LONDON: In the wake of the surprise election of moderate Mohammed Khatami to Iran's Presidency, the U.S. is probing the possibility of better relations. President Clinton Thursday called Khatami's ascension a "hopeful sign," but added that Iran must end its support of international terrorism and its opposition to the Mideast peace process before improved diplomatic relations can be achieved. Don't look for a rapprochement any time soon, says TIME's Scott MacLeod: "It is very unlikely that we will see something from Khatami or the Iranian government in a major way. There may be some subtle things, and to some extent, we have already seen this. In his first press conference, Khatami didn't go out of his way to attack the U.S. But what the U.S. is more likely to see is Iran's standard response, which is that the country does not engage in terrorism and that it supports peace." For Iran, MacLeod notes, closer relations are likely only if the U.S. agrees to concrete concessions such as returning Iranian assets frozen after the Shah's 1979 ouster. "The Iranians have a lot of evidence to suggest the U.S. is not sincere in establishing good relations. So for the time being, the response will be that when the U.S. makes a really serious positive gesture, then an optimistic response will be given."