By George Friedman Tehran has announced that Iran and the United States will hold a new round of talks on the future of Iraq at some point next week. The Iranians said that the "structure of the discussions have been finalized but the level of participation has not yet been agreed." Meanwhile, Iranian Foreign Minister Manouchehr Mottaki said that President Mahmoud Ahmadinejad is expected to visit Iraq before March 20, the Iranian New Year. The United States has not denied either of these reports. There thus appears to be some public movement occurring in the U.S.-Iranian talks over Iraq. These talks are not new. This would be the fourth in a series of meetings; the most recent meeting happened last August. These meetings have been scheduled and canceled before, and because who will attend this go-round remains unsettled, these talks may never get off the ground. More significant, no Iranian president has visited Iraq since the Khomeini revolution. If this visit took place, it would represent a substantial evolution. It also is not something that would happen unopposed if the United States did not want it to; by contrast, the Iraqi government lacks much of a say in the matter because it does not have that much room for maneuver. So we can say this much: Nothing has happened yet, but the Iranians have repositioned themselves as favoring some sort of diplomatic initiative from their side and the Americans so far have not done anything to discourage them. U.S.-Iranian negotiations are always opaque because they are ideologically difficult to justify by both sides. For Iran, the United States is the Great Satan. For the United States, Iran is part of the Axis of Evil. It is difficult for Iran to talk to the devil or for the United States to negotiate with evil. Therefore, U.S.-Iranian discussions always take place in a strange way. The public rhetoric between the countries is always poisonous. If you simply looked at what each country says about the other, you would assume that no discussions are possible. But if you treat the public rhetoric as simply designed to manage domestic public opinion, and then note the shifts in policy outside of the rhetorical context, a more complex picture emerges. Public and private talks have taken place, and more are planned. If you go beyond the talks to actions, things become even more interesting. We have discussed this before, but it is important to understand the strategic interests of the two countries at this point to understand what is going on. Ever since the birth of the Islamic Republic of Iran, Iraq has been the buffer between the Iranians and the Arabian Peninsula. The United States expected to create a viable pro-American government quickly after the 2003 invasion of Iraq, and therefore expected that Iraq would continue to serve as a buffer. That did not happen for a number of reasons, and therefore the strategic situation has evolved. The primary American interest in Iraq at this point is a negative one — namely, that Iraq not become an Iranian satellite. If that were to happen and Iranian forces entered Iraq, the entire balance of power in the Arabian Peninsula would collapse. Whatever the future of Iraq, U.S. policy since the surge and before has been to prevent a vacuum into which Iran can move. The primary Iranian interest in Iraq also is negative. Tehran must make sure that no Iraqi government is formed that is dominated by Sunnis, as happened under the Baathists, and that the Iraqi military never becomes powerful enough to represent an offensive threat to Iran. In other words, above all else, Iran's interest is to avoid a repeat of the 1980-88 Iran-Iraq war. Obviously, each side has positive goals. The United States would love to see a powerful, pro-American Iraqi government that could threaten Iran on its own. The Iranians would love to see a pro-Iranian government in Baghdad and the withdrawal of U.S. forces from Iraq. Neither side is in a position to achieve these goals. The United States cannot create a pro-U.S. government because the Iranians, through their influence in the Shiite community, can create sufficient chaos to make that impossible. Through the surge, the United States has demonstrated to the Iranians that it is not withdrawing from Iraq, and the Iranians do not have the ability to force an American withdrawal. So long as the Americans are there and moving closer to the Sunnis, the Iranians cannot achieve their positive goals and also must harbor concerns about the long-term future of Iraq. Each side has blocked the other's strategic positive goal. Each side now wants to nail down its respective negative goal: avoiding the thing it fears the most. Ever since the 2006 U.S. congressional midterm elections, when President George W. Bush confounded Iranian expectations by actually increasing forces in Iraq rather than beginning a phased withdrawal, the two countries have been going through a complex process of talks and negotiations designed to achieve their negative ends: the creation of an Iraq that cannot threaten Iran but can be a buffer against Iranian expansion. Neither side trusts the other, and each would love to take advantage of the situation to achieve its own more ambitious goals. But the reality on the ground is that each side would be happy if it avoided the worst-case scenario. Again, ignoring the rhetoric, there has been a fairly clear sequence of events. Casualties in Iraq have declined — not only U.S. military casualties but also civilian casualties. The civil war between Sunni and Shia has declined dramatically, although it did not disappear. Sunnis and Shia both were able to actively project force into more distant areas, so the decline did not simply take place because neighborhoods became more homogeneous, nor did it take place because of the addition of 30,000 troops. Though the United States created a psychological shift, even if it uses its troops more effectively, Washington cannot