"We do not know whether Iran currently intends to develop nuclear weapons, although we assess Tehran at a minimum is keeping open the option to develop nuclear weapons by continuing to develop a range of technical capabilities that could be applied to producing nuclear weapons if they decided to do so."
Let me translate that for you. That is the CIA's way of saying: "Look, we screwed up on the WMD stuff with Iraq so we are not going to say Iran has them. What we will say is that we think they have the capability to make one if they want to".
This situation is perilous and there is absolutely no easy way out. The sanctions are simply not working. Increasing them may or may not work but would require international cooperation, something Obama has not been very successful at getting. China may go along with some sanctions but will insist that they be too soft to be very effective (they are getting 11% o their oil from Iran and do not want to jeopardize it). The Russians will drag their feet and only do what they think will gain them something in return, otherwise they are perfectly happy to see the United States fail. As for our European allies, they give good lip-service to the idea but many European companies are making fortunes buying stuff from the US and selling it to Iran because Iran can not buy the material directly from us. -That just ain't going to cut it...
The other problem with sanctions is that, in order to work, they have to cause discomfort to the people. That means that an unintended consequence of sanctions is it may anger the Iranian people at the United States more than at their government and undermine the resistance that has been growing lately within Iran and reduce the possibility of a regime change.
This is where is gets nasty. If the sanctions are not working what do we do? We either use military force to stop Iran or we resolve to live with a nuclear armed Iran and try to develop a "containment" policy instead.
A military action by the United States is not likely. Although there are many who believe it is the necessary and logical action, there are far more, both within the United States and worldwide, that would vigorously oppose such action. With the "Left wing" in control of the Administration the likelihood of military intervention by the US is remote at best.
A military action by the Israelis is far more likely. Israel could easily be the first target of an Iranian nuclear weapon and they know it. Israel has demonstrated many times that they have a policy of proactive deterrence. In other words, they like to strike first. If that happens, no one can predict the results. It is possible that the Arab nations will unite in righteous indignation and strike out against Israel, dragging the United States into a multinational war.
Other the other hand, most Arab nations are far more worried about Iran being nuclear capable than they are willing to admit.They may be willing to just sit in the peanut gallery and watch. Figuring out which way the Arab nations, like Saudi Arabia and Egypt, will go is something the Israelis had better have a good handle on before they act -and we should be bending over backwards to help with that.
If no military action is taken Iran will get nuclear weapons. When that happens all of the major Arab nations will want them for defense as well. Until now they have been content to let the US defend them against nuclear threat, knowing we would never allow Israel (the only perceived threat with that capability) to use them. If Iran gets "the bomb" all that changes. Many of the Arab nations, Saudi Arabia and Egypt in particular, fear Iranian intentions and would insist on being permitted to have the same capabilities.
That means a nuclear armed middle east. Middle Eastern nations have a tendency to get angry and go to war often. They are also prone to periods when the more radical religious elements take over their governments. That means Islamic Fundamentalist Extremists in control of a nuclear arsenal. What a pretty picture that is! War in such a world would be inevitable. Nuclear Holocaust at our door step.
So, what do we do? The only real option is sanctions -but what we need to do is put some backbone into them (and add some teeth while we are at it). We need to stop asking the world to: "Hey, please help us with this and stop making huge profits selling to these guys and please stop getting your oil at discount prices from them, please, pretty please..., with sugar on top?" What we need to do instead is declare an embargo and back it up with a full blockade. Yeah, we will be very unpopular but I would rather be unpopular than have to start breathing air contaminated by nuclear fall out. I would rather be called names by the Europeans in the bright sunlight than be applauded by them in the cold of a nuclear winter.
This is a 'no win scenario' for us no matter what happens. If we act with an embargo we will be looked at by the world as bullies and thugs. If we do not act and a war starts, we will be blamed for having not acted to prevent it. The big difference is the holocaust that will result from not acting firmly enough.
This is not an easy thing to do, but it is the only answer. It is the only way to avoid an inevitable nuclear confrontation. We must act - with sanctions, an embargo and a blockade- and we must act very soon!