Why the U.S. Should Try to Reach a Grand Bargain With Iran

Of the multiple negotiations Secretary of State John Kerry has started in recent months, it's difficult to say which of them looks more impossible. Is it the Geneva peace conference on Syria, which has been pushed back because, well, neither side has any real interest in talking? Is it the Israeli-Palestinian negotiations, which both sides (surprise!) say are failing? Or is it the effort to try diplomacy with Iran, which resumes Thursday, also in Geneva?

The effort to negotiate away Iran's nuclear threat is hard enough, but the idea that Tehran and Washington can achieve even the most meager modus vivendi in relations looks as unlikely as it did three decades ago. As if to drive home the point—and send a message to the new, pro-negotiation president, Hassan Rouhani—regime hard-liners on Monday orchestrated one of the largest of the annual anti-American demonstrations to commemorate the U.S. Embassy hostage-taking in 1979.

And yet as distant as it all looks, the possibility of some kind of "grand bargain" exists. A deal that would not only put Iran's nuclear program on hold (that's all you're going to get) but might also prompt moderates in Tehran to temporize the regime's other destabilizing policies in the Mideast and Central Asia—its support for Hezbollah in Syria, its anti-Israel rhetoric and terrorism, and its temporary alliance with the Taliban in neighboring Afghanistan, among other things.

The fact is, little of note is going to get done on any major issue without Iranian cooperation of some kind, and that has not proved impossible in the past. As Ryan Crocker, one of America's most distinguished diplomats, wrote in The New York Times on Monday, "Although most Americans may be unaware of it, talks with Iran have succeeded before and they can succeed again."

Especially because Rouhani and his worldly foreign minister, Mohammad Javad Zarif, have themselves been part of some of those quasi-successful talks. In 2001-02, for example, Iran provided invaluable assistance in stabilizing the new Karzai government in Afghanistan (Zarif led the talks for Tehran). Iran also became the largest non-OECD donor to post-Taliban Afghanistan, pledging $550 million worth of assistance (about the same as the U.S.) at the Tokyo conference.

Only days after that conference, in another of the disastrous decisions that so marked his first term, George W. Bush declared Iran to be part of the "axis of evil," immediately overturning the progress being made by his own diplomats. According to Iranian moderates I spoke to during a 2007 visit to Iran and then later on, the Bush speech also discredited everyone in Tehran who favored rapprochement. "The hard-liners, when we talk with them, they say, 'Dear friend, you talked with the Americans in a very moderate way, and you didn't get any result at all,' " S.M.H. Adeli, Iran's urbane former ambassador to London, told me then.

Even so, in the spring of 2003, Iranian officials, using their regular Swiss intermediary, faxed a two-page proposal for comprehensive talks to the State Department, including discussions of a "two-state solution" between Israel and the Palestinians. The Bush administration dismissed it at the time as dubious. Zarif, a career diplomat educated at the University of Denver who has conducted perhaps more direct negotiations with Americans than any other Iranian official, also had a hand in that maneuver.

The usual response of skeptics is that the Iranian leadership is just bargaining for time, especially in building a bomb. Opposition to a relationship with the "Great Satan" and any recognition of its minion, Israel, runs deep in the marrow of the Islamic Republic. The basic ideology of the Iranian revolution, after all, was fostered by opposition to the U.S.-backed Shah and the CIA-orchestrated ouster of President Mohammed Mossadegh in 1953. Without America as an enemy, the mullahs don't have as much reason to justify their rule.

But while it's not about to fade away, all evidence the Iranian revolution is in a state of turmoil, thanks in large part to harsh international sanctions that have finally, after many years, begun to set in motion a deeper macroeconomic malfunction, including a worrying amount of inflation. Hardliners and moderates are openly fighting. Conventional wisdom is that the chief hard-liner on nuclear and other issues is the supreme leader, Ayatollah Ali Khamenei, but he's given Rouhani far more flexibility than in the mid-2000s, when as Tehran's chief nuclear negotiator he was slapped down. More to the point, Khamenei is now 74, and it's very unclear whether there will be a supreme leader to follow him.

What is beyond dispute is that on nearly every front from Syria to Iraq to Afghanistan, Iranian cooperation is a necessary ingredient for any measure of U.S. success. In Syria, Bashar al-Assad is gaining ground and refusing to talk to the rebels largely because of the help he's getting from Iran-backed Hezbollah troops. In increasingly violence-wracked Iraq, Shiite Prime Minister Nuri al-Maliki feels he has a freer hand to sideline Sunnis (thereby giving new life to al-Qaida in Iraq) because of support from Tehran, to which Maliki is also granting overflight rights for weapons supplies into Syria. If post-2014 Afghanistan is to gain any stability, Iran must be induced to resume its formerly hostile relationship with the Sunni Taliban in the West. And if Iran can be persuaded to further distance itself from Hamas (Tehran reportedly slashed funding in anger after Hamas moved its headquarters from Damascus to Qatar) and at least quiet its anti-Israel rhetoric, that would make a Palestinian peace deal more possible.

Above all, of course, an Iran that opens itself to international nuclear inspection would put control rods in the most dangerously destabilizing trend in the region. Iranian officials have hinted for years that, under certain conditions, Tehran might be willing to stop short of building a bomb. "Iran would like to have the technology, and that is enough for deterrence," Adeli told me in 2007. But moderates who might go in that direction, like Zarif, must have ammunition with which to silence the hardliners. And that means a deal.

As far as the idea of working with a hardline Islamist regime, is that really so impossible? For a long time religious conservatives in Iran have fondly invoked the "China model," whereby the mandarins in Beijing managed to quash political dissent after the Tiananmen Square democracy movement by redirecting the desire for more freedom into a booming economy. Even they realize that only economic success can ensure the future of the Islamic republic. But for Iran it's only possible if they can find a way to agree to other things. For Washington, it's necessary to at least try.