Relations between the US and Iran are approaching a death spiral. Tehran is defiantly pursuing its nuclear programme, recently announcing its intention to build 10 new enrichment facilities. Many US policymakers are growing sceptical about the prospects for diplomacy and pushing for new sanctions.

Right now, this would be a serious mistake; new sanctions would poison talks in which Iran's fractured government might yet reach a "yes". Instead, the Obama administration should move quickly to make a broad proposal on Iran's nuclear programme and leapfrog the interim deal over which negotiations are now stuck.

Diplomacy is focused on a proposal that Iran export most of its low-enriched uranium (LEU), which can be used either to generate civilian power or to make a nuclear bomb. If Iran agreed, the arrangement would build confidence and buy time. But Tehran has refused to give a clear response. This idea has consumed diplomacy for over two months. It is now time to move on.

The heart of the issue is whether Iran will agree to a deal on the long-term shape of its nuclear programme. To address this head-on, Washington's offer should have two primary elements. First, Iran would have to agree to a very intrusive inspection regime, including snap inspection of all suspect sites. Tehran must assuage concerns that it possesses a network of secret facilities.

Second, Iran must agree to long-term constraints - for perhaps five years - on the amount of LEU it can stockpile. Israelis, who have not ruled out military strikes, are particularly concerned that Tehran will divert its LEU for military purposes, a concern shared by the west. Smaller amounts of LEU in Iran will ease fears. Any plan to build new enrichment plants, a goal that is probably far beyond Iran's technological ability in any case, would have to be shelved. If Iran accepted these terms, it would receive the robust array of incentives currently on offer - help with its civilian nuclear programme, trade benefits and a role in regional security.

The US should not ask that Iran suspend uranium enrichment. Tehran will refuse and the demand will kill talks. Washington should also refrain from seeking new UN sanctions until its proposal is aired. This broader approach should guide US policy for several months, but not longer. Washington must guard against Iran's time-worn strategy of talking and stalling while continuing to develop its nuclear programme.

So far, Iran has shown little willingness to compromise. But there is a chance Tehran's key decision-makers and constituencies could come around. On the proposal to export LEU, Iran's ultimate decider - Supreme Leader Ali Khamenei - appeared initially to support the arrangement but then wavered. Leading conservatives attacked the offer, arguing that the west could not be trusted, as did opposition leader Mir-Hossein Moussavi. Mr Khamenei, sensing a political debacle, backed off.

That dynamic could change. First, Mr Khamenei would have to state firmly and publicly that he supports a deal - and in so doing put an end to elite debate. Second, the regime would have to prepare the Iranian elite and public for a change in nuclear policy. Third, the main pillar of the regime - the Revolutionary Guard - would at least have to acquiesce in the deal.

None of this will happen immediately. Mr Khamenei was weakened by the post-election protests and seems to have no stomach for corralling Tehran's elite. The Guard remains very hardline on the nuclear programme. But in coming months, Mr Khamenei could decide the regime needs both the legitimacy and improved international economic relations that a deal would bring. The Guard would follow his lead - and their myriad new business interests could also lead them to seek a more benign international environment.

Some observers argue that a nuclear deal would sell out the protest movement by legitimising the regime. They are mistaken. Iranian society is plagued by many fractures, which will play out regardless of US policy. Over the longer term, a detente would mean more exposure for Iranians to American ideas.

It is not too late for diplomacy. The Obama administration should jump past interim arrangements and smoke out Iran's bottom line.

The writer is a research director at Eurasia Group and a former state department official.

This article first appeared in the Financial Times.

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