By Jonathan Marcus
BBC diplomatic correspondent, Washington
Mr Obama has vowed to seek a policy of engagement with Iran
President-elect Barack Obama's nominee as Secretary of State, Hilary Clinton, made it clear in her confirmation hearings that the new US administration will seek a policy of engagement with Iran.
Nobody here, though, is hugely hopeful that this will necessarily secure an agreement by Tehran to halt its uranium enrichment programme.
"The efforts by the US and its European allies over the past several years to pressure Iran to suspend its enrichment programme have been a complete failure," says Gary Samore, a proliferation expert at the Council on Foreign Relations.
"Iran has simply ignored the international pressure, including a series of [UN] Security Council resolutions," he says.
Iran has made considerable technical progress. It has mastered the centrifuge technology that it acquired from Pakistan some 20 years ago and Iranian scientists are operating the centrifuge machines at a respectable rate of efficiency.
Mr Samore says the focus of the programme at this point is on installing additional centrifuge machines in order to increase their enrichment capacity.
"And over the course of the next year or two, they will reach the point where they will have at least a theoretical option to produce significant amount of weapons grade uranium should they make a political decision to do so," he adds.
In this respect, the Obama Administration inherits a dossier where time is running out.
"Time is clearly working in Iran's favour," Mr Samore says. "If they can proceed in this way for the next two years or so, they will have reached the point where for all intents and purposes, they have a credible nuclear weapons option."
Of course the urgency in dealing with Iran stems not just from concerns about its nuclear research activities.
Iran is paradoxically the greatest beneficiary of the Bush Administration's toppling of Saddam Hussein's regime in Iraq.
It has seen its regional influence grow dramatically. Indeed, in Washington, Tehran is seen - rightly or wrongly - as being behind pretty much everything that the US does not like in the region.
Karim Sadjadpour, an Iranian expert at the Carnegie Endowment for International Peace, put it this way: "For many people in the United States, what's taking place in the Middle East is a sort of a "cold war" between the US and Iran for the soul of the region.
"They look at Iraq, they look at Lebanon, they look at Palestine as battlefronts against Tehran and I think the Iranians view it in the same way," he says.
If this narrative continues to prevail on both sides, he says we are just going to see continued bloodshed in the region.
"And this is where Iran benefits," he says. "They benefit when the region is in the throes of tumult, conflict and carnage. This is when Iran's ideology appeals to people."
So what tools will the Obama Administration have at its disposal to try to end this regional "cold war"?
In many ways, they will be the same tools as those used by the Bush Administration, which tried to mix threats with albeit limited inducements.
Low-level diplomatic contacts were pursued with Tehran during the second Bush Administration, but to little effect.
So how can team Obama do things differently?
According to Mr Samore, "the question is whether the Obama Administration can employ bigger carrots and bigger sticks." He believes that they can.
"Barack Obama may be more successful than Mr Bush in mobilising an international coalition - and that means the Europeans and the Russians - to bring pressure on Tehran."
On the carrot side, he believes that the Obama Administration's willingness to talk directly to Iran, and to make an effort to try to find a broader accommodation with it on a range of regional issues, may also make it easier to resolve the nuclear issue.
But this has to be hard-headed engagement.
"The key to all of this is not the inducements that the US offers," he insists, but "the threats that it can mobilise if Iran turns down the offer."
For Mr Samore, this is the bottom line: "If Obama is not able to build support for a much stronger package of economic sanctions, any diplomacy is doomed to failure."
How will the new Obama policy of engagement go down in Tehran?
Mr Ahmadinejad has seen his country's regional influence grow dramatically
Well, nobody here believes that it is going to change things overnight.
Mr Sadjadpour says that the task of the Obama Administration is to create cleavages within the Iranian ruling elite.
"What the Bush Administration did was essentially to unite Iran's disparate political landscape against a common threat," he says.
But he thinks Mr Obama will be different.
"When you have a US President who comes with a different philosophy of engagement and dialogue it is going to create cleavages in Tehran, between those people within the Islamic Republic who say its about time we had a different relationship towards the world and we did away with this 'death to America' culture of 1979, and those who are very firmly entrenched in this revolutionary ideology and are really incapable of changing," says Mr Sadjadpour.
"That of course may include the supreme leader himself," he adds.
The broader context may also help the Obama Administration's new approach - the declining price of oil makes Iran's economy more vulnerable to outside pressure.
A willingness to engage with Russia on key strategic concerns may make it a more willing partner in the coalition to pressure Tehran.
And of course while the military option may recede from the headlines for the time being, it will not be removed altogether.
Indeed, if the US drawdown of its forces in Iraq goes smoothly, this may even convince Tehran that a US military option against its nuclear sites is more feasible.
Of course nobody really knows exactly what Iran's nuclear intentions are.
Iran's ruling elite want a nuclear weapons option, Mr Samore says
Mr Samore says that there are a range of views in Tehran.
"Some Iranians think they need nuclear weapons; others argue that to build nuclear weapons would be a mistake, because it would upset their neighbours, destabilise the region and make them a target of international hostility," he says.
He is clear though that there is a pretty strong consensus, at least among the ruling elite in Tehran, to create a nuclear weapons option.
But would Iran seek to pursue an actual nuclear bomb, I ask him?
"My guess is that it would - maybe not right away, but eventually, the Iranian leadership would feel that having a potential capability does not quite meet their needs, in terms of defence and their ambitions to be a major regional player, and that they would feel that having nuclear weapons in hand is really necessary."
So the stakes facing the new Obama team are high, and with so much uncertainty about Iran's intentions, there is clearly no guarantee that new thinking in Washington will be met by an equivalent response in Tehran.