Iranian President Mahmoud Ahmadinejad would be insane to abandon his nuclear program now - or anytime in the foreseeable future. The reason is simple: Every time he says "no," the international community sweetens the concession package it is offering him. So even if he wanted to cut a deal, why do so now when waiting guarantees a better deal later? Two weeks ago, The New York Times reported that European countries, with US consent, are drafting yet another incentive package to woo Iran from uranium enrichment. While the package is not yet finalized, diplomats told the Times that it could include "joint ventures between European and Iranian oil companies" and "talks with Iran on regional security issues." Nor is this the first time Iranian intransigence has paid off. Two years ago, after Iran not only rejected the initial offer, but also restricted international monitoring of its nuclear program and resumed enrichment (which it had earlier suspended), the European Union, backed by America, again responded with an improved benefits package. That package included direct talks with Washington, state-of-the-art nuclear technology and even acquiescence in Iran's uranium enrichment - something previously deemed unacceptable due to Teheran's history of nuclear deception. Thus by holding out, Ahmadinejad has already ensured a better deal than he could have gotten earlier. The problem is that this process is endless: If he rejects this package, the EU will almost certainly propose an even better one. Hence there is no incentive to accept this one, either - or the next one, or the next. As long as saying "no" is likely to produce a better offer, it never pays to says "yes." Clearly, this calculus would be different if Iran were suffering painful sanctions; in that case, the cost of awaiting the next offer might exceed the benefits. But since concessions are piling up far more rapidly than sanctions, Iran loses nothing by waiting. A WEEK after the Times reported the proposed new benefits, the Security Council passed its third sanctions resolution against Iran. It subjected another 13 Iranian individuals and companies to travel bans and asset freezes (Ahmadinejad was doubtless terrified). It also banned trade in specified dual-use items, but the list is riddled with exceptions. For instance, Russia can still supply parts for Iran's reactor in Bushehr; Teheran can also purchase anything needed for joint projects with the International Atomic Energy Agency (sanctions notwithstanding, dozens of such projects remain active). Finally, it urged states to "exercise vigilance in entering into new commitments for public provided financial support for trade with Iranâ€¦ to avoid such financial support contributing" to its nuclear program, and "to exercise vigilance" over transactions between local banks and Iranian banks, "to avoid such activities contributing" to this program. In other words, states need neither stop existing support for trade with Iran (export credits, trade insurance, etc.) nor refrain from expanding such support, as long as this trade is not directly connected with Iran's nuclear program; nor need they halt dealings with Iranian banks, other than transactions directly tied to the nuclear program. All states are free to keep Iran financially afloat - and thereby, since money is fungible, to provide the needed cash for its nuclear program. Thus after three rounds of sanctions, not only is Iran's economy not threatened; even its nuclear program faces no significant impediment. And that, too, will be true for the foreseeable future, since Russia and China adamantly oppose any sanctions that might actually hurt, while the EU - which, as Iran's largest trading partner, could easily impose painful sanctions on its own - objects to sanctions without Security Council approval. So why should Iran not hold out for the inevitable new and improved offer? This self-defeating tactic is not unique to Iran: It is also applied, with equal lack of success, to numerous other international problems. TAKE THE divided island of Cyprus, where in 2004, both halves voted on a UN-sponsored unification plan. But Greek Cyprus was promised EU membership regardless of how either side voted, whereas for Turkish Cyprus, membership depended on both sides approving the plan. Thus Greek Cyprus had nothing to lose by holding out for a better deal - as then president Tassos Papadopoulos repeatedly pointed out in urging his countrymen to vote "no." The result was predictable: Turkish Cypriots, who had something to lose, accepted the deal, but 75 percent of Greek Cypriots rejected it. Nevertheless, Greek Cyprus received immediate EU membership, while Turkish Cyprus, thanks to the Greek side's EU veto, remains under an almost total EU embargo. And this year, negotiations are expected to reopen - with the old deal as the starting point to which sweeteners will be added to woo the Greeks. The same pattern surfaces in Israeli-Palestinian talks. In July 2000, Israel offered the Palestinians all of Gaza plus 88 percent of the West Bank, including parts of east Jerusalem. The Palestinians not only refused, they also launched a shooting war. But the world responded by condemning Israel (for shooting back) and demanding that it offer additional concessions. In December 2000-January 2001, Israel did so, offering 97 percent of the West Bank, including the Temple Mount. The Palestinians again refused, while ratcheting up anti-Israel terrorism. But again, the world responded by condemning Israel's counterterrorism efforts, demanding that it offer additional concessions and increasing financial support for the Palestinian Authority. And now, new talks have begun, with the 2000-2001 offer as the baseline on which Israel is once again expected to improve. But under such circumstances, the Palestinians have no incentive to say yes. If each refusal results in a better offer next time, while entailing no compensatory penalties such as, say, an aid cutoff, they have every reason to continue holding out for more. Carrots, like sticks, are essential tools of international relations. But they only work if the recipient has something to lose by saying "no." If rejection entails no appreciable penalties and a guaranteed better offer later, holding out for more will always pay. And that, unfortunately, is precisely the situation today - with Iran, and in far too many other places.