The announcement by the Bush administration Wednesday that it is reversing a 27-year US ban on direct talks with Iran is a political retreat, one that reflects a weakening in the world position, both military and economic, of American imperialism.

The offer to join in the ongoing talks between Iran and the three biggest European powers, Britain, France and Germany, by no means ensures, however, that there will be a peaceful outcome to the current US-inspired campaign against Iran’s nuclear program. It is entirely possible that the weakness and crisis of the Bush administration will drive it to opt for military action, even though such a course is fraught with the most far-reaching and explosive domestic and international ramifications.

Secretary of State Condoleezza Rice announced the change in US policy in a formal address Wednesday at the State Department. She then traveled to Vienna, Austria, for a meeting the next day of the five permanent members of the United Nations Security Council—the US, Britain, France, Russia and China—plus Germany. The six powers agreed on a joint approach to Iran, offering economic and diplomatic incentives in return for an Iranian agreement to suspend its program of enriching uranium, a key stage in the development of both civilian nuclear power and nuclear weapons.

The shift in US policy was the product of the collapse of its previous efforts to isolate and browbeat the Iranian regime by getting the International Atomic Energy Agency (IAEA) to refer Iran to the UN Security Council and then obtaining a Security Council resolution that would provide the political and legal basis for imposing economic sanctions and threatening military action.

While the IAEA issued the referral, China and Russia have opposed any Security Council resolution under Chapter VII of the UN Charter, the section previously used by the Bush administration to claim international sanction for the invasion of Iraq. Only days before its declaration of a new willingness to negotiate face-to-face with Iran, the administration moved to find common ground by agreeing that any Security Council resolution would be based more narrowly on Article 40 of Chapter VII, which omits references to a “threat” or “breach” of the peace.

Two major factors contributed to the reversal of American policy: the deepening debacle in Iraq and Afghanistan, which makes military action against Iran more difficult, and the increasingly isolated international position of the United States. Russia and China, both major trading partners of Iran, are adamantly opposed to economic sanctions, while none of the European powers is prepared to back a unilateral US military action, not even Britain’s Tony Blair, Bush’s partner in crime in Iraq.

US officials sought to frame the policy shift as a last chance for Iran. “We urge Iran to make this choice for peace, to abandon its ambition for nuclear weapons,” Rice said. Otherwise, she continued, the current conflict “will lead to international isolation and progressively stronger political and economic sanctions.”

She emphasized that the talks would be limited to the nuclear issue, and would not include resumption of US diplomatic relations with Iran, which were broken off during the 1979-1980 confrontation over the seizure of the US Embassy in Tehran by Islamic militants, in which dozens of US diplomatic and intelligence personnel were held hostage.

At the same time, in a marked change in tone, Rice conceded that under the Nuclear Non-Proliferation Treaty (NNPT), Iran has the right to develop nuclear power plants. During the period since 2002, when an exile group revealed a secret Iranian nuclear program, the Bush administration has frequently suggested that Iran was in violation of the NNPT and had therefore forfeited its right under the treaty to conduct nuclear research. But Rice discarded this posture. “The Iranian people believe they have a right to civil nuclear energy,” she said. “We acknowledge that right.”

Rice also said that the US would “actively support” greater European trade ties with Iran, tacitly abandoning the increasingly futile effort to impose an informal economic quarantine on the country. Major US corporations, particularly in oil and heavy equipment, have long chafed at their exclusion from the Iranian market, while their European and Asian rivals enjoy a lucrative relationship.

Rivalry over oil and power

The central issue in the conflict between Iran and the United States is not the alleged Iranian drive to develop nuclear weapons, nor even the longstanding animosity between the fundamentalist Islamic regime in Tehran and Washington, which dates back to the CIA role in the overthrow of the nationalist Mossadegh regime in 1953 and the US backing for the savage dictatorship of the Shah, who was overthrown in the 1979 revolution that placed the mullahs in power.