impose its will on the population. A change in tactics or an increase of troops to 150,000 cannot control a country of 25 million bent on civil war. The decline in intracommunal violence is attributable to two facts. The first is the alliance between the United States and Sunni leaders against al Qaeda, which limited the jihadists' ability to strike at the Shia. The second is the decision by the Iranians to control the actions of Iranian-dominated militias. The return of Muqtada al-Sadr — the most radical of the Shiite leaders — to ayatollah school and his decision to order his followers to cease fire dramatically reduced Shiite-on-Sunni violence. That would not, and could not, have happened without Iranian concurrence. If the Iranians had wanted the civil war to continue unabated, it would have. The Iranians cannot eliminate all violence, nor do they want to. They want the Americans to understand that they can resume the violence at will. Nevertheless, without the Iranian decision to limit the violence, the surge would not have worked. If the prime Iranian threat against the United States was civil war in Iraq, the prime American threat against Iran was an air campaign against Iranian infrastructure. Such a campaign was publicly justified by the U.S. claim that Iran was developing nuclear weapons. With the Iranians having removed the threat of overwhelming civil war in Iraq, the United States responded by removing the threat of an air campaign. The publication of the National Intelligence Estimate (NIE) stating that Iran does not have a nuclear program at present effectively signaled the Iranians that there would be no campaign. There was intense speculation that the NIE was a "coup" by the intelligence community against the president. Though an interesting theory, not a single author of the NIE has been fired, none of the intelligence community leaders has been removed, and the president has very comfortably lived with the report's findings. He has lowered the threat of war against Iran while holding open the possibility — as the NIE suggests — that the Iranians might still be a threat, and that a new NIE might require airstrikes. The Iranians reduced Shiite violence. The United States reduced the threat of airstrikes. At various points, each side has tested and signaled to the other. The Iranians have encouraged small-scale attacks by Shia in recent weeks, but nothing like what was going on a year or two ago. During Bush's trip to the region, the United States triggered a crisis in the Strait of Hormuz to signal the Iranians that the United States retains its options. The rhetoric remains apocalyptic, but the reality is that, without admitting it, each side has moved to lower the temperature. Clearly, secret negotiations are under way. The announcement that an agreement was reached on the structure and subject of a public meeting this week by definition means that unpublicized conversations have been taking place. Similarly, the announcement that Ahmadinejad will be visiting Iraq could not have come without extensive back-channel discussions. We would suspect that these discussions actually have been quite substantial. The Iranians have made clear what they want in these negotiations. Mottaki was quoted in the Iranian media as saying, "We did express our readiness for entering into negotiations with the U.S. when the talks were held by the five Security Council permanent members plus Germany over Iran's nuclear program." He also said that, "Revising its policies toward Iran, the U.S. can pave the way for us to consider the circumstances needed for such talks to be held." Since talks are being held, it must indicate some movement on the American part. It all comes down to this: The United States, at the very least, wants a coalition government in Iraq not controlled by Iran, which can govern Iraq and allow the United States to draw down its forces. The Iranians want an Iraqi government not controlled by the United States or the Sunnis, which can control Iraq but not be strong enough to threaten Iran. Iran also wants the United States to end sanctions against Iran, while the United States wants Iran to end all aspects of its nuclear program. Ending sanctions is politically difficult for the United States. Ending all aspects of the nuclear program is difficult for Iran. The United States can finesse the sanctions issue by turning a blind eye to third powers trading with Iran and allowing U.S. companies to set up foreign subsidiaries to conduct trade with Iran. The Iranians can finesse the nuclear issue, maintaining limited aspects of the program but not pursuing all the technologies needed to build a weapon. Rhetoric aside, we are therefore in a phase where there are ways for each side to get what it wants. Obviously, the political process is under way in both countries, with Iranian parliamentary elections on March 14 and the U.S. presidential race in full swing. Much domestic opposition is building up against Ahmadinejad, and an intensifying power struggle in Iran could be a fairly large distraction for the country in the short term. The Iranians also could wait a bit more to see how the U.S. presidential campaign shapes up before making any major decisions. But then, a political process is always under way. That means the rhetoric will remain torrid; the public meetings few and low-key; the private discussions ongoing; and actions by each side sometimes inexplicable, keyed as they are to private discussions. But it is clear from this week's announcements by the Iranians that there is movement under way. If the Iranian president does visit Iraq and the United States makes no effort to block him, that will be the signal that some sort of accommodation has been reached. The United States and Iran will not recognize each other and will continue to condemn and even threaten each other. But this is truly a case where their rhetoric does not begin to reflect the reality.