John Kerry, the US secretary of state, will on Thursday meet Mohammad Javad Zarif, Iran's foreign minister, in an encounter that is expected to give the green light to a new round of negotiations between Iran and the west over the country's nuclear programme, the Financial Times reported.
The meeting at the UN in New York will be the highest level involving the US and Iran since the 1979 Iranian revolution, and offers the clearest sign yet of Iran's willingness to engage with the west over its nuclear activities.
However, President Hassan Rouhani's speech at the UN on Tuesday has tempered expectations in Iran and western capitals that a deal can be struck soon, and raised questions over how far Iran might compromise on its programme.
Although there were conciliatory passages in the speech, such as Mr Rouhani saying he is committed to engage in "time-bound and result-oriented talks to build mutual confidence and removal of uncertainties with full transparency", much of it repeated Iran's demands over the future of its nuclear activities, insisting that the US must recognise Tehran's right to enrichment.
There was a harsher tone than had been expected on issues beyond the nuclear file, and it was implicitly critical of the US and Israel.
In Iran, many were critical of Mr Rouhani's performance and particularly his decision not to meet Barack Obama, US president.
"We have not talked at that level for 35 years. We must take these steps carefully," Mr Rouhani said at a meeting with the US media on Wednesday.
Mr Rouhani was elected in June with a mandate to pursue a policy to relieve the country of tough economic sanctions imposed by the international community. As a result, many Iranians were glued to their televisions at midnight on Tuesday to listen to his address.
"Rouhani could have been more conciliatory in his speech but instead he said Iran would not retreat from uranium enrichment under any conditions, which means economic problems will continue," said Majid, a 44-year-old computer engineer.
Elham, a 31-year-old housewife, said the president she voted for in the June election should have met Mr Obama instead of giving "contradictory comments and speaking from too powerful a position which does not relieve the economic burden on our shoulders".
However, Iranian analysts warned that expectations Mr Rouhani would break the ice with US on his first visit to the UN in New York after decades of hostility were unrealistic.
"Rouhani's approach in New York may disillusion his supporters for a short period of time," said Saeed Leylaz, a reform-minded political analyst. "But we should not forget that his diplomatic achievements over such a short period of time [since taking office in August] are eye-catching."
Some western diplomats noted that in an interview with CNN after the speech, Mr Rouhani made some encouraging gestures, most notably making some comments to express goodwill towards the American people.
The Iranian president put an end to eight years of Holocaust denial under his predecessor Mahmoud Ahmadi-Nejad by condemning the "crime" of mass killings of Jews by the Nazis.
"I've said before that I am not a historian, and when it comes to speaking of the dimensions of the Holocaust, it is the historians that should reflect," he said. "But, in general, I can tell you that any crime that happens in history against humanity, including the crime the Nazis created towards the Jews as well as non-Jews, is reprehensible and condemnable. Whatever criminality they committed against the Jews, we condemn."
Cliff Kupchan, a leading analyst on Iran at Eurasia Group, said diplomats would probably be wondering what to make of Mr Rouhani's overall performance. "He could have been playing to his conservative critics as he tries to consolidate power in Iran," he said. "Alternatively, Rouhani may be a tougher interlocutor than many observers expected."
In any event, Mr Kupchan believes negotiations on the nuclear file will be tough because of the demands the US will make for Iran to halt many of its nuclear activities in return for a significant reduction of sanctions.
"I continue to believe there is a real chance the sides will reach an interim deal, but on balance diplomacy will probably reach another impasse," he said "There is a 35 per cent to 40 per cent chance of a deal, but the road to one remains uphill."
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