In October 2009, Iran's nuclear negotiators reached an agreement with the "P5+1" to ship its low-enriched uranium out of the country in exchange for higher-refined fuel ready for use in a medical research reactor. But discussions ground to a halt after Iran asked for changes in the initial agreement. Since then, Washington has used harsh economic sanctions against Iran's financial system as a key component in its strategy to force Tehran to the bargaining table – a strategy for which it has amassed broad international support.
To date, the measures have reduced Tehran's oil sales and hindered Iranian banks from accessing most oil revenues held in accounts overseas. In January, the European Union formally agreed to an oil embargo starting July 1. The Iranian economy – already struggling with recession due to the global financial crisis and the free-spending economic policies of Mr. Ahmadinejad's government – has thus suffered an especially harsh blow from the implementation of US and European financial sanctions against it.
If the survival of the Islamic Republic is at stake, then Mr. Khamenei – who has final say in all matters of state – is widely expected to endorse compromise. But the public's knowledge of the supreme leader's involvement in the talks means Iran's negotiators will have to take a tough stance on what those compromises ultimately are.