Read the long, serious essay by Reuel Marc Gerecht in the April 24, 2006 Weekly Standard, here. It is a very sobering article - even those who fundamentally disagree with its policy prescriptions are likely to admit that, if nothing else, it persuasively makes the case that decisions, one way or another, will force themselves sooner rather than later, and far sooner than the Bush administration would like. Establishing the fundamental US posture, now into the future, toward the possibility of a nuclear Iran seems ever more likely to fall to the Bush administration, whether it likes it or not - and it almost certainly does not.
The alternative is sketched out in the forthcoming Policy Review, in an article by the Hoover Institution's Michael McFaul. McFaul argues for seeing the internal politics of Iran as providing greater scope than is often acknowledged from the outside, and argues for a strategy engaging Iranian civil society. I will link to it when it actually appears and discuss it when I've read the whole thing and not just summaries.