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Tehran apparently heard loud and clear President Barack Obama's hint to Iran in his Nobel Peace Prize acceptance Thursday, when he said it is "incumbent upon all of us to insist that nations like Iran and North Korea do not game the system." U.S. Defense Secretary Robert Gates said publicly that he expected the international community to impose significant sanctions against Iran. However, Obama said he does not support isolating countries like Iran, preferring diplomatic solutions instead.

Iran's Foreign Minister Manouchehr Mottaki spelled out the essence of Tehran's response to the international proposal regarding its enriched uranium: It was willing initially to store 400 kilograms of enriched uranium (out of 1,500 kilograms in its possession) on Kish Island in exchange for nuclear fuel. Mottaki said the offer was intended to test the seriousness of the international powers in delivering the promised fuel, insinuating that at the next stage they could talk about continuing the process.

Iran is not yet sure that Russia will oppose more sanctions, and Mottaki's statements are an attempt to keep the diplomatic channel alive. Tehran has so far called the storage of uranium on Iranian soil a "national principle" not to be surrendered. But it seems that Iran is willing to cut corners. While this is not a real concession - the entire amount of uranium will remain on Iranian soil - the portion that will be stored on Kish Island will not be part of the potential for use in the nuclear facilities in Natanz and Qom. The statement thus holds somewhat of a promise for the future, especially when it is an effort to maintain the momentum of dialogue. The question is whether this offer is sufficient to stop the sanctions process or at least to bring Russia back to its former position opposing sanctions.

While the Iranian foreign minister is clarifying Iran's room for flexibility, Defense Minister Ahmad Vahidi last week signed a military pact with Syria. In practical terms, this step is nothing new. Iran and Syria signed a strategic cooperation pact in 2006, without detailing what it would include, and another military agreement in 2007. Trade between Iran and Syria comes to about $350 million a year, and Iran's investments in Syria are about $2 billion a year.

Thus, the importance of the announcement of the pact is in its diplomatic timing. The announcement stated that Iran would not object to Syria's moving ahead on talks to return the Golan Heights, and on Syria's part any attempt to condition negotiations toward a peace agreement with Israel on disengaging from Iran would be unacceptable. This has been the model for Iran's relations with Turkey as well, with Tehran not conditioning these relations on Turkey's cutting its ties with Israel.