Editor's note: Fareed Zakaria is an author and foreign affairs analyst who hosts "Fareed Zakaria GPS" on CNN on Sundays at 1 and 5 p.m. ET.

Fareed Zakaria says we still have a problem with Iran, and we have to have a strategy in dealing with the country.

NEW YORK (CNN) -- Three leading Iranian reformists who have rejected the results of last month's election questioned the legitimacy of President Mahmoud Ahmadinejad's government Wednesday.

This comes as Ahmadinejad is set to take office at the end of the month.

Presidential candidate Mehdi Karrubi wrote a letter in his party's newspaper, saying he would not recognize the government and vowing to "stand by the people and the revolution, until the end of my life."

His statement prompted Iran's government to block publication of the newspaper.

Ahmadinejad's main political rival, Mir Hossein Moussavi, also released a statement Wednesday criticizing the government and its crackdown on the media, which he said has created a "bitter, coup d'etat atmosphere" in Iran.

Iran's former reformist President Mohammad Khatami called on Iranians to keep up the struggle, noting that "all doors are not yet closed."

Author and foreign affairs analyst Fareed Zakaria spoke to CNN about this week's events in Iran.

CNN: What is the likely outcome of events in Iran?

Fareed Zakaria GPS Fareed Zakaria analyzes the latest on the situation in Iran on this week's GPS

Sunday, 1 p.m. and 5 p.m. ET see full schedule »

Fareed Zakaria: The situation is fluid. The challenger, Mir Hossein Moussavi, and the former president, Khatami, are still criticizing the government for stealing the election.

That is an extraordinary level of dissent at the highest levels of the establishment. But the most likely outcome remains that for now, the regime will be able to reassert order.

But it has become a naked dictatorship, losing the facade of the Islamic and democratic political ideals that are important to it.

CNN: But the nuclear program continues?

Zakaria: Exactly. We still have a problem with Iran, and we have to have a strategy in dealing with it. The nuclear program continues to grow, and refusing to negotiate will not do anything to stop it.

On the other hand, it seems wrong to pretend that nothing has happened in Iran. And it also disregards the reality of a divided leadership.

CNN: So, what to do?

Zakaria: I would say do nothing. Inaction can be a strategy. The five major powers on the U.N. Security Council (plus Germany) have given Iran a very generous offer to restart the nuclear negotiations. It has not responded. So, the ball is in its court.

Until it does, the West should build support for tougher sanctions and more isolation. Until we hear from Tehran, there is no reason for the United States or the others to get engaged.

CNN: Is this from a position of weakness, because the West has so few options?

Zakaria: Not really, because while it might seem like the West has few options, in reality, Iran has fewer. Its economy is doing badly, the regime is facing its greatest challenge since its founding, and its proxies in Lebanon, Iraq and elsewhere are all faring worse than it had expected. Let the supreme leader and President Ahmadinejad figure out what they should do first. Time might not be on their side.

CNN: What about a military strike?

Zakaria: It would be bizarre to bomb Iran-- which means bombing Iranians -- now that we have seen the inside of that country. Moussavi and his supporters want a less confrontational approach to the world. So do many members of the establishment.

Moussavi attacked Ahmadinejad repeatedly for his aggressive foreign policy. So we now know the answer to the question, "Are there moderates in Iran?" Yes, millions of them.

All About Mir Hossein Moussavi • Mohammed Khatami • United Nations Security Council