Is the U.S. Ready to Make a Deal with Iran?

Iranian president-elect Hassan Rowhani speaks during a press conference in Tehran on June 17 Photograph by Behrouz Mehri/AFP via Getty Images

During Iran’s brief presidential campaign earlier this month, President Barack Obama imposed yet another round of sanctions on Iran—this time on the automotive industry and Iran’s plummeting currency, the rial. U.S. officials vowed there would be even more punishments unless Iran quickly agrees to roll back its nuclear program.

After the surprise victory this weekend of Hassan Rowhani—the most moderate candidate given permission to run—the administration says it’s eager to return to negotiations with Iran. But that doesn’t mean the Obama administration is ready to ease pressure on the Iranian regime, let alone cut a deal with it. In an interview broadcast on PBS Monday night, Obama said the elections showed “the Iranian people want to move in a different direction,” but he said that sanctions “will not be lifted in the absence of significant steps” demonstrating “that Iran is not pursuing a nuclear weapon.”

Like so much about Iran, Rowhani is a puzzle. Is he a reformer, a pragmatist, or one more organization man, just with better rhetoric? And how will Rowhani’s past experience as a nuclear negotiator shape his attitude? In 2004, he agreed to temporarily suspend Iran’s enrichment efforts, but when talks with the European Union collapsed he was bitterly criticized in Tehran for giving away too much. Rowhani later argued, correctly, that diplomatic “calm” bought critical time for Iran to build up its nuclear capabilities.

One of the biggest questions is how much influence Rowhani will wield over the nuclear program. Supreme Leader Ayatollah Ali Khamenei will be the ultimate “decider” and Rowhani was not his choice for the job. (Khamenei’s favored candidate, current nuclear negotiator Saeed Jalili, came in a very distant third.)

Still, Khamenei’s willingness to recognize Rowhani’s win is seen by some as a sign that Tehran’s power players want to mollify a deeply alienated public. That means finding a way to loosen the sanctions noose. On Monday, Rowhani told reporters that Iran would increase the “transparency” of its nuclear efforts and “increase the trust between Iran and the world.” As for again suspending uranium enrichment, he said, “we are now in a different situation.”

Veteran U.S. diplomat Thomas Pickering, who has been pressing the Obama administration to get serious about negotiating, says that Rowhani will have to be “very careful,” given Iran’s complex politics. “No one should expect him to be some soft touch ready to give away the store.” To truly test Iran’s intentions, he says, Washington and its allies will need to make a better offer.

In the latest round of failed talks, the P5+1 ( the permanent members of the UN Security Council plus Germany) called on Iran, as a first step,  to suspend production of fuel that can be easily turned into weapons grade and to shutter its deeply buried enrichment plant at Fordow. In return, the P5+1 offered to suspend restrictions on Iran’s trade in precious metals and petrochemical products. Pickering calls that “pretty thin gruel” and suggests that if Tehran makes real concessions, Europe could offer to suspend sanctions on transfers by Iran’s Central Bank while Washington could offer to relax its opposition to a gas pipeline between Iran and Pakistan.

James Steinberg, who served as deputy secretary of state during the first Obama term, cautions against trying to game Iranian politics. “Rather than trying to read the tea leaves, we should figure out the right strategy.” Steinberg warns that Iran has made significant nuclear progress in recent months. “It’s getting very late in the game,” he says. The U.S. and its allies need to sharpen Iran’s choices by putting a comprehensive settlement on the table, Steinberg says—and make clear the high price Iran will pay, including possible military action, if it rejects the offer.

The Obama administration is arguing that Rowhani’s victory vindicates the president’s decision to keep piling on punishments. “We see the election as a social cry to end the sanctions,” says one official, adding that the current inclination is to “implement the latest sanctions but hold off on any new ones until we see” where Rowhani is going. The White House may now be open to the argument of “offering more for getting more.” It remains to be seen if that’s an offer Iran’s new president is willing to take.

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