Washington Post

U.S. Reaches Out to Iran. By John Lancaster, Washington Post Staff Writer, Friday, March 17, 2000; Page A01.

Secretary of State Madeleine K. Albright will announce a major overture toward Iran today, promising steps toward the return of assets frozen since Iran's 1979 Islamic revolution, lifting a ban on imports of Iranian luxury goods and making it easier for Iranian academics and athletes to visit the United States.

While stopping short of an apology, Albright will acknowledge past American meddling in Iran, including the CIA-backed coup that toppled Iran's leftist prime minister, Mohammed Mossadegh, and restored its monarchy in 1953. She also will express regret for Washington's "shortsighted" support of Iraq during the Iran-Iraq war of the 1980s, according to an administration official who has read the speech.

These initiatives--to be outlined before the American-Iranian Council, a private group that seeks to foster better relations--are the boldest attempt yet by the Clinton administration to capitalize on the movement toward moderation in Tehran that began with the 1997 election of President Mohammed Khatemi and accelerated last month when reformers loyal to Khatemi captured the Iranian parliament.

U.S. officials have long expressed willingness to begin a dialogue with Tehran. So far, however, Iranian officials have demurred, insisting that Washington first address some of their grievances, with frozen assets topping the list. With today's offer, the United States is heeding Iran's request, according to the administration official.

"It's the first time that we have decided to respond directly to a political development inside Iran" with specific measures, the official said. "They've said, 'Where are the concrete steps?' and these are the concrete steps."

Lifting the import ban on four of Iran's main non-oil products--carpets, caviar, pistachios and dried fruit--will bring immediate if modest benefits to Iran's struggling economy. In 1985, two years before President Reagan banned all non-oil imports from Iran, the country earned $85 million selling such goods to the United States. Iran's carpet industry alone provides jobs for an estimated 5 million people.

The initiatives to be announced today will not affect the main U.S. sanctions barring American investment in Iran's oil sector, which provides Iran with an annual $16 billion, 85 percent of its foreign exchange. U.S. officials remain deeply concerned about Iran's pursuit of nuclear weapons and efforts to disrupt the Middle East peace process through terrorism. These efforts reflect the influence of hard-liners loyal to Iran's supreme leader, Ayatollah Ali Khamenei, who from all indications remains firmly in control of the country's security services.

In her speech today, Albright will reiterate these concerns, suggesting that it is "too early to know" whether the reformers' victory will translate into real changes in the government's attitude toward the United States. But she also will emphasize the Clinton administration's strong desire for a "more normal and mutually productive relationship" with Tehran.

"We're essentially doing what some have said we should have done, which is take a stand on the side of the reformers," the official said. "We're giving them some arguments internally [for improving relations with Washington] but all the while protecting the national security components by making sure that the steps don't go too far."

The issue of frozen Iranian assets is especially sensitive for the Iranian government. After the 1979 seizure of the American Embassy in Tehran, the United States froze about $12 billion in Iranian assets, including bank deposits, gold and other properties. According to U.S. officials, most of those were released in 1981 as part of the deal for the return of U.S. hostages taken in the embassy seizure. But some assets--Iranian officials say $10 billion, U.S. officials say much less--remain frozen pending resolution of legal claims arising from the revolution.

For many years, those claims have been considered on a case-by-case basis by the Iran-United States Claims Tribunal at the Hague, but Iranian officials have argued for resolving them as part of a single, comprehensive settlement. Today, Albright will take a step toward meeting that demand, promising to "increase efforts" toward a "global settlement."

"What we're suggesting is, we're leaning toward their idea of a general solution--eventually," a senior administration official said.

The U.S. overture also will include encouragement for "people-to-people" exchanges that began after Khatemi's election in 1997. Because Iran remains on the State Department's list of terrorist states, Iranian scholars, athletes and journalists have been subjected to humiliating searches and fingerprinting on their arrival in the United States. Albright will declare an end to such "unnecessary impediments."

The most symbolically powerful aspect of Albright's speech, however, concerns the history of American-Iranian relations. The 1953 coup, which restored power to Mohammed Reza Shah Pahlavi, is regarded by many Iranians as a symbol of American perfidy; Albright will acknowledge that the United States played a "significant role" in the coup and that the Shah went on to "brutally repress" political dissent.

In a similar vein, Albright will express regret for the American tilt during the 1980s toward the government of Iraqi President Saddam Hussein--a posture that Washington came to regret when Iraq invaded Kuwait in 1990.

President Clinton has made several lesser overtures to Iran since Khatemi's election. Last year, for example, he loosened the U.S. embargo to allow exports of food and medicine to Iran. And last fall, the administration permitted Iran to receive U.S. safety equipment for civilian airliners.

But reformers' overwhelming victory in Feb. 18 parliamentary elections added to the impetus for a bolder opening. "This is a carefully calibrated effort," a senior official said. "If they don't respond, we've lost little. If they do respond, we have an opportunity to gain much."