But, as the country prepares for presidential elections in June, the signs are clear that the favourite, the former president Ali Akbar Hashemi Rafsanjani, may be preparing the ground for rapprochement with the United States.
Ayatollah Ali Khamenei, Iran's supreme leader, responded to President Bush in a defiant televised statement, claiming that "the Islamic Republic of Iran, because of supporting the oppressed and confronting oppressors, is being attacked by the global tyrants".
But allies of Mr Rafsanjani say that the former president may be planning to seek a "grand bargain" with Washington, offering concessions on Tehran's nuclear programme, terrorism and Iraq if he wins the election in June. Mr Rafsanjani seems to believe that rapprochement is in the best interests of Tehran, after the recent stream of hostile rhetoric from Washington. Press reports have also said that US special forces are already in Iran, and its air force has flown sweeps to pinpoint air-defence systems.
"Rafsanjani thinks he must resolve the problems with the US," said a close ally of the former president, in an interview with The Independent. "We should create opportunities for dialogue. On some regional issues such as Iraq, Afghanistan, al-Qa'ida and Palestine, we have seen we can have direct and co-operative talks."
The mercurial Mr Rafsanjani, the grand old man of Iranian politics, is believed to have tried to reach out to the US before. Among his supporters are many businessmen, diplomats and administrators who believe Iran's split with the US over the 1980 hostage crisis was a huge strategic mistake. They favour renewing diplomatic ties and encouraging American businesses to come to Iran.
The former president's ally listed the problems that need to be addressed in one of the world's most emotionally fraught political relationships, including accusations that Iran supports terrorism and that it has a nuclear weapons programme. He also questioned how long Iran could continue to be more radically pro-Palestinian than most Arab states. Tehran is still in principle committed to destroying Israel.
During the former president's first two terms, he was caught in a constant battle with conservatives, who opposed his more liberal social and economic policies. Many of his critics believe he would face similar, or greater problems, during a third term. Some analysts also believe it is possible that renegade hardliners could try to sabotage warming relations by mounting attacks in Iraq and elsewhere.
In the absence of a genuine reformist candidate in the election, Mr Rafsanjani will aim to attract the votes of young people who are thought to prefer a more liberal candidate but who fear the rise of a genuinely conservative president. Some newspapers are already tipping him to win a third term and several opponents have signalled they would not run against him.Reuse content