The new National Intelligence Estimate on Iran ought to be greeted with cheers and bipartisan agreement on vigorous carrot-and-stick diplomacy to get Iran to open its nuclear program to international inspections. [IMGCAP(1)]

Instead, Democrats tried to use it to accuse President Bush of lying about and hyping the Iran threat — and Bush claimed that it changed nothing about U.S. policy.

Of course, it changed everything, both politically and geopolitically.

The finding that Iran halted its nuclear weapons program in 2003 — reversing a 2005 declaration that Iran had such a program — ended any possibility that Bush could win support for an attack on Iran’s nuclear facilities.

It also undercut Bush’s ability to win support for United Nations sanctions, though European sanctions still are possible.

Politically, it removed one of the two I’s from the probable top tier of 2008 election issues. Iran — at least, the question of whether to go to war — is gone. Immigration, however, remains.

Depending on who the nominees are, there will be a debate on Iran, but it will be over whether diplomacy should emphasize direct “engagement” (the Democrats’ idea) or “sanctions and pressure” (the GOP’s). That’s a significant nuance but not a wedge.

The sensible policy, based on a full reading of the NIE, is both engagement and pressure.

Bush needs to drop his objections to direct talks with the Iranians, and Democrats should support sanctions as a means of controlling Iran’s ongoing nuclear program.

The NIE emphatically did not say that Iran had abandoned its clandestine nuclear weapons program. It said that in 2003, in response to international “scrutiny” and “pressure,” Iran “halted” its effort to fashion enriched uranium into a bomb and probably has not resumed it.

But uranium enrichment goes on, the program is not subject to international inspection or control and Iran continues to build ballistic missiles.

“We assess with high confidence that Iran has the scientific, technical and industrial capacity eventually to produce nuclear weapons it if decides to do so,” the report stated.

And, it added, “We do not have sufficient intelligence to judge confidently whether Tehran is willing to maintain the halt of its nuclear weapons program indefinitely while it weights its options. …

“In our judgment, only an Iranian political decision to abandon a nuclear weapons objective would plausibly keep Iran from eventually producing nuclear weapons — and such a decision is inherently reversible.”

By any objective standard, the NIE’s findings justify Bush’s statement that “Iran was dangerous. Iran is dangerous and Iran will be dangerous if they have the knowledge necessary to make a nuclear weapon.”

That is the reality that will face the next president of the United States, and it ought to be the basis on which presidential candidates and Congressional leaders discuss the issue.

Among the Democrats, only Sen. Hillary Rodham Clinton (N.Y.) sounded as though she got the point — although her campaign could not resist declaring that the NIE’s findings “expose the latest effort by the Bush administration to distort intelligence to pursue its ideological ends.”

Clinton, at National Public Radio’s Iowa debate, said that the NIE should impel Bush to “engage in serious diplomacy, using both carrots and sticks” because, as the NIE said, “pressure on Iran does have an effect.”

The other Democratic candidates offered nothing but carrots and tried to use the NIE as a stick to beat both Clinton and Bush.

Most outrageously, the normally sensible Sen. Joseph Biden (Del.) charged that when the Senate passed the nonbinding Kyl-Lieberman resolution declaring Iran’s Revolutionary Guard a terrorist organization — with Clinton’s support — “every one of our friends, from Iraq to Pakistan, felt they had to distance themselves from us because it appears to be a war on Islam.”

If that’s so, why were Egypt, Syria, Saudi Arabia and the Arab League all represented at the late November Annapolis conference on the Middle East?

As Biden full well knows, Arab nations in the Gulf region are terrified that Iran menaces them.

And, of course, Iran’s Revolutionary Guard do spread terrorism around the Mideast — notably, through Hamas and Hezbollah, as Clinton noted.

Among her rivals, Sen. Barack Obama (Ill.) proposed only carrots for Iran — World Trade Organization membership and normalized relations with the U.S. — while former Sen. John Edwards (N.C.) implied that sanctions do not constitute “diplomacy” and that the primary goal of Democrats should be to thwart Bush, not Iran.

Republican presidential candidates, along with Bush, need to recalibrate their rhetoric in light of the NIE to emphasize diplomacy over military action. Candidates like former New York Mayor Rudy Giuliani, former Arkansas Gov. Mike Huckabee and former Sen. Fred Thompson (Tenn.) all have been especially bellicose on the subject.

Meantime, everyone who leads or wants to lead the country has to contemplate the possibility that the current NIE is wrong and that Iran has been continuing its weaponization program in secret. It’s all the more reason for pressure for full international inspections.

Israel, which presumably has better intelligence on Iran than the U.S. does, still thinks Iran presents a nuclear menace.

Bush deserves credit — not blame — for pushing hard on a multinational basis for controls on Iran. Given his credibility problems stemming from claims about Iraqi weapons of mass destruction, he overstated his case by talking about “World War III” in an October press conference, but presumably he did so to stiffen the pressure for sanctions.

In reality, the chances of America’s going to war over Iran’s nuclear program were slim even before the NIE. As Newsweek reported this week, Defense Secretary Robert Gates told Senate Democrats this fall that war with Iran would be “a calamity.”

Bush probably has been bluffing about war all along — and terrifying Americans along with Iranians. It’s worth noting, though, that Iran has stopped supporting attacks on Americans in Iraq in response to sanctions, detentions and military threats.

Bush noted in his press conference on Tuesday that the U.S. has been cut off inside Iran since 1979, limiting our ability to know what is going on there. That’s a reason for starting to talk to its officials. Some of them might tell us something.

Meantime, Democrats should consider what might have led Iran — and Libya — to halt their nuclear weapons programs in 2003. Likely, it was the U.S. toppling of Saddam Hussein. The lesson is: The use of force and the threat of force can have good effects on the world’s bad guys.