Before the disputed June 12 election, Iran’s senior leadership – speaking through backchannel intermediaries – outlined a possible framework for Middle East peace that foresaw a significant role for Russia and that raised hopes within the Obama administration.

According to a source knowledgeable about the Iranian proposal, key elements included new elections in Palestine with the winner (even if it’s Hamas) being accepted as the Palestinian representative; a peace conference in Russia with the goal of a two-state solution and regional recognition of Israel; opening Iran’s nuclear facilities for inspection; and lifting sanctions on Iran .

The proposal reportedly came from Iran’s supreme leader Ali Khamenei and was to be pushed forward after the expected presidential election victory of Khamenei’s favored candidate, incumbent Mahmoud Ahmadinejad.

But the messy election aftermath complicated matters. Although Ahmadinejad did emerge as the winner, the bitterly disputed election left questions about his legitimacy and revealed a split in Iran’s leadership. How those divisions may affect the Iranian peace overture is uncertain, although Khamenei is believed to still be pushing the concept.

While it was unclear how President Barack Obama felt about the Iranian initiative, he did mute his criticism of the Iranian post-election crackdown at least initially. In his July 6-7 trip to Russia for meetings with President Dmitri Medvedev and Prime Minister Vladimir Putin, Obama also made clear that Iran and Middle East peace were top issues to be discussed.

Still, while hoping to engage Iran in talks about its nuclear program and other regional concerns, the Obama administration ratcheted up the pressure.

Vice President Joe Biden declared on Sunday that the United States “cannot dictate” to Israel what to do if it determines that it is “existentially threatened” by Iran’s nuclear program, a blunt suggestion that Iran may face an Israeli military attack on its nuclear facilities if progress is not made in regional security talks.

Though Biden referenced the club in the closet, Obama denied on Tuesday that the United States had given Israel a green light to use it.

Obama told CNN that "we have said directly to the Israelis that it is important to try and resolve this in an international setting in a way that does not create major conflict in the Middle East."

Obama also has reiterated his readiness to extend an open hand to Iran despite the violent repression of election protesters.

“We’ve got some fixed national security interests in Iran not developing nuclear weapons, in not exporting terrorism, and we have offered a pathway for Iran to rejoining the international community,” Obama said in an interview with the New York Times on Sunday.

The Times also confirmed what I had been told earlier by an intelligence source regarding Iran’s secret outreach to the Obama administration.

“Before Iran’s disputed election on June 12, the president’s top aides say, they received backchannel indications from Iran – from emissaries who claimed to represent the supreme leader, Ayatollah Ali Khamenei – that the country would respond to Mr. Obama’s overtures this summer,” the Times reported.

But the Times noted that the election clashes “have changed the political dynamics” and added that “senior administration officials said they have heard nothing from Iran’s leaders.” [NYT, July 6, 2009]

Ahmadinejad’s Speech

After the initial announcement of his controversial victory, Ahmadinejad traveled to Russia and spoke to the six-member Shanghai Cooperation Organization as Medvedev’s invited guest. Iran has observer status in the SCO, which now consists of Russia, China and four former Soviet republics.

In his June 16 speech, Ahmadinejad decried the failure of the U.S. unipolar approach to resolving disputes and cited the need for international cooperation on regional security problems.

"Iraq continues to be occupied, chaos is growing in Afghanistan, the Palestinian problem remains unresolved, the world is swept by political and economic crises, and there is no hope for their resolution," Ahmadinejad said, adding that “the end of the age of empires is near.”

As Ahmadinejad spoke to the SCO, widespread protests swept Iran and continued for several days until they were put down harshly by Iranian security forces. The election battle revealed a deep public schism in Iran’s clerical elite for the first time since the early days of the Islamic revolution in 1979-80.

The intelligence source said the Iranian peace plan appears to remain on the table despite the political discord in Iran and opposition from Israeli leaders. The source added that, ironically, the supposed Iranian hardliners – Khamenei and Ahmadinejad – might be more amenable to a deal than the alleged reformers around former Prime Minister Mir Hossein Mousavi, who claims he rightfully won the June 12 election.

Thirty years ago, Khamenei and Mousavi also found themselves on different sides over how to engage Washington and Tel Aviv.

In 1980, during the crisis over Iran’s seizure of 52 American hostages, Khamenei appears to have favored a fairly straightforward resolution with then-President Jimmy Carter, while the faction including Mousavi and his current allies – ex-President Ali Akbar Hashemi Rafsanjani and former House Speaker Mehdi Karoubi – was willing to double-deal Carter to secure military supplies through Israel.

The Mousavi -Rafsanjani-Karoubi faction was linked to clandestine contacts with Israel’s Likud leaders and with Republicans to arrange arms shipments behind Carter’s back via Israel and later under President Ronald Reagan.

The secret contacts in 1980 allegedly delayed release of the U.S. hostages until after Reagan had secured the presidency. Channels of military supplies, primarily via Israel, opened for Iran’s war with Iraq, a process that led eventually to the Iran-Contra scandal. [For details, see Consortiumnews.com’s “Iran Divided & the ‘October Surprise.’”]

Now, however, with President Obama having assured Israeli Prime Minister Benjamin Netanyahu that U.S. outreach to Iran must show progress by the end of the year, the question arises again whether Khamenei or Mousavi’s faction would make the better negotiating partner.

Khamenei’s advantage may be that he is more direct in his approach, whereas Mousavi’s faction may have more to gain financially if sanctions against Iran are lifted. Possibly, the worst situation for regional peace would be if continued political dissension prevented Iran from making a deal at all.

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project Truth' are also available there. Or go to Amazon.com.

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