The article addresses the virtual stalemate in international talks on the Iranian nuclear enrichment program, and the effects on the Middle East and the South Caucasus, given that the stalemate has elevated the likelihood of a military solution. The author argues that neither the latest attempt at talks nor Obama’s negotiations with Iran in October 2009 constitute an exhaustion of diplomatic means, and that the collapse of the talks is not due to insurmountable differences between the two sides, but rather, the domestic political constraints that throughout the Obama administration’s term have disabled the parties from making the necessary compromises to reach a deal. Further, the author observes that by all accounts, a military confrontation would be devastating for the region as a whole including the Caucasus: while the risk for war is certainly increasing, it is by no means inevitable.