It is difficult to under-estimate the taboo which has been broken by the Iraq Study Group's suggestion that the United States seeks a diplomatic engagement with Syria and more particularly Iran, in order to alleviate its deteriorating situation in Iraq. There has been much hand-wringing and angst over the possibility of dialogue with Iran over the past year among members of the Washington establishment, but by and large these discussions have remained reassuringly abstract. Now the grand old men of US foreign policy have pronounced, and there can be little doubt that their conclusions make uncomfortable reading for those re-treading the dogma of "staying the course". At the same time, for all the apparent boldness of the recommendations, the authors have (had) to qualify their suggestions to the point of banality.

Some form of coherent and consistent policy towards Iran is essential for any successful conclusion to the Iraqi quagmire. Yet the report says nothing about how any approach to Iran should be constructed, relying more on a tactical change of course than the strategic rethink that is necessary. The report notes for example that collaboration with Iran has already occurred during the initial war against the Taliban, but strangely omits the now infamous "Axis of Evil" speech, which effectively derailed this opportunity for a deeper rapprochement. It adds that Iran has been reluctant to offer help on Iraq because of the "belief" that the US seeks regime change in Iran, but falls short of recommending ways of addressing this fear. It reiterates a long-held US view that "issues" can be dealt with separately and not holistically.

Given the due attention to the Middle East Peace Process as part of the overall solution, this stubborn adherence to categorisation, seems in this report to have been reserved for Iran, and reflects the dogged persistence of successive US policy makers to square the circle of contradiction as far as Iran is concerned.

Put simply, the report recommends that while Iran should be engaged on Iraq (because we need them), the issue of Iran's nuclear programme can be delegated to the UN Security Council, and should be dealt with separately. Quite apart from the fact that Iran's nuclear programme cannot be resolved in isolation, there is no indication in the report quite why the government of Mr Ahmadinejad should have any interest in helping the United States. After all, the view from Tehran is looking rather good. Iran has never looked so imperious, and indeed has much to be grateful to the Bush administration for, but if regime change and the threat of military strikes are still on the cards, then the suggestion that the US would like some help, may strike some in Tehran as perverse.

Moreover, the situation at home is not looking too bad either. The simmering crisis is facilitating a continued crackdown on dissent, a policy which is ironically assisted by the US insistence on the distinction between the various "issues". Put simply, Mr Ahmadinejad is reassured by the US focus on security - Iraqi or nuclear - arguments on which he can win easily, and their neglect of human security, issues with which one suspects, he may have some problems.

Mr Ahmadinejad is an ideologue who sees no merit in negotiation with the West, and indeed regards America's current difficulties as almost divine evidence of the justice of his views. Why change course now? It is this very complacency which may prove to be the ultimate flaw in Iran's position. "Staying the course", has been the undoing of America's position in the Middle East and ironically, Ahmadinejad, like Bush, is likely to be the author of his own misfortune.

If he chose to collaborate with the West, he could do so from a position of relative strength. What his faith will not allow him to see is that he may come to be undermined by his own economy. He is in the process of spending the vast reserves built up by the previous government, the country has suffered from a lack of investment and, paradoxically, is reliant on importing oil for domestic heating. All of which makes it vulnerable, not least to sanctions. "Staying the course" is in no one's interest.

Ali M Ansari is Director of the Institute for Iranian Studies at the University of St Andrews and author of 'Confronting Iran'