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Illustration: Annelise Capossela/Axios

Iran's cool response to the Biden administration's push for diplomatic engagement, along with rising tensions in the region, makes clear that salvaging the 2015 nuclear deal may be far more difficult than many had anticipated.

The state of play: Both the U.S. and Iran have entered the diplomatic dance, but it seems to be moving in circles.

The U.S. announced it was ready to hold direct nuclear talks and took symbolic steps to build goodwill, including removing limitations on the movement of Iranian diplomats at the UN and withdrawing the Trump administration's request for snapback sanctions at the Security Council.

  • The U.S. is not prepared to meet Iran's primary request: unilaterally removing sanctions.

The Iranians have continued to take a tough line, most notably by moving forward with a law that curtails the access of UN inspectors to several nuclear sites.

  • But the Iranians did signal that they want to leave open the window for diplomacy by reaching a deal with the International Atomic Energy Agency (IAEA) to allow the inspectors to continue the bulk of their work for another three months.

The U.S. and its European allies drew up a resolution to censure Iran over its move on inspections when the IAEA board of governors convenes this week in Vienna.

  • The Iranians reacted angrily, threatening to abandon the recent deal with the IAEA if the U.S. and Europeans follow through with the move to censure Iran.
  • The Iranians also rejected a proposal for an informal meeting of the deal's signatories, after previously expressing openness to such a gathering, saying the time isn’t right for talks.

Between the lines: Iran has accused President Biden of "buying time" by focusing on censuring Iran rather than removing sanctions. The Biden administration, meanwhile, contends that Iran has an opportunity to negotiate and isn't taking it.

Driving the news: As the diplomatic difficulties have grown, the U.S. and its allies have also been exchanging kinetic punches in recent days with Iran and its proxies.

  • The U.S. retaliated against the Iran-backed Shiite militia rocket attacks on U.S. targets in Iraq with an airstrike on a militia base across the border in Syria.
  • After an Israeli ship was attacked in the Gulf of Oman, Israel retaliated by striking Iranian targets in Syria. Minister of Defense Benny Gantz claimed Iran had attacked the ship in an attempt to improve its bargaining position in nuclear talks.
  • Meanwhile, Iran-backed Houthi rebels in Yemen launched three attacks against Saudi Arabia this week, including the firing of a missile on the Saudi capital Riyadh, which was intercepted.

What they're saying: Speaking to Hillary Clinton on her podcast, Secretary of State Tony Blinken acknowledged the difficulties of reengaging with Iran, but stressed the importance of doing so alongside European allies:

“They’re also prepared to join us in taking strong action as necessary against some of the other things Iran does that we don’t like. We’re a long way from getting back to where we were. We don’t know what Iran will do or won’t do."

What’s next: The next stage of the diplomatic standoff will come at the IAEA meeting in Vienna, over whether a resolution condemning Iran will pass.

Go deeper

Updated Mar 3, 2021 - World

U.S. contractor dies of "cardiac episode" after rockets hit Iraq airbase

One U.S. contractor died of a "cardiac episode" after least 10 rockets hit the Al Asad Airbase in western Iraq hosting U.S.-led coalition troops, a Pentagon spokesperson said Wednesday.

The big picture: It's the first rocket attack since the U.S. launched an airstrike against facilities in Syria associated with an Iran-backed militia group last week, citing recent assaults and "ongoing threats to American and coalition personnel in Iraq.

Chauvin trial leaves cities, activists across America on edge

Illustration: Brendan Lynch/Axios

The impact of the Derek Chauvin trial is reverberating far beyond the walls of the downtown Minneapolis courtroom.

The state of play: With the trial set to enter its third week, activists across America are watching the proceedings unfold with heavy skepticism that what they perceive as justice will be served.

Felix Salmon, author of Capital
2 hours ago - Economy & Business

The dispiriting housing boom

Illustration: Sarah Grillo/Axios

It's a discouraging scene: Bidding wars, soaring prices, and fears that homeownership is becoming out of reach for millions of Americans. We're in a housing frenzy, driven by a massive shortage of inventory — and no one seems to be happy about it.

Why it matters: Not all bubbles burst. Real estate, in particular, tends to rise in value much more easily than it falls. Besides, says National Association of Realtors chief economist Lawrence Yun, this "is not a bubble. It is simply lack of supply."