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It appears Mahmoud Ahmadinejad has begun treating the declarations of U.S. President Barack Obama as policy, and this is a substantive response to the new American strategy, coordinated with the supreme leader, Ayatollah Ali Khamenei. Contrary to previous Iranian declarations, Ahmadinejad is dropping the precondition to dialogue that the United States first change its policy.

The new American strategy assumes that Iran will continue developing nuclear technology and enriching uranium, and says the Bush policies toward Iran have failed. As such, Washington has decided to do away with Bush's preconditions, which refused dialogue with Iran as long as Tehran enriched uranium. It appears Obama is willing to allow Iran to continue enriching a limited amount of uranium under strict supervision by the International Atomic Energy Agency.

The lifting of this precondition was perceived by Tehran as American recognition of its nuclear program and its right to pursue nuclear technology. Iran also assumes that the threat of further sanctions is now on hold, at least during the dialogue. Iran may be encouraged that the dialogue is not limited in time, and that the U.S. president's rhetoric does not include ultimatums or threats. Moreover, Washington has decided that there is no point in waiting until the Iranian elections are over, both because Ahmadinejad has a very good chance of being reelected, and because the Iranian people fully support the country's nuclear program.

Tehran and Washington are now forming a joint position on Iran's right to equal treatment and the need to lift all preconditions for negotiations. This way Obama has adopted the demand for "mutual respect" that Iran has desired as the basic principle for negotiations.

However, the new public rhetoric is no alternative to negotiations. Iran along with the Security Council's five permanent members and Germany must put forth their offers and hold what will surely be long, complex and exhausting negotiations. There will be issues of inspection, technological cooperation and limits to the dissemination of ballistic missiles.

Obama's foreign policy prestige will face its greatest test in these negotiations. His conduct will determine the future of nuclear arms development and Iran's willingness to stabilize the conflicts in Afghanistan and Iraq, two issues that have become central to Obama's policies.