British Foreign Secretary David Miliband told a think-tank audience in Abu Dhabi yesterday that "the prospect of a nuclear-armed Iran poses the most immediate threat to the stability" of the region. Gulf Arabs don't have to be convinced that Persian hegemony is a peril. They understand that an Iranian bomb would be directed against them as much as against Israel and the West. They worry, too, that Iran is indoctrinating their restive Shi'ite populations with the ayatollahs' extremism. Yet the economies of the two sides of the Gulf are interwoven. The parallels between the Gulf Arabs and the European Union are striking. Both dread the power of a nuclear-armed Iran. Both, paradoxically, keep Teheran solvent through commerce. Unfortunately, in trying to convince the Arabs to get tougher with Iran, Miliband actually gave them every reason not to: "The pressure we are applying to Iran, the sanctions we have supported in both the EU and the UN, are not an attempt at regime change," he said. "Nor are they a precursor to military action. We are 100% committed to a diplomatic resolution of this dispute." MILIBAND'S speech comes days after The New York Times reported that Iran may already have sufficient material for an atom bomb like the one dropped over Nagasaki. According to the Times, Iran has 630 kilograms of low-enriched uranium from its Natanz facility, enough to produce a single bomb, though the material would have to be further purified and "weaponized." Israeli analysts reject the assertion that Iran already has enough refined material for a bomb, though they believe it will have that capacity by the end of 2009, as the Post reported on Friday. Quibbles aside, no one suggests Iran is not moving full-speed ahead on creating weapons of mass destruction. Back in December 2007, the US National Intelligence Estimate found with "high confidence" that Iran halted its effort to develop nuclear weapons in 2003. Teheran may simply have decided to concentrate on enrichment having gone as far as necessary, at the time, on weaponization. The intelligence estimate concluded: "We judge with moderate confidence that the earliest possible date Iran would be technically capable of producing enough highly enriched uranium for a weapon is late 2009," but more likely between 2010 and 2015. If the guesstimate of next year is closer to reality - as the latest indications suggest - telling Iran not to worry about regime change or military intervention sends precisely the wrong signal. We appreciate that Miliband tailored his address in the UAE to his audience with the commendable goal of cajoling Arab leaders to more vigorously oppose Iran's ambitions. But the foreign secretary's overly nuanced and highly conservative message could easily lead the mullahs to conclude that there is no credible downside to their building a bomb: Existing sanctions are insufficiently draconian to deter; the pace by which they could conceivably be strengthened is pathetically out of whack with Iranian nuclear advances; the regime is under no threat; and the military option is off the table. WE DO not oppose negotiations with Iran. With full US backing, EU leaders and diplomats, as well as UN officials, have discussed the nuclear issue with Iran on countless occasions. And from November 2001 through 2008, the United States itself held 28 direct and indirect contacts with Iran, many at the ambassadorial level - not just to talk about Iraq. Miliband is right that for "diplomacy to work we need to present Teheran with a stark choice." But his idea of "stark" comes down to: "Either it cooperates with the UN Security Council, halts enrichment and engages constructively with the IAEA, or it continues on its current path towards further confrontation and isolationâ€¦ It is only by making this choice more and more stark," Miliband says, "by combining increasingly tough sanctions with clear offers of reintegrationâ€¦ that we can hope to veer the Iranian government off its current course." But this is precisely the "stark" choice that Iran derisively rejected in July 2008. The mullahs must be delighted to hear that the only approach Miliband advocates falls short of an immediate punishing embargo, removes the threat of regime change, and even seems to take a last-resort military option off the table. How the Gulf Arabs feel may be another matter.