The shadowy outlines of a new US strategy towards Iran are exercising diplomats and experts around the Middle East and in the west. The US says Iranian personnel are training and arming anti-US forces inside Iraq, and it will not hesitate to kill them. It is sending a second aircraft carrier to the Gulf, doubling its force projection there. It is calling on Europeans to tighten sanctions on Iran until Tehran suspends its uranium enrichment programme.

Is the US rattling the sabre in advance of an attack on Iran? Or is it merely rattling its cage, as it pretends still to be a power in the region in spite of being locked into an unwinnable war in Iraq? The only certainty is that Bush's strategy of calling for democratisation in the Middle East is over. Washington has had to abandon the neocon dream of turning Iraq into a beacon of secular liberal democracy. It is no longer pressing for reform in other Arab states.

On her recent trip to Egypt, Jordan, and the Gulf, Condoleezza Rice said little about democracy. Her pitch was old-fashioned realpolitik as she tried to create a regional counterweight to Iran's influence. Gary Sick, a former National Security Council expert, argues that Washington's return to balance-of-power considerations is designed to create an informal anti-Iranian alliance of the US, Israel and the Sunni Arab states. The aim is partly to divert attention from the catastrophe of Iraq. It also reduces Israel's isolation by suggesting Sunni Arab states have a common interest in confronting Iran, whatever their disagreements over Palestine.

Other American experts argue that Iranian influence should not be confused with Shia influence. The US blunder in invading Iraq and opening the way for Shia Islamists to control its government created an unexpected opportunity for Iran. But it does not follow that Shia movements in other Arab states have grown stronger or that the arc of Shia radicalism that King Abdullah of Jordan has talked of is anything more than a figment of his imagination. The Shia minorities in Kuwait and Saudi Arabia are showing no signs of revolt. On the contrary, Saudi Shias are reported to be fearful of a backlash from the Sunni majority if sectarian threat-mongering continues. Highlighting sectarian identities has turned into a galloping cancer in Iraq, and it would be a disaster if the US seeks to export these tensions into the wider Middle East.

Even in Iraq there are limits to Iran's role. The eight-year war between the two countries in the 1980s showed that Iraqi Shias put their Arab and Iraqi identity above the religious rituals they share with Iranians. Moqtada al-Sadr, the cleric who commands one of the main Iraqi militias, frequently boasts of his Iraqi nationalism and the fact that his father, a distinguished ayatollah, remained in opposition in Iraq during the Saddam Hussein years rather than fleeing, as other Iraqi Shia clerics did, to the protection of Tehran or London.

The US claims Iran has increased its subversion in Iraq in recent months. The US has a record of self-serving and false intelligence on Iraq but, even if true, Iran's actions cannot make much difference to the problems the US is facing. The sectarian violence is perpetrated largely by Iraqis on Iraqis. If outsiders provoke it, they are mainly Sunni jihadis loyal to al-Qaida. As for attacks on US forces, these come primarily in Sunni areas or the mixed province of Diyala. Some US officials now hint that Iranians may be involved in these areas too. Links between Iran and Iraq's Sunni insurgents would be new, but marginal.

The real purpose of Washington's heightened talk of Iranian subversion seems to be twofold. The administration is playing the blame game. When the "who lost Iraq?" debate develops in earnest as the presidential election contest hots up, Bush's people will name its fall guys. Number one will be the Democrats, for failing to fund the war adequately and allowing the "enemy" to take comfort from the sapping of American will. Number two will be Iran for its alleged arming of militias and insurgents. Number three will be Syria for allowing suicide bombers through Damascus airport and into Iraq.

The second purpose of Washington's anti-Iranian claims, as the former national security adviser Zbigniew Brzezinski recently suggested, is to prepare a case for a US military strike on Iran. It will be described as defensive, just as the first attacks on North Vietnam two generations ago were falsely said to be an answer to the other side's aggression.

There could be a third aim: a desire to influence the internal Iranian debate. A senior US official stated in London this week that the Iranian government was a monolith and "we try to discern differences within the Iranian regime at our peril". That may not be the majority view within the administration. Ratcheting up accusations against Iran's revolutionary guards who are close to President Mahmoud Ahmadinejad may be a device to make a case for moderates like the former president Hashemi Rafsanjani. He appears to favour a deal with Washington rather than confrontation.

The safest conclusion is that Washington remains confused about what Iran is doing, and frustrated by its own inability to find allies to support a response. All options are being prepared, along with their "justifications". The International Institute for Strategic Studies' annual survey rightly pointed out this week that US power is fading. It can shape an agenda but not implement it globally.

Two stark new events prove that. One was the meeting between the Saudi and Iranian security chiefs to try to stop Lebanon sliding back into civil war. This showed Iran can be a force for regional stability, and that Saudi Arabia is resisting US efforts to isolate Tehran. The other was President Jacques Chirac's comment that it would not matter if Iran developed a nuclear bomb or two as they could not be used productively. Described as a gaffe since it broke ranks with Washington, it expressed the views of many Europeans (as well as the contradiction inherent in the French and British nuclear arsenals), since the French president added that the bigger problem was the push for other nations to follow suit.

As Washington's neocons go into eclipse and the realpolitikers dither, Britain and other European governments need to be far clearer in public than they have so far been. They should point out that the dispute with Iran is not as monumental as Washington claims. Fomenting new divisions in the Middle East or resorting to force are cures far worse than the disease.

j.steele@theguardian.com