Iran’s official reaction to the modest but unanimous UN Security Council resolution passed just before Christmas is yesterday’s defiant pledge to “accelerate” the nuclear programme that has exposed it to UN sanctions. That much was to be expected, not least because of Russia’s insistence on restricting the resolution’s impact by exempting from sanctions the reactor it is building for Iran at Bushehr. The resulting text may make it slightly more difficult for Tehran to build the nuclear bomb it denies intending to possess, but no one is so naive as to expect that the regime’s ambitions will be thwarted by freezing the assets of a handful of Iranian companies and officials.

When President Ahmedinejad gleefully dismissed Resolution 1737 as “superficial”, he therefore had a point. But that does not make the resolution “unimportant”. Ten months after being referred to the Security Council by the International Atomic Energy Agency (IAEA), Iran is finally on the council’s formal watchlist.

That guarantees one thing: Iran’s nuclear ambitions will be the focus of concentrated international attention throughout 2007, at last given a prominence commensurate with the dangers they present. Within 60 days, the IAEA, the UN’s nuclear watchdog, is required to report to the council what steps Iran has taken to comply with UN demands. If, instead of suspending uranium enrichment, President Ahmedinejad has by then fulfilled his threat to upgrade production to “ industrial” levels while also curbing IAEA access to Iranian facilities, the choice for Russia – and for China, which has put oil contracts ahead of its responsibilities as a permanent Security Council member – would then lie between tightening the screws on Iran, or watching as Western governments do so without waiting for deadlock at the UN to be resolved.

Up to this point, the Iranian regime has calculated that there was not much the West would do, even if it could, not least because of Iran’s capacity to make mischief in Iraq. It has played a divided field with considerable success. Defiance will be costlier now. Iran’s leaders would not have tried so hard to prevent Security Council agreement at any level, if they did not grasp that, however timid this first step may be, it has more than symbolic “importance”.

Iran’s boast has been that there is nothing the West can do to hurt it. Western commentary has by and large concurred, but the calculus is shifting. Iran has proved itself such an energetic troublemaker, not only in Iraq but in Lebanon, that the arguments for kid-glove diplomacy look weak. In addition, it is evident that the regime is even more dependent on oil revenues than the world is on Iranian oil – and Iran’s oil industry, starved of foreign technology, is in trouble. Exports are declining by around 10 per cent a year.

Oil money buys off dissent, but President Ahmedinejad’s popularity is shrinking even faster than oil revenues. In recent municipal elections, his supporters were trounced by moderate conservatives and reformers. Voters were promised a war on corruption and a campaign for economic revival. They got, instead, an escalation of confrontation with the West, and they do not like it. Technically, financially and politically, the regime is thus more vulnerable than it pretends. Bombastic nationalism may have seen Mr Ahmedinejad through 2006 but, at home if not abroad, it has run its course. The world’s strongest weapon in 2007 may be the hunger for change within Iran itself.