Two conclusions, one grim and the other potentially more encouraging, can be drawn from Iran’s resumption of uranium conversion at its Isfahan plant. The first is that the regime has no intention of dismantling what it euphemistically calls its “national nuclear industry” — an industry that includes facilities, clandestinely constructed and hidden from the International Atomic Energy Agency, which have no plausible non-military purpose.

The second is that when, two years ago, Iran agreed to negotiate with Britain, France and Germany, it believed that the EU troika could be hoodwinked into cutting a deal that isolated the United States, without compelling Iran to give up its capacity to produce weapons-grade uranium. Tehran may have calculated that the Europeans could be won over by the argument that Article 4 of the Nuclear Non-Proliferation Treaty gives non-nuclear weapon states an “inalienable right” to develop nuclear fuel-cycle technology, a right that Iran could not therefore be denied.

The mullahs miscalculated. The Europeans came with soft voices and no sticks in sight; but they stuck to the central point. Iran, by cheating and by failing fully to co-operate with IAEA inspectors who found traces of weapons-grade plutonium at a secret enrichment plant at Natanz, had violated the obligation that all nuclear activities be solely peaceable, and fully open to international inspection. The facilities were thus suspect and must close.

The Bush Administration, which at first shared Tehran’s perception that the Europeans would prove a soft touch, began to reinforce the negotiating effort; and the more Tehran played the Europeans along, the closer transatlantic co-operation became. Sensing that it was trapped in a pincer movement, Tehran gave the final EU offer barely a glance before rejecting it. Iran now declares that the heart of the deal, an offer to supply the country with nuclear fuel in return for the dismantling of its own fuel-cycle capabil-ities, is an insult to its sovereignty.

This may prove to have been a further miscalculation. At an emergency session of the IAEA board in Vienna, both Russia and China have come out in firm support of an EU draft resolution demanding an immediate suspension of fuel conversion. With American agreement, and in order to overcome Third World resistance on the board, this text omits any reference to the UN Security Council; but with all five permanent members at last working together, a unified response is possible. The intention is that after issuing a strongly worded formal warning, the board will reconvene within a week or two and formally refer Iran to the Security Council.

Iran has all but dared the IAEA to do just that — possibly on the depressingly plausible assumption that the Council could take months to reach a decision and that Iran could shrug off any sanctions other than a ban on its oil exports. If sanctions looked like biting, Iran could always put its nuclear programme back on ice, having already moved closer to developing nuclear weapons.

Yet Iran may be more reluctant than it pretends to be declared a nuclear outlaw: witness yesterday’s hint of new Iranian “initiatives and proposals”. First on that list must be the suspension of uranium processing. Without that, EU diplomacy has now run its course.