The Islamic republic should now be converting its gains, none of which are irreversible, into lasting advantages. That requires being constructive in Iraq, encouraging moderation from parties it backs in the Palestine Territories and Lebanon and building relations with its neighbours. There should be sensitivity about international concerns about its nuclear plans and an end to the provocative gestures by President Ahmadinejad that make it harder for those arguing for an accommodation with Iran to get a hearing.

Tehran has done none of these things and is about to pay the price. President Bush unveiled his new Iraq policy on 10 January. But Iran is the principal target of the US’ unfolding Middle East strategy. The US, moderate Arab states and Israel are now taking steps to halt and even reverse Tehran’s regional ascent.

The White House is taking the initiative by increasing pressure on Iran through the UN. US military assets are being put in place in a display of strength that is a warning and a precaution. In Lebanon, it is backing the government of Prime Minister Fouad Siniora. Dissidents and minorities in Iran are getting Washington’s support.

In Iraq, President Bush’s accusation that Tehran supports Shia groups that murder Sunnis and provides havens for insurgents has been followed by harassment of Iranian officials in the country. The troop surge is mainly designed to protect Sunni areas of Baghdad. Washington wants more even-handed treatment of the Sunni population by the Shia-dominated Iraqi government.

The Gulf states, Egypt and Jordan are increasing their support for the Lebanese government. To woo Damascus away from Tehran, they are promising support for Syria’s campaign to regain the occupied Golan Heights. The moderates also back the US’ Iraq troop surge plan. Saudi Arabia has engineered a $10-a-barrel fall in the price of oil since mid-December. With financial reserves at their highest levels for more than a quarter of a century, Riyadh can weather oil well below $50 a barrel. It believes Iran cannot.

The third party to the new US approach is Israel. By leaking earlier this month that it is ready to attack Iran, it has successfully maintained international attention on Tehran’s nuclear programme. Israel is reported to be using its influence with the Kurds in Iran and Iraq to cause problems for the Islamic republic.

But the partnership is not an alliance. To keep it together, Israel will have to make concessions about Palestine and the Golan. US Secretary of State Condoleezza Rice has announced that a new peace initiative is planned. The challenge will be to make this sufficiently credible to convince moderate Arab states to maintain their commitment to Washington’s new approach.

Iran is the big Middle East story of 2007, but talk of war is premature. The US is not ready to dilute its efforts in Afghanistan and Iraq. Washington’s Arab allies want Iran deterred, not provoked. US public opinion will also need to be primed before any attack as it was ahead of the 2003 Iraq invasion. That takes time.

The ponderous US policymaking machine is now in motion. It will take at least a year, or a big shock, to send it in a different direction. The good news is that Washington is seriously engaged with the Arab-Israel issue for the first time since 2000.

The big unanswered question is: how will Iran respond? Thinking Iranians recognise that President Ahmadinejad’s antics are jeopardising Tehran’s strategic gains. They want a deal with Washington that will allow the Islamic republic to focus on domestic development and modernisation. The US, however, is probably no longer in the mood for negotiations. But in the world of diplomacy, there is no such thing as a lost cause. It’s late, but not too late, for Iran to recognise how much it stands to lose, stop the rhetoric and start talking sensibly about the constructive contribution it can make to a new and peaceful Middle East.