Diplomacy Reigns

April 2007 | Political Risk Analysis

With many false dawns, there is little ground for optimism over the possibility of an imminent solution to the nuclear impasse that continues to monopolise international attention. That said, some positive signals from both sides, Iran and the US, leave open the door, albeit only tentatively, to some progress on the diplomatic front. We maintain our view that 2007 will be another year of uncertainty but that a military confrontation remains largely 'off the table', particularly, as we have long argued, since Tehran is likely to pursue a somewhat more conciliatory approach. Indeed, both the Iranian and US governments are under immense domestic and international pressure.

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