Iran appears to be locked in a fierce internal debate over whether to hold bilateral nuclear talks with the United States, with key political leaders calling for dialogue with Washington and hard-liners pressing ahead with expansion of the country's nuclear facilities.
The Obama administration, girding itself for what could be the first major foreign policy test of its second term, has dangled an offer of bilateral talks in hopes of breaking through the nuclear impasse with Iran and easing the threat of a new Middle East war.
But despite positive comments in recent days from President Mahmoud Ahmadinejad and other senior leaders, Iran has shown no hint that it plans to accept the offer, U.S. and European diplomats say.
Instead, intelligence analysts are detecting signs of continued progress at Iran's uranium-enrichment plants and no significant softening on the part of the country's supreme leader, Ayatollah Ali Khamenei, the man who will ultimately decide the country's nuclear course, according to the diplomats.
"We don't think the Iranians are there yet, in terms of a deal," said a European diplomat, insisting on anonymity in discussing nuclear diplomacy with Iran. "Things are moving a bit because they're feeling pressure from sanctions. But we have no information suggesting that they're willing to change."
A new report expected later this week from the U.N. nuclear watchdog, the International Atomic Energy Agency, is expected to show that Iran has nearly completed installing centrifuges at its Fordow uranium-enrichment plant, a facility being built inside a mountain tunnel to protect it against military strikes, according to Western diplomats briefed on the IAEA's preliminary findings.
While not all the centrifuges are operating, the near-completion of the plant moves Iran a step closer to having a virtually bomb-proof sanctuary in which to increase its stockpile of enriched uranium, which can be used for civilian purposes or — if enriched further to fissile form — for nuclear weapons. Only the most powerful U.S. bunker-busting munitions are believed capable of destroying the facility.
U.S. and Israeli officials worry that Iran could use the Fordow plant to make highly enriched uranium for nuclear bombs. Iran insists that it seeks nuclear energy only for peaceful purposes.
The search for a diplomatic solution to the long-running crisis gained new urgency in recent weeks because of a conviction among Western governments that time is running out for averting an Israeli military strike on Iran's nuclear facilities, which could trigger a wider conflict in the region.
Israeli officials have signaled a willingness to delay a strike, but Israeli Prime Minister Benjamin Netanyahu has warned that his government will act unilaterally if necessary to prevent Iran from acquiring nuclear-weapons capability.
Dennis Ross, the administration's chief adviser on Iran before leaving government late last year, cited the implicit Israeli threat last week in predicting that 2013 would "be a decisive year, one way or another," for Iran.
"We will see this come to a head," Ross told a forum at the Washington Institute for Near East Policy on Thursday. "Either it will come to a head diplomatically or through the use of force."
Ross also cited Iran's worsening economic crisis, which he said was battering the Iranian economy to the point where Iran's leaders must soon decide between negotiations and economic catastrophe. Under pressure from international sanctions, Iran's currency has plummeted in recent months while exports of petroleum — Iran's chief source of foreign revenue — have been cut nearly in half.
"The focus on their economy has become more acute, and that suggests that there may be increased interest in looking for a way out," he said. On the other hand, "it doesn't mean that diplomacy is guaranteed to produce an outcome that we want," Ross said.
Administration officials have acknowledged raising the possibility of bilateral talks as a way of luring Iran back to negotiating table. The offer was most recently made during informal contacts on the sidelines of September's U.N. General Assembly meetings in New York. Iranian diplomats at the time expressed interest in exploring the idea, according to U.S. and European officials familiar with the exchange.
The offer remains open, diplomats said, though no negotiations — formal or informal — have been held, or planned so far. A State Department spokesman last week dismissed as "ridiculous" a published report that Obama adviser Valerie Jarrett was meeting privately with Iranians.
Meanwhile, the signals from Iran have been mixed. In Tehran, where Obama's reelection triggered speculation in state-run media about an imminent "grand bargain" to settle the nuclear dispute, a number of prominent politicians and opinion leaders have wondered aloud about whether the moment had finally come for ending three decades of hostility with the United States.
"Some people in the system and administration are increasingly asking this question: Who has said — and why — should we so intractably insist on enmity with the U.S.," Sadegh Ziba Kalam, a political analyst and professor at Tehran University, said in an interview Sunday. "It is possible that the idea that enmity with the U.S. is not in our interests is getting more weight and we see a move toward serious negotiations."
Ahmadinejad is among several prominent Iranians who have spoken favorably in recent days about a possible deal with the United States. The Iranian president, during a visit last week to Indonesia, said Iran's nuclear program was now a "political" issue, adding, "The issue should be resolved in relations between Iran and the United States."
Another senior official, Mohammed Javad Larijani, secretary of Iran's High Council for Human Rights and brother of the country's parliament speaker, suggested in a televised interview that it was in Iran's interest to deal directly with Washington. "To protect the interests of our system, we would negotiate with the U.S. or anyone else even in the abyss of hell," he said last week.
But other prominent officials remain adamantly opposed. Influential figures among Iran's military and paramilitary organizations — such as the Islamic Revolutionary Guard Corps and Basij militia — have flatly rejected the possibility of U.S. talks, as have a number of conservative clerics and religious leaders.
"We are not going to resume relationships with America, unless the U.S. changes its behavior," Brig. Gen. Mohammad-Reza Naghdi, the leader of the Basij, told a news conference on Saturday in Tehran.
The last significant opportunity for a breakthrough in U.S.-Iranian relations came in 2003, when Iranian leaders secretly reached out through intermediaries to members of the George W. Bush administration to discuss a possible "grand bargain." The effort quickly collapsed.
Many Western analysts agree that circumstances are again favorable for a deal. Some argue that diplomacy should not be abandoned even if Iranian leaders do not immediately accede to deep cuts in the country's nuclear program.
Negotiators should adopt a "realistic" approach, first seeking agreement on confidence-building steps and transparency measures that create a framework for a larger deal, said Greg Thielmann, a former State Department intelligence analyst and now an Iran expert at the Arms Control Association.
"Difficult negotiations are rarely concluded in a matter of weeks," he said.
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Jason Rezaian contributed to this report from Tehran.Reuse content