The developments of the past few weeks confirm that there is no clear Iran strategy in Washington, as the Trump Administration flip-flops between exerting maximum pressure and signalling its desire to restart negotiations with Tehran and tension between the two countries reaches new levels.

There is a massive deficit in confidence on both sides and intense mediation is needed to defuse tensions. The main objectives of mediation would be to build confidence and pave the way for future engagement.

In addition to recent Japanese efforts — and old channels through Switzerland and Oman — new mediation efforts are under way. Most prominently the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani will visit Washington to offer his country’s services in that regard. Some eyes are also focused on the current G20 meeting in Japan at which President Donald Trump and Prime Minister Shinzō Abe will exchange views on Iran policy.

While these processes are unfolding, escalatory measures continue to influence the relations. Nonetheless, greater understanding is gradually emerging in Washington that the maximum pressure strategy has not produced positive results and a course correction is needed, although there is no consensus on how to move forward.

For now, Washington’s strategy seems to be continued pressure short of war. Iran’s strategy will be to meet pressure with pressure: directly through shooting down drones and other US assets; and indirectly by creating costs for US allies in the region through its proxies. The major risk of the current standoff is that it can easily get out of control.

At the same time, the latest sanctions show that Washington is running out of ideas on how to put pressure on Iran. If the goal is to entice Tehran to start a process of negotiations, the new sanctions are certainly misplaced because they will harden the Iranian position and vindicate Supreme Leader Ayatollah Ali Khamenei’s view that one should not trust the Americans.

The best that can be hoped for at this point is the avoidance of military confrontation while both sides enhance their leverage for future talks and wait for the domestic balance of power to change.

This excerpt is taken from Iran Strategic Focus, our monthly intelligence report on Iran. Click here if you would like to receive a free sample.