By Paul Reynolds
World affairs correspondent, BBC News website
The American offer to join direct talks with Iran has now been followed with agreement among leading members of the Security Council on a package of incentives to encourage Iran to reach agreement on its nuclear programme.
The US move represents a major shift of American policy but does not in itself clear the way for a solution.
The nuclear programme has become a rallying point for Iranians
Before talks could be held, Iran would have to suspend the enrichment of uranium, as it did once before when it held talks with Britain, France and Germany.
It is reported that the package would allow Iran to carry out some limited enrichment if the IAEA was satisfied that Iran did not intend to develop a nuclear bomb.
This would represent a major change of policy by the US and its allies, since they have always insisted that the only way to be sure that Iran did not make a bomb was to stop it from enriching uranium.
For Iran enrichment has assumed almost mythical importance as a symbol of its right to a hi-tech future and would require a huge change of policy to abandon.
Two scenarios are opening up. There is a benign one and a malign one.
In the benign one, the doves, led by the Secretary of State Condoleezza Rice, have won the argument in Washington.
This move, it is hoped, will lead to direct talks with Iran, which will agree on a package which will settle the issues.
In exchange, it will also receive a bag of goodies that will include help with civil nuclear power and trade concessions.
In the malign scenario, the hawks in Washington have gone along with the move in the belief that an offer of direct talks now will improve their arguments for military action later. It also helps to keep Russia and China on board.
The hawks think this initiative will lead nowhere because Iran will not negotiate seriously even if it agrees to talks - and when it all breaks down, they will have been shown to have gone the extra mile.
They would then press for a mandatory Security Council resolution ordering Iran to suspend enrichment and then, if Russia and China blocked sanctions, they would call for unilateral measures by the US and its allies.
If that failed, then eventually there would be discussion of a military strike.
The basically hostile American attitude towards Iran was made clear in a BBC interview with the US intelligence supremo John Negroponte.
Despite Iranian statements to the contrary and despite its membership of the treaty against nuclear proliferation, he declared that Iran "seems to be determined to develop nuclear weapons" and "might be in a position to have a nuclear weapon" by the middle of the next decade.
Whichever scenario eventually plays out, this is probably the last diplomatic throw of the dice.
The package was prepared for presentation to Iran by the Security Council's leading powers - the US, Russia, China plus the three European Union countries that have been negotiating, unsuccessfully, with Iran, Britain, France and Germany. They agreed on the proposals in Vienna on 1 June.
Condoleezza Rice says the US is ready for direct talks with Iran
It remains an open question as to whether these countries will collectively agree on any sanctions that might be applied if Iran does not comply.
It may be that the US will lead a so-called "coalition of the willing" if there is no agreement with Russia and China, both of which have opposed sanctions up until now.
It is possible that Iran will agree to explore the idea of talks, though its initial response has been cautiously positive, though, as always, somewhat ambiguous.
On the other hand, Iran might have reached the stage where a pause for talks might suit it. It appears to have reached a plateau in its current enrichment programme, having announced that it has enriched uranium to nuclear power levels.
The next stage requires a huge amount of work on centrifuge cascades and it might be that now is not a bad time for it to talk.
It has suspended work before, for talks with the three EU nations, so there is a precedent.
Iran's nuclear programme has aroused foreign suspicions
A paper on the fundamental Iranian position was published recently by the Crown Center for Middle East Studies at Brandeis University in the United States.
This indicates that Iranian moves on suspension and negotiation are carefully calibrated to delay confrontation and allow time for technical work to be done.
In the paper, Dr Chen Kane analysed a speech made by Iran's former nuclear negotiator Hassan Rohani, sometime in late 2004.
Iran's Mahmoud Ahmadinejad has refused to stop enrichment
The speech, according to Dr Kane, "reinforces the more cynical view held by some in the West that Iran's main objective in negotiating with the EU was simply to gain time".
"Rohani confirmed the assessment that Iran had used the calm atmosphere of negotiations as a smokescreen behind which it continued to deliberately advance its nuclear programme."
It is interesting to note that Hassan Rohani's view almost exactly mirrors that of senior European negotiators who claim that their talks with Iran have slowed down Iran's programme.
Diplomats on both sides are therefore claiming success for their tactics, as they often do.
Which way will Bush go?
President Bill Clinton's former Middle East negotiator, Dennis Ross, who himself called for direct US talks with Iran recently, says that the sticking point will be the US demand for Iranian suspension.
Speaking during a visit to London on Wednesday, he said that Washington had had to re-capture the initiative and this would force the Iranians to "figure out what to do".
However, he cautioned that talks would not necessarily lead to a solution.
He outlined two scenarios himself - one under which President Bush would not want to leave office with one of the powers he named in the "axis of evil" having developed a nuclear weapons capability. That implies military action.
In the other, in the knowledge that his domestic position was weak and that attacking Iran would unleash chaos and violence, Mr Bush could leave Iran for a successor.