Remember when candidate Obama promised aggressive diplomacy to deal with Iran’s nuclear weapons program? Yet, every time President Obama offered has offered the Iranians the hand of friendship he’s been flipped the bird.

Why? Because President Obama has no leverage over Iran, or at least no leverage he’s willing to use. And negotiating without leverage isn’t negotiating, it’s begging.

Iran’s President Ahmadinejad, of course, maintains its nuclear program is for peaceful purposes only, but more people now believe in the Easter Bunny than in Ahmadinejad’s claims.

General Petraeus told Congress that he doesn’t think Iran will have nuclear weapons “this calendar year”, but left unsaid what might happen in 2011. So, whether it’s in 7 months or 17, we’re fast facing the point of letting Iran get the bomb, or bombing Iran.

If we, or Israel, bomb Iran’s nuclear facilities, experts think it would – at best - set Iran’s nuclear weapons program back a few years. Chairman of the Joint Chiefs of Staff Admiral Mullen warns an attack could ignite a regional war in the Middle East – with Iran unleashing Hezbollah and Hamas attacks on Israel, reactivating Shiite militias in Iraq, and even mining the Strait of Hormuz. This would send the price of oil, and gasoline at American pumps, through the roof. And it would probably draw the U.S. Fifth Fleet into the fray to clear the mines.

On the other hand, if Iran gets the bomb, it would set off a nuclear arms race throughout the Middle East, as moderate Sunni Arab states rush to build their own nuclear arsenals. Not only would this increase chances a nuclear weapon could be used, accidentally or intentionally, but also that nuclear materials could fall into the hands of terrorists. Former Secretary of State Lawrence Eagleburger believes the world will have a nuclear war within 20 years.

Is there a third way? Perhaps. The U.S could advocate regime change in Iran by crippling the country's economy and encouraging Iranians to replace their leaders. Here are two things we could do to make that work: 

- First, President Obama should impose crippling gasoline sanctions on Iran IMMEDIATELY – even if the U.S. has to go it alone. Although Iran exports gasoline, it doesn’t have the facilities to refine it, and must import nearly half of its gas. By targeting the companies that sell, ship or insure Iran’s gas imports, we could make things very difficult for Iran’s leaders very fast.

-Second, Obama should encourage regime change in Iran – not by sending American boots on the ground, but encouraging Iranian reformers on the streets – like President Reagan did with the Solidarity Labor movement in Poland in the 1980’s. Obama’s outreach to the Muslim world has gained him moral authority, it’s time for him to use it.

The chattering class is starting to say Iran’s nuclear program can’t be stopped, but might be contained. They argue that even if Iran gets nuclear weapons, they probably wouldn’t use them.
Try telling one that to Israel – you know the line that says even if the Holocaust-denying, Armageddon-threatening Iranian president has his finger on the button he won’t press it. The Israelis understand the odds, but it’s the stakes they don’t like.

The Obama administration’s allies have floated a trial balloon by declaring that we can deter Iran but extending a defense “umbrella” over the region. They argue that nuclear deterrence kept the peace between the U.S. and Soviet Union during the Cold War, so why wouldn’t it keep the peace with in a nuclear Middle East?

The problem with this argument is that it ignores the obvious – that deterrence, or mutually assured destruction (MAD) kept the peace between the U.S. and Soviet Union because each side knew if it launched a first strike, the other side would survive to launch a second strike.
But nuclear deterrence doesn’t solve Israel’s problem. It would be cold comfort to Israel if the U.S. promises to attack Iran after Iran nuked -- and vaporized -- Israel.

That’s why it is critical that President Obama take strong and decisive action immediately to find a third way – between letting Iran get the bomb and bombing Iran.

Kathleen Troia “KT” McFarland served in national security posts in the Nixon, Ford and Reagan administrations. She wrote Secretary of Defense Weinberger’s November 1984 "Principles of War Speech" which laid out the Weinberger Doctrine. She is a senior adviser to the Foundation for the Defense of Democracies and a frequent contributor to the Fox Forum. Watch "K.T." and Mike Baker every Monday at 10 a.m. on FoxNews.com's "DefCon3" already one of the Web's most watched national security programs.