Iran and the United States have been going through what might be described as diplomatic mood swings. One minute, it seems as if the two countries are on the brink of war. The next, there seem to be small but perceptible policy shifts towards each other. As VOA correspondent Gary Thomas reports, complex political calculations are being made in the corridors of power in Tehran and Washington.

After insisting it would never take part in negotiations with Iran, the Bush administration recently sent a senior envoy to sit in on international talks with Iranian officials in Geneva on the nuclear issue. And a new offer of incentives aimed at getting Iran to halt uranium enrichment was put on the table by the United States and the European Union.

But the bottom line is that nuclear negotiations remain in limbo. Iran has not responded to the new P5-Plus One offer, and Iran continues to enrich uranium, using what it said Saturday is a marked increase in the number of uranium centrifuges.

Would Obama Presidency Affect US-Iran Relations?

An Iran affairs analyst at the non-partisan Congressional Research Service, Ken Katzman, says the Iranian leadership is essentially stalling for time until a new U.S. president is elected.

"The Iranians are betting that Mr. Obama is going to win the election and are forecasting that there will be a much softer line from the United States after that," Katzman said. "In that respect I think they are trying, the Iranians are trying, to stave off any U.S. or Israeli military action or even another sanctions resolution."

Katzman adds that the softer tone of Iran's firebrand president reflects a wider debate in Iranian power circles.

"He is trying to adjust his demeanor to fit with some shifting opinion in Tehran. And I do think there is shifting opinion in Tehran," he added. "But I think that Ahmadinejad has successfully prevailed on the Supreme Leader and on the system for now not to make any dramatic concessions. What makes me somewhat optimistic about what is going is that there is a battle at all inside Iran as to what to do."

What's Behind Shift in Bush Administration Stance?

The shift in the U.S. stance by the Bush administration is both puzzling and disappointing to American neoconservatives like former U.S. ambassador to the U.N. John Bolton, who scoffs at the idea of an internal policy debate in Tehran on the nuclear issue.

"The State Department search for Iranian moderates is comparable to Captain Ahab's search for the great white whale," Bolton said. "It is an obsession within the State Department. There are obviously differences within the leadership cast inside Iran. But we have never detected any differences over the fundamental strategic objective of getting a deliverable nuclear weapon."

In his interview, President Ahmadinejad reiterated that Iran harbors no ambitions to build nuclear weapons.

Is Deal With Iran in The Works?

Some analysts think a deal with Iran may already be in the works.

Reva Bhalla of Stratfor, a private intelligence firm, believes there is some similarity to 1980 and 1981, when negotiations to free American hostages at the Tehran Embassy were conducted under President Jimmy Carter, but the Iranians would not release them until Ronald Reagan was sworn in.

"They still at the same time deprived Carter of that foreign policy victory," Stratfor noted. "Instead, it went to Reagan. But the work was all done under Carter. So it could be the same kind of calculation where the Iranians may not want to give that foreign policy [victory] to the Bush administration, but are putting everything in place right now for that deal to happen. Because they really cannot take too many risks, not knowing what the next administration might bring."

But other analysts say more and tougher economic sanctions will still have to be levied on Iran before there are significant concessions from Tehran.