Even when the European-Iranian agreement to halt Iran's uranium-enrichment program looked solid, the United States was blunt in its disapproval. The ink was barely dry on the accord when the Bush administration, it appears, began trying to derail it.

First, rather than endorse the accord, Secretary of State Colin Powell essentially accused the Iranians of lying when they said their nuclear program was for peaceful purposes. He announced that new intelligence showed Iran is developing a nuclear warhead to arm its Shahab-3 ballistic missiles. Then, at a Nov. 20 meeting of heads of state in Santiago, Chile, President Bush stated unequivocally that Iran is trying to build a nuclear weapon.

Why would the administration take such a combative stance? Because hard-liners within the administration thought Tehran would use the settlement to buy time for building nuclear weapons, and that the United States would be better off bombing Iran's suspected weapons sites.

Proponents of using military force against Iran have not yet won the argument within the Bush administration. But the past two weeks of strong pronouncements about the threat Iran poses suggest that the military option may be gaining ground. And Iran's last-minute attempts to maintain some enrichment capabilities -- which by press time Friday were threatening to kill the European agreement -- no doubt strengthened the hard-liners' hand.

Before the United States even considers such a drastic step as airstrikes against suspected nuclear weapons sites -- or even trying to compel the United Nations to endorse new economic sanctions against Iran -- it is essential that our leaders be clear about what they are trying to accomplish in Iran and whether such actions will help or hurt.

If the ultimate goal is to create a democracy -- one that would not fear the United States and therefore have less use for the bomb -- then dual-track diplomacy with Iran's government and with its people is more likely to work than military action.

Probably the most important question the administration's leaders should ask themselves is whether Iran, even a nuclear-armed Iran, poses a direct threat to the United States and its allies.

The answer, we believe, is no.

The mullahs who rule Tehran long ago gave up their ideological quest to "export'' revolution. Like the last generation of octogenarians who ruled the Soviet Union, Iran's leaders today want nuclear weapons as a means to help them preserve their power, not to help them spread their model of theocratic rule to other countries.

Deterrence works

In other words, even if Iran's rulers succeeded in building nuclear bombs, they would be very unlikely to take on the United States and its vast nuclear arsenal or to attack Israel. (The mullahs in Tehran understand that any nuclear attack against Israel would trigger full retaliation from the United States.) In dealing with Iran, deterrence works.

Tehran would also be unlikely to pass a bomb to Islamist terrorists, despite its support of Arab terrorist organizations that continue to attack Israel. One reason, again, is deterrence. Iran's rulers know that the United States would probably be able to trace the weapon back to them and retaliate.

The threat of a nuclear Iran comes, instead, from the reaction it is almost sure to spark in the region and the world, possibly sending Egypt and Saudi Arabia on their own quests for nuclear weapons.

Such an arms race would undermine the longstanding Treaty on the Non-Proliferation of Nuclear Weapons, an agreement signed by nearly 190 countries, that has proved indispensable in preventing the spread of nuclear weapons.

Bush administration hard-liners want to save that arms-control treaty by using arms. In advocating a "surgical'' military strike against Iran's most important nuclear facilities, including the once hidden enrichment plant in Natanz, they cite Israel's airstrike against Iraq's nuclear complex at Osirak in 1981 as a model of success. They argue that an American (or Israeli) strike would not end Iran's nuclear aspirations, but would dramatically slow its program and make the mullahs reconsider the costs of trying to restart it.

Attack would backfire

But a pre-emptive military strike would instead do just what the hard-liners in Tehran hope for: It would unite their people behind them.

Even a precise bombing campaign would kill hundreds if not thousands of innocent Iranians; destroy ancient buildings of historical and religious importance; trigger an Iranian counterstrike, however feeble, against American targets and friends in the region, and spur the mullahs to increase their direct support for American enemies in the Shiite part of Iraq.

Even more important, an attack would only encourage Tehran to redouble its efforts to build a bomb, just as Saddam Hussein sped up his efforts after the 1981 strike. It would also hurt the democratic opposition movement inside Iran, which is already in retreat and cannot afford another setback. After an attack, Iranians, not unlike Americans, are sure to rally around the flag and their government.

