Enough has been said about the latest National Intelligence Estimate's findings on Iran in the media, and there's enough in there to cast lots of (deserved) doubt on Bush's policies. But the biggest issue for me is not that Iran doesn't want nuclear weapons: I still suspect that they are pushing for some kind of nuclear program. Rather, it's that Bush's past positions make it incredibly difficult to pursue the only remaining policy option with international support: work through the IAEA.
Ahmadinejad is correct: Iran has a right to use nuclear power for energy, and Tehran's rationale for pursuing nuclear energy makes a certain economic sense. But he's wrong in a critical way: Iran cannot pursue nuclear power unless it declares its production sites and allows international inspectors unfettered access to those sites. This was always been the sticking point for me. Tehran could have gotten nuclear power through the existing international system. But why didn't it? If their intentions were peaceful, there's nothing stopping them.
But unfortunately, Bush has made hay about taking a "strong" stand against Tehran, which has forced it to eschew the carrot side of any negotiations. The U.S. could easily and clearly have said, "We respect your right to nuclear power, but you have to comply with existing international rules." Instead, the threats of war have muddled the message and American credibility, and this latest NIE report casts a further cloud over the President's objectives. It's made it much harder now to work with the IAEA and other countries to find a solution to this mess, and that clearly hurts the American position both right now and in the longer term.