Last month, Iranian President Mahmoud Ahmadinejad announced that Iran was installing an additional 6,000 centrifuges at Iran's main nuclear enrichment complex. The Bush administration in turn needs to use every diplomatic tool in its arsenal to halt Tehran's development of nuclear weapons.

While the military option can never be taken off the table, most experts admit it would be unlikely to succeed. Because Iran has dispersed its nuclear facilities and buried some deep underground, an air strike will at best slow down, without preventing, its eventual creation of nuclear weapons. A military occupation might do so, but there are less costly solutions available.

Those solutions begin with understanding the fundamental instability of Iran's theocratic dictatorship. Iran is not a homogenous country. It is home to several major and traditionally competitive ethnic groups – Persians, Azeris, Kurds and Arabs. The predominant Iranian culture is mild and secular, not prone to religious fanaticism. Iranians have a great affinity for Western goods and ideas. Satellite TV is illegal in Iran, but there are an estimated five million satellite dishes in Iranian households. The most popular television station is not Al Jazeera nor even CNN, but MTV.

Most importantly, Iran is considerably younger, more educated and more middle class than its neighbors. More than two-thirds of the population is under 30, and the literacy rate is 79%. Women make up half of all incoming university students. Iran's average income far exceeds its neighbors. The growing middle class treasures economic success above political or religious rights, and they measure the success of the current regime on an economic scale.

This dynamic creates an opportunity. Economic sanctions could cause the Iranian government to negotiate seriously with us, and might, over time, topple the theocracy. In fact, the mildest of economic sanctions – a boycott of Iranian banks by U.S. and European central banks – has already produced an economic slowdown, and unrest among Iranians.

Stronger economic sanctions could produce more effective results. To work, these sanctions would require the cooperation of the U.S., Britain, France, Germany, Russia and China. The U.S. and Britain have always backed tougher action; Germany and France are also now on board. The Chinese may go along if everyone else will. That leaves Russia and its prime minister, Vladimir Putin. Thus far, it is Russia that has blocked more effective economic sanctions.

There are three reasons. First, Russia has a longstanding, close relationship with Iran and regards itself as Iran's protector. Second, the Russian economy benefits from its relationship with Iran by several billion dollars a year. Third and most important is leverage. Mr. Putin is an old-fashioned nationalist who seeks to regain the power and greatness Russia had before the fall of the Soviet Union. Russia's relationship with Iran is a key point of leverage over the West that he will not relinquish easily.

To bring Putin's Russia on board we must make it an offer it cannot refuse. The offer has three parts.

First, we must treat Russia as an equal partner when it comes to policy in the Caspian Sea region, recognizing Russia's traditional role in the region. Second, we must offer to make Russia whole if it joins in our Iranian boycott and forgoes trade revenues with Iran. That will cost the U.S. roughly $2 billion to $3 billion a year, about what we spend in Iraq each week. Third, we should tell Mr. Putin we will cease building the ineffective antinuclear missile defense sites in Eastern Europe in return for him joining the boycott.

Two years ago, under NATO auspices, Poland, the Czech Republic and Romania agreed to build an antimissile defense site to thwart the threat of a nuclear missile attack by Iran. The threat is hypothetical and remote, and the Bush administration's emphasis on pursuing the antimissile system, without Russia's cooperation, still baffles many national security experts.

It also drives Mr. Putin to apoplexy. The antimissile system strengthens the relationship between Eastern Europe and NATO, with real troops and equipment on the ground. It mocks Mr. Putin's dream of eventually restoring Russian hegemony over Eastern Europe.

Dismantling the antimissile site, economic incentives and creation of a diplomatic partnership in the region – in exchange for joining an economic boycott of Iran – is an offer Mr. Putin would find hard to refuse. It is our best hope to avoid a nuclear Iran, because a successful economic boycott would certainly force the Iranian regime to heed Western demands more than anything attempted so far.

Mr. Schumer is a Democratic senator from New York.

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Printed in The Wall Street Journal, page A19