If the administration decides, in the end, that American military options are limited and counterproductive, the only serious way to impede the development of Iranian nuclear weapons is through negotiation. Iran's recent accord with France, Britain and Germany is only temporary, and negotiations are expected to continue.

If the United States were to jump in now, it could try to ensure that our European allies accept nothing less than a permanent and verifiable dismantling of Iran's enrichment capabilities, as well as banning any plutonium production.

Allowing the Iranians to enrich even some uranium, which they say will be used merely to feed their nuclear power plant, makes it too easy to cheat. To make the deal work, the United States would need to join with Europe, Russia and China in pledging to guarantee Iran a permanent and continuous supply of enriched uranium. To make the deal even more attractive, the fuel could be offered at reduced prices.

Even under the strictest inspection regime, Iran's leaders will cheat, as they have often done in the past, and they will eventually divert enriched uranium from peaceful to military purposes. But the harder and more transparent the allies can make it, the longer it will take Iran to begin building bombs.

In the long run, the world's only serious hope for stopping Iran from developing nuclear weapons is the development of a democratic government in Tehran. A democratic Iran will become an ally of the Western world no longer in need of a deterrent threat against the United States.

Democracy in Iran therefore obviously serves U.S. national interests. Yet Bush administration officials (as well as their predecessors in the Clinton, Bush and Reagan administrations) have not succeeded in developing a strategy for advancing the cause of Iranian democracy.

New strategy

What is needed is a radical new approach that would nurture change from within the country, in alliance with Iran's democratic movement, rather than impose change from without.

A first step would be to establish an American presence in Tehran, as many in Iran's democratic opposition have proposed. Now decades old, the U.S. policy of isolating Iran has not weakened but instead strengthened its autocratic government.

Of course, we are not suggesting that the United States open an embassy in Tehran and turn a blind eye to human rights abuses; that would only contribute to the further consolidation of the mullahs' hold on power. But we are suggesting a new strategy that would allow American government officials, as well as civic leaders, academics and business people, to engage directly with Iranian society.

This engagement cannot occur on a widespread scale without some level of diplomatic relations and some revision of the American sanctions against Iran. Then, more Western foundations would be able to make grants to pro-democracy Iranian organizations, while business people -- and especially the Iranian-American business community in the United States -- would be able to leverage their capital and know-how to influence economic and political change inside Iran. A U.S. presence in Iran would, not incidentally, also enhance the West's ability to monitor Iran's nuclear program.

Critics of engagement argue that diplomatic relations with Iran will reward this "axis of evil'' member for years of supporting terrorism and pursuing nuclear weapons. In fact, an American presence in Iran is the mullahs' worst nightmare.

Iran's government has long used its ongoing tensions with the United States, as well as the embargo, as an excuse for the economic difficulties that are, in fact, the direct results of the regime's incompetence and corruption. Tehran's leaders have conveniently labeled nearly all of their opponents as "agents of America.''

Most important, part of the regime's self-declared legitimacy lies in its claim to be the only Muslim country fighting what it sees as U.S. imperialism. If the United States could prove it's not an enemy of the Iranian people, the legitimacy of Iran's leaders would diminish.

Reagan's course

In the first years of his presidency, Ronald Reagan labeled the Soviet Union the "evil empire'' and went out of his way to avoid contact with such a regime.

Over time, however, Reagan charted a new course of dual-track diplomacy. He engaged Kremlin leaders (well before Gorbachev) in arms control, while also fostering contacts and information flow between the West and the Soviet people in the hope of opening them up to the possibilities of democracy.

In the long run, it was not arms control with the Soviets, but democratization within the Soviet Union, that made the United States safer.

If George W. Bush desires a foreign-policy legacy as grand as Reagan's, now is the time to think big and change course as dramatically as Reagan did.