With or without a handful of rudimentary nuclear weapons, Iran would not pose a serious security threat to the United States, with its arsenal of 10,000 nuclear bombs and missile warheads and a military establishment with resources greater than all other countries in the world combined. As a nuclear power, Iran would be dwarfed by Israel, which has more than 200 warheads, together with missile and submarine launch capabilities, and even by neighboring Pakistan.

As for the US charge that Iran is a supporter of terrorism, this refers largely to Tehran’s sponsorship of the Shi’ite Hezbollah group in Lebanon, a military-political organization that controls the largest bloc of seats in Lebanon’s parliament and dominates the southern part of the country. The Shi’ite-based clerical regime in Iran has had hostile relations with such Sunni fundamentalist groups as the Taliban in Afghanistan and the Al Qaeda terrorist group, and it is actively backing the Shi’ite militias in Iraq that are waging a dirty war against Sunni-based insurgents.

The overarching issue in US-Iranian relations, as in the conflict between the US and Saddam Hussein, is the drive by American imperialism to establish its dominion over the oil-rich region which extends from the Persian Gulf north to the Caspian Sea, a vast territory in which Iran is the geographic and strategic focal point, as well as the second-largest oil producer.

As a result of the Pentagon mobilization carried out in the name of the “war on terror,” Iran is now effectively surrounded by US military assets. The conquest of Afghanistan and Iraq has placed American ground troops on Iran’s eastern and western borders, while US naval forces patrol the Persian Gulf to its south, and US warplanes are stationed in several former Soviet republics to Iran’s north.

The American military deployment has provoked a reaction not only from Iran, but from Russia, China and the European Union. From their standpoint, the establishment of American domination over Iran, either through military conquest or bullying and political subversion, creating a US-run bloc of Iraq, Iran and Afghanistan, would give Washington effective control over the region which supplies the bulk of the world’s oil exports.

The six-party initiative announced in Vienna thus represents an acute contradiction. For the Bush administration, it is an attempt to cajole and pressure its rivals into joining in a campaign of political intimidation against Iran. For at least four of the other five powers—Britain seemingly in the middle—the Vienna agreement is an effort to restrain America, not Iran, by inducing Washington to postpone, perhaps indefinitely, any military action.

While Rice and other Bush administration spokesmen emphasized the penalties that Iran would face if it refused to suspend its nuclear program and enter talks, Russia, China and the European powers emphasized the potential benefits for Tehran and the significance of the US agreement to suspend efforts to obtain a Security Council resolution that could be interpreted as authorizing military force.

The precise details of both the carrots and the stick were not made public in Vienna, and are to be communicated privately to the Iranian government by a European mission to Tehran in next several days. The incentives could include technical assistance in the form of light-water nuclear power reactors, similar to those offered to North Korea in a 1994 agreement with the US that the Bush administration subsequently disavowed. Light-water reactors do not produce the kind of nuclear byproducts, like plutonium, that can be used to develop nuclear weapons.

In an indication of the sensitive—and tentative—character of the six-power talks, US officials refused to use the word “sanctions” in describing the penalties Iran might face, according to a report in the Washington Post. Instead, they spoke of “steps,” “measures,” “actions” and “negative disincentives.”

According to the New York Times, US officials have rejected European urgings that the incentives to Iran include security guarantees against a future military assault. But Russian President Vladimir Putin declared that he opposed military action against Iran “under any circumstances.” The British Foreign Office, in a statement on the talks, said, “military force is not on the agenda.”

The response from Tehran

The regime in Tehran responded cautiously to the US initiative, one that it tacitly invited in the letter sent by Iranian President Mahmoud Ahmadinejad to President Bush last month. That document was the first official communication from an Iranian leader to the US government since the 1979 hostage crisis.

Iranian spokesmen denounced Rice’s rhetoric but not the offer of talks. In the main sermon at Friday prayers in Tehran, Ayatollah Ahmad Khatami rejected Rice’s claim that Iran’s nuclear program was a threat to world security. “The US government has over the past 50 years independently and indirectly launched military strikes on 25 independent states,” he said. “If that’s not insecurity, then what is?”

