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At long last, the lawmakers were ready to end the months of inaction and delay. Argued Hojatolislam Mahallati in backing the bill: "We have let the government start negotiations with a third country and we cannot go against the government." The majority seemed to side with Nabavi when he contended: "We have rubbed America's nose in the dirt. The government wants to get rid of the problem in the next two or three days—either freedom or a trial."
The arbitration bill was passed, but action on the less urgent measure nationalizing the Shah's assets was postponed. The Guardians filed out of the assembly, met solemnly in private and emerged to declare the legislation to be in keeping with Islamic law. Learning of the decision, U.S. State Department Spokesman John Trattner said only: "It's a step in the right direction." Also dampening any euphoria, Secretary of State Edmund Muskie suggested that the Administration would work at the problem right up to the moment that Reagan is inaugurated. "The real deadline is the 20th, not the 16th," he told reporters, thus abandoning an earlier publicly stated termination date for positive action by Iran.
By Thursday, however, the impression of substantial new progress could not be concealed. In Tehran, Iranian Prime Minister Muhammed Ali Raja'i looked drawn and uneasy as he and Nabavi walked into an austere two-story house in Jamaran, a village north of Tehran, presumably to advise Khomeini of the parliament's action, the latest offers from Algeria and a proposed Iranian response. Raja'i emerged much more relaxed and cheerful. He had received the Ayatullah's consent to send a positive reply. Not only were the negotiations now rushing toward a likely conclusion, but the worried Prime Minister no longer could be accused of selling out to the Americans. He had Khomeini's blessing.
It did not take long for the Algerians to relay the Iranian response to Christopher. Even as he began studying it, a copy of the four-page text was rushed by coded radio communication to the computer printer near Secretary Muskie's office on the State Department's seventh floor. Muskie, however, had just gone off to make a luncheon speech to the World Affairs Council. On his return, he read the message slowly, picked up a telephone to summarize the cable first to the President and then to National Security Adviser Zbigniew Brzezinski. With that, Muskie returned calmly to another problem: an interdepartmental squabble over U.S. policy in El Salvador. Said a surprised aide: "He showed no emotion."
The Administration's initial public response was equally low-key. The Iranian reply was "substantive," said State's Trattner. "It warrants close and intensive study. We cannot yet predict whether it will enable the parties to resolve their remaining differences." In fact, the reply was more constructive—at least on its face—than U.S. diplomats had expected. Observed a senior State Department official: "The response included provisions that are advantageous. They offered prescriptions for dealing with the banks that are improvements over our positions."