On Monday, U.S. Secretary of State Mike Pompeo presented a list of sweeping demands for Iran, including abandoning nuclear enrichment, its ballistic missile program and its role in Syria, Lebanon and Yemen, or face â€œthe strongest sanctions in historyâ€.
Four senior Iranian officials contacted by Reuters interpreted Pompeoâ€™s remarks as a â€œbargaining strategyâ€, similar to Washingtonâ€™s approach to North Korea.
Last year U.S. officials were pressing for tougher sanctions against Pyongyang and sent an aircraft carrier to the region in a show of strength before relations eased to a point where President Donald Trump may hold talks with North Korean leader Kim Jong Un.
â€œAmerica does not want to get involved in another war in the region. Iran also cannot afford more economic hardship … always there is a way to reach a compromise,â€ said one of the Iranian officials, who was involved in Iranâ€™s nuclear talks with major powers for two years.
â€œThe era of military confrontations is over,â€ the official said. Like others giving their views on relations with the United States, the official asked not to be named because of the sensitivity of the matter.
However, it will be difficult for Iranâ€™s Supreme Leader Ayatollah Ali Khamenei to back any diplomatic solution, because doing so could undermine his credibility among his hardline power base, who reject any detente with the West.
â€œThey (Americans) are lying. Even if Iran accepts all these demands, they will continue to demand more. Their aim is changing Iranâ€™s regime,â€ said one official who is close to Khameneiâ€™s camp.
â€œAmericans can never be trusted. We donâ€™t give a damn to their threats and sanctions,â€ he said, echoing Khameneiâ€™s public statements.
Pompeoâ€™s speech did not explicitly call for a change in leadership in Iran, but he urged the Iranian people to reject their clerical rulers.
â€œCUP OF POISONâ€
Earlier this month the United States withdrew from a 2015 multinational deal which restricted Iranâ€™s nuclear program in return for lifting sanctions that had crippled the economy.
Tehran says its right to nuclear capabilities and its defensive missile program are non-negotiable.
But with Iranâ€™s economy so fragile, weakened by decades of sanctions, corruption and mismanagement, Khamenei may yet consider diplomacy over confrontation with the United States.
Some insiders said that, though difficult, he could drink â€œthe cup of poison,â€ as his predecessor Ayatollah Ruhollah Khomeini described it when he reluctantly agreed to a U.N.-mediated truce that ended the 1980-88 Iran-Iraq war.
â€œFor most Iranians, the economy is the main issue, not what Iran does in the region or the countryâ€™s nuclear program,â€ said a senior Western diplomat in Tehran.
â€œThat is why Iranian leaders will show some flexibility despite the harsh rhetoric.â€