The United States and Iran say they are willing to hold direct talks for the first time since relations were severed in 1980. Both countries say any dialogue would be strictly limited to Iraq, and would not include international efforts to convince Tehran to give-up its nuclear program.
President Bush's national security adviser, Stephen Hadley, says the White House has a long list of concerns about Iran, including its nuclear program, the treatment of its own people and its involvement in Iraq.
"It is Iranian activity in Iraq, which is giving comfort and, in some cases, equipment to terrorists that are killing Iraqis and killing coalition forces. And that is what we have made very clear is unacceptable."
The secretary of Iran's Supreme National Security Council, Ali Larijani, says Tehran is ready to open direct talks with Washington about Iraq. Hadley says the U.S. ambassador in Baghdad, Zalmay Khalilzad, is authorized to speak with Iranian officials, but only about Iraq.
"In connection with Iraq, we are prepared to have a conversation with Iran, in which we would explain and make clear our concerns about Iraq, and Iranian activity in Iraq."
Hadley says it is in the best interests of both Iran and Iraq to have good relations, and that is something they have to work out on their own.
"We should avoid anything that suggests that we are going behind the back of Iraqis to have some kind of arrangement with Iran about Iraq. That would be inconsistent with our policy, and unfair to the Iraqi people."
If the United States and Iran agree to meet about Iraq, it would be the first direct talks since 1980, when diplomatic relations were cut, following Iran's Islamic revolution. Officials from the two countries last met with representatives from seven other nations five years ago to talk about Afghanistan.
Larijani and Hadley both say any such conversation would not include talk about international efforts to stop Iran from enriching uranium. Iran says it has the right to pursue a peaceful civilian nuclear program meant to generate electricity.
President Bush says Iran is secretly developing a nuclear weapon. In an updated national security strategy, President Bush said Iran may present the single greatest future challenge to America.
Answering questions about that 49-page document, Hadley said there are indications that Iran is starting to listen to international concerns about its behavior.
"There is beginning to be a debate within the leadership, and I would hope a debate between the leadership and their people, about whether the course they are on is the right course for the good of their country.
That has only come about because they have heard a coordinated message from the international community."
Hadley says it is important to maintain international solidarity on Iran, as the issue of its nuclear program is now before the U.N. Security Council. In his national security strategy, President Bush says that diplomatic effort with Iran must succeed, if confrontation is to be avoided.
He did not specify the nature of that potential confrontation, but the warning comes in a section of the report justifying the president's use of pre-emptive military action to disrupt security threats.
The president says it was right to invade Iraq three years ago because of concerns that then-dictator Saddam Hussein was hiding weapons of mass destruction. None of those weapons were found.
Asked what lessons the administration has learned from the failure to find weapons of mass destruction in Iraq, Hadley said America needs better intelligence.