The stand-off between Iran and the US can be resolved in one of three ways, writes Amin Howeidi* Exchanges between Iran and the US tend to be high-profile. Since the Shah was deposed Washington and Tehran have been at loggerheads. Tehran has denounced the Great Satan at every opportunity, while the US views Iran as a pariah state and a member of Bush's axis of evil. And now Washington has a stake in Iraq, a country that has often had misgivings about its neighbour to the east. Even when the Shah was in power Iran had issues with Iraq. The two countries have long- running disputes over territorial waters and the holy sites of Kufa and Najaf. The Shiites have sacred sites in Iraq, which they need to visit as part of their pilgrimage rituals. A century ago Iranian Shiites were entitled, through an Ottoman mandate, to supervise some of Iraq's holy shrines. The Iraqis were not always happy about it, nor about occasional Iranian interference in Kurdish and Shiite areas in the north and south of the country. In the early 1960s, as Egypt's ambassador to Iraq, I witnessed a small incident that seemed to epitomise the tensions between Baghdad and Tehran. The Iranian ambassador had just arrived in Baghdad -- following a period in which ties had been severed -- and was conferring with President Abdel-Salam Aref at the latter's office. I had an appointment to meet Aref on the same day. While waiting to meet the Iraqi president I saw the Iranian ambassador storm out of his office , soon followed by Aref who looked as if he were about to chase the ambassador down the palace corridors. When it was my turn to meet the president I found him agitated. "The Iranian ambassador has just told me that the Shah wanted him to make sure Shiites in the holy places were doing fine. I told him this constitutes interference in our domestic affairs, because the Shiites are Iraqis. He insisted on his demand so I threw him out of the office," the Iraqi president told me. The ambassador left Iraq immediately afterwards and relations between the two countries were severed once again. Following 9/11 and the US invasion of first Afghanistan and then Iraq, dynamics in the region changed. Even Washington reconsidered its policy towards Iran. Animosity turned to friendship, as often happens in politics. Iran used the US invasion of both Afghanistan and Iraq to promote its interests in the region. In AfghanistanTehran forged close links with the Hazara and Tajik militia. It also supported the Shiites of Iraq who would eventually become Baghdad's power brokers. Iranian revolutionary guards were deployed in south Iraq, while Iranian intelligence trained the Badr Corps. Iran gained control of the Straits of Hormuz, through which 80 per cent of Gulf oil is transported, having already occupied the Tonb and Abu Musa islands. Iran also consolidated its ties with Syria and Hizbullah. As Iran was consolidating its position in the region the US was sinking in the quick sands of both Afghanistan and Iraq. US strategists had obviously miscalculated, and things worsened by the day. The US needed a way out and was hoping for Iranian help. The Iranians wanted something in return. A game of bargaining ensued between the two sides. On the one hand the Iranians pushed ahead with their nuclear programme. On the other hand the Americans pressed for changes across the region. Iran stood its ground, resuming uranium enrichment activities and declaring itself a nuclear power. Iran has enriched uranium to a level of 3.5 per cent, hardly weapons-grade. But it exaggerated its achievement, claiming that it has become a member of the nuclear club. Iran is not expected to be in a position to produce warheads in the near future, although it has missiles that can deliver such warheads across its borders. At some point Iran will have to tone down its rhetoric unless its programme is far more advanced than it is letting on. As things stand, President George Bush has one of three options: do nothing and let Iran continue as it wants; push things to the point of military confrontation and risk sinking deeper into trouble, or talk to the Iranians. Which of these will he choose? We'll know the answer soon. * The writer is former minister of defence and chief of General Intelligence.