On Friday, the world awaited Iran's decision on a proposal by Western powers that the country outsource its uranium enrichment. Enriching uranium is the key step to making a bomb, so, the thinking went, if Iran is indeed sincere about wanting a peaceful nuclear-power program, a perfect fix would be to unload the supersensitive process to one of the big nuclear states, such as Russia. Iran would build its own power plants, and everyone would be happy. No such agreement was reached, however. Iran's counteroffer remains private, but what's known is that Iran offered to buy fuel abroad but made no commitment to halt enrichment.

Iran's intentions seem all the more suspect when you consider the 800-pound nuclear gorilla in the room: a striking behind-the-scenes deal that has garnered very little attention but could have huge ramifications across the region. Iran's neighbor, the United Arab Emirates, has decided to skip the shadow games and enter the nuclear club through the front door, as it is now finalizing plans to spend $40 billion to build an estimated eight nuclear plants over the next several decades and become the first openly nuclear-powered state in the Middle East. And it is doing so with the blessing of the United States.

What's groundbreaking is that the U.A.E. has promised not to construct its own uranium-enrichment facilities. Instead, it will outsource the entire fuel cycle—from enrichment to reprocessing—to an established nuclear country, probably France. The program will also be subject to strict inspections from the International Atomic Energy Agency. The fact is that roughly three quarters of the countries around the world with nuclear-power plants today rely on the international market for fuel from the major producers in France, Europe, Russia, and the U.S. Only a minority actually do their own uranium enrichment and reprocessing.

The Bush administration inked the nuclear-cooperation deal, known as a "123 agreement," in January, Obama approved it in May, and the Emirates just put it into law by decree early this month. The final diplomatic legalities—called the exchanging of diplomatic notes—are expected to be finished next week. "It is a breakthrough," says Matthew Bunn, who heads the Project on Managing the Atom, a nuclear-issues research group at Harvard. "The U.A.E. is saying they want to be an exemplar of how to do a peaceful nuclear program properly." And it exemplifies the Obama administration's seemingly counterintuitive strategy: to plug proliferation, it is spreading nuclear power, but keeping the process closely supervised.

The deal could well chart a road map for a slew of states in the Middle East that are already on their way to nuclear power. In recent years, countries like Qatar, Yemen, and Saudi Arabia have made their intentions to build nuclear-power plants clear. Though many are awash in oil, the costs, environmental concerns, and spiking demand for electricity are pushing them toward the atom. The Emirates deal sets a precedent for countries that say they want nuclear energy, but not the bomb. Why go to the expensive trouble of enriching uranium if France or the U.S. will do it for you? Nations can still insist on their right to do their own enrichment, but it's becoming much harder to convince the international community that their intentions are peaceful.

At first glance, the U.S. is clearly interested in a share of the $40 billion that the Emirates plans to spend on new nuclear plants in the coming years. Nuclear firms like Westinghouse and General Electric stand to benefit handsomely. A study by the U.S.-U.A.E. Business Council, which clearly favored the passage of the deal, made a generous estimate that cooperation could result in the creation of 10,000 U.S. jobs. But on closer inspection, the Obama administration's more strategic aim likely is to establish a safe and replicable model for countries to roll out peaceful nuclear-power programs. A joint statement issued by the two countries late last year proclaimed that "the U.A.E. has committed to complete operational transparency and to pursuing the highest standards of nonproliferation safety and security." If there will be a number of new nuclear states in the coming years, not just in the Middle East, but around the world—Indonesia, Vietnam, and Kazakhstan are likely pioneers—the question moves from "when?" to "how?" The U.S. clearly wants to guide the process as much as possible.

Preventing the spread of nuclear weapons is an enormous challenge, in large part because states in pursuit of the bomb can easily claim they're only after nuclear power. Indeed, this appears to have been Iran's strategy; Tehran has long insisted on its right to nuclear energy, while Western assessments are that the nation is likely using that as camouflage for more sinister goals. Last month's revelation of a secret uranium-enrichment facility in the city of Qum, and Tehran's subsequent claims that its nuclear program is entirely peaceful, only underscore the suspicions. The deal with the Emirates doesn't do much to halt Iran's enrichment, but it does make Tehran look all that much more rogue. And if other states follow the Emirates' path, Iran in the years to come will find itself more and more alone.

© 2009