On paper, the prospects for a diplomatic solution to the Iranian nuclear crisis seem pretty good right now. In the past, Iranian foreign policy has often appeared wild and unpredictable: Iran has lied about its nuclear facilities and provocatively test-fired missiles, all the while issuing bellicose rhetoric on the evils of Israel and America. Last week, however, during talks between Iran and six other countries in Geneva, the Iranian negotiators were in a conciliatory mood:

Knocked off balance, perhaps, by the revelation of a new nuclear site at Qom, Iran seems to have agreed to a more direct engagement over its nuclear programme, despite many previous assertions by President Mahmoud Ahmadinejad that the issue was closed.

Western negotiators say they won two important agreements. Iran will allow inspectors to visit the controversial new plant later this month. Tehran has also agreed in principle for a large part of the uranium it has already enriched at the Natanz plant to be shipped out of Iran. It would then be processed by Russia and France to a higher grade, for use in a research reactor in Tehran which produces medical isotopes.

The latter concession is particularly important. The dispute between Iran and the West has revolved mostly around Iran’s uranium enrichment capability. Most countries that operate nuclear power plants simply buy reactor-grade uranium from commercial suppliers, rather than going through the difficult and expensive process of enriching it themselves. Iran’s insistence on enriching its own fuel, along with the secretive nature of its nuclear programme and its development of medium-range ballistic missiles, has provoked Western suspicions that Iran’s ultimate goal is to construct a nuclear bomb. But if Iran is willing to send its uranium overseas for processing, there may be scope for a compromise. Such a deal would allow Iran to save face by holding on to its nuclear enrichment facilities, while also giving foreign observers a chance to confirm that Iran is not producing weapons-grade, highly-enriched uranium.

Why has Iran changed its negotiating stance? There are two explanations worth considering. The optimistic explanation is that Barack Obama’s foreign policy is starting to pay dividends. Obama came into office promising to engage with Iran, renew America’s alliance with Europe, and push the “reset” button with Russia. The new spirit of transatlantic cooperation was in evidence when Gordon Brown and Nicolas Sarkozy literally stood shoulder to shoulder with Obama when he revealed the existence of the Qom nuclear site. And while the White House insisted that it did not expect to receive any quid pro quo for its decision not to deploy missile interceptors in Poland and the Czech Republic, it was pleased when Dmitry Medvedev hinted that Russia might be willing to allow stronger sanctions against Iran in the UN Security Council. At the same time, Obama’s policy of engagement has convinced the Iranian leadership that his government accepts the legitimacy of the Islamic Republic, and that he is negotiating in good faith rather than with an eye towards eventual “regime change”. In short, Obama can wield bigger sticks and bigger carrots than his predecessor, and Iran’s change of behaviour reflects this new set of incentives.

The pessimistic explanation is that Iranian cooperation is merely a ruse, designed to buy time in which Iran will either advance its nuclear programme beyond the point of no return, or fortify its nuclear facilities against air attack. Sceptics were quick to point out that Iran’s concessions are still vague and ill-defined. The decision to send fuel to Russia for reprocessing is still only an agreement “in principle”, and there is no way to guarantee that the uranium Iran intends to send abroad represents its entire stockpile. Moreover, Iran is currently in the process of procuring Russian S-300 anti-aircraft missiles, one of the world’s most advanced air defence systems, which can track a hundred aircraft and engage twelve targets simultaneously at range of nearly 200km. Perhaps Iran is merely trying to stave off an imminent Israeli attack while it gets its air defence network into place.

Or perhaps neither of these explanations accurately captures the complexity of Iranian decision-making. The Iranian government is notoriously opaque. Iran has an elected President and Majilis, an unelected Supreme Leader and Council of Guardians, and a set of powerful bureaucracies such as the military and the Islamic Revolutionary Guards. In theory, foreign policy lies within the ambit of the Supreme Leader, but since 2005, President Mahmoud Ahmadinejad and the Revolutionary Guards have assumed so much power that it has become difficult to tell where decisions are actually made. There are realists within the Iranian leadership who would prefer to see some form of strategic rapprochement with the United States, but there are also numerous hardliners who view Western influence as the single greatest threat to the Islamic Republic. This may explain why, at the same time that Iran’s negotiators were preparing for the talks in Geneva, its military was testing a new missile that is capable of hitting Eastern Europe. Rather than a country that is hedging its bets, maybe this should be seen evidence of a divided government that can’t make up its mind.