By Jonathan Beale
BBC News, Washington
The US is reviewing its policy in Iraq as violence there continues
Tehran and Washington have been living through a diplomatic ice age. They have not been talking for the past 27 years.
But on Wednesday, giving evidence before the Senate Armed Services Committee, Ambassador David Satterfield - Condoleezza Rice's senior advisor on Iraq - appeared to signal a change.
He said the US was "prepared in principle to discuss Iranian activities in Iraq".
The US under secretary of state had earlier told me that such talks were "not beyond the realms of possibility."
So is the thaw about to begin?
Relations have been in deep freeze ever since the US embassy hostage crises in 1979.
It is the open sore that has never healed - the cloud that hangs over every attempt to renew diplomatic links.
The Iranian revolution cast the US as the "Great Satan."
Iran cast the US as the "Great Satan" after its Islamic revolution
More than a quarter of a century later the Bush administration labelled Iran as one of the greatest threats to world peace. Not much hope of reconciliation.
Despite their poisoned history some politicians in both Washington and Tehran have tried to bridge the divide.
Most recently Iranian and US officials talked with each other about the formation of a new government in Afghanistan following the fall of the Taliban.
If it was a sign of a diplomatic breakthrough, it was very short-lived.
Any goodwill quickly evaporated when President Bush in 2002 described Iran as part of the "axis of evil."
So far it is the hardliners on both sides who have held sway.
Reason to talk
But America's troubles in Iraq have given the US a new reason to talk.
Iran stands accused of fuelling the sectarian divide - of supplying arms and bomb-making equipment to Iraq's Shia militia and insurgents.
Earlier this year, state department officials signalled that they wanted direct talks to discuss Iran's "unhelpful behaviour."
The US has signalled Iran it wants to talk about security in Iraq
Feelers were put out through the Swiss Embassy in Tehran which acts as an intermediary.
Iran too at first seemed receptive to the idea.
But the US says Tehran muddied the waters by suggesting this would be a venue to discuss "other issues" - namely Iran's nuclear programme. The trail once again went cold.
But the pressure on the Bush administration continues to grow.
First from two of America's strongest allies - Britain and Australia.
Second from the Iraq Study Group led by the former secretary of state James Baker.
He has already said that he does not consider talking to your enemies as "appeasement."
The Iraq Study Group has yet to publish its findings, but the commission could well advocate renewed attempts to engage with both Iran and Syria.
Any optimism of talks taking place has to be countered by America's efforts to isolate Iran over its nuclear programme.
Iran says it wants a change in US attitude before any talks over Iraq
A senior state department official explained to me why the talks had as yet not materialised.
First, he said that earlier this year the US did not want to be in a position of negotiating over the heads of a new Iraqi government.
Second, the US did not want to bargain over Iraq's security with the nuclear issue.
The truth is that there is still little appetite among senior US officials for direct talks while Iran continues to enrich uranium.
They argue that Condoleezza Rice has already announced a major shift in policy by offering to sit down with Iran if it suspends those activities.
American diplomats believe it is now Iran's turn to make concessions.
That is why there is still the question of timing. But the US may soon be forced to swallow its pride if it wants Iran's help to stabilise Iraq.