The United States needs natural gas. Developing countries many thousands of miles away are willing to supply it. This sleepy beachfront town and other communities along the Gulf of Mexico are likely to become the links between producers and consumers.

Altogether, energy companies are planning to spend more than $100 billion in the next decade to bring gas from developing countries to rich nations, according to PFC Energy, a Washington consulting firm. The only way to do it is to supercool the gas so that it condenses into a liquid, which is then compact enough to load onto tankers and send across oceans.

For years, this process was too costly to compete with relatively cheap domestic supplies of natural gas and with imports from Canada. But those supplies are tightening just as the demand for clean-burning gas is soaring. That has led to the most severe gas shortage in the last 25 years and caused domestic gas prices to double this year.

The gap between domestic supply and total demand is forecast to grow significantly over the next 20 years. That has made liquefied natural gas competitive, if only companies can find places that are willing to accept having L.N.G. terminals built nearby. "We've entered the gas age, and there's no turning back if we want a firm supply of a strategically crucial fuel," said Michael S. Smith, an investor who controls Freeport LNG, a Houston company that plans to build a receiving terminal on Quintana Island.

Mr. Smith and his partners, Cheniere Energy and Contango Oil and Gas, both of Houston, expect to begin construction of the terminal early next year on this tiny island about 70 miles south of Houston. The $400 million operation will be able to receive ships full of liquefied natural gas, warming the gas and piping it to a nearby plant owned by the Dow Chemical Company.

Quintana Island's attraction lies not only in its proximity to a plant that uses natural gas as a raw material but also in its location near the center of the nation's energy industry. That, it is hoped, will make political resistance to such projects tepid compared with the safety, aesthetic and environmental concerns in places like Northern California and Massachusetts.

Despite such concerns and worries that large, potentially explosive gas terminals could become terrorist targets, energy companies are eager to import liquefied natural gas. It is a shift that could avoid gas shortages forecast for the future, but could also increase the nation's dependence on foreign energy supplies.

"Just as we're debating the need to diversify our oil supplies, we're faced with an array of challenges to secure reliable and politically stable sources of gas," said David G. Victor, director of the Program on Energy and Sustainable Development at Stanford University.

More than a dozen projects like the one here are seeking approval from regulators in North America, including several on the Gulf Coast and in the northern Mexican state of Baja California.

The United States is already the world's largest natural gas producer, and domestic production is expected to increase to 28.5 trillion cubic feet in 2020 from 19.1 trillion cubic feet in 2000, according to the Energy Information Administration. Still, demand is expected to far outstrip production, growing to 33.8 trillion cubic feet by 2020 from 22.8 trillion cubic feet in 2000.

The gas to close that gap - more than five trillion cubic feet, a 40 percent increase in 20 years - will have to come largely from outside the United States.

Almost all of America's imported natural gas currently comes by pipeline from Canada. But a growing market for gas within Canada and rapidly depleting Canadian wells are expected to weaken that country's ability to increase exports. Mexico, though believed to have large untapped gas reserves, is mired in nationalist debate over making it easier for foreign financiers and companies to explore for gas.

As a result, Mexico, a power in crude oil, is a growing importer of natural gas - and an attractive base for liquefied natural gas receiving terminals, which cost as much as $700 million to build. The Organization for Economic Cooperation and Development recently forecast that the percentage of North America's gas from imports would climb to 26 percent by 2030 from just 1 percent today.

Those imports will come mostly from developing nations like Equatorial Guinea, a former Spanish colony in West Africa where Marathon Oil of Houston plans to build an L.N.G. plant able to serve gas fields throughout the Gulf of Guinea.

Ambitious ventures are also under way in other West African countries, including Angola and Nigeria, where energy companies were recently burning gas escaping from oil drilling operations because there was no ready market for it. In the Middle East, small countries like Oman, a sultanate on the Strait of Hormuz, and Qatar, are emerging as important gas powers.

In South America, Trinidad and Tobago has become an early leader in exporting liquefied natural gas, although companies in Bolivia and Peru have had difficulties advancing efforts to export L.N.G. to California. Producers in Indonesia, Malaysia and Russia could step in to supply the West Coast, pushing the Andean countries to the margins of the business.

