Chances for U.S.-Iran talks dim, but not snuffed out

WASHINGTON (Reuters) - Iran's political turmoil has dimmed immediate prospects for U.S. dialogue with Tehran but U.S. President Barack Obama's hopes for engagement have by no means been snuffed out, U.S. officials and analysts said.

Officials acknowledge that the Iranian authorities bloody crackdown on street protests sparked by Iran's disputed June 12 election have made it less likely that Tehran will wish to engage and harder for the Obama administration to do so.

However, Obama has deliberately not withdrawn his open-hand policy toward Iran even as the authorities displayed an iron fist to intimidate demonstrators in the biggest anti-government protests since the 1979 Islamic revolution.

"The president's policy of engagement is obviously delayed, but we are going to have to deal with the government of Iran," Senator John Kerry, chairman of the influential Senate Foreign Relations Committee, told Reuters.

"The dust will have to settle but ultimately we are going to deal with a government of Iran because we have to, because the nuclear issue is so compelling, urgent, dangerous and important to us," he added.

Since taking office, Obama has made a series of overtures to Iran -- including inviting its diplomats to July 4th parties at U.S. embassies around the world -- as a way of trying to rebuild ties severed after the 1979 Islamic revolution.

The U.S. hope is to coax Iran into a negotiation over its nuclear program -- which Washington suspects is designed to produce atomic bombs but which Tehran says is to generate electricity -- as well as other issues.

SECURITY CLAMPDOWN

Jim Dobbins, a senior fellow at the Rand Corporation nonprofit research group and a former top U.S. diplomat who has dealt extensively with Iranians, said an assumption that the engagement policy was now dead took too short-term a view.

"Engagement with Iran is off for the foreseeable future, but the foreseeable future extends about a week," he said.

"If the regime succeeds in tamping down resistance, establishing effective control, and then proves willing to engage the United States in meaningful talks, my guess is that the administration will ultimately agree, although it will be more difficult as a result of these events," he added.

Security forces have clamped down on Tehran to prevent protest rallies. Reformists say the June 12 election was rigged to return President Mahmoud Ahmadinejad to power and to keep out moderate former Prime Minister Mirhossein Mousavi.

The furor over the election has exposed deep rifts within Iran's political elite, with Supreme Leader Ayatollah Ali Khamenei solidly backing Ahmadinejad against Mousavi and declaring the disputed election result would stand.

U.S. conservatives argued that the Iranian crackdown had vindicated their view that Iran's ruling authorities are not willing to negotiate with the West over their nuclear program.

"I think his underlying policy is fundamentally wrong because negotiation is doomed to failure in the future, just as it has been doomed to failure in the past, when it comes to their nuclear program," said John Bolton, a U.S. ambassador to the United Nations under former President George W. Bush.

"I think the policy he should be pursuing is overthrowing the Islamic revolution of 1979," he said, calling for the United States to funnel more resources -- covert and overt -- to strengthen opponents of the Islamic republic inside and outside Iran.

U.S. CAN'T WRITE OFF AHMADINEJAD

Obama has taken some political heat for his careful response to the election, with Republicans arguing that he should supported the protesters earlier and criticized the government's crackdown against them more sharply.

Kerry, however, suggested that Obama could not afford to write off the possibility of negotiating with Ahmadinejad.

"We don't' have the luxury of choosing our negotiating partners in certain situations," he said.

Asked how long any engagement might be delayed, Kerry replied: "I can't tell you how long that is, it could be a matter of weeks.

"Personally, I don't believe it will be a long period of time, but that will ultimately depend on how they will resolve this crisis, internally in Iran. If they choose to do things that are so extreme that they confront everybody's conscience ... they could make it very (difficult) in the short term."

(Additional reporting by Susan Cornwell; editing by Mohammad Zargham)