point will major sanctions on Iran’s oil and banking sectors begin to ease? What will be the duration of the agreement?

Of course, the discussions are not just technical — there will also be maneuvering for political advantage. But in the end, both sides see the political benefit lying in a deal, not in walking away from one.

So even if the media does not get its breakthrough declaration of success, look for the interim nuclear agreement to be extended beyond July 20, giving more time and space for the difficult points to be agreed.

2. IRAN DESPERATELY WANTS A DEAL

If you have been conditioned by years of spin in the Western media about What Iran Really Does, hyou might believe that Tehran has only reluctantly been dragged to the negotiating table and that it is continuing to pursue its undercover nuclear activities even as they are talking to the 5+1 Powers.

Have a look at the Iranian media and the picture is far different. With the notable exception of the Revolutionary Guards’ Fars News, Tehran’s outlets are filled on a daily basis with proclamations of the value of the negotiations and how countries around the world are hoping for success. Even the Supreme Leader’s finger-wagging about American dishonesty is within the context of his endorsement of the discussions.

I rarely agree with The Washington Post’s editorial board in their approach to Iranian issues, but they got to the crux of the matter in their comment last week:

Iranian President Hassan Rouhani feels more urgency to strike a deal than does President Obama. The Iranian economy is still suffering from international sanctions; predictions by Israeli leaders that controls on trade and investment would crumble after an interim agreement offered Tehran partial relief have not been borne out. Elected on the promise that he could end Iran’s isolation and revive the economy, Mr. Rouhani is under pressure to deliver.

It is not just Rouhani who is under pressure. The entire Iranian system — its business and corporate interests, its politicians, its scientific community, the Republican Guards, and the Supreme Leader, and of course Iran’s people — face an economic future of declining production, limits on technological advance, unemployment, inflation, and restricted exports including oil.

That’s not just because of sanctions — the mismanagement of the Ahmadinejad years has made a significant contribution to the predicament. However, the stark reality is that any prospect of recovery will be curbed, if not completely ruled out, while the force of the sanctions is felt.

Of course, you won’t hear this from regime stalwarts who walk the tightrope of “Sanctions hurt the Iranian people, but they do not halt our economic progress”. But this was the message that President Rouhani gave the Supreme Leader last September — the message that convinced Khamenei to enter the negotiations for an interim agreement and now those for a comprehensive settlement — and it is still the prime motivation for Iran’s pursuit of the talks, no matter how “difficult” they may be.

THE US CAN PLAY THE GAME LONG

The Obama Administration, despite all the sniping from hard-line pundits and Congress, wants a deal as well. Ever since Iran told the International Atomic Energy Agency in June 2009 that it needed a guaranteed stock of 20% uranium, US officials have tried to parlay the opening into an agreement that would put a lid on any possible military program.

But having gone through almost five years of on-off talks, the Administration does not have to jump at an agreement in the next two months. The prospect of Israeli military action has now all but evaporated, and Obama’s officials have kept at bay those members of Congress who would rather strike Tehran than reach a deal. And Washington does not face the economic urgency that is propelling the Iranians towards resolution.

So if the US and its European partners do not like the number that Iran put on the centrifuges it will retain, they can step back in the hope that Tehran will drop the figure — or, more likely, they can pursue the “work unit” arrangement. They can insist on the re-design of the Arak heavy-water reactor, probably in the knowledge that it will meet its target date of late 2014 to begin operations. They can demand a tough set of inspection and supervision arrangements between Iran and the International Atomic Energy Agency.

That strategy has always brought results. Iranian officials have accepted the Arak re-design and have also indicated that the launch date will be pushed back to 2016 or 2017. Tehran has suspended production of 20% uranium and has diluted existing stock to 5% or converted it to oxide powder. Iran and the IAEA have already begun implementation of arrangements sought by Washington.

BUT HERE’S HOW THE US CAN UNDO THE DEAL

The relative luxury for US negotiators carries a big risk, however. Recognizing Iran’s economic predicament, the Americans could push even harder, bringing in demands that were not put forward at the outset of the talks.

One prominent example is Iran’s ballistic missiles. Tehran has maintained that these are not part of talks on nuclear production an material — and indeed previous discussions have not put delivery systems on the agenda.

However, in an effort to assuage Congress and Israel, US officials have talked about inclusion of missiles in the discussions. And given their advantageous position, those officials could turn rhetoric into a formal demand.

If they do so, Iran will step away from the table, despite the economic consequences. The missiles are seen as essential for defense and deterrence, given the Islamic Republic’s history of tension with other countries in the region — including Iraq, with whom it fought an 8-year war only a generation ago. They are also a marker of national pride, and a vested interest for key players like the Revolutionary Guards.

The Supreme Leader, while supporting the talks, has prepared for this scenario. His declaration of a “resistance economy” is not as much a program for Iranian prosperity as a blueprint for sacrifice. He is saying — and bolstering this with his denunciations of the US — that Iranians will suffer, but they will accept this as part of their principled stand against the bullying West.

The Obama Administration is doing its own calculations, not only over the missiles but also over how far to push “possible military dimensions” as a required part of any agreement.

If it miscalculates, underestimating how the Supreme Leader and others in the Islamic Republic will fall on economic swords rather than bow to what they see as excessive demands, then the US and the 5+1 Powers will lose their advantage of time.

They will lose it because, after more than a decade of headline animosity over Iran’s nuclear program, they will have given away the best opportunity for a way out of the conflict.