Evert said the EU needed to demonstrate two things: that its approach toward Iran could stay united under pressure and that its strategy of "conditional engagement" with Tehran could deliver real results.

On the first count, the EU can justly claim a feather in its foreign policy cap.

"The one silver lining in the Union's dealings with Iran is that it has stayed united and even managed to draw in the Americans," says Tomas Valasek, director of the Brussels office of the Center for Defense Information.

Smaller EU states may grumble that France, Britain and Germany have done all the running on Iran, but after the deep splits over whether to support the U.S-led invasion of Iraq, most countries have been happy to let the bloc's big three do the hard talking.

Europe's basic position since negotiations with the clerical regime began two years ago is that Iran must, at all costs, be dissuaded from joining the club of nuclear nations and that offering carrots rather than wielding sharp sticks is the best way to keep Tehran nuke-free.

The United States has always been suspicious of the EU's softly-softly approach, but in a major coup for the bloc's fledgling foreign policy, U.S. President George W. Bush threw Washington's weight behind Europe's approach in March.

"It is difficult to fault the EU," says Mark Leonard, foreign policy director at the Center for European Reform. "It was engaged with the Iranian problem even before it was a crisis, it has been tough in its dealings with Tehran and it has been on the front foot throughout the negotiations. If it fails, it will be an honorable failure."

The prospect of failure is looming larger after the newly-installed Iranian government's decision to restart uranium processing activities Monday. Although Tehran might be engaged in a game of brinksmanship and may return to the negotiating table, it is difficult to argue the EU's policy of "conditional engagement" with the hard-line clerical regime has delivered tangible results.

For over two years, Paris, London and Berlin have tried to prod Iran down a non-nuclear path by offering a wide range of incentives to Tehran to freeze its nuclear weapons program. In its latest offer last week, the Union even recognized the Islamic republic's right to develop nuclear power for peaceful purposes and promised a package of trade, technology and security assistance.

Iran's rejection of that package Saturday, coupled with its decision to resume nuclear activities Monday, leaves the EU's policy toward Tehran severely compromised and its key foreign policy goal of "effective multilateralism" open to question. "The EU assumed Iran's tough stance on uranium enrichment was a negotiating ploy," says Valasek. "Now we can see it wasn't. They meant it."

American neoconservatives will certainly be delighted at the break-down in negotiations between the EU and Iran.

"Baghdad is for wimps, real men go to Tehran," said the American Enterprise Institute's Radek Sikorski last year, only partly tongue-in-cheek.

The problem for the Bush administration, and its neo-con backers, is that it has little leverage with Iran. The United States cut off diplomatic relations with Tehran after the American hostage crisis in 1979 and imposed trade sanctions on the regime in the mid-1990s. It can refer Iran to the U.N. Security Council, a move that now seems increasingly likely after weekend's "double whammy," but any punitive action against Tehran is likely to be blocked by Russia, China and possibly France.

This leaves the military option advocated by U.S. administration hawks and right-wing think tanks. Such a move would shatter the united front Europe and America have so far presented and would cause further headaches for the United States in Iraq and Afghanistan, where Iran has considerable influence. Surgical strikes against nuclear facilities aside, it is also difficult to see how an overstretched U.S. Army could sustain any sort of military operation in a country three times the size of Iraq.

"No one has got a better solution than the European one," says Leonard. "If you want to know whether this is a success or a failure, you only have to compare Iran with North Korea, where the west has absolutely no leverage."

The U.S. administration might be skeptical about the chances of signing a deal with the mullahs and frustrated about the slow pace of talks between Tehran and Brussels, but -- for the moment at least -- the EU talkathon is the only show in town.

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