On a tour of the neighbourhood around the old American Embassy in the Iranian capital, Mustafa El-Labbad reveals the complexity and importance of the relationship between Tehran and Washington "Death to America!" reads a large sign that has been hung on the wall of the United States Embassy in Tehran. The notorious "den of spies" stands on Talqani Street, which in the days before the revolution was known as Franklin Roosevelt Street, in honour of the famous US president. The street is free of roadblocks, barricades and military gun posts; shops on the other side of the street, facing the embassy, go about their normal business and no one stops visitors from pausing on the pavement to take pictures of the embassy. As you stand there, you are struck by the contrast between the tranquillity that envelops this neighbourhood and the customary din of the streets of the Iranian capital in the summer and the searing temperature of Iran's international relations -- but then again what you see on the surface in Iran seldom betrays what is bubbling beneath. The tumultuous relationship between Iran and the US stands prominent in the diplomatic history of the last half-century. The two countries have swung between being closest to fiercest enemies, but whatever their stance, this bilateral relationship has remained vitally important to the region. Although the two countries -- since the Iranian revolution -- have been predominantly antagonistic, a noticeable shift occurred with the rise of the reformist camp in Iran, led by former President Khatemi, which coincided with Clinton's Democrat administration in the White House. At the time, both sides began to make conciliatory noises that augured well for a rapprochement and the hope that they might alleviate the tension. This promise seemed closer to being fulfilled in New York when President Khatemi delivered an important address to the United Nations and Iranian Parliamentary Speaker Mahdi Krobi met with leaders of the city's Jewish community. But the Iranians asked too high a price -- American recognition of its regional role -- and any understanding remained far off. The conjunction of the advent of the neo- conservative Republican administration in Washington with the events of 11 September 2001 changed everything. As part of the transformation in American foreign policy, the US immersed itself in ongoing wars in Afghanistan and Iraq. This US military presence to the north and west of Iran brought relations between Washington and Tehran to a completely new and unprecedented threshold, as the neo-conservatives now found themselves, to all intents and purposes, next- door neighbours to Iran. Furthermore, Washington had now performed an immense service for Iran by ridding the region of two hostile regimes in Baghdad and Kabul, thereby strengthening Tehran's political and sectarian influence across its borders. Since then, the Iranian issue has loomed increasingly large in US strategic thinking. A co-operative Iran would be the keystone in pushing through the American strategy for the region and then safeguarding it, whereas an obstructive Iran could create any number of problems, by virtue of its geographical position and its political and religious connections in the region. Currently, Iran is conforming to the latter model, combining the opportunistic exploitation of American misadventure with some well thought-out tactical manoeuvering and classic Iranian cunning. Meanwhile, bogged down in Iraq and with the Bush administration's popularity ratings at an all-time low, Washington no longer has the luxury of time to slowly tighten the political and economic screws on the Iranian regime. Nor can it afford to ignore the steady expansion of Iranian influence that is encroaching on the network of US alliances in the Gulf and throughout the rest of the Middle East. As a result, Washington's options with respect to Iran appear to have been reduced to two: either regime change through the application of military force, which would be a highly risky and potentially counterproductive venture, or coming to terms with Iran as a powerful regional partner that could help promote American interests or at least minimise their losses. Iran has demonstrated on numerous occasions its extraordinary ability to evade US pressure and to augment its regional leverage, making it by far the most formidable opponent to the US in the region. However, these factors alone are not sufficient to guarantee it the regional standing to which it aspires. Iran's regional influence has to be translated into recognized political assets, and this requires an understanding with Washington. Fardousi Square is not far from the US Embassy and is presided over by a statue of the square's eponymous great Iranian poet. Here, you will be pursued by the calls of the neighbourhood's black marketeers: "Hey Mister, we buy dollars." Again, you note the calmness of Iranian public opinion and the sedateness of political officials, and how starkly this contrasts with the hullabaloo rained down on Iran by the Western media. Iranians of all ages and political hues seem to have come to a tacit agreement that a military strike against their country is highly improbable. Iran is unlike other countries in the Arab and Islamic world in many ways, but one of the most striking differences is that while in other Middle Eastern countries anti- Americanism is a rising trend, in Iran such sentiments are generally restricted to the rhetoric used by the domestic media and government officials. Persian literature is filled with wisdom, and the unique Iranian attitude towards the US can be summed up by one of Fardousi's lines: "Love and hate are hereditary". Current Iranian-US relations emerged in a complex climate of geo-strategic considerations, centered around Iran's regional role and how this corresponds to the demands of US interests. Iran possesses a number of vital assets that underpin its claim to regional power and that make Iran an important player in the international community. Iran has always been adept at the geopolitical game, capable of playing its cards astutely to maximize its margin of maneuverability and ultimately to expand the boundaries of the regional role it is permitted within the framework of the international order. In light of the Bush administration's difficulties both abroad and at home, it is likely that Iranian-US relations will gradually head toward a rapprochement and an understanding over Iran's regional role. That the revolutionary regime in Tehran has a record of working, and even making deals, with previous Republican administrations lends support to this analysis. As you end your tour of the neighbourhood of the US Embassy building in Tehran, you cannot help but admire, not without a twinge of jealousy, the determination and grit with which Iran has withstood the barrage of international pressure. After a quick lunch in a restaurant, you take a walk in an area where there are several modern buildings under construction. The technique here is the same as in the US: after laying foundations deep into the ground, a gridwork of steel girders is constructed to the building's specifications; then the columns and the gaps in the skeleton are fleshed out with cement and other materials, until eventually the building comes to life precisely as it was conceived by the drafters of the blueprint. Iranian strategic planners apply a very similar approach to realizing their regional ambitions: on the foundations of Iran's strategic position, they have painstakingly constructed a regional diplomatic edifice on the pillars of the American quagmire in Iraq, and filled the regional void left by retiring Arab regimes with the growing sphere of Iranian influence. Tehran has successfully built up an impressive and diverse source of power, through a typically Iranian combination of strategic foresight, tactical cunning, political acumen and ideological conviction. The nuclear issue forms the gateway through which US-Iranian negotiations must pass towards a new understanding. Therefore, prepare yourselves for two historic developments in the coming weeks: the first will be a fatwa or religious ruling by Supreme Guide of the Iranian Revolution Ali Khameini, sanctioning the restoration of relations with Washington on the basis of the primacy of national interests; the second will be the scene of Condoleezza Rice, dressed in the head-covering obligatory in Iran, cutting the ribbon to inaugurate the new American embassy building in Tehran.