Obama faces a dilemma on the Iran issue: no common ground exists between the demands of the Netanyahu "Greater Israel" faction for unilateral security and the legitimate demands of any patriotic Iranian regime. Moreover, what is good for both the American and Israeli societies would be very bad indeed for the Netanyahu "Greater Israel" faction.
Plenty of room exists for a reasonable compromise between the U.S. and Iran: Iran needs security, while the last remaining superpower can surely live with a secure Iran. To reach that positive-sum position, both sides will obviously have to move some distance from their preferred solution space, but both can easily do so and maintain "their way of life." Moreover, such a compromise also satisfies the legitimate national security interests of the Israeli people.
Nevertheless, Obama faces a real dilemma, though it is a political dilemma rather than a national security dilemma, because no common ground exists between the demands of the Netanyahu "Greater Israel" faction and the legitimate demands of any patriotic Iranian regime. The crisis with Iran appears to exist because Washington has not ever sincerely and consistently, i.e., persuasively, offered Iran a compromise. (I say "appears" because Washington has never offered Iran a real compromise, so the proposition that Tehran would accept such a compromise, while logical, remains untested.) Instead, Obama is publicly demanding, in essence, that Iran surrender its ability to defend itself and surrender its independent foreign policy by placing itself in a strategic position of such inferiority that its independent stance becomes clearly untenable. The collusion of the Shah and the Shi'i mullah landowning class with British and U.S. intelligence to overthrow the Iranian democracy movement in the early 1950's notwithstanding, it is hard to imagine any Iranian regime today accepting such a negotiated defeat.
No national security justification exists for Washington's stance. Given nuclear transparency on Iran's part, that country presents no particular security threat to the U.S. or Israel. A strong and independent Iran symbolizing opposition to the current world order is something both the U.S. and Israel could live with, if not benefit from, to the degree that it would encourage both to reconsider their behavior toward the rest of the world. A deal with Iran would have immediate benefits for the U.S. in its efforts to stabilize both Iraq and Afghanistan by facilitating negotiated solutions to the endless instability in those two countries. A strong but clearly non-nuclear Iran would, however, challenge two things: U.S. global dominance (as opposed to U.S. global leadership) and Greater Israel (Israeli regional military domination, Israeli territorial expansion, and the repression of the Palestinian people).
A deal with Iran that left Iran transparently non-nuclear, clearly enunciated the parallel goal of ultimate (if not immediate) Israeli nuclear transparency and nuclear demilitarization, made room in the world for an Iranian political challenge to U.S. or Israeli regional domination, and recognized Iran's right to possess the means of self-defense would have both benefits and drawbacks for various American and Israeli factions. For the people of the U.S. and Israel (as well as for the people of Iran), the benefit would be the opening of the door to a more cooperative and more stable relationship with the Muslim world, not to mention the strengthening of domestic democracy. American or Israeli empire-builders, on the other hand, would suffer a powerful and immediate setback. Justifying foreign wars or waving the bloody shirt to win elections would become far more difficult. International relations would take a different course.
One might argue that Iran should take the deal still publicly being offered by Obama and submit to avoid war. Admittedly, giving up the ability to defend itself is a small loss for Iran, since it obviously really has no ability to defend itself against nuclear Israel anyway. But such a deal would represent a humiliating return to the days of being a lackey of the West. The humiliation part will be hard to swallow, and the humiliation part is surely Netanyahu’s minimum goal because the whole nuclear issue is only a proxy for Israeli hegemony. The Greater Israel faction ruling Israel does not want equality and mutual security; it wants domination. It wants a carte blanche for Israeli control over, if not obliteration of, Palestinians and the continuation of its overwhelming military superiority over all of its neighbors, to put it simple, "unilateral insecurity" for everyone else.
This leaves Obama with a problem: if he cuts a rational deal with Iran designed to resolve the nuclear problem, then it must include something for Iran and that “something” must surely address Iran’s legitimate right to self-defense. This is not difficult – U.S. guarantee of no attack plus support for the sale to Iran of Russian air defense missiles might suffice. A more reasonable deal would include diplomatic recognition of Iran as a country, termination of all efforts at regime change, and acceptance of Iran as a political counterpart like every other state on earth with which the U.S. would consult on regional issues.
The problem is that a rational deal trading complete Iranian nuclear transparency for Iranian national security will take the sting–the humiliation–out and therefore such a deal WILL NOT SATISFY NETANYAHU. On the contrary, a deal that recognizes Iran’s right to exist, be safe, and continue to pursue its independent foreign policy, while frankly quite fine for the U.S., would be the worst defeat the Greater Israel faction has ever suffered. So Obama has a problem.