Iranian Supreme Leader Ayatollah Ali Khamenei said Jan. 3 that Iran sees "no benefit" in re-establishing relations with the United States at this point but did not rule out a resumption of ties in the future. Speaking to students in the city of Yazd, Khamenei said, "Cutting ties with the United States is one of our basic policies. We have never said that they will be cut forever." Khamenei added, "The conditions of the U.S. government are such now that it is harmful for us to resume relations. Despite some talkative people's claims, it has no benefit for the Iranian nation. The day that relations with the United States are beneficial to the Iranian nation, I will be the first one to approve of that." Khamenei's remarks are very similar to those made by U.S. President George W. Bush on Dec. 4, when he said Iran's behavior had improved and that talks with Tehran are proving constructive, but he maintained a stance just firm enough to pacify those on the American right. Khamenei is not just reciprocating but also signaling the United States that Tehran is prepared to re-establish ties with Washington but requires certain gestures on the part of the Americans. Just as the Bush administration cannot simply walk away from almost 30 years of public hostility, the clerical regime also needs to create the conditions needed to prepare the domestic scene for such a major foreign policy shift. In many ways, a resumption of bilateral relations is the logical outcome of a U.S.-Iranian deal on Iraq. Both sides realize that an agreement on Iraq will not be effective without some semblance of a bilateral relationship. Other recent developments also point to the probability of the normalization of ties between the United States and Iran. There has been an unprecedented warming of relations between the Iranians and the Arab states, highlighted by a series of unprecedented developments. Iranian President Mahmoud Ahmadinejad attended the summit meeting of the Gulf Cooperation Council in the Qatari capital. This was followed by Ahmadinejad performing the hajj at Saudi King Abdullah's invitation. Iran's leading national security and foreign policy official, Ali Larijani, took a trip to Egypt during which there were discussions about Cairo and Tehran resuming diplomatic ties. There have been public events that underscore a normalization between the Persian Shiite state and the Sunni Arab states, but there has not been any such public discussion between Iran and the United States. Given that Washington and Tehran have long been back-channeling on Iraq, it is possible that this matter came up in those back-channel talks. Such a proposal most definitely triggered an intense debate within the clerical establishment, with pragmatic elements in favor of resuming ties and ultraconservative players opposing the idea. We would expect a similar debate within the Bush administration — many members of which saw the Tehran hostage crisis occur during their formative years. This would explain the context in which Khamenei made the comments. If the Iranian regime is going to move toward resuming ties, the more hard-line factions will offer great resistance, and Khamenei will have to assuage their concerns. By saying that there are dangers associated with normalizing ties, Khamenei is letting the more conservative camp know that he is approaching the matter with caution. Khamenei also said, "Resuming relations will create the possibility of U.S. influence (in Iran) and the coming and going of U.S. spies." This remark is not just an attempt to placate hard-liners; it reflects a genuine concern among everyone within the regime that normal contact with the United States could lead to a color revolution of sorts in which democratic forces could unseat the unelected clerics at the apex of the Iranian political system. Ultimately, these concerns will not only thwart moves toward normalization, they also will impede progress on the issue of Iraq.