By Stefan Smith - TEHRAN
The US administration has been wielding the stick against Iran by lumping it into its "axis of evil" and following up with almost daily accusations of misconduct. The European Union has preferred to go for the carrot.
Seeing negotiations as the way ahead, EU member states have been dangling what could be a lucrative trade and cooperation agreement in exchange for concessions in four areas of major concern: Iran's nuclear programme, contacts with groups deemed "terrorist", the Middle East peace process and human rights.
But one year down the road, EU diplomats feel they are hitting their heads against a brick wall.
"There is a degree of major frustration. There is a chink of light on the nuclear issue, total immobility on human rights, some movement but not much on terrorism and nothing at all on the Middle East peace process," said one Tehran-based European ambassador.
The EU has been at the forefront of pressure on Iran to allow tougher International Atomic Energy Agency (IAEA) inspections of its suspect nuclear programme, something that Iran has resisted but will nevertheless continue discussing with the IAEA in the coming weeks.
But its verbal efforts to reassure the world that it is not using an atomic energy programme as a cover to acquire nuclear weapons have to some extent been undone by an announcement just two days ahead of a visit by IAEA director Mohammad ElBaradei that it had conducted a successful final test of a ballistic missile capable of hitting Israel.
"Iran claims to have peaceful intentions but that doesn't mean a thing," Germany's Foreign Minister Joschka Fischer said earlier this month.
He was followed up by Britain's Foreign Secretary Jack Straw, who on a visit here bluntly warned that no tougher IAEA inspections meant no trade deal.
"The first consequence, obviously, if they fail to sign up, is that they fail to make progress on a host of other issues on which they do want progress, for example on a trade and cooperation agreement," he said.
On human rights, the EU has watched Iran's elected reformist camp - with whom it is engaging - show its powerlessness when it comes to defending the right to peaceful protest against a crackdown by unelected hardline institutions.
"To be honest, the only real concession on human rights we've seen is a temporary suspension of executions by stoning. But when you see 4,000 people arrested for protesting, it's a case of one step forward, two steps back," noted one EU troika diplomat engaged in the talks here.
On terrorism, where the United States has accused Iran of harbouring and not arresting fugitive al-Qaeda members, the Europeans also appear deeply frustrated. Some diplomats accuse Iran of attempting to use al-Qaeda detainees - some of whom are believed to be senior - as bargaining chips.
And on the Middle East crisis, EU appeals that Iran tone down its anti-Israeli rhetoric have been quickly followed up by the praising of Palestinian suicide bombers at Friday prayers here.
"The clock is ticking as far as the European approach is concerned, and the warning signs have been hoisted," a European ambassador said.
But Iran, no stranger to threats and warnings, is keen to publicly show that it is taking it all in its stride.
"The commercial cooperation accord would be profitable for both sides, so this cannot be used as leverage," foreign ministry spokesman Hamid Reza Asefi told reporters.
"Sanctions against the Islamic republic have been ineffective. The Europeans should be careful about what they say and avoid using threats."
So can it be described as a diplomatic endgame?
"I wouldn't go so far as to call it that," an EU member-state's ambassador here said. "Military action is not on the cards at all, and I emphasise that strongly."
The likely consequence, EU diplomats say, is that their bid to engage the Islamic republic is put on hold, or in other words less of the carrot and more of the stick.
"Scheduling problems" have already been reported for their latest installment of talks on heightened trade.
"Companies from individual member states are doing business and will continue to do business in Iran," another senior EU diplomat said. "But there won't be any trade agreement. In fact, we are going to have to sit down again and reexamine our entire strategy."