The new National Intelligence Estimate on Iran ought to be greeted with cheers and bipartisan agreement on vigorous carrot-and-stick diplomacy to get Iran to open its nuclear program to international inspections.

Instead, Democrats tried to use it to accuse President Bush of lying about and hyping the Iran threat – and Bush claimed that it changed nothing about U.S. policy.

Of course, it changed everything, both politically and geopolitically.

The finding that Iran halted its nuclear weapons program in 2003 – reversing a 2005 declaration that Iran had such a program – ended any possibility that Bush could win support for an attack on Iran’s nuclear facilities.

It also undercut Bush’s ability to win support for U.N. sanctions, though European sanctions still are possible.

Politically, it removed one of the two I’s from the probable top tier of 2008 election issues. Iran – at least, the question of whether to go to war – is gone. Immigration, however, remains.

Depending on who the nominees are, there will be a debate on Iran, but it will be over whether diplomacy should emphasize direct “engagement” (the Democrats’ idea) or “sanctions and pressure” (the GOP’s). That’s a significant nuance but not a wedge.

The sensible policy, based on a full reading of the NIE, is both engagement and pressure.

Bush needs to drop his objections to direct talks with the Iranians, and Democrats should support sanctions as a means of controlling Iran’s ongoing nuclear program.

The NIE emphatically did not say that Iran had abandoned its clandestine nuclear weapons program. It said that in 2003, in response to international “scrutiny” and “pressure,” Iran “halted” its effort to fashion enriched uranium into a bomb and probably has not resumed it.

But uranium enrichment goes on, the program is not subject to international inspection or control, and Iran continues to build ballistic missiles.

“We assess with high confidence that Iran has the scientific, technical and industrial capacity eventually to produce nuclear weapons it if decides to do so,” the report stated.

And, it added, “We do not have sufficient intelligence to judge confidently whether Tehran is willing to maintain the halt of its nuclear weapons program indefinitely while it weights its options. ...

“In our judgment, only an Iranian political decision to abandon a nuclear weapons objective would plausibly keep Iran from eventually producing nuclear weapons – and such a decision is inherently reversible.”

By any objective standard, the NIE’s findings justify Bush’s statement that “Iran was dangerous. Iran is dangerous and Iran will be dangerous if they have the knowledge necessary to make a nuclear weapon.”

That is the reality that will face the next president of the United States, and it ought to be the basis on which presidential candidates and Congressional leaders discuss the issue.

Among the Democrats, only Sen. Hillary Rodham Clinton (New York) sounded as though she got the point – although her campaign could not resist declaring that the NIE’s findings “expose the latest effort by the Bush administration to distort intelligence to pursue its ideological ends.”

Clinton, at National Public Radio’s Iowa debate, said that the NIE should impel Bush to “engage in serious diplomacy, using both carrots and sticks” because, as the NIE said, “pressure on Iran does have an effect.”