Barack Obama's election as the next US president has raised hopes that the US and Iran will set aside 30 years of mistrust and antipathy and follow the path of rapprochement (EC Jul.18,p2). But the view from Tehran is that nothing will change until the Obama administration, which comes into office Jan. 20, makes a clean break with the Bush era and treats Iran with respect. "They're going to wait and see what happens," a Western diplomat says of Iran's leadership, predicting that it will take at least six months for the policies of either side to become clear. Iranian observers are inclined to agree: "Initially, Iran's response will be pretty cautious; they won't do or say anything too dramatic," says a political analyst in Tehran.

So far, Iran's response to the US elections has been a mixture of courtesy and bluster. President Mahmoud Ahmadjinejad, who is renowned for his anti-US rhetoric, congratulated Obama on his victory, while Foreign Minister Manouchehr Mottaki said Obama's election was a "clear sign of the American people's wish and desire for fundamental change." On a more aggressive note, the Iranian army issued a statement the day after the election warning US forces against violating Iranian airspace, claiming that it had spotted American military helicopters flying close to the Iraq-Iran border. The announcement seemed timed to send a message to Obama that Iran is a force to be reckoned with.

In the run-up to the US elections, the Iranian leadership let it be known through the state media that the outcome of the vote would have no bearing on its policy towards Washington. Iran "has no intention of opening its clenched fist to the US, no matter who is the winner," an editorial in the hard-line newspaper Keyhan said days before the elections, while predicting an Obama victory.

More Flexible

If his campaign statements are anything to go by, Obama will adopt a much more flexible approach toward Iran than outgoing President George W. Bush. "The notion that somehow not talking to countries is punishment to them -- which has been the guiding diplomatic principle of this administration -- is ridiculous," he said in July 2007. But some analysts believe Obama's pragmatic style will be seen as threat to Iran's hard-liners, who have thrived on the confrontational approach of the Bush administration. One possible scenario is that hard-liners loyal to Ahmadinejad and the Revolutionary Guard will sabotage any chance of constructive dialogue with the US by stirring up a crisis in Iraq or Afghanistan. However, this would risk antagonizing Supreme Leader Ayatollah Khamenei, who weighs up all the forces around him before making a decision.

Khamenei may be more inclined to talk with America if Iran's political and economic situation worsens (EC Oct.17,p3). A combination of rising inflation and unemployment and US-led sanctions has left Iran's economy in a mess, while the fall in oil prices is exerting mounting pressure on the budget. Iran is also dogged by political infighting between hard-line factions; this week, Ahmadinejad suffered a setback when the Majlis (parliament) voted to dismiss his close ally, Ali Kordan, as interior minister on the grounds that he had forged a degree from Oxford University. If the Majlis gets rid of one more minister, this would trigger a vote of no-confidence in the entire cabinet.

The future of US-Iran relations will become a hot topic in the run-up to Iran's own presidential elections in June 2009, in which Ahmadinejad is likely run against several conservative and reformist candidates. A victory for the incumbent -- who until recently was seen as the clear favorite but is fast losing support -- could undermine any attempts to improve relations. The election of a reformist candidate such as former President Mohammad Khatami could boost the chances of rapprochement.

Israeli Influence

A key player in the US-Iran equation is Israel, which is growing increasingly concerned at Iran's nuclear program and has threatened to take military action to prevent Tehran from acquiring nuclear weapons. The Israeli government is already applying pressure on Obama: "The United States under Obama's leadership is not prepared to accept a nuclear Iran," Israeli Foreign Minister Tzipi Livni said after the elections, adding that, "Dialogue at this point may be interpreted as a sign of weakness" (see p1). Analysts expect powerful lobbying in the months ahead by the Aipac, the influential pro-Israeli group. Obama's prospective chief of staff, Rahm Emanuel, also has close ties to Israel.

Paul Sampson, London

Compass Points

• SIGNIFICANCE: Barack Obama's election triumph has given Iran plenty to think about. Tehran's position -- as often -- is obscure and contradictory, but Supreme Leader Khamenei might, in due course, be encouraged to extend a hand of friendship to the "Great Satan."

• CONNECTION: The new US administration cannot view Iran in isolation and will have to assess its wider role in the Mideast and South Asia. There is concern in Washington that a US troop withdrawal from Iraq could create a vacuum that will be filled by Iran. Tehran also plays a key role in Afghanistan, where the US military presence looks set to increase.

• NEXT: Iran will probably wait for Obama to make the first move and, until he does, continue with uranium enrichment at the risk of tougher sanctions. If no progress is made on ending Iran's nuclear program, the Israelis may decide to take matters into their own hands.