As Iranians across the world celebrated their ancient new year, Nauroz, an unlikely name added itself to the list of celebrants when President Obama gave his wishes to the Iranian people through an Internet video message. In his message, Obama signaled a shift in American policy towards the Islamic Republic, striking a reconciliatory tone and focusing on projecting US respect for the Iranian nation - an issue dear to Ayatollah Khamenei and the ruling Iranian clique.

Despite his reconciliatory tone, hopes for a sudden thaw in US-Iranian relations were quickly dismissed by Supreme Leader Khamenei, as he warned the U.S. that change would be measured not through rhetoric but through policy changes. With Iran on the cusp of crucial presidential elections and analysts unclear whether the country will swing towards moderation or re-elect President Mahmoud Ahmadinejad, Iranian policy towards America could become a deciding issue when Iranians vote on June 12.

Regardless of shifting political tides in Iran, Obama made it clear that he was speaking to both the Iranian people and their leaders, a marked shift from previous policy where the people were courted in hopes of driving a wedge between them and their government. When the President said, "I would like to speak directly to the people and leaders of the Islamic Republic of Iran," he implied recognition of the post-revolutionary Iranian government. Obama‚Äôs use of the phrase "Islamic Republic" was significant as well. A recent article in The Wall Street Journal said, "Using it [the title "Islamic Republic"] would grant legitimacy to the country's clerical regime," and Obama's inclusion of the phrase was a further effort to engage the current Iranian government. The tone and rhetoric used by President Obama thus reaffirmed the administration's message‚ that they respect both Iran and its government and are willing to work with them as equals. As George Friedman, founder and CEO of the private intelligence analysis firm Stratfor says, "Obama is trying to create a new global perception of the United States" - which chips away at the suspicion of America built up by years of the unilateral and aggressive Bush foreign policy. While this tape signals a move in this direction, it must be the start of such a trend, not the culmination.

While many Iranians welcomed the gesture, the two sides are far from embracing in friendship quite yet, and significant obstacles block that path. The U.S. has made its conditions for a better relationship clear, repeatedly demanding that Iran halt its nuclear program and end support for those seen to be acting against American interests, namely Hizbollah, Hamas, and Shia factions in Lebanon, Palestine and Iraq. In exchange for these major concessions on what many see as major pillars of Iranian policy in the Middle East, the U.S. will begin working on ending sanctions and bringing Tehran in from the cold.

A simple cost-benefit analysis from the Iranian point of view, as conducted by Stratfor's George Friedman, shows that "the suspension of sanctions is much too small a price to pay for major strategic concessions" by the Iranians, and thus they have less impetus to negotiate with America at this time. Recent events have catapulted Hamas and Hizbollah to popularity at the expense of the U.S.-backed Saudi and Egyptian regimes, and the insurgency in Iraq triggered a public outcry in the United States in 2006 and 2007, resulting in Iran feeling more emboldened and less likely to compromise. Indeed, to continue to place the enormous pre-condition on Iran that it must make significant changes to its security and foreign policies before dialogue can even begin smacks of the hypocrisy and hubris in American foreign policy that President Obama has indicated he would try to change.

Whether the relationship between the United States and the Islamic Republic can be enhanced through other means remains a crucial question. With Iran's acceptance of the U.S. invitation to attend discussions at The Hague about Afghanistan, a new front for cooperation between the two nations has already opened up. As Iranian and American interests in Afghanistan merge and as they seek a stable Afghanistan free from sectarian and religious violence, this avenue for partnership is rapidly opening up, especially with the new U.S. administration making clear that it is willing to work with rather than try and destabilize the Iranian government. For the Obama administration to show the centrality of Afghanistan to U.S. policies it must show that it is willing to work with Iran on this crucial issue and not let ideology and domestic politics hinder this potential partnership.

With merely two months remaining until Iranians vote, the timing and political implications of the Obama overture could have significant affects on the outcome of the vote. Though much foreign policy power - in addition to final veto on almost all issues - lies with the unelected Supreme Leader, the manner in which Iranians vote will prove to be a referendum on the more aggressive, confrontationist approach followed upon President Ahmadinejad’s assumption of office. Coming to power vowing to fix the Iranian economy, the drop in oil prices has effectively ended any hopes of realizing this promise before Ahmadinejad next faces the voters. With rising discontent over the economy, relations with America could provide a useful tool for Ahmadinejad to mobilize the masses, either around the issue of foreign interference and disrespect or as the redeeming legacy of the president that oversaw the rapprochement between the U.S. and Iran.

As polling within Iran is difficult if not impossible, analysts struggle to reliably predict whether the country is likely to embrace another reformist revolution, as it did with the election of Mohammed Khatami in 1997, or continue with the nationalist, confrontationist Presidency of Mahmoud Ahmadinejad. With reformist opposition to President Ahmadinejad crystallizing around former Prime Minister Mir Hossein Moussavi and endorsed by former President Khatami, the challenge to Ahmadinejad could prove to be formidable. Though opting not to wait until the outcome of the election was decided, the Obama administration hoped to and must continue to tread softly. Meddling with internal Iranian politics in the name of vaguely-defined and abstract "American interests" has proved detrimental to the U.S. before - a lesson from history that the Obama administration will hopefully keep in mind.