The US president is expected to announce on Tuesday that he will re-impose economic sanctions on Tehran -- effectively pulling the US out -- but that does not mean the deal is dead and buried.
Malley, now the head of the International Crisis Group peace-building think tank, said in an interview that the 2015 agreement's original European backers must try to keep Tehran inside the deal.
Through his constant attacks on the "terrible" agreement, Trump has shifted the narrative away from the prior international consensus that the deal has successfully curtailed Iran's nuclear ambitions.
But Malley, who served on Obama's White House National Security Council, holds out hope that fellow deal signatories Britain, France and Germany can work with Tehran to keep the agreement alive.
And the agreement, he argued, remains critical to preventing Iran from resuming its alleged search for a nuclear weapon.
"This is the most comprehensive verification regime ever negotiated by a country other than one that's been defeated in war," Malley said in Washington on the eve of Trump's decision.
"If they do try to cheat, there are so many tripwires to know when they're cheating, where they're cheating... it would be discovered."
President Emmanuel Macron of France, Chancellor Angela Merkel of Germany and British Prime Minister Theresa May have sought to "mollify" Trump by offering to negotiate tougher anti-Iran measures.
But they remained determined the Iran deal implementation mechanism -- the Joint Comprehensive Plan of Action (JCPOA) -- must remain in place, even if a supplemental agreement is found.
Trump now seems unlikely to renew the US sanctions waivers that Obama announced as the US commitment under the JCPOA, but it is unclear whether Iran will seize on this to renew its nuclear program.
If Europe is willing to impose tougher penalties on Iran's ballistic missile program and regional military adventurism, Malley said, it is only because they want to preserve the underlying nuclear deal.
"It is a slight inflexion, I won't deny that," he added. "And frankly, I think if what Trump wants is to be able to claim victory he could do that.
"He could say 'without me, Europe never would have cared so much about Iran's ballistic missiles program, never would have cared so much about its regional behavior.'
Malley said Trump is bent on undoing whatever foreign policy legacy Obama has, and fails to understand that pressure without compromise will not curtail Iran's other provocations.
"That's going to perpetuate all the uncertainty that currently surrounds the deal. That's going to make it very unlikely for businesses to invest in Iran.
"It's clear that the US is in the mode of killing the deal."
Malley's International Crisis Group, therefore, has been urging the Europeans to shift their attention from Trump and to work instead on convincing an angry Tehran not to break its end of the bargain.
"It's going to be a very tough endeavor," he said. "What we try to do... is to say here are steps that the European can take mitigate the harm of the reimposition of US sanctions."
Smaller EU businesses that do not have investments in the United States that could be exposed to renewed US sanctions, could work together to do business with Iran, he suggested.
"It's not easy but that's the effort the Europeans need to be engaged in and Iranians too," Malley said.
Such trade, he added, could show "why preserving this deal is better for Europe and it's better for Iran even if the economic dividends of the deal that Iran expected to get they're not going to see now."
And he has a message for the Iranians:
"Isn't it better to have some kind of continued commercial and trade relations with Europe and have the US being isolated, than have you isolated and have the Europeans and the Americans on your case?
"Because the truth is if tomorrow the US reimposes the sanctions and the Iranian response is 'We're leaving the deal too,' Europe won't have the choice," Malley warned.
"They may blame president Trump (but) they will reimpose sanctions on Iran if Iran resumes its nuclear program."
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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