Sometimes big developments are hidden in plain sight, and that appears to be the case with Iran and the United States. The two countries have moved over the past year from mutual isolation to the edge of serious diplomatic discussions. The Bush administration is aggressively signaling that it wants such a dialogue. But the Iranians, who seem convinced they have the upper hand, are being coy. They still seem unsure whether Iran’s national interests are best served by a deepening confrontation with America, or by a policy of engagement. The decisions the Iranian leadership makes over the next several weeks about diplomatic strategy will shape their future, as well as that of the Middle East. Given the stakes, it’s likely that whatever decision they make will initially be hedged – not quite engagement, or not quite rejection. As in a commercial transaction in Tehran’s covered bazaar, this negotiation won’t be quick or direct. But a process of bargaining is under way between Iran and America. That’s what became clear this week, in two different diplomatic channels. And it marks a change from the isolation and intense suspicion that have prevailed for most of the 28 years since the Iranian revolution of 1979. Iranian pragmatists who favor discussions with the US say that the diplomatic ground is now well prepared for moving forward. One Iranian official cautions that there are factions in both Washington and Tehran that favor a continuation of the stalemate, but they are not a majority. “The majority in both capitals must make a decision to go for a solution, he says. The first diplomatic channel involves the Iranian nuclear program. Javier Solana, the European Union’s top diplomat, met Wednesday and Thursday in Ankara with Ali Larijani, Iran’s national security adviser. Details of the conversation are still fuzzy, but the crucial point is that they agreed to meet again in two weeks for what, in effect, will be a resumption of the so-called EU-3 talks on Iran’s nuclear program. Solana’s message to Larijani was that Iran should sit down at the negotiating table before the current set of United Nations sanctions expires on May 24 and the Security Council moves to consider a tougher third round of sanctions. Solana envisions a complicated minuet, in which the Iranians would meet in mid-May with representatives of France, Britain and Germany – probably joined by Russian and Chinese diplomats. It’s hoped that meeting would produce a deal – suspension for suspension is what the diplomats are calling it – in which UN sanctions would be lifted in exchange for an Iranian pledge to stop enriching uranium during the course of negotiations. If Solana’s diplomatic dance is successful, the United States would then join the talks. Nobody has yet floated a formula that would actually bridge the wide US-Iranian differences over the nuclear issue, but then, that’s what diplomatic negotiations are all about. Iranian officials argue privately that Solana must be given enough latitude to find a solution that’s acceptable to both sides. If the talks simply restate existing positions, cautions one Iranian source, they will fail. To reassure the Iranians, US Secretary of State Condoleezza Rice took the unusual step of disavowing any American plans for regime change. “It [regime change] was not the policy of the US government. The policy was to have a change in regime behavior, she said in an interview Monday in The Financial Times. A second diplomatic channel to Iran will open next week, when Rice travels to the Egyptian resort of Sharm al-Sheikh for a meeting with Iraq’s neighbors, including Iran and Syria. Although Iran is expected to attend, Iranian officials caution that their foreign minister, Manouchehr Mottaki, may stay away unless the US signals that it intends to release five Iranian officials who were seized in January in the northern Iraq city of Irbil. Rice wants bilateral meetings with Iranian and Syrian representatives at the “neighbors meeting. And State Department officials say they hope the meeting will be the start of regular discussions with Iran and Syria about how to stabilize Iraq. In that sense, the administration is now fully ready to embrace the diplomatic recommendations of the Baker-Hamilton report. The door is opening on the possibility of the first real US-Iranian negotiations since 1979. Both sides have to decide they want them – and to ignore the powerful voices in each capital that argue for confrontation. Syndicated columnistDavid Ignatius is published regularly by THE DAILY STAR.