The trouble with brinkmanship of the type now being played out over Iran’s nuclear program is that it is so easy to fall over the cliff. At the first two rounds of new talks between Iran and the P5+1 (the five permanent United Nations Security Council members plus Germany), in Istanbul in April and Baghdad in May, both sides still at least stumbled along the edge of the precipice. Now, after the third round in Moscow, they are holding on by not much more than their fingernails.

Neither side has been prepared to compromise on any substantive issue. They did agree – barely – to hold a low-level experts meeting in early July, but no one expects this to lead to a breakthrough.

By then, new European and American sanctions on Iranian oil exports will be in force, and the United States Congress is pushing to apply more, with influential voices there arguing that the negotiation game is over. War talk is still close to the surface in Israel, and anxiety is mounting that, in the highly charged political climate of a U.S. election year, escalation might not be containable.

Although the two sides’ negotiating positions throughout the current series of talks have not been as far apart as in the past, their core demands have so far proved irreconcilable.

The six world powers are currently insisting on three things. First, Iran must halt all enrichment of uranium to 20 percent purity (a level required for research reactors, but only a short step away, in practical terms, from weapons-grade uranium). Second, Iran must swap its existing 20 percent stockpile for fuel capable of use only in the Tehran Research Reactor or for some other manifestly peaceful purpose. The final demand is that Iran shut down its highly protected underground enrichment facility at Fordow, near Qom.

In return for all of this, no new sanctions would be imposed, and access to aircraft spare parts would be eased. But Iran wants more: at a minimum, formal recognition of its “inalienable right to enrich” uranium; no shutdown of any existing facility; and the removal, in significant part, of the many sanctions that have been imposed upon it (for refusing to comply with Security Council resolutions requiring it to suspend all enrichment activity).

There are several sub-texts underlying the current standoff, superbly analyzed in a report this month from the International Crisis Group. On the P5+1 side, certainly in the minds of United States officials and their European partners, there has been a perception that Iran is reeling under the sanctions – unable to cope with more and desperate for relief – and deeply fearful of an imminent Israeli military strike.

But Iran sees the West – in the context of the economic turmoil in Europe, and President Barack Obama’s effort to win re-election – as desperate to avoid a conflict that would send oil prices rocketing. Its leaders feel their own bargaining position strengthened by the country’s new facilities and stockpiles, and, while hurt by sanctions, too much pride is at stake to ever surrender in the face of them.

The reality is that each side is exaggerating its own strengths and the other’s weaknesses. In particular, the global powers are underestimating Iran’s resilience, and Iran is overestimating the ability of the United States, in an election year, to curb possible Israeli military adventurism. Some modification of their respective positions is necessary.

There is no doubt that Iran – with its long history of secrecy and dissimulation – deserves the intense hostility and distrust that its nuclear program continues to engender. But the most common view of security and intelligence experts worldwide is that, while Iran may want the technical breakout capability to build a nuclear weapon that Japan now has, it is still a long way from building a usable atomic weapon, and has made no decision to do so. Indeed, Iran’s leaders, weighing the costs and benefits, have plenty of good reasons not to cross that red line.

However, those assessments will prove to be naive unless Iran, at the very least, verifiably suspends any enrichment beyond 5 percent, renders its 20 percent stockpile incapable of military application, and meets the concern about Fordow by modifying its role and opening it to intrusive monitoring.

In return, the P5+1 must be prepared to modify significantly its own current bottom-line demands, regardless of the political difficulties that this will entail, not least for Obama in an election year. The global powers should openly acknowledge that – whether one likes it or not, and whether it is good policy or not – the legally correct position under the nuclear Non-Proliferation Treaty is that the Islamic Republic does have a right to enrich uranium for purely civilian purposes.

And, even more important, the P5+1 must be prepared not only to disavow new sanctions, but to wind back existing ones as Iran takes each of the reasonable steps required of it.

That way lies not accommodation with the devil, but recognition that the current situation is unsustainable; inflammatory confrontation is closer than we think, and catastrophe can be averted only by cool, level-headed diplomacy of the kind that, until now, has been in unhappily short supply.

Gareth Evans, a former Australian foreign minister and president emeritus of the International Crisis Group, co-chaired the International Commission on Nuclear Non-Proliferation and Disarmament. THE DAILY STAR publishes this commentary in collaboration with Project Syndicate © (www.project-syndicate.org).