It has been easy to overlook repeated declarations by Iran and its western adversaries that they are ready to return to the negotiating table.
Analysts: Israeli threats will help spur agreement with Iran
Reports that Israel could strike Iran's nuclear facilities as early as April will help spur the drive for a diplomatic solution to the crisis.
During months of rising tensions and bellicose rhetoric, it has been easy to overlook repeated declarations by Iran and its western adversaries that they are ready to return to the negotiating table.
Many analysts believe that Israel will have to allow time to measure the success of diplomacy and tough new US and European sanctions that come into effect on July 1.
An Israeli strike on Iran before engagement and sanctions have been given a chance would isolate Israel internationally. The US has also made repeatedly clear to Israel that it does not want to be drawn into a disastrous war.
So talk of an Israeli attack in the spring or summer is seen by many observers largely as a bluff, designed to ensure the West ramps up pressure on Iran.
Diplomacy will take place in concert with a war of nerves. Iran announced yesterday it has begun mass production of an anti-ship missile, while ground forces from its Revolutionary Guard began military exercises in the country's south. It was the latest display of Iranian muscle-flexing following threats to close the Strait of Hormuz in retaliation for tougher western sanctions.
In turn, the US and Britain have beefed up their naval might in the Gulf in recent weeks after pledging to use force to keep the Strait open.
Iran's supreme leader, Ayatollah Ali Khamenei, insisted on Friday that "crippling sanctions" would never force Tehran to "retreat" on its nuclear programme. He warned that any military strike "will be 10 times more detrimental to the US" than to Iran.
On the diplomatic front, Iran will soon host another visit by UN nuclear experts, indicating that Tehran finally may be willing to address suspicions that its atomic programme has a military dimension. A team from the International Atomic Energy Agency (IAEA) said it had held "good talks" in Tehran last weekend.
The New York Times reported yesterday Iran had failed to address the team's key concerns but one IAEA diplomat told the newspaper that "dialogue is continuing, and that's a good sign".
There are strong incentives on all sides for a diplomatic solution. Tehran is braced for unprecedented tough sanctions, facing military threats and concerned about the loss of its key regional ally if Syria's president Bashar Al Assad is toppled. The US administration, meanwhile, believes a conflict could have catastrophic effects.
Given deep mutual mistrust, however, just arranging talks on Iran's atomic ambitions is proving difficult and the chances of success if they do proceed appear slim, diplomats and analysts said.
The deliberations of the fractious Iranian regime remain opaque, while major powers are said to be divided on their approach, notably on whether to let Iran keep enriching uranium at some level.
Iran insists its nuclear programme is solely peaceful in nature. US intelligence chiefs said this week that Iran has not decided whether to seek a nuclear weapon but was keeping open the option by developing various capabilities to do so.
The European Union and US have imposed their toughest ever sanctions against Iran, targeting its vital oil export sector. Their stated aim was to persuade Iran to return to nuclear talks and so defuse the threat of military action.
Some Iran experts say more diplomatic energy was expended on marshaling the sweeping sanctions than on devising new incentives for Iran that could make negotiations successful.
"Sanctions are something that we knew how to do...finding a new relationship [with Iran] was something we didn't know how to do," John Limbert, a professor of Middle East studies at the US Naval Academy and former State Department official on Iran, said in an interview.
Other analysts argue that escalating sanctions and military threats could give weight to arguments by those in Tehran who may want a nuclear deterrent.
Iranian media say Saeed Jalili, Iran's chief nuclear negotiator, is expected within days to suggest a date and venue for a new round of talks with a group known as the P5+1, comprising the US, China, Russia, Britain, France and Germany.
The group is represented by Catherine Ashton, the EU's foreign policy chief, who sent Mr Jalili a letter on October 21 proposing new negotiations on Iran's nuclear programme. That Iran has taken so long to respond is hardly surprising, according to some analysts who argue that Ms Ashton's letter set implicit preconditions.
Her missive said "confidence-building steps should form the first elements of a phased approach which would eventually lead to a full settlement between us." This would involve "the full implementation by Iran" of resolutions passed by the UN Security Council and the IAEA.
The UN resolutions call on Iran to suspend uranium enrichment, which Iran steadfastly refuses to do, insisting that activity is its sovereign right under the international Nuclear Non-Proliferation Treaty.
"The EU and the West in general claim that they've made an unconditional offer of talks, but actually it's highly conditional," said Peter Jenkins, a British former ambassador to the IAEA. They are "basically saying, 'we'll talk to you if you concede what we want'", he said in an interview.
Iran at "the very least" will want "an assurance from Ashton that the talks would really be on the basis of a tabula rasa [blank slate], without conditions", he said.
Another problem is that the six world powers have yet to agree on what incentives to offer Iran if talks resume.
They are likely to ask Iran to halt enriching uranium to a 20 per cent level and turn over its stockpile of nuclear fuel enriched to that level. In return they would supply fuel rods for an Iranian research reactor producing medical isotopes for cancer patients.
Mr Jenkins argued that a deal can be achieved if Iran is allowed to continue enriching uranium to the lower, 3.5 per cent level needed to fuel electricity-generating nuclear reactors. In return, Iran would be required to provide "top-notch" IAEA safeguards and "voluntary measures to reassure neighbours made nervous by Iran's past undeclared enrichment research".
This, Mr Jenkins said, was essentially what Iran offered Britain, France and Germany in 2005, a solution that in hindsight they should have "snapped up".
Allowing such enrichment would represent a concession at odds with the P5+1's past positions. And Barack Obama, the US president, may well find it hard to make concessions with Iran during an election year.
Despite overseeing the harshest ever US sanctions on Iran, he is accused by his Republican opponents of being soft on the Islamic republic. Mr Obama extended a hand of friendship to Iran in 2009. But Tehran, embroiled in the tumultuous aftermath of presidential elections, was unable to meet a tight US deadline for responding to a nuclear fuel swap proposal that was designed as a confidence-building measure.
Trita Parsi, a leading Iran analyst in the US, wrote in Salon magazine this week that Mr Obama has played down his diplomatic efforts on Iran, allowing his hawkish Republican rivals to "define the metrics of success on Iran."
Diplomacy, Mr Parsi reminded the US president "takes time, courage, persistence, political capital and the will to spend it."