President Barack Obama’s surprise mid-December announcement that the US would unwind its 50-year-old isolationist approach towards Cuba, and re-establish diplomatic ties with its oldest and nearest foe, will have resounded strongly with many Iranians.

While Washington’s outreach to Tehran over its nuclear programme predated the approach to Havana, both diplomatic initiatives represent a decisive break with the past and a bid to reposition the US’ relations with previously hostile states.

Now or never

Obama is seeking legacy foreign policy successes that will compensate for failures elsewhere, in the face of an unsympathetic Congress. The Iranian leadership under President Hassan Rouhani is keenly aware that there might not be a better time to cut a deal with the Americans, one that could bring substantial benefits - notably the ending of the sanctions stranglehold on the economy.

Although the 24 November deadline for the P5+1 negotiations under the Joint Plan of Action was missed, the extension of the talks provides another window of opportunity for Tehran to drag itself out of isolation and establish a new footing within the international community.

A new deadline of 1 March has been set for a political agreement, ahead of a 1 July deadline for a fully detailed deal.

“Both sides will make serious efforts to reach an agreement by the March deadline, as that is the crucial date,” says Richard Dalton, an associate fellow at UK think-tank Chatham House and a former British ambassador to Tehran. “What they have to do thereafter is agree the annexes to the agreement that stipulate implementation details, which is when they all need to be on the same page as far as the procedures of verification and inspection measures go, so they need time for that.”

Whether Iran can seize the opportunity remains to be seen. The responsibility for meeting the P5+1 terms is not in Rouhani’s hands alone. Despite the close contacts formed between US Secretary of State John Kerry and his Iranian counterpart, Mohammad Javad Zarif, over the past year, both Iran and the US have formidable domestic constituencies that are pulling in opposite directions.

Vested interest

There are powerful groups inside Iran that have a vested interest in seeing the nuclear negotiations fail. Many inside the Islamic Republic have benefited in direct financial terms from the maintenance of the sanctions regime, and do not want to easily cede these. Others are intrinsically opposed to doing any deals that are ultimately favourable to the Americans.

Then there are the US opponents, possibly a more egregious threat to achieving a successful outcome at Geneva than the Iranian critics. Fresh allegations have recently circulated in the US that accuse Tehran of seeking to acquire components for a heavy-water reactor that could be used in the production of nuclear weapons-grade plutonium. A UN Security Council panel of experts monitoring the sanctions has been informed that Iranian procurement agents are increasing their efforts to illicitly obtain equipment for the IR-40 research reactor at the Arak nuclear complex. This will encourage Israel and its Washington supporters.

Sources indicate that once the US Senate reconvenes, momentum will grow for new sanctions that might relate to the March and July dates, which could seriously complicate decision-making.

For the moment, however, it is politically convenient for Obama to sweep allegations about underhand Iranian behaviour under the carpet. The bigger question, as far as Iranian motivations go, is whether Supreme Leader Ayatollah Ali Khamenei is fully committed to a deal that swaps centrifuges for an easing of sanctions. This arch-sceptic of US policy has a pivotal position at the helm of the Iranian power structure. “There are many decision-makers in Iran, but only one decision-taker,” says Dalton, alluding to Khamenei.

His support base, which includes key institutions such as the Islamic Revolutionary Guards Corps, has contradictory feelings about cutting a deal with Washington that does not give sufficient reward for the sacrifices Tehran is prepared to make over its nuclear programme.

Khamenei cautious

Some analysts see Khamenei’s acute political antennae at play here. “The signals he’s sending suggest Khamenei is very much behind the negotiation process, but he’s also been quite wise in that if it does fail, he won’t get blamed for its failure,” says Ali Ghezelbash, a political risk consultant and director of UK-based AdAugusta Consulting.

That is down to the Supreme Leader’s innate scepticism about US motivations - although also likely prompted by the fact that he cannot be sure that a deal will eventually be sealed. In this case, he will need to ensure his own position of authority is not jeopardised by making the wrong call.

The recent downward shift in global oil prices will likely have a bearing on decision-making. A period of prolonged low energy prices - depriving Iran of its main revenue base - would be dire for the future of the system, and could force the leadership to rely more on the security apparatus and less on consent. The fear is that there might be uprisings and instability.

