By Frances Harrison
BBC News, Tehran
News that Iranian President Mahmoud Ahmadinejad had written a letter to his US counterpart George W Bush triggered short-lived optimism in Iran that a diplomatic breakthrough could be in the offing.
The letter seems to be a searing attack on the US foreign policy
That was until the letter was swiftly dismissed by the Americans.
Before the letter was rejected, much of the Iranian press hailed the letter as the "beginning of a new phase in Iranian foreign policy" and "a turning point in Iranian-American relations" that could "lead to direct talks between the two sides" and "showed the cleverness and dignity of the Islamic Republic".
Only some hardline papers criticised the letter, saying its contents should not have been kept secret.
There was a brief spurt of euphoria that Iran's troubled relations with the West might change.
Most Iranians know that the relationship with the US is at the root cause of their problems and that to be solved the nuclear issue needs direct talks with America.
That an Iranian leader directly communicated with the US president after 27 years was in itself a sign for hope.
But traders in Tehran's main bazaar were unhappy with the development, because their customers started trying to return their purchases in the hope prices would fall on good news from abroad.
Retailers in other cities saw that oil and gold prices started to fall on Monday after the news of the letter.
They hoped that would bring wholesale commodity prices down, so they informed the transport companies not to send goods they had ordered.
President Ahmadinejad now says he is waiting for a reply from Mr Bush before deciding what to do next.
It will be interesting to see if there is a reply, because Mr Ahmadinejad's 18-page letter seems to have been a searing attack on America's foreign policy.
He complained "lies were told in the Iraqi matter" about the presence of weapons of mass destruction.
He said there was no way to rationalise or explain the creation of the state of Israel.
And he even questioned why the American intelligence services did not do more to stop the 11 September attacks - asking: "Why have various aspects of the attacks been kept secret?"
This is hardly ingratiating stuff and there is no mention of any concession on the nuclear issue.
But the letter is the first in a series to heads of states to mark what Iran has declared as the year of the Prophet Muhammad.
As such, it calls on President Bush to join the increasing number of people around the world who are flocking towards Almighty God.
Mr Ahmadinejad writes approvingly that he has been told George Bush "follows the teachings of Jesus and believes in the divine promise of the rule of the righteous on Earth".
The messianic tone of the letter was picked up on by one hardline Iranian newspaper, which said it was similar to invitations by the Prophet Muhammad to pagan leaders asking them to convert to Islam - hardly a flattering comparison for Mr Bush.
There were also analysts who thought the approach was an attempt to sow disunity among the international community as it struggles to reach consensus on the nuclear issue.
Many believed this was a way of increasing the doubts of Russia and China about a UN resolution against Iran.
That might explain the speedy rejection by the US of the letter just as they are trying to bring Russia and China on board.
Now in Iran there is a sense of disappointment that America did not pick up on this opportunity to start a dialogue - just as many here felt Iran's announcement in March that it was willing to hold talks with the US on the issue of Iraq could have helped rapprochement, had the Americans been more enthusiastic.
But there is also some disappointment that the letter did not do more to bridge the gap with the US.