With Iran and North Korea threatening to raise the stakes in their twin nuclear stand-offs, the looming collapse of diplomatic efforts on both fronts is driving the Bush administration to reassess its options, focusing debate on containment and possible military strikes.

North Korea's statement on Wednesday that it had removed fuel rods from its Yongbyon reactor possibly to produce plutonium for several nuclear bombs reinforced the view of “hawks” in Washington that the communist state hasno intention of negotiating away its nuclear deterrent. Six-party talks, hosted by China and last held nearly a year ago, are in effect moribund and may soon be pronounced defunct by the US.

If Iran carries out its threat to end its voluntary freeze agreed with France, Germany and the UK then talks with the European Union trio would also be over. Diplomats said Iran was expected to notify the International Atomic Energy Agency by the end of the week that it was resuming preparations to enrich uranium.

Breaking off negotiations with Iran and North Korea may well exacerbate the divisions between the US and its allies that hindered diplomacy in the first place. Despite US rhetoric, neither the EU nor the Asian allies were convinced that the Bush administration was willing to make the concessions they saw as crucial to strike deals. As a result, unity over sanctions will prove elusive, diplomats say, let alone military strikes.

Critics of the Bush administration say it has narrowed its own options by “outsourcing” US diplomacy to China and the EU. The loss of credibility in US intelligence after Iraq, and Iran's latent ability to create havoc there, are also serious problems.

China has a significant role. It is possible that Beijing has successfully used its leverage over North Korea to forestall a nuclear test. But it appears unwilling to join tough sanctions out of concern that a collapsed North would lead to unification on the South's terms. Likewise, China could apply economic pressure on Iran but values it as a future provider of energy.

As a result, United Nations sanctions against Iran and North Korea may not be achievable. Officials say the US may have to turn to the Group of Seven industrialised nations for agreement on punitive measures, as well as the Proliferation Security Initiative, an adhoc coalition set up by Washington to apply pressure through interdictions of cargoes.

War gaming at the Pentagon has not produced attractive military options, analysts say. But nor have they been fully excluded. “They don't see a military option in North Korea. They do in Iran,” said Cliff Kupchan, an analyst with the Eurasia Group consultancy.

Military strikes would include targeting of Iran's gas conversion facility near Isfahan. That might set back Iran's nuclear programme by several years, experts say. If there is no progress in the EU-Iran talks, Mr Kupchan sees a “70 per cent chance of a US or Israeli military strike by next April”.

Ray Takeyh of the Council on Foreign Relations disagrees. He says that despite the Iraq experience, the US might well do nothing and reluctantly accept a not-so-perfect deal which that the EU could might yet strike with Iran.

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