Prisoner deal heralds Iran-US thaw, but no nuclear deal seen

Two and a half years into Joe Biden's presidency, and after exhaustive diplomacy with Iran's clerical leadership, his administration has reached a first deal -- to free five detained Americans.

The delicate agreement heralds an easing of tensions between the longtime adversaries, and experts and diplomats believe it could bring further, quiet efforts to address concerns including Iran's nuclear work.

Few people, however, expect major agreements anytime soon, with the clock ticking to the 2024 US presidential election.

"I think both sides have an interest in using this initial agreement as the gateway to get back to dialogue, but not necessarily to a deal," said Ali Vaez, the Iran project director at the International Crisis Group, which promotes conflict resolution.

European-led talks collapsed last year on reviving a 2015 nuclear deal, which constrained Iran's contested program in return for promises of sanctions relief but was trashed by former president Donald Trump.

Biden himself, in a caught-on-camera encounter at a campaign stop late last year, said the nuclear deal was "dead" in all but name, at a time when the Islamic republic was putting down massive protests led by women.

- De-escalation seen -

A source familiar with the negotiations said the prisoner agreement was separate from the nuclear issue. But he also said diplomacy has been effective in lowering the temperature with Iran, pointing to the truce that has held unofficially for more than a year in war-ravaged Yemen, where Huthi rebels are backed by Iran.

Attacks by Iranian-linked Shiite militias against US troops have also appeared to subside in Iraq, noted a diplomat from a US ally.

"The tensions are still very much there but the two governments are communicating, and that makes a difference," the diplomat said.

US and Iranian officials reopened diplomacy in May in indirect meetings arranged by Oman, with some talks exploring measures to cap Iran's nuclear program that stop short of fully restoring the nuclear deal, according to diplomats.

"I think the de-escalatory context already exists," said Vaez, who helped outside efforts to bridge gaps to reach the 2015 accord.

But he doubted the Biden administration has the appetite on a new nuclear deal with the election season opening.

"Any substantive deal with Iran requires significant sanctions relief that will be extremely politically controversial in the US," he said.

"On the Iranian side, given the proximity of US election, it doesn't make sense to them strategically to give away most of their leverage not knowing who the next US president is," he said, with Trump or another Republican likely to tear apart any new deal.

Republicans have gone on the offensive over the prisoner deal, accusing Biden of enriching a hostile regime.

In an agreement that Biden officials insist is not final, South Korea will unfreeze $6 billion in Iranian oil revenue blocked over US sanctions, with the funds transferred to an account in Qatar for humanitarian purchases.

In an initial step, Iran moved five US citizens, one of them arrested nearly eight years ago on spying charges he strongly denies, from prison to a guarded hotel.

- Poor sign to Iran protesters? -

Holly Dagres, a nonresident senior fellow at the Atlantic Council, agreed that the prisoner deal amounted to "a confidence-building measure and could revive talks over Iran's nuclear program."

"But this also signals to Tehran that it can get relief from its hostage-taking model, which may prompt it to continue the status quo given that it can also sell oil due to weakly enforced sanctions," she said.

She also questioned the timing of the agreement. September 16 marks one year since death in custody of Mahsa Amini, who had been arrested by the clerical state's morality police for not wearing the mandatory headscarf.

Her death prompted mass demonstrations in one of the biggest challenges to the Islamic republic established after the overthrow of the pro-Western shah in 1979.

"Doing a deal with the United States around such a sensitive period is, in essence, communicating to protesters that Washington doesn't care about their plight," Dagres said.