Bloomberg News

Obama-Rouhani Chat Covers Nuclear Talks, New York Traffic

September 28, 2013

Iranian President Hassan Rouhani

Iranian President Hassan Rouhani has used this week’s trip to the United Nations in New York to emphasize how he’s different, and prepare the ground for renewed talks on Iran’s nuclear program. Photographer: Thomas Koehler/Photothek via Getty Images

The historic conversation between President Barack Obama and Iran’s President Hassan Rouhani touched on the Islamic Republic’s nuclear program and New York City traffic and ended with “Khoda Hafez” from Obama -- Farsi for “God be with you,” an expression used as “goodbye.”

The 15-minute phone call through interpreters yesterday was the highest-level U.S.-Iranian encounter since before Iran’s Islamic revolution of 1979. It sprang from a change of heart by the new Iranian leader, who announced the exchange on the Twitter social network and unfolded as he was driven to the airport to leave the U.S.

Their chat marked an about-face from three days earlier, when the Iranian leader rejected a U.S. invitation to meet with Obama -- or just shake hands -- at the United Nations General Assembly in New York. Both men have spoken in recent weeks of prospects for reengagement amid international sanctions aimed at keeping Iran from developing nuclear weapons.

“A path to a meaningful agreement will be difficult, and at this point, both sides have significant concerns that will have to be overcome,” Obama said at the White House an hour after the call. “But I believe we’ve got a responsibility to pursue diplomacy, and that we have a unique opportunity to make progress with the new leadership in Tehran.”

The call, which began at 2:30 p.m. New York time, didn’t set the stage for direct U.S.-Iran talks or future conversations between the two men. It also didn’t set a deadline for resolving concerns about Iran’s nuclear program, according to an Obama administration official who described the conversation on condition of anonymity.

Crude Oil

West Texas Intermediate for November delivery crude oil settled 0.2 percent lower at $102.87 a barrel on the New York Mercantile Exchange yesterday on concerns that the U.S. budget impasse may hurt growth in the largest oil-consuming country.

The Iranian rial has risen about 20 percent on unofficial markets since Rouhani won election on June 14.

About a hundred supporters cheered Rouhani upon his return to Tehran today, according to a report by the state-run Mehr news agency. Almost the same number of protesters tried to block his way, chanting anti-U.S. slogans. One of the protesters threw a shoe at his car, Mehr reported.

“I think it is a positive move. But I’m wondering why there’s no reaction from the Supreme Leader since last night,” said Ramtin, 45, who asked to be identified only by his first name. “Either he’s ordered it, or he’s really angry about it and waiting for Rouhani’s report on the recent developments.”

Netanyahu Meeting

Obama and Rouhani spoke days before a Sept. 30 meeting at the White House between Obama and Israeli Prime Minister Benjamin Netanyahu, who has expressed deep skepticism about the motives behind Rouhani’s outreach and suggested Iran is trying to buy time to develop the capability to make a nuclear weapon. U.S. officials spoke with Israelis to inform them of the call, according to the Obama administration official.

“I’m going to speak the truth, the whole truth, in the face of sweet talk and smiles, because the truth is now essential for the security of Israel and the security of the entire world,” Netanyahu told reporters in Israel today before leaving for the U.S.

The Iranian president shared details of the call with the world over his English-language Twitter feed. He said that Obama had expressed his hope for progress on nuclear talks as well as “respect for you and ppl of #Iran,” and apologized for New York City’s traffic.

Change in Strategy

It wasn’t immediately clear what prompted Rouhani’s change in strategy, though the U.S. official who described the call said it may have been the positive tenor of renewed talks about Iran’s nuclear program in New York the day before. U.S. Secretary of State John Kerry and counterparts from five other world powers met with Iranian Foreign Minister Mohammad Javad Zarif, who proposed a goal of reaching an accord within a year.

After saying that a meeting between Obama and Rouhani on Sept. 24 in New York would be too complicated, Iranian officials contacted their U.S. counterparts yesterday and said that Rouhani wanted to speak with him before leaving New York, according to the administration official.

