Washington/Brussels, 13 August 2013: In the midst of dispiriting events sweeping the region, Hassan Rouhani's 4 August swearing-in as Iran's president offers a rare and welcome glimmer of hope.

In its latest briefing, Great Expectations: Iran's New President and the Nuclear Talks, the International Crisis Group examines the potential embodied by Rouhani's election. There are still far more questions than answers: about the extent of his authority; his views on his country's nuclear program; and the West's ability to display requisite flexibility and patience. But although both sides can be expected to show caution, now is the time to put more ambitious proposals on the table.

The briefing's major findings and recommendations are:

Rouhani's victory has not changed the fundamentals: Supreme Leader Ali Khamenei retains final say; friction between him and the president is all but inevitable; and Iran's bottom line demands - recognition of its right to enrich and meaningful sanctions relief - will not budge. But presidents are not mere figureheads and they can significantly affect both style and negotiating tactics.

Rouhani's extensive track record and voluminous writings offer some clues regarding his preferred approach. His negotiating experience carries mixed messages: he is the author of the only nuclear agreement between Tehran and the West, yet feels that the latter let him down, exposing him to bitter criticism at home. This may prompt him to greater caution. In particular, at a time when the U.S. and EU are intent on limiting the extent of Iran's uranium enrichment program, Rouhani could be more inclined to offer concessions regarding that program's transparency than its scope.

A deal today is more difficult than before. Positions have hardened, trust has diminished, the nuclear program has substantially advanced, and sanctions have proliferated. Western doubts about Rouhani's ability to deliver are matched by Tehran's scepticism that Washington, in particular, can accept a modus vivendi with the Islamic Republic, or that President Obama has the political muscle to lift sanctions.

Refreshing the stalled nuclear talks could be achieved in three interlocking ways: altering the substance of a possible deal, combining a confidence-building agreement on Iran's 20 per cent enrichment and the contours of a future nuclear endgame; modifying modalities of negotiations by complementing multilateral discussions with confidential, bilateral U.S.-Iranian engagement; and expanding the scope of those talks to include regional security matters.
“The promise embodied by Rouhani's election can grow or quickly fizzle”, says Ali Vaez, Crisis Group's Senior Analyst for Iran. “As he takes office and comes face to face with myriad domestic and foreign challenges, it would be good for the West to encourage him to move in the right direction”.

“There is no reason to build up - and every reason to downplay - expectations of a rapid break-through”, says Louise Arbour, Crisis Group's President, “but opportunities for a new beginning in approaching the nuclear crisis have been few and far between. This is one neither side can afford to squander”.

International Crisis Group