SCENARIOS: How U.S.-Iran ties might develop after election

TEHRAN (Reuters) - Iranian voters will choose on Friday between President Mahmoud Ahmadinejad, a fierce critic of U.S. "arrogance," and his more moderate rivals.

Even if Ahmadinejad loses the poll, a sudden thaw in ties with the United States after three decades of mutual hostility is unlikely, partly because Supreme Leader Ayatollah Ali Khamenei has the last say on foreign policy and nuclear issues.

Here are some scenarios on how Iranian-U.S. relations might evolve after the presidential election:

MULTILATERAL NEGOTIATIONS

The United States said in April it would join five powers -- Russia, China, France, Germany and Britain -- in nuclear talks with Iran. Ahmadinejad has ruled out any such discussions and rejected a Western proposal for Iran to freeze expansion of its nuclear work in return for a freeze on any new sanctions.

In contrast, moderate candidate Mirhossein Mousavi said if he wins, Iran would pursue talks with big powers to assure them its nuclear activity was peaceful, although the work would go on. Iran says it aims to generate electricity, not make bombs.

The five permanent members of the U.N. Security Council and Germany have sought to persuade Iran to halt uranium enrichment by offering benefits and applying sanctions. Iran has rejected the incentives package offered in 2006, and sweetened last year, saying it wanted to negotiate a broad peace and security deal.

U.S.-IRANIAN TALKS

U.S. President Barack Obama has suggested direct talks on a range of issues including the nuclear dispute, offering possible renewed ties if Iran "unclenches its fist" and saying he would like to see progress by the end of the year.

Washington's goal remains for Iran to suspend enrichment, but it has dropped this as a precondition for talks -- which could cover bilateral relations, Afghanistan, Iraq and Arab-Israeli conflict as well as the nuclear dispute and other issues.

Obama has said he hopes to start talks soon after Iran's election. All four Iranian candidates demand "practical" changes in U.S. policy before any direct negotiations.

The two moderates challenging Ahmadinejad, ex-premier Mousavi and former parliament speaker Mehdi Karoubi, talk of a new page with Washington. Mohsen Rezaie, a former Revolutionary Guard commander, also advocates a less confrontational approach.

But nothing can happen without the approval of Khamenei, who has toughened his anti-U.S. rhetoric since Obama's overture. He could take months to decide on a response, whoever wins the election, analysts say. However, victory for a moderate would put him under pressure to show flexibility.

A second term for Ahmadinejad would set back the moderate conservatives, pragmatists and reformists who have been coalescing against him since he came to power in 2005. They include former President Akbar Hashemi Rafsanjani and his successor Mohammad Khatami, who both accuse Ahmadinejad of worsening Iran's isolation with his combative speeches.

TOUGHER SANCTIONS

Like his predecessor George W. Bush, Obama is determined to stop Tehran from building a nuclear bomb and has mooted "a range of steps," including sanctions "to ensure that Iran understand we are serious" if no diplomatic progress is made by end-2009.

Existing U.S. and United Nations sanctions have raised trade costs and deterred many Western companies from doing business in Iran, but they have failed to shift Tehran's nuclear policy.

Russia and China have resisted previous efforts at the Security Council to introduce tougher measures. The U.S. Congress is considering a gasoline sanctions bill that would penalize companies supplying petrol to Iran. Such action would be among the strongest economic measures available. Iran imports up to 40 percent of its petrol because it lacks the refining capacity to serve its highly subsidized local transport sector.

MILITARY ACTION

While reaching out to Iran, Obama has generally avoided repeating Bush's mantra that "all options are on the table," meaning a U.S. assault on Iranian nuclear facilities.

But he has not ruled out military action if diplomacy fails.

The Obama administration, like its predecessor, is reported to have warned Israel against attacking Iran on its own.

According to a Likud party official, Israeli Prime Minister Benjamin Netanyahu told a closed-door party session on May 25: "Either we will lead the defense against this threat, or no one will. The main goal is to repel the Iranian threat."

(Writing by Alistair Lyon)