So Who's talking to Iran?

Iran, which President Bush includes in his famous axis of evil, may be easing toward cooperation with the U.S. It could be a dramatic turnaround, provided Iranian hard-liners cooperate. The two nations have clashed over Iran's nuclear ambitions, and Washington has accused Tehran of harboring senior al-Qaeda members. The U.S. broke off official dialogue in May, after it blamed a bombing in Saudi Arabia on al-Qaeda leaders based in Iran. But Abdullah Ramezanzadeh, spokesman for Iranian President Mohammed Khatami, tells TIME that Tehran is supplying intelligence services of friendly Western and regional powers with information culled from some 500 al-Qaeda captives. "If Americans need any information," he says, "they can ask through countries friendly to us." Ramezanzadeh also insists that three al-Qaeda leaders reportedly in Iran are not among those his country has captured: Osama bin Laden's son Saad, bin Laden's right-hand man Ayman al-Zawahiri, and spokesman Sulaiman Abu Ghaith.

The two sides have even begun talking again. Sources tell TIME that several former senior U.S. officials have recently held informal discussions with Iran, among them Brent Scowcroft, chairman of Bush's Foreign Intelligence Advisory Board. Participants on both sides say the talks have touched on Iran's suspected nuclear-weapons program, its sponsorship of terrorism and other sore points. None of the issues have come close to being resolved. But Tehran has offered to repatriate some al-Qaeda suspects if the U.S. cracks down on the People's Mujahedin (m.e.k.), a group of Iranian exiles in Iraq who want to overthrow Iran's mullocracy. After complaints from Tehran, the U.S. in August shut down the group's offices in Washington and Los Angeles. But Iran wants the m.e.k.designated a terrorist group by the Clinton Administrationto be fully disarmed, as President Bush has ordered. Citing Iran's claims of cooperation in fighting al-Qaeda, a senior Iranian official notes, "There is no need for an unending crisis in U.S.-Iranian relations." But Administration hard-liners oppose any thaw, insisting the only sound policy toward Iran is one pressing for "regime change."