This is a dangerous moment in Iranian-British relations. The arrest of local staff working at the British embassy in Tehran is shocking but should not altogether surprise us. When authoritarian regimes feel cornered, they go for the jugular. Unwilling to take on the Great Satan of America, Tehran smartly picks on the mini-Satan of Britain; an easier, lower-risk target. At the same time, fights with Britain still have a real historic resonance in Iran. Distrust of the British as interfering imperialists is practically written into the country's DNA, fortified by memories of Britain's role in the coup against the popular Mossadeq government in the early 1950s and the rise of the Shah.
The weight of this historic baggage poses dilemmas to the Government as it struggles to respond in a manner that is appropriate and does not look craven, but which does not ratchet up the dispute unnecessarily. Firm condemnation of what looks like an act of petty vindictiveness must not be accompanied with a side serving of shrill and implausible threats.
One reason for such caution is that the Iranian government's motives and goals in this affair are transparent. Diminished in their eyes of their own people by the protests that followed the disputed presidential election, the rattled authorities have an interest in trying to re-unite their fractured country through a nationalist crusade against foreign meddlers.
This is a crucial time for them, as the opposition's will-power to continue contesting the election results flags and as Mahmoud Ahmadinejad's victory awaits formal confirmation by the Guardian Council. Tehran would feel its strategy had been amply vindicated if careless words or gestures on Britain's part caused the dispute to spiral upwards, further confusing the opposition and making it easier for the regime to smear them as the dupes of the enemy.
Our experience of diplomatic rows with the regime in Zimbabwe is instructive here, even if only as a salutary warning about how not to proceed. Trading accusations about human rights with Robert Mugabe did little or nothing to help the embattled opposition there, or the farmers facing eviction from their land; it may have made their position worse while leaving us with even less diplomatic leverage than before. That does not mean that we should do nothing about these arrests. It means that we must try to co-ordinate every response in close concert with our allies, especially with countries such as France and Germany that have better relations with Tehran than we do. We should not hesitate to sound out Russia. Prime Minister Vladimir Putin is no close ally but he has considerable traction among Tehran's rulers, evidenced by Ahmadinejad's recent trip to Moscow.
One other way that Britain can respond to Tehran's bellicosity is by continuing the battle for hearts and minds through the BBC. After only six months on air, the Persian service has been a resounding success, drawing thousands of emails daily and millions of viewers. That the regime appears desperate to block the BBC from reaching Iranian audiences tells much about what British weapons they really fear.
Meanwhile, we must not let Tehran feel its strategy of deliberate provocations is paying a dividend. Let our cool heads embarrass their synthetic display of hysteria. If they then choose to accelerate this dispute even further, it will be clearer to most Iranians, and to the world, which side is angling for a fight – and why.