America bolsters its military strength in the Gulf. Yet Iran is defiant. Time for diplomacy is running out. So, will this be a battle of wills or armies for presidents Bush and Ahmadinejad?

AN American carrier battle group led by the USS Dwight D Eisenhowerheads towards the Persian Gulf to reinforce the naval assets already in place. A third is due to follow shortly. In Bulgaria, the newly opened strategic US Air Force bases start receiving squadrons of B-2 Stealth bombers.

For all that the administration of president George W Bush has denied it is targeting Iran - according to vice-president Dick Cheney yesterday on a visit to Australia, "all options are still on the table" - it is hard to avoid the impression that the US is sending a not-so-subtle message to the regime in Tehran to call a halt to its nuclear programme, or else.

As the military build-up continues, the five permanent members of the United Nations Security Council plus Germany meet in London tomorrow to make one last-ditch effort to prevent Iran from expanding its uranium enrichment programme in defiance of resolution 1737.

The official line is that the US still sees containment as the best way of dealing with the problem but Washington is beginning to tire of dealing with a country which it sees both as a future nuclear risk and a present danger intent on destabilising its neighbour Iraq through support of Shia militias.

Even the rhetoric is being cranked up, with US under-secretary of state NicholasBurnsaccusingIranof "effectively thumbing its nose at the international community".

Coming on top of a damning six-page report produced by the International Atomic Energy Agency (IAEA) claiming that Iran has expanded from research-scale to industrial-scale production of enriched uranium, the pressure is slowly growing on president Mahmoud Ahmadinejad.The report, produced by IAEA director Dr Mohamed el-Baradei, also accuses Iran of building a heavy water reactor and production plant in defiance of the UN resolution.

In an area of diplomatic activity - US involvement in the Middle East - where perception is often as important as reality, the rumour mill insists that the US is on the brink of taking decisive military action against Iran to forestall its nuclear ambitions and put a stop to its support of Shia militias in Iraq.

Even if that story refuses to stick, one other piece of tittle-tattle refuses to go away: if the US does not take action against Iran then it will hand the task over to its ally, Israel, whose airforce has recentlybeenequippedwithUS bunker-busting ordnance capable of destroying Iran's hidden nuclear facilities.

Yesterday it was revealed the Israeli defence forces are negotiating with the US to provide an air corridor over Iraq to enable their war planes to overfly the country in order to attack Iranian nuclear facilities. The Israelis have carried out such an attack before: in 1981 they bombed Iraq's nuclear reactor at Osirak and destroyed the country's fledgling nuclear industry.

Comparing the current crisis with the days leading to the outbreak of hostilities in Iraq in 2003, there are obvious parallels. The US has made some strong allegations about Iran's complicity in supplying weapons to the Shia militias; there is an undertow of anger at Iran's refusal to give up its nuclear ambitions and Bush and Ahmadinejad are failing to discover any common ground which will allow them to steer clear of a military confrontation. From Washington to Tehran the big question centres on US policy: is Bush going for broke by laying plans to attackIranorisheinvolvedina dangerous game of brinkmanship?

The Military Option THE US is in a strong position to launch a pre-emptivestrikeagainst Iranian positions thought to be nuclear facilities or military installations and senior commanders have produced contingency plans for a series of attacks on the Iranian homeland. The US has bases in Iraq, plus an army which will eventually number 160,000 troops. With three carrier groups soon to be deployed in the Gulf, it has the capacity to launch air strikes or even to make limited amphibious landings.

From its bases in Bulgaria and the former Soviet central Asian republics, it can employ air power to destroy suspected targets either by using stealth bombers or pre-programmed cruise missiles. Even though Iran is a big country with suspected installations scattered in remote areas, intelligence from satellites and aerial surveillance has provided US commanders with sufficient real-time recordings to construct an accurate picture of Iran's main assets and how they might be destroyed.

Even a series of surgical strikes could be sufficient to bring the Iranians to heel. Although these were used to limited effect by the Clinton administration against targets in Iraq during the 1990s, US forces have drawn up plans for a more concentrated effort which would bring targets such as suspected nuclear facilities under attack not just from cruise missiles but also from a new generation of bombs capable of penetrating underground installations.

The build-up of naval power in the Gulf suggests the attacks would be made by missiles and carrier-borne aircraft, thereby eliminating the need to use any Arab country as a base for the attacks. At a meeting of Arab diplomats in Dubai last month the US position was put with unusual bluntness by Nicholas Burns.

"The Middle East isn't a region to be dominated by Iran," he said. "The Gulf isn't a body of water to be controlled by Iran. That's why we've seen the United States station two carrier battle groups in the region. Iran is going to have to understand that the US will protect its interests if Iran seeks to confront us."

Burns is involved in a US initiative to build up a new coalition - what US secretary of state Condoleezza Rice calls a "a new alignment of moderates" - to contain the threat of Shia expansionism. This would involve Saudi Arabia, Egypt, Jordan and the Gulf states and the obvious result would be regime change within Iran to produce a more moderate administration. A special unit has been created in the US State Department to co-ordinate Iranian opposition groups and funds have been earmarked for increased propaganda efforts in what is seen as a proxy war but bullish military commanders still believe that a series of precise military strikes could achieve the same objective - of toppling Ahmadinejad - more cheaply and more effectively.

A Diplomatic Solution IN an attempt to defuse the crisis, president Bush has consistently poured cold water on the idea that he is minded to order a pre-emptive strike. Last week he rejected the speculation as "noise" and made it clear that he was seeking other options. "All major problems should be solved diplomatically," he said during the course of a television interview.

"In other words the military is the last resort to solve problems. And I believe we still have the capacity to solve this issue diplomatically, because a lot of the world now understands the dangers of Iran having nuclear weapons. And so we're still working toward that end, and we're pressuring the regime through diplomatic channels."

Bush's words have an ameliorative ring and they can be read in conjunction with the decision taken by the European Union to impose limited sanctions on the import of materials which would facilitate Iran's nuclear programme.

It is also possible Bush is conforming to the old military adage that any country seeking peace should prepare for war. If so, the sabre-rattling could have been introduced to concentrate minds in Tehran and to put further pressure on Ahmadinejad's increasingly unpopular administration. It did not go unnoticed in Washington that last December's municipal elections went against him and there is increasing frustration over his rabid anti-US and anti-Israel stance.

The main sticking point for a diplomatic solution through UN sanctions lies in US insistence that Iran has to halt uranium enrichment before talks can begin. On the face of it this leaves little room for manoeuvre but, as the recent Iraq Study Group findings made clear, the nuclear issue could form part of a wider debate which would see Iran and even Syria participating in a regional summit on solving the civil conflict in Iraq.

That solution would be attractive to moderates in Iran who are becoming increasingly hostile to Ahmadinejad's stance, which they believe is harming their country. Sanctions have already hit theIranianeconomyandfurther restrictions will make matters worse.

In the war of words, much will depend on how far the Democrats are prepared to go in frustrating Bush's plans for an increased military presence in Iraq. Democrats claim any escalation will have a knock-on effect of dragging Shia elements from Iran into the fighting.

Increased forces in Iraq could also be used for an assault on Iran, one reason why Democrats are opposed to supporting the increased military build-up. Harry Reid, the party's leader in the Senate, has already warned that "the president does not have the authority to launch military action without firstseekingcongressional authorisation" and that this is likely to remain the bottom line.

"The truth is the president is running out of options," says a US diplomatic source. "While he'd like to give Ahmadinejadabloodynoseand show him who's boss, he can't afford to open a second front while he's still struggling to impose some order on Iraq. He knows it and so do his generals; it just doesn't stack up."