In this context, Rouhani should be able to keep domestic critics in check for the next few months and ensure sufficient leeway to achieve compromise. One reason for this is that the Iranian system has an inbuilt consensus mechanism that bridges the wide gap between reformists and conservatives. “Big strategic decisions like this one tend to be made by consensus, which is partly why they can take so long,” says Ghezelbash. “But once the decision is made, it’s relatively solid.”

Military support

There are other bulwarks that could help cement Tehran’s relations with the West in the crucial months ahead. Iranian military support for Iraq in its campaign against the jihadist group Islamic State in Iraq and Syria (Isis) provides another means of smoothing ties, with both Tehran and Washington fighting on the same side against the Sunni militants.

Iranian military support has been important in shoring up the positions of the Kurdish Peshmerga forces, with Al-Quds Force leader Qassem Suleimani a frequent visitor to the Kurdistan region of Iraq in 2014. Tehran has also bolstered Iraqi army positions and channeled funds and weapons to Iraqi Shia militias that are successfully battling Isis in parts of northeastern Iraq. There has been a degree of tactical cooperation with US-led forces, such as over how air space is administered.

This parallel engagement evokes memories of the low-key and short-lived Iranian-US cooperation of 2002-03 in Afghanistan. The reformist President Mohammed Khatami offered Washington military and security
cooperation in ousting the Taliban, during which the two sides met regularly in Geneva. President George W Bush’s decision to then describe the Islamic Republic as a core member of the ‘Axis of Evil’, subsequently threatening military action against Iran, put a swift end to the rapprochement.

There are clear similarities between the campaign against Isis now and the US-led attack on the Taliban in Afghanistan in 2002. “There’s a convergence of interests here,” says Ghezelbash. “The Iranians see this not just as a threat to the security of Iraq, but to their own security. They were therefore very quick to offer support to the Kurds and also to Baghdad with a certain amount of boots on the ground, but also a huge amount of logistical support and advice.”

However, this may not have a decisive impact on Iran’s future strategic relations with the West. According to Dalton, the coincidence of interest over Iraq may not provide a sufficient platform for a sustained improvement in relations. “There are too many negatives and neither side needs overt coordination with the other in the way they did in Afghanistan to achieve their objectives,” he says, pointing out that the US and Iran are still on opposite sides when it comes to the conflict inside Syria.

Facilitating deal

The main focus of Iranian foreign policy will therefore be on the nuclear talks, rather than seeking strategic payoffs from participation in the anti-Isis campaign. The fact that the nuclear issue at the Geneva talks has been kept separate from other issues where the West and Iran remain at loggerheads - whether over Syria, Lebanon or Israel-Palestine - is helpful.

“By deliberately not adding other elements that could complicate matters, whether domestic or regional, it makes it easer to cut a deal - they aren’t having to bring in issues such as Syria or the Israel-Palestine issue,” says Ghezelbash. “They’ve been very smart in avoiding this becoming a mix of issues to discuss at the table.”

There is cautious optimism that, despite the mid-term election of a Republican-dominated Senate, both sides are still motivated to reach a political deal by March that will stick.

Such an agreement would be a necessary - albeit insufficient - condition to gradually improve the atmosphere between Iran and the West and its Gulf neighbours, reducing tensions and generating understanding where there was none previously.

But here again, caution is needed. Recent history suggests that signing a deal is no guarantee of achieving material progress. Back in 2003 and 2004, Iran reached agreements on the nuclear issue with EU states, but found consensus on other issues - the Middle East peace process, weapons of mass destruction, human rights and terrorism - impossible.

The Gulf states, meanwhile, remain hostile towards Iran, whom they accuse of agitating against their ruling families. Their suspicions will not easily be overcome, and could undermine efforts by Tehran to re-engage with the international community.

Still hope

No one can pre-guess the outcome of the P5+1 talks, and whether the summer will spell an epoch-changing shift in Iran’s relations with the rest of the world. The question is, would failure at Geneva spell a return to the worst days of the Bush-Ahmadinejad era, when Iran seemed on the verge of being subjected to a US-led bombing campaign?

The answer is: not necessarily. The mere fact that, procedurally, the two sides have been able to maintain a dialogue, and agree more time to reach a final settlement, is a positive. The breaking of taboos and the loosening of ideological barriers is significant and would have been inconceivable just a few years ago. That suggests there is unlikely to be a return to the previous state of affairs.

“In the event of failure, relations aren’t going to go back to square one,” says Ghezelbash. “The reason is the Rouhani government is a much more capable administration than the previous one, especially when it comes to managing the economy and managing international relations.”