Bush administration is on the proper course.

Tehran blinked first
The affair of the British captives has exposed some disunity in the Iranian ranks.
Francis Fukuyama

While commentators have charged that Britain capitulated to Iran and handed it a humiliating victory in obtaining the release of the 15 Royal Marines last week, it would appear that something more like the opposite is actually the case. But to understand why this is so, we have to look at the larger picture of internal Iranian politics against which the crisis played out.
Our Iranian problem is actually a problem with the Islamic Revolutionary Guard Corps (IRGC or, in Persian, Pasdaran) and allied institutions such as the Basij militia. These are the "power" agencies that serve as the political base for the conservatives inside Iran. In return for their support, political leaders such as the former president Akbar Hashemi Rafsanjani and the Supreme Leader, Ayatollah Ali Khamenei, have allowed the IRGC to grow into a semi-autonomous state-within-a-state. Today it is a large, sprawling enterprise that, much like the Russian FSB or the Chinese military, controls its own intelligence agency, manufacturing base and import-export companies. Since coming to power, the Ahmadinejad regime has awarded IRGC-affiliated companies billions in no-bid contracts, increasing the already great perception among the Iranian public of its corruption. It is widely believed that Supreme Leader Khamenei put the current nutcase president, Mahmoud Ahmadinejad, into office as a means of counterbalancing Rafsanjani and has been regretting his decision ever since after Ahmadinejad spouted off about the Holocaust, pushing Iran deeper and deeper into isolation. The current president comes out of the IRGC (specifically the Ramazan unit of the al-Quds force) and has used that organisation and the Basij to help consolidate his power by moving against more liberal political opponents. No one knows exactly why the naval wing of the IRGC took the 15 marines captive at the end of March. Some have speculated that it was a matter of freelancing by the IRGC's command, or the navy reacting to a local target of opportunity. The IRGC may have wanted some bargaining chips to help spring some of its members captured in Iraq. It does not seem to be an accident, though, that the capture came quickly after the security council passed a very specific set of sanctions against Iran that targeted not just IRGC-affiliated companies and financial institutions, such as the Ammunition and Metallurgy Industries Group and the Bank Sepah, organisations dealing with nuclear or ballistic missile activities, but also a series of senior IRGC commanders including Morteza Rezaei, the IRGC deputy commander, Vice-Admiral Ali Ahmadian, chief of the joint staff, and Brigadier General Mohammad Hejazi, commander of the Basij. By freezing Iranian assets outside Iran, the UN was hitting the IRGC where it hurt, in its pocketbook. Clearly, whoever was responsible for the decision to take the marines prisoner was hoping to rekindle some of the fervour of the 1979 revolution and use that to force the rest of the leadership into a confrontation with Britain and America. Hence the televised "confessions" that hearkened back to the taking of hostages in the American embassy (the "nest of spies") and the rallies against foreign embassies. But the gambit didn't work, and there was clearly a behind-the-scenes power struggle between different parts of the regime. Ahmadinejad was supposed to give a major speech to a huge rally in Tehran, but he cancelled at the last moment. And when he did speak, it was to announce that the captives would soon be released. The IRGC prisoners in Iraq were released, but Britain did not apologise or admit wrongdoing in return. So it would appear that it was the Iranians who blinked first, before the incident could spiral into a genuine 1979-style hostage crisis. All this does not mean, however, that there are necessarily "radicals" and "moderates" within the clerical regime in Tehran. Those pulling the IRGC's chain are themselves committed to a revolutionary agenda, and doubtless want a nuclear weapon as badly as the Pasdaran commanders do. One of the alleged reasons Khamenei didn't want Rafsanjani as president was because he was not keen enough on the nuclear programme. The Iranian regime is not a totalitarian juggernaut, though: there are important splits within the leadership and there is an important faction that does not want Iran to be isolated. The IRGC has evolved into something like a mafia organisation, with extensive economic interests that lead both to corruption and potential vulnerability to sanctions imposed by the international community. It is important to remember: those who were responsible for taking the marines captive wanted an escalation of the confrontation, both to improve their domestic standing and to punch back for sanctions that were beginning to bite. This suggests that in slowly ratcheting up the pressure through the use of diplomacy to create an international coalition that now includes the Russians, the