It's essential to read riot act fully and be diplomatic! (7)
I believe the answer is:
tactful
'be diplomatic' is the definition.
(similar in meaning)
'it's essential to read riot act fully' is the wordplay.
'it's essential to' indicates a hidden word (I've seen this in other clues).
'TACTFUL' is hidden in the letters of 'read riot act fully'.
'and' is the link.
(Other definitions for tactful that I've seen before include "Discreet - diplomatic" , "Sensitive in dealing with others" , "Considerate for other's feelings" , "Sensitive to others on difficult issues" , "Like diplomat" .)