In some ways, the scramble for natural gas projects resembles the heady early days of the oil industry a century ago. Then, British, Dutch and American investors raced around the world to stake out interests in remote oil fields in the Middle East, Central Asia and the archipelagoes of the Java Sea.

Some regions are considered more promising than others. Industry executives point out that just three countries  Iran, Qatar and Russia  hold more than half of the world's natural gas reserves, inevitably focusing attention on the delicate interplay between politics and commerce in these places.

Russia, with the largest proven reserves, plans to start exporting liquefied natural gas in 2007 with deliveries to Japan. Iran, while off limits to American companies because of trade restrictions by the United States, has attracted Japanese, French, British, Indian and South Korean concerns interested in mounting gas ventures.

There are important differences, however, between past oil booms and the current interest in natural gas. For one thing, studies show the world will be swimming in natural gas supplies while oil reserves are expected to dwindle in the decades ahead. Just one area in Qatar, a monarchy near Saudi Arabia with fewer than a million people, is thought to have enough gas to supply the United States for 40 years, according to a study by Deutsche Bank.

The natural gas industry has to overcome several obstacles before evolving into a vibrant global market. Even with ample supplies there is no market for trading liquefied natural gas, as there is for crude oil. Instead, producers and customers sign long-term contracts, sometimes resulting in significant price differences from one year to the next or from one country to another.

One reason the natural gas market has remained fragmented is because the fuel is difficult and expensive to extract and transport. But these costs are declining, adding to the appeal of gas projects. Lord Browne, the chief executive of BP, said the cost of developing gas liquefaction plants had halved since the 1980's, while shipping costs had also fallen.

Shipbuilders are seeking to meet demand for tankers, with the global gas fleet expected to grow to 193 ships by 2006 from 136 in 2002, according to LNG One World, a gas- shipping information service operated by Drewry International of Britain and Nissho Iwai of Japan.

Natural gas is still not considered as crucial as oil for overall energy security since oil's main use is for transportation and there is no short-term alternative. Natural gas has a variety of important industrial uses, like serving as a raw material for fertilizer and generating electricity.

Still, the growth in demand for liquefied natural gas in the United States is expected to outstrip other parts of the world. It is likely to grow 35 percent in the next five years, compared with 20 percent in other North Atlantic countries and 12 percent worldwide, according to Deutsche Bank. Hence the rush to proceed with projects that supply liquefied natural gas to the United States.

"The world could be consuming more gas than oil by 2025," Philip Watts, the chairman of the Royal Dutch/Shell Group, the large British-Dutch energy company, said in a recent address to industry executives in Tokyo. "We must be prepared for growing geopolitical turbulence and volatility in an increasingly interdependent world."

The United States has only five terminals capable of receiving L.N.G., including one in Puerto Rico. Almost 20 are on the drawing board, but opposition to the terminals has already prevented the start of work on several of them. Earlier this year, for instance, Shell and Bechtel Enterprises shelved a plan to build a terminal about 30 miles north of San Francisco because of stiff public opposition.

California remains perhaps the most difficult place in the country to gain approval for gas-receiving terminals. This has encouraged imaginative proposals like one last month from BHP Billiton, Australia's largest energy company, for a $600 million floating terminal 20 miles off the coast of Oxnard in the southern part of the state. It remains to be seen whether any of the California projects will be built.

An air of resignation hangs over even the critics of the plan to build the terminal on Quintana, which is scheduled to start operating by 2007. Officials from Freeport LNG have told residents that they expect to make more than $1 million a year in tax payments to the city, a substantial sum for a community of 40 homes that is the smallest municipality in Texas.

At the Jetties, a restaurant on the island's edge overlooking the brown water of the Gulf of Mexico, the walls are plastered with warnings of the perceived dangers of receiving tankers full of potentially combustible gas from far-flung parts of the world. But the restaurant's employees seem to believe that the terminal will be built, inevitably changing the island's easygoing atmosphere.

