The United States wants to maintain a hard stance against Iran over the "axis of evil" nation's nuclear program, but by doing so Washington runs the risk of inflaming a neighbor of war-wracked Iraq.
In addition to accusing Iran of secretly trying to develop nuclear weapons, the United States has charged that Iran is providing support to insurgents battling US-led forces in Iraq.
President George W. Bush lumped Iran with Iraq and North Korea in 2002, calling the trio an "axis of evil."
The Bush administration has also warned about the danger of allowing "rogue" states acquire weapons of mass destruction.
The International Atomic Energy Agency (IAEA) adopted a resolution Saturday demanding that Iran suspend uranium enrichment and report sensitive nuclear activities. The resolution also set a November 25 deadline for a full review of Tehran's nuclear program.
Iran reacted to the resolution by saying it would cooperate, but it warned it may defy the agency's call to suspend uranium enrichment, the process for making fuel for nuclear reactors but also the explosive material for atomic bombs.
The Islamic regime insists its nuclear program is strictly aimed at generating electricity.
The resolution allows the Europeans and Americans to keep a unified front over Iran's nuclear program, and its November 25 deadline is helpful to Bush, since any action taken by the United States, which could prompt strong international reactions, would come after the November 2 presidential election.
Bush, who is seeking a second four-year term, will face Democratic Senator John Kerry of Massachusetts in the election.
A nuclear-armed Iran would profoundly affect Washington's national security policy and its Middle East allies: Israel, Saudi Arabia and post-Saddam Hussein's Iraq.
The United States is already concerned about Iran's alleged role in the violence in Iraq.
"I don't think there is any doubt that the Iranians are involved and providing support" to insurgents in Iraq, US Secretary of State Colin Powell said in Friday's Washington Times.
"How much and how influential their support is, I can't be sure and it's hard to get a good read on it," Powell said.
In contrast with its pre-invasion warnings against Saddam's Iraq, Washington has shied away from making military threats against Iran.
The Bush administration also wants to avoid a rift with Britain, France and Germany, which seek a diplomatic solution in Iran. While Britain is a US ally in Iraq, France and Germany were fierce opponents of the March 2003 invasion.
Another political crisis with the European powers would likely add fuel to Kerry's contention that Bush has alienated Washington's traditional allies.
The Bush administration has also failed to point to a "smoking gun" or irrefutable evidence proving that Tehran has plans to build a nuclear bomb.
Washington is already hard-pressed to provide proof that Saddam had stockpiles of weapons of mass destruction, none of which have been found. Iraq's alleged arms cache was Bush's chief argument for toppling the Iraqi dictator's regime.
UN nuclear watchdog chief Mohamed ElBaradei said Sunday that "we haven't seen in Iran any material imported or produced that could be used for nuclear weapons. That is good news."
"I'm not sure we are facing an imminent threat," he said.
But, he cautioned, "we are facing an Iran acquiring, if not already acquired, a capability to produce the material that can be use for nuclear weapons should they decide to do that. It's really a question of intention."