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Iran is hurting. Economic and banking sanctions, plus an effective oil embargo led by the European Union, have brought chaos to Iran's economy. The bottom fell out of its currency, the rial, a couple of weeks ago, provoking street protests. Iranians of all social classes are struggling to cope.
These challenges, along with other signals, hint at Iran's willingness to engage in bilateral talks with the U.S. about its nuclear activities. Over the weekend, The New York Times first reported that the U.S. and Iran have agreed to face-to-face talks after the election.
The White House quickly issued a denial, and the Iranian government on Sunday also said no such talks were planned.
'Despite Their Rhetoric'
Publicly, the rhetoric coming out of Iran has been tough and uncompromising, like the comments last week from the spokesman for Iran's foreign ministry, Ramin Mehmanperast.
"These sanctions are illegal, irrational and inhumane," he said, "because they were imposed on our nation under the pretext of our peaceful nuclear program."
Many of Iran's leaders use the same language in public. But Alireza Nader, an analyst at the RAND Corporation, believes there's been something else going on below the surface.
"The Iranian government is indicating that it is serious about negotiations," he says.
The results of the sanctions have come as a shock, Nader believes.
"Despite their rhetoric, they realize that they are facing a national crisis. And we hear this from a lot of Iranian officials today that Iran is facing the most serious national crisis since the Iran-Iraq war," he says.
Last week, the screws got tightened. It hardly seems possible that there are any targets left in Iran to sanction. But last week, the EU widened the scope of sanctioned financial transactions with Iran. The EU now is refusing to buy its natural gas, on top of its embargo of Iranian oil.
The EU foreign policy chief, Catherine Ashton, said Europe is still determined to find a diplomatic solution to the nuclear impasse.
"But we've significantly tightened our restrictive measures targeting Iran's nuclear and ballistic programs," she says.
The New York Times reported that any direct talks would occur only after the U.S. presidential election. Seyed Hossein Mousavian, a scholar at Princeton and former nuclear negotiator for Iran, is convinced Tehran is ready to make a deal. He too sees some chance for a breakthrough, but only after Nov. 6.
"I cannot imagine any progress before the U.S. election. I hope we would be able to have progress after elections," he says.
Mousavian says each side must take reciprocal and simultaneous first steps. For Iran, he says, it can no longer brush off Western suspicions about its nuclear program.
"Iran needs to recognize that there is a serious concern," Mousavian says.
But, he says, the U.S. and Europe must understand there is no diplomatic solution if they don't recognize Iran's right to enrich uranium for civilian purposes only.
A Shift In The Climate
Jon Alterman, an expert on the Middle East at the Center for Strategic and International Studies, believes the issue could be reaching a breaking point.
"There's no question that the Iranian government thinks that this may be a decisive moment," he says, "but there's also no question the Iranian government doesn't see a need to fundamentally resolve this issue."
That could put the Iranian government in a precarious position.
"When you have protests around the money exchanges, that must make them crazy, because it means that they could well be entering a period of unpredictability," Alterman says, "which could fundamentally change the environment not in months but in days."
Right now, all the signals point to a besieged Iranian leadership — one that is uncertain it can maintain a defiant stance at the bargaining table for very much longer.