The United States plans to restore diplomatic relations with Iran, the Guardian reported this week.  In an apparent nod to a non-military solution to the Iranian nuclear threat, the U.S. is preparing to station its first diplomats in the Islamic Republic since the 1979 Islamic Revolution, when diplomatic ties were severed between the two nations.

According to the British report, an announcement will be made next month on a U.S. "interests section" in Tehran, a preliminary step to establishing a full embassy in the Iranian capital. The section will be staffed by American diplomats.

The announcement represents a dramatic shift in recent U.S. policy towards Iran, which it has long classified as a hostile regime. The U.S. has regarded the Islamic Republic's interests as contrary to its own ever since the Muslim fundamentalist revolution which toppled the U.S.-backed Shah, and the sudden reversal of President George Bush's hawkish approach toward Tehran comes just as international tensions reach a new peak over Iran's disputed nuclear program.

The last months have seen Iran intensifying its threats to annihilate Israel as Iranian President Mahmoud Ahmadinejad's escalates his invective against the Jewish state and its American ally, whom he has taken to calling the "Great Satan". Meanwhile, following live tests of Iranian long-range missiles, the American military elite have grown sufficiently concerned about the Iranian nuclear threat to issue Israel an "amber light" to attack Iran if and when the U.S. deems it necessary.  As Israel prepares for a possible confrontation with Iran, signs are appearing of a new entente between the superpower and the recalcitrant Middle Eastern regime.

The White House announced Wednesday that William Burns, a senior official in the U.S. State Department, will fly to Switzerland on Saturday to meet with Iranian officials and hear Tehran's response to a European diplomatic initiative aimed at resolving the nuclear standoff.

The meeting comes despite Bush repeatedly ruling out direct talks with Tehran until the Islamic Republic shelves its uranium enrichment timetable. The centrifuging of uranium into a weapons-grade isotope is a critical first step on the way to a nuclear weapons capability, and thousands of centrifuges are currently spinning in Iran, with many more expected to become operational soon.

Although Bush has taken a hard line with Iran throughout the last seven years, many believe that, in the dying days of his presidency, he is making overtures toward an Iran rapprochement as a final legacy of a term in office, set to end next January.

The prospective return of U.S. diplomats to Iran is contingent on Iran's approval. Presently, the Swiss embassy oversees U.S. interests in Iran, and Tehran has frequently complained of America's refusal to deal with their government directly, relying instead on Britain, France and Germany as intermediaries.

Earlier in the week President Mahmoud Ahmadinejad indicated that he was favorably disposed to a new US mission in Tehran.

"We will receive favorably any action which will help to reinforce relations between the peoples," said the Iranian president, adding: "We have not received any official request but we think that the development of relations between the two peoples is something correct."

The special interests section would be similar to the one in Havana, Cuba, where US diplomats returned in 1977 following a break precipitated by Castro's 1961 takeover of the island country. The Havana section carries out all the functions of an embassy, formally a part of the Swiss embassy but otherwise American-staffed and independent of the Swiss.

The decision to open a diplomatic mission in Iran comes after years of intense debate within the Bush administration over the proper response to Iran's nuclear overtures and expressed hostility to the US and Israel. Vice President Dick Cheney has pushed for a military strike against Iran's nuclear sites, while the State Department has been pressing the White House to reopen diplomatic relations with Tehran by setting up an interest section.

In the absence of such a section, the US has had to rely on European diplomats for information about the inner workings of Iranian politics. Having its own staff in Tehran would give the US access to students, dissidents and other sources of information vital to American and global security interests.

While the US State Department is concerned that its move toward diplomacy not be interpreted as a sign of weakness, Iranian enthusiasm for the move was reciprocated by US Secretary of State Condoleezza Rice. "We want more Iranians visiting the United States ... We are determined to reach out to the Iranian people, " the chief American diplomat told reporters last month.

Some in Israel worry that the American nod to a diplomatic approach to Iran in the face of European pressure is reminiscent of American appeasement of Nazi Germany in the years leading up to WWII. As Israel braces itself for a rocket attack from a potentially nuclear Iran, the fear in the Jewish state is that such appeasement will lead to another holocaust of its people.

The Israeli government has yet to issue an official reaction to the US announcement.