...The thing is, that iran has almost certainly already "broken out" in the sense of dirty bombs and possibly those even with regional missile capability.
Any country that has nuclear activity is capable of constructing dirty bombs, as such bombs require nothing more than their containing some radioactive waste. Dirty bombs have a localized impact in contrast to full-fledged nuclear weapons. The goal is to prevent Iran from gaining the capability to weaponize nuclear fission (and later fusion).
It also seems dangerous to rely on new sanctions unless the Security Council is reliably and unilaterally in the boat and willing to robust action should efficient nuclear weapons capability be at all probable.
The sanctions would be the starting point. They would not preclude even more severe responses, though those latter responses would have to be tied to credible and sufficient evidence to justify their being undertaken. The failure of diplomacy would not be sufficient grounds for immediate military action unless there were sufficient and credible evidence that Iran was near a breakout and was going to pursue that outcome.
If Iran decides to flaunt iaea inspection now, we shiuld be clear that the negotiations are over and we sshould make this absolutely clear.
The talks are ongoing. It's still unclear whether Iran will insist on its position throughout the remaining duration of the talks. Personally, I think Iran will maintain that position given its past conduct and Ayatollah Khamenei's role. To retreat on that position would undercut the Iranian Supreme Leader's credibility. For the Iranians, that would be an inconceivable outcome. Therefore, I believe Iran won't relent.
In that case, I do not believe the P5+1 should accept an agreement with Iran. Such an agreement would be inherently flawed in its lacking a credible verification mechanism. I also don't believe that kind of fundamental difference should be papered over with another extension in the deadline for an agreement, as one would be dealing with a fundamental and intractable difference not insufficient time to conclude a deal. IMO, Iran is seeking a "safe harbor" for nuclear activities by demanding that sites be off limits to inspection. Accommodating those terms would risk a repeat of the North Korean "surprise" where that country accepted a generous agreement only to pursue secret nuclear activities that culminated in its becoming a nuclear weapons state shortly thereafter.
There may be no doubt in Teheran that there will be war, if they do not submit to the inspections totally.
I believe that the U.S. should make abundantly clear to Iran that the U.S. would take such measures as necessary to prevent Iran's developing or acquiring nuclear weapons (and I believe it has on several occasions in the past), including military measures if they are necessary. The focus would need to be on nuclear weapons not inspections. Lack of access for inspectors would, of course, increase the risk of military strikes given that there would be uncertainty as to what capabilities Iran possessed and a risk of miscalculation. Right now, I don't believe we're at the stage where such strikes must be conducted should the talks fail.
Moreover, there is no arbitrary date beyond which the U.S. or any of its allies could not strike any of Iran's nuclear facilities should Iran's development of nuclear weapons become imminent. Even a fully functional nuclear plant can be destroyed by a country that faces a catastrophic or existential risk, as the anticipated harm to civilians/civilian objects would not be excessive relative to the anticipated military objective (preventing a catastrophe or even demise of a country and its people). The Mutually Assured Destruction (MAD) doctrine was designed for deterrence and it was wholly consistent with the principle of proportionality described above.
By no means does such a grave decision have to be made at the present time. Moreover, it may never have to be made. I certainly hope it won't ever have to be made and I'm not advocating such an approach under the present circumstances. I mention this theoretical and legal position strictly because a prominent public official had erroneously suggested military strikes were needed several years ago, not because Iran was about to achieve a nuclear breakout, but on the incorrect grounds that beyond a certain date, no military options could be undertaken.
At present, I favor allowing the diplomatic process to reach its conclusion at the end of June. If Iran rejects an appropriate verification mechanism, the P5+1 should terminate the talks and re-impose the sanctions that had been lifted. Afterward, additional sanctions could be designed and imposed. Then, further non-military and/or possibly military measures would depend on developments.