The Iran Challenge.

It was tough for US Secretary Rice to hold together a fragile coalition to rein in Iran's nuclear ambitions. The Israel-Hizbullah war has made that job harder. The key point in Iran's Aug. 22 response to the package of incentives from the US, Russia, China and EU3 was that Tehran did not agree to suspend uranium enrichment - the coalition's central demand. The question is whether Rice can get the UNSC to vote sanctions. While only the five permanent UNSC members have a veto, smaller states are so angry over how the US has handled the Lebanon crisis that they will give Russia and China cover to balk against imposing tough sanctions.

Russia and China have deep economic interests in Iran. Any sanctions which could hurt Iran's energy sector would ratchet up already high oil prices and end up harming the West. That was the road Rice faced even before the Lebanon crisis. Now, "Lebanon has proven that there's no military solution to the problem in the Middle East", says Trita Parsi, Iranian-born author of "Treacherous Triangle: The Secret Dealings of Israel, Iran, and the United States", which he intends to publish in 2007.

While there is no talk about hitting Iran militarily, Israel now has a general in charge of co-ordinating in such an event, and European states are worried about a downward spiral if the sanctions do not work. While initial sanctions will be too weak, there could be trouble if the US tried to prod Russia and China to take aim at Iran's energy sector. Iran, which has the world's second largest oil reserves, is forced to import more than 40% of its gasoline because it does not have refining capacity to meet its needs. China and Russia have energy companies invested in Iran. They, along with EU powers, are likely to think hard before agreeing to prohibit the purchase of Iranian oil or limiting investment in Iran's petroleum industry.