• This is a partial transcript from "The Journal Editorial Report," September 23, 2006, that has been edited for clarity.

    PAUL GIGOT, HOST: As world leaders gathered this week at the United Nations, the United States had hoped to move decisively towards political and economic sanctions against Iran after that country missed an August 31 deadline to halt uranium enrichment.

    Instead, diplomats discussed a new deadline and have authorized the European Union's foreign policy chief to meet with Iran's nuclear negotiator any place at any time.

    Joining me now from Washington is the son of the late Shah of Iran, Reza Pahlavi.

    Mr. Pahlavi, thanks so much for being with us.

    REZA PAHLAVI, SON OF THE LATE SHAH OF IRAN: Good morning, Paul.

    GIGOT: You heard, I'm sure, President Mahmoud Ahmadinejad's speech. He has also been giving some interviews. What do you think he's trying to accomplish this week with these appearances?

    PAHLAVI: Well, unfortunately, I think that the grandstanding of Mr. Ahmadinejad is a carefully planned move to gain more popularity on certain Arab streets, as a champion of the cause of extremists who simply don't look at the world the same way we do.

    The truth is that he is losing more and more popularity at home, based on complete dysfunctionality of our economic situation. People are tired, are miserable. They have a lot of economic hardship.

    And frankly, in order to compensate for that loss of popularity, he is trying to, once again — as the Islamic Republic leaders have always done the same — deflecting attention from home-grown issues to some international arguments.

    GIGOT: OK, now, you know the U.N. Security Council is considering economic and political sanctions. What impact do you think — in response to the missed deadline on Iran's nuclear program, what impact do you think those sanctions would have on the regime and the politic—nuclear program? Do you think they would cause them to slow down? Have any impact at all?

    PAHLAVI: Well, first of all, I think that, if there is a sanction package considered, it has to be part of a much more profound strategy and policy.

    I have proposed before — and if I may repeat it again today — a three-pronged approach which consists of confrontation, pressure and support.

    By confrontation, I mean that everywhere this regime is up to mischief, it has to be dealt with whether it's in Afghanistan or Lebanon or Saudi Arabia or in Iraq.

    Number two is pressure. This is where sanctions come in.

    I believe that very carefully targeted and calculated sanctions aimed at the political, economic and personal interests of the regime's leadership and structure, as opposed to the entire Iranian nation, could certainly hurt the regime without necessarily hurting the people.

    And, of course, support at the end of the day is about helping the Iranian people being changed — fundamental change in Iran by putting an end to this regime.

    I think it is in that context that economic sanctions could, in fact, work not just to curtail the regime, but put an end to the entire problem by eliminating the regime once and for all.

    GIGOT: Interesting. There is more and more discussion in the United States that President Bush needs to sit down and have direct face-to-face talks with President Ahmadinejad. And people say, look, Ronald Reagan talked to the Soviet leaders during the Cold War. Why can't President Bush talk to the Iranians now?

    Do you think that would be a good strategy for the U.S. to pursue?