With a very hostile U.S. occupying Afghanistan to your east (admittedly for good cause) and a very hostile U.S. occupying Iraq to your west (admittedly for no good cause whatever except perhaps some sort of misguided evangelical zeal), what would you do?
Can Iran produce a credible amount of weapons grade material? Probably not, but so long as the U.S. insists they can that chip can be bargained at nearly full value.
Would the U.S. invade? Not likely given it's already heavily overextended. A third front in the Mideast war wouldn't go over real well with the American public - and this close to the next election they'd probably have to cancel the election to pull it off and that really, really wouldn't go over well. Even Red States might be a tad pissed (there still are Red States other than Montana, aren't there?).
Would the U.S. bomb? Quite likely, but conventional bombing was proved in WWII and in Vietnam to be of very limited value - doing less damage than it costs - and you know which way World Opinion would flop here, don't you?
Would the U.S. use nukes? Even with the current moron in the White House it seems unlikely. Impeachment would probably be instantaneous with a conviction in about 20 minutes.
So Iran is playing its hand with skill - and releasing the trespassing Brits looking fine, well treated and well dressed for their photo ops was a master stroke in public relations.
So what would I do if I was in charge?
First, I'd get things calmed down with Iran, they'd make a great ally (as they once were). I'd trade them a semi-autonomous Iranian state in southeastern Iraq for a semi-autonomous Kurdish state in northeastern Iran.
Next I'd deal with Turkey. They really need to own up to the Armenian Genocide, quit this "insulting to Turkishness" nonsense, and resolve their Kurd problem so they can be re-integrated with Europe. We trade full support for returning to the European fold for a confession and a semi-autonomous Kurdish state.
We'll need to lean on Germany and France a bit, but we can threaten to cut off imports or Porsche and Mercedes which would bankrupt both companies even before the Asian and Yuppie communities in Los Angeles (where most of their production goes) could organize a protest. With France we just threaten to subsidize California wine exports.
So now we have a Kurdistan consisting of three states: Kurdistan proper, Eastern Kurdistan (nominally part of Iran) and Western Kurdistan (nominally part of Turkey).
So why should be so favor the Kurds here? Because they're the only bunch we can hope to get along with. A formerly European people (now rather mixed) that has an even more moderate adhesion to Islam than Turkey does. Plus they've got oil.
So that leaves the eastern chunk of Iraq, and Kuwait. Kuwait shouldn't exist but does and we probably need to leave it that way. The people of western Iraq should be given a referendum as to whether to be Iraq or a semi-autonomous state within Syria.
So we end up with no Iraq at all? So who the hell needs it? This whole mess, same as with the god-awful mess in Africa, was caused by the British drawing lines on maps - an entertainment at which they have never excelled.
In the Mideast the Brits made two horrible mistakes. First, they were so damned slow with drawing the lines that Turkey just drew its own lines and said "deal with it". Second, they forgot to draw any lines at all for the Kurds. They also made a minor mistake drawing lines called Kuwait to favor a buddy of theirs - but that we can live with - the others we can't.
We will not deal with mess in Africa in this session.
So my plan may be based on totally misguided fantasy - but I hold that it's one hell of a lot more practical and less based on totally misguided fantasy than any other plan so far proposed.