With the widely popular election of President Khatami in May of 1997, Iran turned a corner on many fronts. President Khatami, elected on a platform of a respect for the rule of law, a liberalization of social restrictions, and an normalization of relations with the world, began a series of liberalizations that were strongly opposed by hard-liners.

On the domestic front, he reduced censorship, opened the media to more competition and liberalized social controls. All this set off a frenzy of political debate. He attempted curbs of the Revolutionary Guards and offered more opportunities to women.

In foreign policy he began a process of bringing Iran back into dialog and friendly relations with Arab neighbors and the European Union. He called for dialog with the United States.

These moves led to significant opposition from the hard liners, including arrests of several of his allies and propaganda against his efforts. This opposition thwarted many of the domestic reforms, whereas in the foreign area he has led Iran to a significant series of achievements with almost all dialog partners other than the United States.

His economic policies to reduce the bloated state sector and open the economy to more competition were hamstrung by internal debates between those who advocated free market reforms and those who wanted more state intervention to promote social justice.

Relations with the United States did not progress as far. Lukewarm United States response to initial overtures led to critical Iranian reaction, leading to a spiral of self-fulfilling predictions of mutual hostility.

Khatami remains personally popular, but his effectiveness has been limited by the opposition. Iran remains balanced between more moderate and hard-line futures. (1), (2), (3), Sources are given as numbers in brackets, see the end for documentation.

Why is Iran important to the United States?
The reasons would include:

• Oil. Iran is a logical way for oil in Caspian basin to be brought out to the world and Iran has significant oil resources itself. Having Iranian oil and transport would help diversify U. S. options.
• A counter to Saddam Hussein.
• China and Russia are involved in supporting the Iranian nuclear program. We have an interest in curbing nuclear proliferation, thus another reason exists for engaging Iran.
• Turkey and Iran are rivals for influence in Central Asia.(4) And while Turkey seems to have influence at the moment, the instability of that country suggests it would be useful to have Iran as a counterweight.
• Iran's constructive participation in Gulf security with normalized relations with Saudi Arabia and other states would significantly enhance security of the Gulf and insure U.S. access to oil in the region.

Why should good relations with Iran be possible over the long haul?

An examination of the history of Iranian culture does not tend to support the idea of it becoming or staying a nation of fanatics. It's tradition of more sensual lifestyle, relatively liberal Islamic interpretation of social rules and openness to pragmatic arguments suggest that the fervor of the revolution was more likely to be a reaction to the problems of the Shah, and not a long term characteristic of the country. Further, it actually has a longer history of democratic institutions than many other countries in the Gulf region. (5) (6)

Why is the U.S. so opposed to engaging Iran?
The adamant opposition of the Israeli governemt to Iran might suggest a reason. Israeli opposition stems from many sources. First, Israel is now forging closer ties with Turkey. Turkey and Iran are rivals for influence in the Caspian area. Then, there is no doubt that Iran supported various extremist organizations that were engaged in violence against Israel. Given that U.S. policy on the Middle East is often both viewed through Israeli eyes and shaped by Israeli demands, this may explain why U.S. policy makers are unable to notice the changes taking place in Iran. (7) It also appears that the specific lobbying to create the sanctions against Iran was not merely led by the U.S. Israel lobby, AIPAC, but this was a sort of "comeback" effort for them to reestablish their clout in Washington. (8)

What issues does the U.S. have with Iran?
It is usually boiled down to three:

terrorism. (see analysis in the other column)

opposition to the peace process in Israel. But Iran's opposition these days consists largely of support for the Palistiians.

Concern about purchases of weapons of mass destruction (nuclear, biological, chemical). In fact, Iran's level of military prowess is less than it was before the Iran-Iraq war and much lower relative to other powers in the Persian Gulf than it was a decade ago. Other Gulf nations seem unconcerned about this issue. Nonetheless, Iran's purchase of longer range missiles is a legitimate concern for the U.S.

What about terrorism?
Terrorism certainly matters. There are two issues: does Iran still engage in it, and does the U. S. have a double standard about states that engage in it.

As for the level of terrorism, the evidence I've seen conflicts. (9) All agree that as recently as a year or two, Iran did support various terrorist activities. Some argue that Iran has stopped doing so, some argue that there is no evidence of an actual, declared change of policy.

Once U.S. military related source that makes a case for Iran as an active sponsor of terrorism (10)) lists 8 incidents in 2 years. When the list is examined, it is found that one incident happened in 1992, two involve Iranian financing with allegations of control, two are little more than rumor. The three remaining incidents with active Iranian involvement include two that were planning terrorism, rather than actual events. That leaves one event, and it is certainly a significant one: the 1996 Hamas series of four suicide bombings that killed 59 in Israel. (It is alleged that Hamas is controlled by Iran.).

This would hardly put Iran in the top ten of terrorist states. More to the point, the level and nature of Iran supported terrorist activities seems hard to separate from what Israel, Turkey or other allies of the U.S. does on a regular basis. Iran's involvement seems to typically be financial and rhetorical rather than physically and directly engaged in terrorist actions. I've not seen evidence to say that Iran is the leading practitioner of terrorism. All states in this region engage in activities like Iran. Nor, for that matter, are internal abuses of civil liberties equal to those in, say, Saudi Arabia.

Terrorism is legitimately a serious concern of the U.S. It would seem useful for us to support those Iranian leaders who are trying to direct their country away from such activities.

Is Iran serious about engaging us?
Some Iranian leaders are. Charles Kurzman recounts (11) how the struggle between those interested in engaging the world constructively, and those who seek conflict dates as far back as the hostage crisis in 1979. Even the Iran-Contra affair in 1986, however distasteful U. S. actions were, reveals that some in Iran thought that by working with the U.S. to return hostages, that they might be able to open a door to dialog with the U.S. These moderates are never able to stick there necks out very far and always have to defend against the agitation of the right wing in Iran. But, isn't in our interests to help these people succeed?