On Saturday, both Foreign Minister Manouchehr Mottaki and President Ahmadinejad used far more positive language, each referring to the US proposal for talks as a potential “breakthrough” for US-Iranian relations. Mottaki told a news conference, “We think that if there is goodwill, a breakthrough to get out of a situation they have created for themselves...is possible.” He said that Iran would consider the offer “within the necessary time frame,” adding that the discussions “could prepare the ground for a comprehensive understanding.”

Ahmadinejad said that Iran would make public the details of both the incentives and penalties that the six-power offer contains, and he warned against “threats and intimidation.” He said that his government was willing to discuss “the proliferation of weapons of mass destruction and how to stop it,” and other “common concerns.”

Iran’s state television reported that Ahmadinejad told UN Secretary General Kofi Annan, in a phone conversation, that so long as Iran’s right to nuclear energy was preserved, the talks could achieve “a breakthrough to overcome world problems.”

The Iranian bourgeois regime has long used anti-imperialist rhetoric and denunciations of Israeli oppression of the Palestinians, at times laced with anti-Semitism, to give itself a “radical” cover, even while it pursued domestic policies based on enriching a narrow layer of clerical families and elements drawn from the bazaar merchant class. Ahmadinejad, in particular, has sought to generate popular support by denouncing the US and glorifying Iran’s nuclear program as a symbol of Persian nationalism.

At the same time, the regime seeks to pursue the ambitions of the Iranian bourgeoisie in the Middle East and Central Asia, and behind its anti-US rhetoric is a desire to establish a new relationship with American imperialism that would foster these aims.

Tehran has, moreover, ample reason to focus popular attention on the external enemy, since the regime faces a mounting challenge from below, with millions of youth and young workers who have no prospects for decent jobs and who chafe at the stifling cultural and political restraints of the “Islamic Republic.” Last week, the government was shocked by mass rioting in the northwestern region of the country, largely populated by Turkish-speaking Azeris, Iran’s largest minority, provoked by anti-Azeri racism in the Tehran media.

The crisis of the Bush administration

As for the Bush administration, the climbdown over talks with Iran is another demonstration of its deepening political crisis. As the Washington Post observed, “The administration made this move at a moment of weakness. The president’s public opinion ratings are among the lowest ever recorded for a modern president, and oil prices have reached record levels, in part because of the confrontation with Iran. The high price of oil, in turn, has enriched the Iranian treasury.”

The action follows months of vocal criticism of Bush’s intransigent Iran policy by sections of the US ruling elite, including numerous Senate Republicans and figures such as former secretary of state Henry Kissinger and former national security adviser Zbigniew Brzezinski. Last month, the Senate Foreign Relations Committee held two days of hearings on US-Iran relations, with Republican Chairman Richard Lugar strongly endorsing a change in policy.

It is now apparent that the committee hearing was deliberately timed to acclimate public opinion to a change in policy that was already in the making. Press accounts on the weekend said that the shift began two months ago after Rice returned from a meeting in Berlin with European foreign ministers where there was no support for the US position. “The Iranians were winning,” one Bush aide told the New York Times.

There still remain serious divisions within the Bush administration, with Defense Secretary Donald Rumsfeld and Vice President Cheney resisting the policy shift. Even after the US offer of talks, Rumsfeld described Iran, in remarks to a military conference in Singapore, as “one of the leading terrorist nations in the world.” He specifically criticized Russia and China for permitting Iran to participate as an observer in the Shanghai Cooperation Organization, a regional organization of countries in Central Asia, formed in response to the US conquest of Afghanistan and Iraq.

One of the principal media advocates of the war with Iraq, Washington Post diplomatic columnist Jim Hoagland, suggested in his Sunday column that the same chain of events that took place in 2002-2003 in Iraq could well be unfolding in 2006-2007 in relation to Iran: a well-publicized diplomatic offensive, followed by unilateral US military action.

Hoagland wrote, “The president has genuinely not yet made up his mind about acting militarily, if necessary, to halt or delay Iran from covertly developing nuclear weapons. That decision is probably a year away.... By the summer of 2007, Bush will be looking at two converging timelines: the end of his presidency and the fate of the diplomatic effort to talk the Iranians into a verifiable peaceful nuclear program.”