"People come out here to drink beer on the beach and look at the birds and the gulf," said Dana Difatta, a cook at the restaurant. "Imagine what they'll think when they're staring at some huge vats holding natural gas. Will they be horrified or relieved?"

Since the Iron Curtain came crashing down, American and Russian diplomats have been searching for a special relationship between their countries to replace Cold War animosity.

Security matters have not yielded much. On issues such as the expansion of Nato, stabilising Yugoslavia and the war in Chechnya, the two have sought each other's tolerance more than co-operation. Nor have the two nations developed much economic interaction, as a result of Russia's weak institutions and faltering economy. Thus, by default, "energy" has become the new special topic in Russian-American relations.

This enthusiasm is misplaced, however. A collapse of oil prices in the aftermath of an invasion of Iraq may soon lay bare the countries' divergent interests. Russia needs high oil prices to keep its economy afloat, whereas US policy would be largely unaffected by falling energy costs. Moreover, cheerleaders of a new Russian-American oil partnership fail to understand that there is not much the two can do to influence the global energy market or even investment in Russia's oil sector. The focus on oil has also eclipsed another area in which US and Russian common interests could run deeper: nuclear power. Joint efforts to develop new technologies for generating nuclear power and managing nuclear waste could result in a huge payoff for both countries. These issues, which are the keys to keeping nuclear power viable, are formally on the Russian-American political agenda, but little has been done to tap the potential for co -operation. Given Russia's scientific talent and the urgent need to reinvigorate nuclear non-proliferation programmes, a relatively minor commitment of diplomatic and financial resources could deliver significant long-term benefits to the United States.

On the surface, energy co-operation seems a wise choice. Russia is rich in hydrocarbons and the US wants them. Oil and gas account for two-fifths of Russian exports. Last year, Russia reclaimed its status, last held in the late 1980s, as the world's top oil producer. Its oil output this year is expected to top eight million barrels per day and is on track to rise further. Russian oil firms also made their first shipments to US markets last year - some symbolically purchased as part of US efforts to augment its strategic petroleum reserve. In addition, four Russian oil companies are preparing a new, large port in Murmansk as part of a plan to supply more than 10 per cent of total US oil imports within a decade.

Meanwhile, the US remains the world's largest consumer and importer of oil. This year, it will import about 60 per cent of the oil it burns, and the US Energy Information Administration expects foreign dependence will rise to about 70 per cent by 2010, and continue inching upwards thereafter. Although the US economy is much less sensitive to fluctuations in oil prices than it was three decades ago, diversification and stability in world oil markets are a constant worry.

War jitters and political divisions cast a long shadow over the Persian Gulf, source of one-quarter of the world's oil. In Nigeria, the largest African oil exporter, sectarian violence periodically not only interrupts oil operations but also sent Miss World contestants packing last year. A scheme by Latin America's top producer, Venezuela, to pump up its share of world production helped trigger a collapse in world oil prices in the late 1990s and ushered in the leftist government of President Hugo Chavez. Last year, labour strikes aimed at unseating Mr Chavez shut Venezuela's ports and helped raise prices to more than US$ 30 (HK$ 234) a barrel. Next to these players, Russia is a paragon of stability.

The aftermath of a war in Iraq would probably provide a first test for the shallow new Russian-American partnership. Most attention on Russian interests in Iraq has focused on two issues: Iraq's lingering Soviet-era debt, variously measured at US$ 7 billion to US$ 12 billion, and the dominant position of Russian companies in controlling leases for several Iraqi oilfields. Both are red herrings. No company that has signed lease deals with Saddam Hussein's government could believe those rights are secure. Russia's top oil company, Lukoil, knew that when it met Iraqi opposition leaders in an attempt to hedge its bets for possible regime change. (Saddam's discovery of those contacts proved the point: he cancelled, then later reinstated, Lukoil's interests in the massive Western Kurna field.)

