Leading article: Diplomacy has not yet run its course with Iran

Not for the first time, Iran is sending out mixed messages about its nuclear programme. At the end of last week, President Mahmoud Ahmadinejad said he was ready to export Iran's stocks of low-enriched uranium for processing into nuclear fuel rods abroad. But at the weekend the president was seen on national television telling Iran's atomic scientists to step up the enrichment process at home.

President Ahmadinejad's mention of a target of 20 per cent enrichment – a level above what is necessary for civilian nuclear power – has set alarm bells ringing in Western capitals. Yet the President added at the weekend that the door was still open to "interaction" with the West on the nuclear issue.

So what is going on? Does this apparent lurch from conciliation to provocation reflect tensions within the regime? Or is it just a tactic from Tehran to sow confusion among foreign powers and buy time? It is impossible to say. The regime in Tehran has always been opaque. And since last year's disputed elections and the popular protests which have convulsed the country, the door has been shut altogether. The more important question in many ways is: how should the outside world respond? Many argue that the time has come to end the talking and impose punitive measures on Iran.

At the Chilcot inquiry into the Iraq war, our own former prime minister, Tony Blair, was keen to talk up the Iranian threat. And he is far from a lone voice. The demands for a fresh round of United Nations Security Council sanctions on Tehran are growing, even though this is likely to be vetoed by Russia and China. It is said that if UN sanctions are blocked, the US and the EU should be prepared to act alone.

There are signs too that pressure is growing within the US administration for President Obama to put away the "extended hand" offered to Iran a year ago and to bring back the clenched fist of the Bush era. Mr Obama's Defence Secretary, Robert Gates, has suggested that Western powers need to think about a "different tack" on Iran. The reported deployment of US defence systems to Iran's Gulf neighbours last month has been seen a sign of a shifting policy in Washington.

The wider world must certainly be firm with Tehran over its nuclear programme. Iran is defying a UN Security Council resolution to freeze its enrichment programme. And it kept an enrichment plant at Qom secret from the International Atomic Energy Agency until late last year. If international law is to mean anything, these breaches cannot simply be ignored.

Yet the outside world must also tread carefully. A grave danger lies in turning up the temperature with sabre-rattling and further punitive sanctions. A sense of external threat will give the hardliners in Tehran an excuse to crack down on internal dissent. And sanctions that end up inflicting suffering on the Iranian public will strengthen the reactionaries too.

The state of negotiations between the outside world and Iran is undeniably depressing. But it is wrong to argue that diplomatic engagement on Tehran's nuclear programme has comprehensively failed. An updated US National Intelligence Estimate on Iran's nuclear weapons ambitions is being prepared. It would make no sense to take punitive action before its conclusions are revealed. Mr Obama has shown admirable patience thus far on the Iranian nuclear issue. Despite the swelling chorus of demands for a more confrontational policy, he should hold his present course.