Of the many unintended consequences of George Bush's Iraqi mess, probably the worst has been the strengthening of Iran's extremist government. The dangerous power vacuum left by Iraq in growing anarchy has made Iran the region's only hegemon, both politically and strategically. Ahmadinejad's machiavellian handling of the conflict between Israel and Hezbollah only strengthens this point.

It is no coincidence that the Iranians are becoming defiant. They know that given the sorry state of American diplomacy, they can't really be pushed. Indeed, Iran's president has proven himself a skillful observer of the world stage; he has moved his pieces well. Carrots certainly will not work with such an emboldened state.

Naturally, economic sanctions are in order. The world cannot be misled into thinking that Iran's top-secret nuclear facilities have been built with only peaceful objectives in mind or that the regime is suddenly being taken over by moderates. The Iranian regime's first priority is to ensure its own survival, and nothing would make that easier than having a nuclear arsenal at its disposal.

Although it seems virtually impossible to do so now, the UN Security Council should impose sanctions precisely tailored to hit Iran's energy sector. Even if such a move would further increase the price of oil, it is the only way to make Iran reconsider.

Still, such sanctions are a remote possibility. Russia and China will never back such a proposal and American diplomacy is too weak to convince them otherwise. And that, in the end, is the saddest news of all: Ahmadinejad's belief in his own invulnerability is actually quite close to reality. Only a comprehensive, long-term approach will be able to shift the balance of power in the region. And, thus, unfortunately, the question remains: What to do next?