With Obama back in Washington, meeting with India’s prime minister Manmohan Singh and bracing for the prospect of a government shutdown over differences with congressional Republicans on the budget and health-care, the U.S. president said yes.

The call took place as Rouhani was en route to the airport, Iran’s official IRNA news agency reported.

Aaron David Miller, a vice president at the Wilson Center in Washington and Middle East adviser to several U.S. administrations, said that “at best” the call reflects “a transactional dynamic, not a transformation.”

‘Sense of Urgency’

“This is all being driven by a fear of the alternative,” Miller said. “The Iranians are being driven by the economic sanctions,” while Americans are prodded by a sense of nervousness among the Israelis and a sense of urgency that Iranians are nearing “a breakthrough capacity” on weapons, he said.

“The Iranians have already mastered how to build nuclear weapons,” Miller said. “The best we can do is keep them X number of years away from a nuclear weapon. Are we going to be able to live with that? Are the Israelis going to be able to live with that?”

Economic Sanctions

Iran’s pursuit of nuclear technology has led Obama and his allies in Europe to tighten economic sanctions and the U.S. and Israel to threaten military action to prevent the Islamic republic from obtaining nuclear weapons. Iran denies that it’s seeking to do so.

Nuclear talks stalled in April, when Rouhani’s predecessor, Mahmoud Ahmadinejad, was still in power. Discussions got under way again as Kerry and his counterparts from the five other world powers -- China, France, Russia, the U.K., and Germany -- met Zarif. The participants agreed to “jump-start the process so we could move forward with a view to agree first on the parameters of the endgame,” Zarif said afterward.

Neither side trusts the other, and Obama and Rouhani each face internal political pressures not to negotiate.

Rouhani took office last month after winning election on a pledge to end Iran’s global isolation and ease the trade curbs. At the UN this week, he repeatedly said his government is ready for a deal.

Skeptical Reaction

Some U.S. lawmakers say they remain skeptical of Rouhani’s overtures. Representative Eliot Engel of New York, the top Democrat on the House Foreign Affairs Committee, said after Rouhani’s address to the UN General Assembly that the Iranian leader’s rhetoric “does not reflect any significant change in Iran’s calculus or behavior.”

“We must continue to make clear that all options remain on the table to prevent Iran from developing a nuclear weapons capability,” Engel said in a Sept. 24 statement.

Diplomats and analysts have cautioned that the real test of Rouhani’s commitment to an accord will start when detailed negotiations resume in Geneva on Oct. 15. “One meeting and a change in tone, which was welcome, doesn’t answer those questions yet” about Iran’s nuclear intentions, Kerry said on Sept. 26.

‘Big Interest’

In his UN address this past week, Rouhani said Iran maintains its “inherent right” to enrich uranium. The Vienna-based International Atomic Energy Agency circulated a document yesterday in which Iran stuck to its positions, including barring inspectors from visiting the Parchin military base to investigate whether tests were conducted there related to triggering a nuclear device.

“Rouhani has a big interest in moving quickly to show that he can get sanctions relief, but whether he can deliver the rollback in their program that we will need for that remains to be seen,” said Dennis Ross, Obama’s former adviser on Iran and now a counselor at the Washington Institute for Near East Policy.

Iran’s Supreme Leader Ayatollah Ali Khamenei controls the country’s nuclear program. Rouhani told reporters in New York earlier yesterday that he has the support of “all forces” in Iran for the next phase of nuclear talks, and that the country will present a proposal in Geneva.

Rouhani won support from voters in Iran’s June election by promising to improve an economy wrecked by the sanctions. Oil exports, Iran’s main source of revenue, have dropped by half to less than 1 million barrels a day, and inflation has almost doubled in two years, reaching 39 percent last month.

To contact the reporters on this story: Margaret Talev in Washington at mtalev@bloomberg.net; Kambiz Foroohar in New York at kforoohar@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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