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Monday, the Obama administration announced a new round of sanctions specifically targeting Iran’s petroleum industry in hopes of further isolating its government and holding it accountable for its ongoing nuclear program, confirmed by the latest International Atomic Energy Agency (IAEA) report.

Last week’s IAEA report did more than verify the Islamic Republic of Iran’s suspicious and dangerous activity. It also afforded the U.S. government, previously tentative on taking serious action against Iran, a clearer perspective on what steps must be taken next.

The report stated, “Iran has carried out activities relevant to the development of nuclear explosive devices,” in short, a scientific way of saying Iran seeks military nuclear capability.

For those closely following Iran developments, the report was no real news. Iran’s ongoing nuclear agenda has been on the radars of most knowledgeable experts.  Yet, a published report, plainly stating the fact, stirred a renewed urgency among policy makers on confronting Iran before it is too late.

American frustration with the prospect of a nuclear Iran, despite multiple rounds of sanctions, has lead to increased discussion in respect to an attack on Iran’s nuclear sites.  Policy makers have summed up the report to mean: Either we bomb them, or we let them get the bomb.

It is not wise to take the military option off the table. However, apprehensions about yet another U.S. military confrontation can be replaced by a serious push for implementing from the remaining diplomatic and economic options. We can use them to oblige the Iranian regime to uphold domestic human rights, to respect the rule of international law, and to abandon its pursuit of nuclear capability.

U.S.-initiated sanctions pioneered a path, which the European Union (E.U.) largely followed, albeit lacking the same U.S. dedication to diplomatically and financially isolate the Iranian regime.

In 2010 alone, almost €30 billion Euros were traded between Iran and Europe, according to the European Trade Commission. Close to 90% of EU imports from Iran were energy related.

While sanctions have worked to the degree in which they have been properly implemented and enforced, the Obama administration still has room to flex its muscles in further crippling Iran’s financial and energy sectors, which this new round of sanctions aspires to do, as well as compelling European leaders to strictly follow suit.

Until now, neither the U.S. nor the E.U. have directly targeted the Central Bank of Iran (CBI), which, as its title states, is responsible for a majority of significant transactions, especially in respect to energy and international trade.

For sanctions to be effective and efficient, U.S.-E.U. cooperation is necessary, but with European economies threatened with collapse, the E.U. has neglected to maintain pressure against the Iranian regime by becoming lenient on and remiss of their nuclear ambitions and human rights abuses.

To make matters worse, Europe’s warm and welcoming treatment of Iran’s diplomats has fueled and reaffirmed their actions.  A lax perspective and generous hospitality will not translate into game-changing diplomatic isolation.

Europe’s previous mistakes in cozying up to rogue government leaders demonstrate the crux of the matter.  European leaders are now charged with the decisive choice of whether or not to recall their nations’ ambassadors and high-ranking diplomats to Iran and to in-turn appropriately sanction Iran’s diplomats when traveling abroad. These are the steps that will ultimately help isolate and properly target the Iranian regime’s brazen conduct. These are also the steps toward avoiding a devastating military confrontation—yet another war that the world cannot afford.

But the responsibility does not solely lie on European shoulders; while the U.S. must look for willing partners, particularly in Europe, the U.S. must begin directly supporting independent movements and minds in Iran.

The Iranian people are still the biggest threat to their regime.  They are a nation of 70 million, young, vibrant, forward-thinking citizens with strong and capable potential leaders. They are well-read and formally educated, understanding how to effectively communicate with one other and the rest of the world through new technologies. Defeating the Iranian regime means not looking past this gold mine of educated and passionate young people who yearn for a new Iranian order more than the west does.

The world witnessed the way in which they risked their lives and came into the streets in the aftermath of the contested 2009 presidential election.  They challenged their oppressive government and looked to the west for, at the very least, a pledge of moral support for their well-intentioned movement.

The American response to the Iranian uprising, or perhaps we should call it the “Iranian Spring” to garner a more emotional response, was shameful and baffling.  It was an opportune moment in an opportune situation, and the U.S. abandoned the Iranian people and in turn emboldened their government.

Mistakes of the past now have one last chance to be reversed. The IAEA report should be considered a last warning before the world becomes witness to nuclear armed Ayatollahs, and by default, a nuclear Hezbollah and Hamas as well.

The Obama administration must decide whether it will take this opportunity to diffuse the Iranian threat, or if it will pay no heed to the counsel of the international arena’s most respected nuclear agency.

Lisa Daftari, is a journalist and commentator who specializes in counterterrorism, Middle East and Iranian affairs. For more, visit her website: www.LisaDaftari.com