For Mohamed ElBaradei, the head of the International Atomic Energy Agency, “a combination of ignorance and arrogance” under the Bush administration squandered countless diplomatic opportunities with Iran and so allowed it to forge ahead with its nuclear program.

Referring twice to Dick Cheney as “Darth Vader,” ElBaradei told me in an interview that “U.S. policy consisted of two mantras — Iran should not have the knowledge and should not spin one single centrifuge. They kept saying, wait, Iran is not North Korea, it will buckle. That was absolutely a mistake.”

Instead of building on Iran’s Afghan help in 2001, exploring an Iranian “grand bargain” offer in 2003, or backing 2005 European mediation that hinged on the U.S. agreeing to sale of a French nuclear power reactor, “We got Darth Vader and company saying Iran was in the axis of evil and we have to change this regime.”

The result, ElBaradei said, was that instead of containing the program at a few dozen centrifuges, “Iran now has close to 5,500 centrifuges, and they have 1,000 kilos of low enriched uranium, and they have the know-how.” Still, he dismissed the notion that Iran “could go to a weapon tomorrow” as “hype,” putting the time frame for that at two to five years.

Imagine if Roosevelt in 1942 had said to Stalin, sorry, Joe, we don’t like your Communist ideology so we’re not going to accept your help in crushing the Nazis. I know you’re powerful, but we don’t deal with evil.

That’s a rough equivalent on the stupidity scale of what Bush achieved by consigning Iran’s theocracy to the axis of evil and failing to probe how the country might have helped in two wars and the wider Middle East when the conciliatory Mohammad Khatami was president.

Seldom in the annals of American diplomacy has moral absolutism trumped realism to such devastating effect. Bush gifted Iran increased power without taking even a peek at how that might serve U.S. objectives.

So here we are, several thousand centrifuges on, with Iran getting what it has long craved: recognition of the regime from the Obama administration, relegation of threats and renunciation of the demand that enrichment be suspended as a condition for America’s joining other major powers in nuclear talks with Iran.

That’s salutary. American realism is now essential. It should heed ElBaradei’s view: “I don’t believe the Iranians have made a decision to go for a nuclear weapon, but they are absolutely determined to have the technology because they believe it brings you power, prestige and an insurance policy.”

I think it’s almost certainly too late to stop Iran achieving virtual nuclear power status — something like Brazil’s or Japan’s mastery of the know-how without a weapon. Iran’s advances of the past eight years cannot be undone. What can be transformed is the context Iran operates in; that in turn will determine how “virtual” Iran remains.

One context changer was Obama’s call for a nuclear-free world: it’s hard to argue for nonproliferation without tackling disarmament. “You can’t have nine countries telling the likes of Iran nuclear weapons are dangerous for you, but we need to go on refining our arsenals,” said ElBaradei, who won the Nobel Peace Prize in 2005 and ends his term later this year. “It’s a different world.”

He sees two years of U.S.-Iranian talks as needed, given the degree of mistrust, with “every grievance on the table.”

Here’s one normalization scenario:

Iran ceases military support for Hamas and Hezbollah; adopts a “Malaysian” approach to Israel (nonrecognition and noninterference); agrees to work for stability in Iraq and Afghanistan; accepts intrusive International Atomic Energy Agency verification of a limited nuclear program for peaceful ends only; promises to fight Qaeda terrorism; commits to improving its human rights record.

The United States commits itself to the Islamic Republic’s security and endorses its pivotal regional role; accepts Iran’s right to operate a limited enrichment facility with several hundred centrifuges for research purposes; agrees to Iran’s acquiring a new nuclear power reactor from the French; promises to back Iran’s entry into the World Trade Organization; returns seized Iranian assets; lifts all sanctions; and notes past Iranian statements that it will endorse a two-state solution acceptable to the Palestinians.

Any such deal is a game changer, transformative as Nixon to China (another repressive state with a poor human rights record). It can be derailed any time by an attack from Israel, which has made clear it won’t accept virtual nuclear power status for Iran, despite its own nonvirtual nuclear warheads.

“Israel would be utterly crazy to attack Iran,” ElBaradei said. “I worry about it. If you bomb, you will turn the region into a ball of fire and put Iran on a crash course for nuclear weapons with the support of the whole Muslim world.”

To avoid that nightmare Obama will have to get tougher with Israel than any U.S. president in recent years. It’s time.