DUBAI – Iran faces a time of reckoning, and the stakes couldn't be higher: potential war with the United States, the reversal of its gains across the Middle East and the future of its revolutionary state.

It would surprise most Americans how little the Arab public and media here – nine time zones from Washington, D.C. – were occupied this week with the congressional hearings on impeaching President Donald Trump. They instead were focused on the crisis in Iran, just 600 miles away from the UAE as the drone flies.

This defining moment for Tehran – perhaps the most critical since the Iranian Revolution of 1979 -- has been prompted by the Trump administration's "maximum pressure" campaign of sanctions, Iran's dangerously declining economy, and the cumulative effect of Tehran's domestic malfeasance and regional overstretch.

Growing protests in Iran, Iraq and Lebanon have charged the atmosphere with urgency.

What's clear is that the growing scale of the challenge makes it difficult for Iran to pursue its earlier approach toward mounting U.S. pressure: hunkering down and waiting out the Trump administration through the November 2020 election in the hope of Democratic victory.

What's less clear is whether Tehran over the short term will respond to this historic test with more military escalation, diplomatic compromise – or a combination of both.

Diplomats in the Middle East argue that the United States has put itself in a good position to shape that choice. They argue Washington could take advantage of Iran's increased difficulties by working more closely with European and Mideast allies to frame an offer that would ease sanctions but put in place a process that would block Iran's path to a nuclear weapon and end its foreign policy of regional meddling.

However, that sounds like wishful thinking in the world of Washington's distractions, transatlantic distrust and Iranian outrage. Trump administration officials are sanguine, arguing that at the very least the sanctions have cut deeply into the resources Iran can invest in its proxies. Protests at home and abroad are usefully soaking up regime energies.

The danger is that may risk further military escalation to gain attention and leverage, following its June 20 shooting down of the American drone and its Sept. 14 strike on Saudi oil processing facilities. Or it could take further steps away from its nuclear agreement of 2015, having this month resumed low grade uranium enrichment at its underground Fordow nuclear plant to 60% of fissile purity, not far from the 90% level required for nuclear bomb fuel.

It's hard to imagine Iran entering the expanded talks the U.S. would want without first getting the sanctions relief Trump has thus far refused. Yet it's just as difficult for Iran to imagine that the status quo is sustainable, amid a collapsing economy and rising protests.