IRAN has set tough conditions for dialogue with the United States, its enemy for 30 years, to buy time for its ponderous and opaque decision-making process which is facing a dilemma on whether or not to open up, analysts say. Adding to uncertainty in Iran about how to respond to US President Barack Obama's overture, the Islamic Republic holds a presidential election in June that could strengthen moderate voices backing detente over their more hardline opponents. Ultimately policy will be determined by Supreme Leader Ayatollah Ali Khamenei, the Islamic Republic's top authority who tends to seek consensus although any decision, analysts add, will be based on preserving the system of clerical rule. But foot-dragging that has frustrated the West in years of fruitless talks over Tehran's disputed nuclear work could weaken Iran's position if Obama and the world tire of delays and toughen sanctions that will hurt an economy already grappling with falling oil revenues. “The Iranian political elite aren't quite sure what to do about the United States. (They) do think about relations in the long term but weren't expecting to have to make a decision now,” said Ali Ansari at St Andrews University, Scotland. Obama, who after just a week in office offered to extend a hand of peace if Iran “unclenched its fist”, had “seized the political initiative”, Ansari said. “Ahmadinejad's call for the US to apologize for 60 years of mistakes is simply playing for time,” he added. President Mahmoud Ahmadinejad has demanded Washington say sorry for decades of “crimes” against the Islamic Republic, founded 30 years ago this month to chants of “Death to America.” Tehran also says it cannot let down its guard as long as US troops are posted on its borders in Iraq and Afghanistan. Divided opinion The demands are unlikely to be met soon. Obama has pledged a substantial withdrawal from Iraq in a year but aims to boost forces in Afghanistan. The Clinton administration acknowledged past US intervention in Iran but stopped short of an apology. Yet Iran's tactics may well serve to stall engagement while a Byzantine political establishment works out the next step or determines what concessions can be squeezed from Washington. “In my opinion, there are two branches among officials,” said Tehran University professor Hamidreza Jalaiepour, pointing to pragmatists seeking talks and hardliners opposed to them. “The president is on the border between these two camps,” he said. Ahmadinejad has hinted at his guarded interest by, unusually, congratulating Obama on his election win in a letter. Even some of his conservative backers criticized that move. Negotiations could offer Ahmadinejad a boost in the run-up to the June vote, when an aide said he would seek a second four- year term. Many Iranians are tired of isolation but frustrated by inflation that has soared under Ahmadinejad's watch. But he could face a challenge from Mohammad Khatami, whose 1997-2005 presidency was marked by thawing ties with the West. If Khatami runs, it will offer a stark choice between a man backing detente and one whose presidency has witnessed a sharp deterioration in Iran's international relations. Though not a determining factor, the result could influence any debate on strategy. Khamenei has not made his own position clear, staying silent so far on Obama and his overture. But last month he told Iraqi leaders that Americans could not be trusted. Delicate choice For Western diplomats, it's a familiar story. “With Iranians, there are always two sets of negotiations. The one you have with them and the one they have among themselves,” said one diplomat in Tehran. “The risk is those who think that Iran's interests are better served by clinging to their hardline ‘we're-winning- you're-losing rhetoric' ... may win,” said another. For Iran's ruling establishment, it is a delicate choice. Rapprochement could lead to lifting UN and US sanctions, slapped on the country over work the West says is to build nuclear weapons despite Tehran's denials. Officials shrug off the impact, but executives say sanctions are hurting by driving up trade costs and driving out investors. That could quickly change if sanctions were scrapped because Western and other firms are hungry to invest in Iran, holder of the world's second biggest reserves of both oil and gas. But opening up may reveal weaknesses in an economy dominated by the state and where loyalists, like the Revolutionary Guards, have been winning many big contracts. And it could open Iranians to Western influences that revolutionaries ejected in 1979. “Isolation brings immunity,” said one Iranian analyst, adding Iran wanted concrete action like a unilateral easing of US sanctions or scrapping a fund to promote democracy in Iran. But, as Iran holds out for concessions, Obama's threat of tougher sanctions could gain momentum and damage Iran as it tightens its budget belt for 2009/10 after crude prices tumbled more than $100 in the past six months to around $40 a barrel. Iran may also find other bargaining chips like leverage in Iraq weakening, as US troops quit and Iraq's government establishes more control. “Iranians will engage in talks when, in a way, it is too late, when they have no other choice,” said the analyst.
