"We are moving into a period of time with Iran where I think we're going to have to, the world is going to have to make some decisions," Ms. Rice said. 
Her skepticism about progress in the talks was clear, however, and she chose unusually blunt language to lay out the probable next step.
"When it's clear that negotiations are exhausted, we have the votes" to take Iran before the Security Council for possible punishment.."
It looks to me like Bush, Blair, and our other NATO allies are working on a decision between two options on Iran: 1) the "US/British/Israeli cop" option where the US and Britain hit Iran hard with airstrikes to stop their nuclear program, after which the US, Britain, and/or Israel bomb key sites repeatedly as Iran tries to rebuild them, or 2) hard airstrikes followed by some kind of invasion that removes the current regime permanently. I would be very surprised and disturbed if Bush left office in 2009 without stopping the Iranian nuclear weapons program. If we can get some help from NATO, regional allies like Turkey, and supporters of democracy within Iran, we might just see option 2 within the next two years.
I truly believe that for the US, inaction is not a viable option. Besides the enormous risk of inaction, we know the Israelis will attack Iran on their own anyway if necessary so we may as well give them a hand and completely destroy Iran's nuclear program. Iran will either back down in the next two years or the world will act to terminate their nuclear weapons program.