LONDON– There is a tide turning in the affairs of Iran, the land of megalomaniacal mullahs, passionate Islamic fundamentalism and secret nuclear bomb research where America’s proven role as the Great Satan is an inviolable text that until now has guided every move of the ruling elite.

Item 1. An advertisement in Monday’s International Herald Tribune by the devoted sister of the late Shah of Iran, overthrown by a popular revolt led by Ayatollah Ruhollah Khomeini, ending a monarchial system dating back 2,500 years. For years the Shah’s sister has taken advertising space to denounce the rulers of Iran. Now she commends on Iran’s recent presidential election thus, “Iranians have overwhelmingly voted for personal freedom, political democracy, separation of religion and government, economic development and peaceful foreign policy.” This is an endorsement of the new president, given its source, of rather stunning and unexpected proportions. She concludes ringingly, “This is what my brother would have wished.”

Item 2. From Monday’s Washington Post: “The Clinton Administration has decided not to oppose a $1.6 billion pipeline that would carry huge quantities of central Asian natural gas across Iran, in the first significant easing of Washington’s economic isolation (of Iran).”

Reconciliation between Washington and Tehran is still a long way away. But it is no longer out of sight and spurred on by the upset presidential election result of Mohammed Khatami (who takes office on Saturday) Washington is visibly changing gears.

A lot is going to hang on President-elect Khatami. Is he a glass half empty or half full? He was part of the regime for long enough, holding at one time the post of minister of culture. He was a voice for moderation yet, nevertheless, he was an enthusiastic proponent of rule by mullahs and still today ultimate power remains not with the elected president but with the supreme religious leader, the orthodox Ayatollah Ali Khamenei.

The important thing, however, in this delicate balance of power, is that Mr. Khatami remains, as the Shah’s sister makes plain, the only one with a popular mandate for change, voted by an electorate disillusioned with the ong years of theocratic rule.

The people are worse off materially than they were in the Shah’s time. The bazaar–the merchant class–whose hostility doomed the Shah is now likewise alienated from the regime. Besides, fundamentalism almost everywhere in the Middle East seems to have peaked. In Egypt the fundamentalist guerrillas are in retreat and the cause no longer has the popular cachet it once did. In Algeria extreme fundamentalism is being undermined by the twin policy of repression and controlled electoral participation.

A pressing question for Washington is whether this apparently half-full glass is going to be topped up by the new president by putting the nuclear bomb program on the shelf.

Last month General Binford Peacy, head of U.S. Central Command, with responsibility for U.S. forces in the Gulf, said he believed that Iran could have nuclear arms within three years.

The imperatives for Iran to build a nuclear armory have been strong. If Saddam Hussein’s Iraq had perfected its nuclear weapons during its 1980-88 war with Iran it may well have used them. Iraq remains Iran’s supreme enemy and although United Nations inspectors have supervised the dismantling of Iraq’s nuclear weapons programme there is undoubtedly a question mark over the future. For Iran nuclear deterrence must seem the best insurance.

Then there is the issue of Israel. Iran values its position as the country which most faithfully supports the Palestinian cause. It is not that Tehran believes it can engage Israel in nuclear brinkmanship to force Israel out of Palestine. It is simply a question of standing and also, usefully, of adding to the war of attrition on Israeli nerve ends.

Finally, there is the relationship with the U.S. with whom conflict has become a way of life ever since the American embassy and its occupants were seized and held hostage shortly after the Khomeini revolution.

What then has Washington to offer to persuade Iran to return its nuclear genie to the bottle? Washington cannot, except indirectly, bring peace between Palestinians and Israelis. Nevertheless, it is now clear that it must get tougher with prime minister Benjamin Netanyahu if the Oslo accords are to be salvaged. On Iraq it is as much in Washington’s interest as Tehran’s to keep Saddam Hussein’s nuclear war machine in the dismantled state it now is. By making it clear that the U.S. no longer sides with Iraq against Iran–its de facto position during their war–Washington could make a huge physchological gain. But as for America’s direct relationship itself, prisoner for too long of its own fundamentalist-style crusade against Iran, it is surely the time for constructive management. Iranian public opinion, as the Shah’s sister has intimated, is ready to bury the hatchet. So should Washington. And that change of relationship alone will do more to help bury the Iranian bomb than any policy of isolation and confrontation.