The Iranian regime is in turmoil and its sole salvation might well be a controlled confrontation with the United States. Giddy minds, Shakespeare tells us, are best kept busy with foreign wars.

Yet, for the often reckless now-weakened regime, the rhetoric needs to be contained because it can ill-afford a military confrontation with the U.S.

Furthermore, if there is to be any chance of convincing Europe, Turkey, Russia and China to stand up to the U.S., save the nuclear deal and help solve Iran’s economic woes, the regime needs to seem to be reasonable.

Finally, some in the regime are openly talking about a more clear and clean pivot away from the West and toward Russia and China as a path out of the current crisis.

U.S. policy on Iran has also been erratic. In recent weeks, it has moved from all-cap Trump tweets of fire and fury to his surprising offer to negotiate unconditionally with Iran — later amended by the secretary of State to say there are actual conditions for such talks.

Central to the policy of unilaterally withdrawing from the nuclear deal has been the idea of implementing biting sanctions on Iran.

The implied logic of these policy moves seems hinged on the notion that extreme economic sanctions, even if they hurt the Iranian people — innocent victims of the regime — will either bring about a regime change or bring the regime to its knees and thus willing to throw in the towel and negotiate a “better deal” with the U.S.

Though there are increasing signs that more and more people in Iran, even voices in the regime itself, are blaming the economic crisis on the regime’s corruption and cronyism, and not on U.S. sanctions, too much pressure on the people — virtual hostages to the regime — might prove counterproductive and change the domestic dynamics in favor of the regime.

The U.S., hoping for regime change, and the Islamic regime hardliners, angling to save the status quo at any cost, might either miscalculate or inadvertently find themselves in a more direct confrontation, and the consequences of such an error will haunt Iran and the region, no less than Europe and America, for decades.

The mere announcement of the U.S. decision to withdraw from the nuclear deal beget a further fall in the value of Iranian currency, instability in the market, anxiety in the population and open division among the military political leadership.

Sporadic demonstrations, focused on the dire economic situation, occasionally peppered with shouts of death to the dictator, have been a nightmare for the regime. The fact that they are centered amongst the social strata that had been staunch supporters of the regime, have seriously rattled the regime’s self-confidence.

The Trump offer for direct negotiations caught virtually everyone by surprise in Iran. Even the conservative forces usually adamant about the uselessness of any negotiation with the “Greatest Satan” were this time divided on the expedience of accepting Trump’s offer of negotiations.

Rouhani, forever trying to triangulate, waxed rhetorical against the U.S. but left open the possibility of direct negotiations. He even went further by suggesting the necessity of a national referendum to decide whether relations with the U.S. should be normalized.

The troubled Iranian regime, facing galloping inflation, a large drop in the price of its currency on foreign exchange markets, a traumatic flight of capital, double-digit unemployment, waning direct foreign investment and an increasingly agitated population, is surely in no situation to fight a war with the U.S.

But it is a regime monomaniacal in its determination to stay in power. There has been open talk in Iran of the possibility of the Iranian Revolutionary Guard Corps taking over the country in a military coup.

The commander of the Qods Brigade, Qassem Suleimani, has been groomed as a possible knight in shining armor, ready and able to save the country from collapse. While such a takeover will not solve the economic woes of the country, it will put in place for a few years a more radical and brutal regime.

On the other hand, reformist and democratic forces inside Iran have openly advocated dialogue with the U.S. To varying degrees, they recognize that the regime faces an existential crisis and political and economic openness at home is needed.

The reformists, to their own political peril, have been trying to bring about enough reforms to save the status quo, while the democrats are aspiring to gradual but structural changes.

Adding yet another layer of complexity to the situation is the fact that some in Iranian diaspora, hoping to come to power with the help of the Trump administration, have not only supported every move Trump has made, but are goading it to act ever more provocatively and confront the regime more openly.

In the midst of all of these developments, the Supreme Leader finally chimed in, taking the rare step of admitting a mistake. The mistake, he declaimed in the language not of a jeremiad but a despot, was his decision to ”allow” negotiations on the nuclear issue.

In no less a declaratory tone, he said he now “forbids” such negotiations. There will be no war, he said. Neither will there be negotiations with the U.S. He had already declared, rather remarkably, that there is no crisis and that “the people” will yet again overcome the obstacles.

In these fraught conditions, U.S. policy on Iran must be based on the apparently paradoxical propositions that change in Iran is needed and inevitable, that U.S. can’t bring about that change and that only the Iranian people can be the masters and arbiters of that change.

U.S. efforts to arbitrate the result or force the process will only delay the much-needed change for a more democratic Iran. Sanctions that freeze the ill-gotten assets of regime leaders, and not those that hurt the people of Iran, can be a first effective step to help the needed transition.

Abbas Milani is the Hamid and Christina Moghadam director of Iranian Studies at Stanford and a research fellow at the Hoover Institution.