Russian officials have pressed the US to guarantee the existing contracts, but officials have wisely demurred. There would be no faster way to confirm Arab suspicions that regime change is merely a cover for taking control of Iraq's oil than by awarding the jewels before a new government is known and seated.

Of course, the impact of a war on world oil supply and price is hard to predict. A long war and a tortuous rebuilding process could deprive the market of Iraqi crude oil (about two million barrels a day, last year). Damage to nearby fields in Kuwait and Saudi Arabia could make oil even more scarce. And already tight inventories and continued troubles in Venezuela could deliver a "perfect storm" of soaring oil prices.

The most plausible scenario, however, is bad news for Russia: a brief war, quickly followed by increased Iraqi exports, along with a clear policy of releasing oil from America's reserves to deter speculators. A more lasting Russian-American energy agenda would focus on subjects beyond the current, fleeting common interest in oil. To find an area in which dialogue can truly make a difference, Russia and the US should look to the subject that occupied much of their effort in the 1990s, but that both sides neglected too quickly: nuclear power.

With the end of the Cold War, the two nations created a multi-billion-dollar programme to sequester Russia's prodigious quantities of fissile material and nuclear technology. The goal was to prevent these "loose nukes" from falling into the hands of terrorists or hostile states.

The Co-operative Threat Reduction programme also included funds to employ Russian scientists through joint research projects and academic exchanges.

Inevitably, it has failed to meet all its goals. In a country where central control has broken down and scientific salaries have evaporated, it is difficult to halt the departure of every nuclear resource. Nor is it surprising that US appropriators have failed to deliver the billions of dollars promised for the collective endeavour. Other priorities have constantly intervened, and Russia's uneven record in complying with arms control agreements has made appropriation of funds a perpetual congressional battle. Various good ideas for reinvigorating the programme have gone without funding and bureaucratic attention - even in the post-September 11 political environment, in which practically any idea for fighting terrorism can get money.

Russia has opened nuclear waste encapsulation and storage facilities near Krasnoyarsk, raising the possibility of creating an international storage site for nuclear waste. This topic has long been taboo, but it is an essential issue to raise if the global nuclear power industry is to move beyond the inefficiencies of small-scale nuclear waste management.

Russia should also be brought into worldwide efforts to design new nuclear reactors. The global nuclear research community, under US leadership, has outlined comprehensive and implementable plans for the next generation of fission reactors. The Russian nuclear programme is one of the world's leaders in handling the materials necessary for new reactor designs. Yet Russia is not currently a member of the US government-led Generation IV International Forum, one of the main vehicles for international co-operation on fission reactors and their fuel cycles. Top US priorities must include integrating Russia into that effort, endorsing Russia's relationships with other key nuclear innovators (such as Japan), and delivering on the promise made at last summer's G8 meeting of leaders of the world's biggest economies - to help Russia secure its nuclear materials.

For opponents of nuclear power, no plan will be acceptable. But the emerging recognition that global warming is a real threat demands that nations develop serious, environmentally friendly energy alternatives. Of all the major options available today, only nuclear power and hydroelectricity offer usable energy with essentially zero emissions of greenhouse gases.

Neither government should be naive about the sustainability of this endeavour. Russia is not an ideal partner because its borders have been a sieve for nuclear know-how and because its nuclear managers are suspected of abetting the outflow. Thus, plans for nuclear waste storage, for example, must ensure that they render the waste a minimal threat for proliferation. The US must also be more mindful of Russian sensitivity to co-operation on matters that, to date, have been military secrets.

Another difficult issue that both nations must confront is Russia's relationship with Iran. A perennial thorn in ties, Russia's nuclear co -operation with officials in Tehran owes much not just to Iranian money but to the complex relationship between the two countries over drilling and export routes for Caspian oil. This link to Iran cannot be wished away, as it is rooted in Russia's very geography. Any sustainable nuclear partnership between the US and Russia must develop a political strategy to handle this reality.

The world, including the US, needs the option of viable nuclear power. Yet Russia's talented scientists and nuclear resources sit idle, ready for action.