If the Obama Administration had hoped to get the bulk of Iran's current stockpile of enriched uranium out of the country under a new agreement for reprocessing abroad, those hopes are fading fast. The counter-proposal offered by Iran on Thursday contained such substantive revisions that Western officials are interpreting it as a rejection — at least of the aspect of the deal most important to the Western powers. More worrisome, perhaps, for the future of President Obama's engagement strategy may be the fact that although the deal contained some important concessions to Tehran, the possibility that President Mahmoud Ahmadinejad might embrace it sparked a storm of criticism from across the Iranian political spectrum.The agreement brokered by the International Atomic Energy Association Nuclear Agency in Vienna last week sought to bridge Western concerns that Iran's stockpile of low-enriched uranium could potentially be reprocessed into weapons material and Iran's need for fuel for a medical research reactor in Tehran. It requires Iran to provide the uranium for the fuel plates it needs from its own stocks, envisaging the transfer of an amount equivalent to some 75% of its stockpile to Russia by the end of the year for further processing. But according to Western officials briefed on Iran's response, Tehran wants instead to ship its uranium in smaller batches, and over a longer period of time. (Just as the Western powers suspect Iran of enriching uranium for ultimate conversion into bomb material, so do the Iranians suspect that the Vienna deal may fit with the Western goal of ending Iran's enrichment capability.) But Western officials warn that anything that leaves intact Iran's current stockpile — hypothetically enough to be reprocessed into a single crude atomic bomb should Iran decide to do so — is a deal-breaker. Although Iran continues to enrich uranium, replenishing the stocks of low enriched uranium shipped out under the deal would take about another year, during which time Western powers hope to negotiate an end to uranium enrichment in Iran.The aspect of the deal most welcomed by Tehran was the fact that it represented a kind of tacit acceptance of Iran's enrichment program — after all, the uranium that would be used to create the reactor fuel was enriched in violation of U.N. Security Council resolutions, and the deal was not even contingent on Iran heeding those resolutions. Whereas the Bush Administration had refused to negotiate with Iran unless it halted enrichment, the Obama Administration has been talking without preconditions, about a deal that wouldn't even halt continued enrichment. Iran had managed to shift the debate from whether or not Iran should be allowed to enrich uranium to measures to safeguard its enriched uranium stockpiles from being used in a weapons program. Ahmadinejad proclaimed that diplomatic achievement when he appeared to endorse the nuclear deal on Thursday. "A few years ago, they said we had to completely stop all our nuclear activities," he said in a speech broadcast live on state television. "Now they want nuclear cooperation with the Iranian nation."Still, the proposed deal caused an uproar in Iran, where not only conservatives, but also pragmatists and opposition leaders accused the West of trying to steal the country's nuclear patrimony. "Iran's response is that it will not give even one milligram of its enriched uranium to be changed into 20% enriched uranium by foreigners," wrote on columnist in the hardline newspaper Kayhan on Monday. "These American cowboys, old British foxes, and Zionist child murderers want to use this ploy to take Iran's uranium and not give it back." Some of the strongest criticism of the deal came from Mir Hossein Moussavi, the leading opposition presidential candidate in the disputed June election. "If the promises given [to the West] are realized, then the hard work of thousands of scientists would be ruined," he said. Conservatives had accused moderates of treason over previous attempts to reach a nuclear agreement with the West; now the country's embattled opposition leaders are getting their own back, perhaps fearful that rapprochement between the West and Ahmadinejad would reinforce the regime that has cracked down hard since the election. The breadth of opposition to the deal within Tehran suggests that dealing with the U.S. may be politically radioactive for the Iranian government.The Obama Administration had hoped the deal would buy more time for its engagement strategy, particularly with Israel threatening to launch a military attack if diplomatic measures failed to stop Iran's enrichment program in the near future. Iran's reported response could be a significant setback, forcing the Administration to either seek new sanctions or to redouble its diplomatic efforts to forge cooperation on the nuclear question and other regional issues.The biggest winner if the Vienna agreement collapses could be Israel, whose leaders had been publicly skeptical of the deal for its failure to address the question of ongoing Iranian enrichment. Israeli leaders also feared that a deal offering cooperation and further safeguards but not removing from Iran the capability to build a bomb would leave Israel's more hardline position internationally isolated. Israeli military officials heaped scorn on Iran's counter-proposal. "We hope Obama won't play the village idiot and accept," a senior Israeli military source told TIME. "This is bazaar bargaining at its best. It takes the essence out of the ability to control and supervise Iranian enriched uranium." But Iran's negative response may have reassured the Israelis. After a week in which his Defense Minister had questioned the deal, Prime Minister Benjamin Netanyahu on Friday called it a "positive first step" — which, of course, Iran appears unwilling to take.If the Israeli government has been wary of the Obama Administration's diplomatic approach to Iran, Israeli and American military ties remain as strong as ever. The two countries are in the midst of a three-week military exercise — one of the largest ever held in Israel. Operation Juniper Cobra simulates the coordination of defenses against a missile attack on Israel from an enemy unnamed, yet unmistakable. "I've never seen so many American generals," another senior military source told TIME. No doubt Tehran is noticing too.With reporting by Aaron J. Klein/Tel Aviv