A package of concessions offered to the US by Iran in 2003 was very close to what the US is now asking from Tehran. The BBC reports that Iran offered, among other things, to end support for Lebanese and Palestinian militant groups and to help stabilize Iraq following the US-led invasion. But a former US senior official told BBC's Newsnight program that the package was rejected by Vice President Dick Cheney's office.

One of the then Secretary of State Colin Powell's top aides told the BBC the state department was keen on the plan – but was over-ruled. "We thought it was a very propitious moment to do that," Lawrence Wilkerson told Newsnight. "But as soon as it got to the White House, and as soon as it got to the Vice-President's office, the old mantra of 'We don't talk to evil'... reasserted itself."

The BBC reports that in exchange for the above concessions, along with making its nuclear program more transparent, Iran wanted the US to "end its hostility, to end sanctions," as well as to disband an Iranian rebel group based in Iraq and repatriate its members.

The Washington Post reported in October of 2005 that Col. Wilkerson, who had been Mr. Powell's right-hand man at the State Department, made some serious charges against the Bush administration. Wilkerson, a 31-year military veteran and former director of the Marine Corps War College, has been described as "the man who would say what Colin Powell was thinking."

"What I saw was a cabal between the vice president of the United States, Richard Cheney, and [the then-secretary of defense] Donald Rumsfeld," he said. By cutting out the bureaucracy that had to carry out those decisions, "we have courted disaster in Iraq, in North Korea, in Iran, and generally with regard to domestic crises like Katrina." If there is a nuclear terrorist attack or a major pandemic, Wilkerson continued, "you are going to see the ineptitude of this government in a way that'll take you back to the Declaration of Independence."

In a news analysis, ABC News reports that "provocative words by President Bush and a fresh American military buildup in the Persian Gulf seem to mark a new focus on Iran that could signal another Cold War or even a deadly confrontation." Last week President Bush set a tough tone with Iran when he basically dismissed the Iraq Study Group's recommendation of dialogue with Iran and Syria. The same day the US raided an Iranian consulate in northern Iraq and arrested six Iranian diplomats who the US military said were connected to a group that funds insurgents in Iraq. US Secretary of State Condoleezza Rice later said that "The United States is simply responding to Iranian activities that have been going on for a while now that threaten not just to destabilize the chance for Iraq to proceed to stability but also that endanger our forces."

But Jon Soltz, an Iraqi war vet who heads the VoteVets Action Fund, says tough measures against Iran won't work.

[Soltz] said the move could signal a forthcoming strike against Iran or be an attempt to create enough leverage to force Tehran back into talks on its nuclear ambitions. "There's no question it's a chicken game with Iran," he said. "By us playing more war games with them, it only gives them more reasons to tie us down in Iraq."

Meanwhile, the Associated Press reports that one of the six Iranian diplomats arrested by the US last week has been released, and Iran's envoy to Iraq has said that the other five will be released "within days."

The Guardian reports that a senior Iraqi official Tuesday criticized the raid and the US position on Iran, which experts are describing as another sign of a growing rift between Iraq and the US about how to deal with Iran. Former Iraqi Prime Minister Ibrahim al-Jaafari told reporters that he does not believe that Iran is a threat to Iraq. Other politicians also criticized the US actions in Mosul.

Abdul-Aziz al-Hakim, the leader of the 130-member Shiite bloc in parliament and one of Iraq's most powerful politicians, [Tuesday] criticized the raid and condemned the detention of the Iranians as an attack on Iraq's sovereignty. "Regardless of the Iranian position, we consider these actions as incorrect," Mr Hakim, leader of the Supreme Council for the Islamic Revolution in Iraq, said in an interview with the BBC. "They represent a kind of attack on Iraq's sovereignty, and we hope such things are not repeated."

AP also reports that Mohamed El-Baradei, the head of the United Nations nuclear watchdog agency, said he was concerned that US sanctions on Iran "could escalate the standoff with Western powers over its suspected weapons program."

Mohamed ElBaradei called for a resumption of negotiations. Only applying pressure, he suggested, could prompt the Islamic republic to follow the path of North Korea, which kicked out U.N. inspectors, pulled out of the Nuclear Nonproliferation Treaty in 2003 and then conducted its first-ever nuclear test last October. "My priority is to keep Iran inside the system," said the 2005 Nobel Peace Prize winner, speaking in Paris. "My worry right now is that each side is sticking to its guns," he said. "The international community is saying 'sanctions or bust.' Iran is saying 'nuclear enrichment capability or bust' and we need somebody to reach out and be able to find a solution."

France is considering sending an envoy to Iran to talk about regional issues other than the nuclear issue. Mr. El-Baradei, who was meeting with France's foreign minister on Thursday, said, "Any effort by anybody to get the Iranians and the Europeans – and the Americans in particular – engaged would be something I welcome."