Growing domestic strains within this country appear to be pushing Iran's fundamentalist leaders to look for ways to end both the hostage impasses and the Gulf war.
The fundamentalists once hoped that they could strike back against Iraq with weapons expected to flow in after release of the American hostages. Today such hopes have faded.
Instead it is clear that the fundamentalists miscalculated their ability to persuade the United States, in effect, to trade the hostages for renewed military supplies. And, at the same time, the Europeans have emphasized they will not funnel weaponry into the region while the war grinds on.
Hence the new and more modest hope here is that ending the hostages' long captivity will ease the country's severe economic strains; that a hostage release would pave the way for an inflow of nonmilitary goods and credits and sidetrack today's rising resentment against the "mullah-cracy."
Hence, in turn, the fundamentalists are carefully keeping their options open on mediation both with the United States and with Iraq. Well-informed diplomats here point out that:
1. Iran has not given an outright rejection to the US reply to Iran's conditions for release of the hostages. Instead, a special commission in Prime Minister Muhammad Ali Rajai's office has been studying the US reply for the past five days.
2. At the same time, Iran has shown revived interest in attempts by the United Nations, the nonaligned nations, and the Islamic states to bring both sides in the Gulf war to the negotiating table.
On the hostage issue, Iran's demands for cancellation of all US claims against it and for the return of the wealth of the former Shah are the "sticky issues," according to diplomatic sources. But prominent Iranian officials seem to be searching for a possible compromise.
The US, for example, is understood here to be willing to release only $5 billion of the $8.5 billion assets now frozen in American banks. And, according to one senior diplomat, an Algerian negotiator is trying to explain to Iran that "even if President Carter releases at 8:00 tonight Iran's frozen assets, valued at $8.5 billion, US courts will have $3.5 billion impounded by five past 8 the same evening."