The 18-page letter Iranian President Mahmoud Ahmadinejad recently sent to President Bush was bluntly dismissed as unhelpful by the White House and widely seen in the West as the rantings of an irrational leader.

President Ahmadinejad

Iran's leaders may live in a different world, but it would be foolish to dismiss them as crazy. Iran has played its cards well in its nearly 30-year confrontation with the United States, and Ahmadinejad knows what he is doing. In his own fashion, he is trying to make a break with the past.

Until recently, Iran's hardliners opposed any open dialogue with the “Great Satan.” They even jailed a prominent sociologist for publishing the results of a poll showing that three-quarters of the population were in favor of talking to America. The fact that Ahmadinejad - the hardest of the hardliners - is now openly offering a dialogue is an important gesture, even if he did not address Washington's concerns.

Since 1979, when I watched and reported as Iranian revolutionaries trampled on the American flag and abused America's diplomats, the US government has had no formal relations with Tehran. Attempts to break the ice have been repeatedly rebuffed by both sides. Iran turned down President Bush's offer of aid when an earthquake killed tens of thousands of Iranians in 2003. Washington was equally unreceptive when Iran offered to send aid to the American Red Cross, and even oil, after Hurricane Katrina last year.

That does not mean there have not been discussions between the two governments. There have been back channel communications on the situation in Iraq ever since the United States toppled Iran's arch-enemy Saddam Hussein. Washington and Tehran both share an interest in seeking a stable Iraq that no longer threatens its neighbors.

Ahmadinejad's letter seeks to broaden the discussions to a whole range of issues. There was a precedent, incidentally, for his exhortations to Mr. Bush to return to God (“I have been told that Your Excellency follows the teachings of Jesus”). The late Ayatollah Khomeini, leader of the 1979 Islamic Revolution that overthrew America's ally the Shah of Iran, once wrote to Soviet President Michael Gorbachev urging him to convert to Islam and even sent a list of helpful books on the subject.

Iran sketch by Tom Fenton

But the real purpose of the letter is to head off the impending clash with America over Iran's nuclear research program. Iran's apparent desire to join the club of nuclear powers dates back to the time of the Shah, but its clandestine programs to enrich uranium and produce plutonium have only come to light in recent years. We now know that Iran received extensive help from Pakistan and has also collaborated with North Korea on missile development. Most experts believe it is only a matter of time until Iran has the expertise to produce a small nuclear arsenal. How much time is the main question.

But the Bush Administration and the Iran's Islamic leaders have boxed themselves into corners on the nuclear issue, and Ahmadinejad's letter seems designed to give Iran some room for maneuver. President Bush, with the backing of America's European allies, has drawn a line in the sand: Iran will not be allowed to possess nuclear weapons.

Iran, while professing to be seeking only nuclear power stations to meet its energy needs (despite enjoying the world's fourth largest oil reserves), refuses to give up its enrichment program, which Washington believes is really intended to produce nuclear weapons. In a tough part of the world where some of the neighbors already have the bomb, Iran's ambitions are understandable.

However awkwardly, Ahmadinejad has opened the door to Washington a crack. Now Washington, for its part, seems to have three options.

The military option, which it pointedly refuses to rule out, is feasible but fraught with difficulties. There are more than a hundred sites in Iran suspected of having a role in its nuclear program. An attack might only delay Iran's long-term goal.

Washington can hope for, or help bring on, a change of regime in Tehran. Many experts think that is no more than wishful thinking by Washington policymakers who can't decide which way to go.

Finally, the U.S. can try constructive engagement with Iran, to negotiate recognition and security guarantees for the Iranian regime in return for abandonment of its nuclear ambitions. Efforts by European intermediaries will not do the trick. Only guarantees from the United States might work. Of course, that may also be wishful thinking, but at the moment, Winston Churchill's dictum that “Jaw-jaw is better than war-war” seems appropriate.

What America needs most of all at this critical time are capable intelligence services that can read the minds of the various factions in Iran, and a genuine willingness to search for non-military solutions. A nuclear armed Iran would be a frightening prospect, indeed. But an attack on Iran – which would have the effect of rallying the Iranian population around its hard line government and raising anti-Americanism to a fever pitch in the Moslem world – seems hardly better.