One of the greatest challenges that U.S. President Barack Obama will face in his second term is Iran's pursuit of advanced nuclear technologies.

While a nuclear Iran would damage America's strategic position in the Middle East, action aimed at forestalling Iran's nuclear progress also carries serious strategic and economic consequences.

Armed with nuclear weapons, Iran would be better able to project influence, intimidate its neighbors and protect itself. As a result, U.S. allies in the region would need new security guarantees. But an increased American presence could provoke radical groups, while requiring defense resources needed to support U.S. interests in East and Southeast Asia.