Diplomacy around Iran's leader is understood (5)
I believe the answer is:
tacit
'is understood' is the definition.
(I've seen this before)
'diplomacy around iran's leader' is the wordplay.
'diplomacy' becomes 'tact' (tact can mean diplomacy or sensitivity).
'around' is an insertion indicator.
'leader' indicates taking the first letters.
The initial letter of 'iran' is 'i'.
'tact' going around 'i' is 'TACIT'.
(Other definitions for tacit that I've seen before include "Not said though understood" , "Attic? (anag)" , "Respect, admiration" , "Understood, implicit" , "Implied without being stated" .)