Yousaf Butt explains why Iran is not responding to sanctions in the way that U.S. and Western governments want:

So while the IAEA initially referred Iran to the UN Security Council over a lack of transparency, the Security Council took that opportunity to slap on additional ad hoc demands: this is like being stopped for a traffic violation and then having your car confiscated for no solid reason. While Iran is probably willing and able to satisfy IAEA demands for greater transparency, such a concession will not satisfy the Security Council demands that require Iran to suspend enrichment indefinitely.

This is possibly why Iran feels it has little to gain by cooperating with the IAEA at this stage. Even if it makes the IAEA happy, the Security Council sanctions and various others would still be fully in effect. So these sanctions are, in fact, a disincentive for Iran to cooperate with the IAEA; if they are going to be sanctioned by the Security Council, the United States and the EU anyway, why should they cooperate with the IAEA?

Further poisoning the waters is the questionable legality of the UN sanctions themselves. Such sanctions are applicable under Chapter 7 of the UN Charter—but only after a determination of “the existence of any threat to the peace, breach of the peace, or act of aggression” is found, something which has never been done in Iran’s case.

This is something that gets overlooked very easily in the Iran policy debate here in the U.S. Having already concluded that Iran must be doggedly pursuing a nuclear weapon, the pro-sanctions governments have deemed Iranian enrichment as such unacceptable, which puts Iran in the very difficult position of being sanctioned or repudiating what it and most Iranians see as Iran’s national right. By overreaching with the sanctions in this way, the pro-sanctions governments have made it virtually impossible to end the impasse.

Contrary to the frequent claims of Iran hawks that Iran is engaged in illegal proliferation activities, Butt explains that this is not so:

The most objective reading of Iran’s intentions is that it may be stockpiling enough low-enriched uranium (LEU) to give itself a “break-out” option to weaponize in the future. Unfortunately for the U.S. government and its allies, there is nothing illegal about that. (Note that even the 20 percent enriched uranium is considered LEU by the IAEA). Options and ambitions that the Iranian leadership may harbor in their heads cannot be illegal. To be clear: The fault lies with the Nuclear Non-Proliferation Treaty, which allows a latent nuclear-weapons capability, not with Iran which is simply taking advantage of this fact.

One problem with current Iran policy is that it is effectively trying to re-write the terms of the NPT and then apply the new rules selectively so that Iran cannot engage in enrichment.

Hooman Majd talks more about the Iranian nuclear program and Iranian popular opinion with the managing editor of Foreign Affairs here.