By Kim Ghattas
BBC News, Washington
The Obama administration is finalising its policy for engaging Iran.
Will President Obama send Ayatollah Khamenei a letter?
The approach is likely to involve a combination of small steps to initiate contact between the two countries and may include an overture in the form of a letter to Iran's Supreme Leader Ayatollah Khamenei, according to Western diplomats and senior US officials.
A senior Western diplomat, speaking on condition of anonymity, told reporters that he expected the letter to be sent to Mr Khamenei before the Iranian elections this summer, although Washington's allies would prefer this step to be taken after the vote, to avoid influencing the election.
The last time reports about a letter to Iran circulated, the White House emphatically denied it.
But last week a State Department spokesman said he did not have anything to say about a letter, adding that he would not discuss the options being considered. He then referred reporters to the White House.
A similar type of letter was drafted during the Bush administration but never sent.
US officials insist that no final decisions have been made and no announcements are expected for at least another 10 days while Dennis Ross - the top official in charge of reviewing US policy towards Iran - conducts an assessment.
Even after his policy review is finalised, it is unclear how much of it will be made public.
"Iran recognises that its regional influence derives in large measure from its defiance of the United States, so Iran would prefer not to publicly advertise its discussions with the United States unless or until real progress has been made," said Karim Sadjadpour, an Iran expert at the Carnegie Endowment for International Peace.
"[Iranian President Mahmoud] Ahmadinejad will have to strike a delicate balance, where his most powerful backers are anti-American while a lot of Iranian people are favourably inclined to the US."
The engagement with Tehran started with US Secretary of State Hillary Clinton's public invitation to Tehran to attend a conference in the Hague on 31 March to discuss Afghanistan.
The invitation was in line with what has been Mrs Clinton's general approach to diplomacy - focus on areas of overlapping concern to help foster dialogue in the build-up to tougher discussions.
Iran has said it is mulling over the invite.
It is likely that most of the engagement will initially be cautious and involve small steps.
And while Washington pursues engagement, there will be no push for tougher sanctions, leaving that option for whenever the US determines that engagement is not yielding results.
During her trip to Asia, Hillary Clinton signalled that if the Obama administration reached out to foes and found they were not responsive, it would have a stronger case to make to the international community to rally around Washington.
The Western diplomat said Washington was planning to lift the ban on regular diplomatic contacts with Iranian officials around the world, enabling US diplomats to engage with Iranians just as they would with representatives of other countries, including those with which the United States has difficult relations.
This would allow the two countries, which have had little contact in 30 years, to "reacquaint themselves with each other" and slowly build trust before any substantive discussions, according to Mr Sadjadpour.
Nest of spies
"Washington should make it clear to Tehran that the United States is genuinely interested in establishing a new tone and context for the relationship," he said.
Mr Sadjadpour said that if Washington did send a letter to Tehran, Mr Khamenei would be the appropriate recipient - addressing it to him would signal that Washington understands how Iran functions.
Mr Ahmadinejad is facing a re-election battle
He added that the tone of the letter would be crucial - it should be solicitous, while avoiding the subject of Iran's nuclear programme and sending a clear message to Iran that Washington was not seeking regime change.
Other experts have argued that the letter should be sent to an elected president of Iran, either to Mahmoud Ahmadinejad or - if it is sent after the election and Mr Ahmadinejad loses - to his replacement.
One initiative that is no longer on the table (according to the Western diplomat) is the opening of a US interest section in Tehran.
The move was debated last year by the Bush administration, which eventually decided against it.
The Obama administration is also steering clear, because the move would present too many headaches - an "interests section" could be seen by Iranians as a nest of spies, and might become a target for demonstrators. Iranians may be reluctant to go inside for fear of being harassed by the authorities.
One of the complicating factors in engaging Iran is the question of time - how long should the negotiations continue and at what point do you determine they are not going anywhere?
"At some point you have to be able to say 'it's over'," said the diplomat.
He also added that any engagement with Tehran faces a serious time constraint - the build-up of Israeli pressure for an attack on Iran.
The diplomat said Europeans often used Israel's belligerence to try to pressure the Iranians into starting serious negotiations about their nuclear programme. In other words: "Start talking before you face an Israeli attack."
So far, the Iranians have not responded to an offer by Washington and its partners to give up its nuclear programme in exchange for a package of incentives.
The diplomat said that there had been no momentum for the negotiations so far and that in a way they had not really started since substantive issues were not being addressed.
But "the fact that the US is now stepping in may change the rules of the game and create the momentum" that has been lacking so far, he added.