David Ignatius appears to have been convinced that the Obama administration is deftly playing its Iran hand. I am not so easily persuaded, but I did see in Ignatius's report one thing worth praising: President Obama now appears to understand that the sanctions track is the diplomatic track.

There are basically three schools of thought regarding diplomatic engagement with Iran. One school thinks the prospect is hopeless from the get-go and not worth doing. I understand this school's pessimism -- for 30 years, anyone betting that diplomacy with Iran would fail made money -- but I have not been in this school because of its naiveté. That's right, naiveté. It is hardly naïve about the intentions and stubbornness of the Iranian regime, but it is naïve about everything else regarding American foreign policy options regarding Iran. Everything else we might have to do with respect to Iran -- whether it is the hawkish option of military strikes or the dovish option of learning to live with an Iranian nuclear weapon -- is easier to do if we have thoroughly tried and exhausted other diplomatic options. So pragmatism requires that we try diplomatic engagement, even if pragmatism also leads us to be bearish about its prospects for success.

The second school thinks that diplomatic engagement is hard but doable, provided that the United States faithfully makes ever larger concessions and offers ever larger carrots. This school believes that the Iranian regime has several times made sincere offers that belligerent Bush officials foolishly ignored or rejected. This school wanted Obama to reset Iranian relations and pursue an approach that began with unconditional carrots and only threatened vague and imprecise sticks should the Iranian regime reject U.S. concessions. The problem with this school is that it offers no hedge against Iranian negotiators pocketing the concessions, moving the bargaining space accordingly, and stringing out the negotiations while the Iranian nuclear weapons program inches ever closer to a fait accompli. Like the quest for the Holy Grail, the quest for Iranian moderates who would cut a deal was tantalizing and never-ending. Not surprisingly, this school ends up consistently arguing against applying sanctions, and instead proposes new concessions as the way out of diplomatic impasses. The best gimmick this school has in this regard is pretending that sanctions are the alternative to diplomacy rather than acknowledging that they are part and parcel of a robust diplomatic approach. Thus, second school apologists consistently argue "let's give diplomacy a chance and not pursue sanctions just yet," which is sort of like arguing "let's try to swim the English Channel but let's not use our legs just yet, let's wait until we are drowning first."

During the campaign, a careless answer to a gotcha question in a foreign policy debate put candidate Obama partially in the second school. When asked whether he would sit down for an unconditional face-to-face with Ahmadinejad, Obama gave the reflexive "if Bush is against it, I must be for it" answer and said yes. Hillary Clinton pounced. Under the onslaught of criticism from both Republicans and Democrats, Obama doubled down on and elevated it to a pseudo-doctrine during the campaign: For Obama, diplomacy would mean unconditional face-to-face meetings with tyrants, without regard to diplomatic preparation or prospects for success.

Of course, once in office, the Obama administration had to retreat from that unsustainable position. Face-to-face meetings with the president are too precious to be granted without adequate diplomatic preparation -- without getting something guaranteed and up front. But they were stuck with enough of the ideology of this second school that they felt obligated to adopt the Bush carrots-and-sticks strategy on Iran with one crucial difference: sequence the carrots-and-sticks by leading with carrots and waiting a long time -- over a year -- before recognizing that it was time for sticks.

To my eyes, the praiseworthy piece of the latest report on Obama's thinking on Iran is that he has apparently now moved into the third school, where I have been hoping he would end up long ago. This third school thinks that diplomatic engagement is hard and only doable if the United States and our international allies have sufficient leverage over the Iranian regime. The necessary-but-not-sufficient condition for diplomatic success is for the Iranian regime to believe they are on a negative trajectory. The longer they delay, the worse things get for them; the deal they could get today is better than the deal they could get tomorrow. To borrow a hackneyed idea from the Cold War, diplomatic engagement means first setting the conditions so that the correlation of world forces runs against the Iranian regime -- and that they perceive this to be the case. To be sure, this must be done deftly so that the Iranian regime does not grow so pessimistic that it launches its own preventive military strike. The deftness requires consistently offering a plausible set of carrots that would change the trajectory in a positive direction, but ensuring that the Iranian regime sees those carrots as the alternative to their eroding status quo. All of this requires leverage.

There are many elements to establishing this leverage. For instance, reversing the negative trajectory in Iraq helped. Likewise, forging closer cooperation now among our Gulf allies who would be the most adversely affected by an Iranian nuclear weapon could further isolate the regime. But of greatest import, I believe, is activating what diplomats call the "pressure track" -- meaning ratcheting up the economic pain that the Iranian regime is suffering -- and doing so before, or in tandem with, offering carrots.

For diplomacy to work, the Iranian regime has to confront the choice of sticks-now-but-carrots-in-the-future-if-they-get-onside. This is the opposite of the second school, which offers the choice of carrots-now-but-sticks-in-the-future-if-they-stay-offside. The third school's approach has a higher chance of success because it tightens with time. The more the Iranian regime dithers, the more pain it experiences.

The approach also is slightly less vulnerable to mischief from weakly committed partners on the U.N. Security Council (such as the Russians and Chinese) who consistently drag their heels on sticks and demand that more time be given to carrots. The third school hedges against this weakness by offering the Russian and Chinese this bargain: in exchange for the United States offering more carrots to Iran, you must first ratchet up the sanctions. Russian and Chinese cooperation will always be the Achilles heel of any Iranian strategy, but our best shot requires prioritizing their sticks over our carrots, and taking advantage of every opportunity to further that priority.

The Obama administration squandered the best opportunity they had in this regard -- the smoking gun evidence of Iranian cheating on uranium enrichment, which the administration dramatically revealed last September. At that moment, the optimal strategy would have been to seize the temporary diplomatic advantage in the Security Council, push for immediate sanctions, and then re-launch the various offers of carrots and concessions. Instead, Obama, perhaps still under the sway of the second school' thinking, re-launched the carrots and concessions.

The predictable (and predicted) result was diplomatic failure and a full year was lost. Now the Obama administration has belatedly started to apply the approach advocated by the third school. It may well be too late now, but it is still worth trying.