The White House, meanwhile, is trying to rebuild a suddenly wobbly coalition of states that had been pressuring Tehran to suspend its nuclear work through a new round of United Nations-backed sanctions.
Some in the Bush administration note that Germany, France and the United Kingdom are still talking publicly about the importance for Iran to bring transparency to its nuclear work. And they said there are signs that even Russia understands a key finding of the NIE: Iran continues to aggressively develop a nuclear fuel cycle, even if its actual weapons program appeared to end in 2003.
"The Iranians have a strategic choice to make," President Bush told a gathering in Omaha, Neb. "They can come clean with the international community about the scope of their nuclear activities," and accept U.S.-backed terms for new nuclear negotiations, "or they can continue on a path of isolation."
President Mahmoud Ahmadinejad yesterday called the report a "declaration of victory" for the country's nuclear efforts. Tehran's oil minister, Gholam Hossein Nozari, told reporters that he questioned the U.S.'s ability to push ahead with a new round of U.N. sanctions in light of the new intelligence report.
"Do you think the Americans will pursue the third round of sanctions after this announcement?" Mr. Nozari told a news conference at a meeting of the Organization of Petroleum Exporting Countries here. "If they do, I do not understand their logic and how they can convince" the international community.
In a sign of Tehran's growing confidence, Mr. Nozari said Iran was unconcerned if American companies continued to avoid Iranian investment, especially in the country's vast petroleum sector. Washington prohibits most investment in Iran. Many European and Chinese companies have continued to operate there, but so far their participation has been spotty.
The U.S. intelligence assessment complicates a two-prong diplomatic approach that Gulf states have for some time maintained with Iran, a Shiite Muslim state and historic regional rival to the Sunni-led Arab Gulf monarchies.
Gulf states have expressed worry about Iran's rising regional influence and are loath to see Iran with nuclear weapons. Amid U.S. pressure, the United Arab Emirates recently issued new rules tightening export and re-export controls, a move seen aimed partially at illicit trade to and from Iran.
But officials there have been clear that they will only go so far, acknowledging Tehran's key role in the region's economy. The Gulf Cooperation Council, an economic grouping of the six Arab Gulf countries, recently started negotiating a free-trade pact with Iran. UAE officials have repeatedly said they are unwilling to significantly restrict economic ties with Iran, one of their biggest trading partners.
At a GCC summit earlier this week, after the release of the U.S. intelligence report, other Gulf officials backed away from further economic sanctions. "We cannot afford to follow certain international strategies that could harm our interests," Qatari Prime Minister Shaikh Hamad Bin Jasem Al Thani told reporters at the close of a GCC summit Tuesday. It was the first meeting of its kind in which Iran's president was invited.
Mr. Nozari, the oil minister, said Iran had extended offers to supply water and energy, including the country's plentiful gas supplies, to help Arab neighbors who are increasingly struggling with their rising domestic water and energy use.
"We are trying to upgrade our relations with our neighbors," Mr. Nozari said