Iran has formally informed the International Atomic Energy Agency (IAEA) of its plans to produce 20 percent enriched uranium for its Tehran research reactor that produces medical isotopes. The 20 percent enrichment will be done under the supervision of inspectors and observers from the International Atomic Energy Agency. Western officials accuse Iran of failing to respond to a UN-backed offer to transfer the bulk of its low-enriched uranium abroad in exchange for 20 percent enriched uranium. Iran has said it wants to conduct the fuel exchange on its own soil and determine the amount according to its fuel needs. The West rejects this and even threatens to impose sanctions on Iran. So where does this leave the West, after Iran has given them the option which they failed to take up? Furthermore, what will this mean for the Islamic Republic?