The atmospherics have rarely been so good on the eve of Iran nuclear negotiations, which are set to resume tomorrow in Baghdad between world powers and the Islamic Republic.

United Nations nuclear agency chief Yukiya Amano today announced an agreement with Iran that was expected to deepen inspections and clear up remaining questions about possible weapons-related work – issues that have plagued Iran's nuclear dossier for years. Speaking in Vienna after a high-profile visit to Tehran on Monday, Mr. Amano said "important" progress had been made on a framework plan and that an accord would be signed "quite soon."

Yet as expectations of progress have grown in recent weeks, analysts question whether Iran's Supreme Leader Ayatollah Ali Khamenei can rise above domestic and ideological issues and strike a deal.

Ayatollah Khamenei is torn between hard-liners who reject any agreement with the West in principle – his own rhetoric has long pointed in that direction – and the benefits of global recognition of Iran's nuclear program, with a deal that also avoids war and eases crippling sanctions.

"The only thing that makes me doubt is: Up there [for Khamenei] is there a will to go ahead and make a deal, or not?" asks a veteran analyst in Tehran who preferred not to be named.

"Is there a ... clearly decided aim at 'Let's get this over with, put it behind us, and move forward?' " asks the analyst. "The problem is the hard-line guys ... who think that Iran is in the best, strongest position ever, and America and the West are in the weakest position, and we don't need to lift a small finger to do anything; it's they who have to do something.

"This crazy way of thinking is still in fashion; the moderate voice is not being heard a lot," adds the Tehran analyst. "This hard-line voice is still holding the loudspeaker, and shouting its ideas, and there is no sign that it's being shut up."

Khamenei takes charge of the nuclear issue

Positive signals from both sides have preceded the Baghdad talks, in which Iran and the P5+1 group (the US, China, Russia, Britain, France, and Germany) will seek a deal to verifiably limit Iran's nuclear efforts to peaceful use only.

Before leaving Tehran, Amano – who heads the International Atomic Energy Agency (IAEA) – had said the "intensive negotiations in a good atmosphere" would have a "positive impact" on the Baghdad talks.

Iran replied in kind, with chief nuclear negotiator Saeed Jalili on Monday praising "very good talks" that "God willing [will yield] good cooperation in the future."

These are the latest positive signals, which coincide with political dynamics inside Iran that consolidate Khamenei's position. Challenges from President Mahmoud Ahmadinejad last year have seen the fiery president sidelined. And parliamentary elections in early March were officially portrayed as a "victorious" vote of confidence in the regime.

This has enabled Khamenei to take charge of the nuclear dossier as never before, says a ranking former European diplomat who recently finished his tour in Tehran.

"Everything I hear in the last few months out of Iran is that it is Khamenei who is driving this this time, a difference [from] before, where he always had someone in between and different factions driving it," says the former diplomat, who asked not to be named.

Before the Istanbul talks in April, which broke a 15-month dry spell, Mr. Jalili was named a "personal representative" of Khamenei.

"That's clearly signaling [to the P5+1] that they are only dealing with one guy, which makes things much easier," says the former diplomat.

Perilous position for Khamenei?

But while that may help streamline the nuclear negotiations, it is "not good" in the long-run for Iran's Islamic system, where past battles between competing power centers helped prevent a "normal dictatorship," he says.

"Now with everything concentrated on Khamenei, you have a bit more of the classical dictatorial structure, which also means that everything that goes wrong can only be attributed to one guy," adds the former diplomat.

Such a role means the talks have put Khamenei in a "perilous position," writes Iran expert Mehdi Khalaji, in a recent analysis for the Washington Institute for Near East Policy.

"Compromising is as dangerous for [Khamenei] as digging in his heels," after years in which he "has made an uncompromising nuclear policy central to his domestic authority," writes Mr. Khalaji.

"For years, he sabotaged the efforts of Iranian officials who might have cut a deal with the West because he doubted their loyalty to him," adds Khalaji. "Those whom Khamenei did trust were not skillful enough to craft a policy of compromise that would preserve his ability to portray himself as a tough anti-American leader."

A deal that 'makes everybody happy'

Iran has not wavered in its refusal to halt uranium enrichment, once a red line for the West. Today more than 9,000 centrifuges are installed in Iran, and few now expect Iran to stop entirely.

But Iran has frequently said it is willing to halt its most sensitive work enriching to 20 percent purity – the level it needs to fuel a small research reactor, though technically not far from weapons-grade 90 percent.

Initial stages of a deal are likely to see Iran limit enrichment to below 5 percent, to fuel power reactors, and allow intrusive inspections, in exchange for an easing of sanctions.

If the positive signals are genuine, says the Tehran analyst – and Iran is not asked to give up enrichment altogether – then a deal is possible "that makes everybody happy."

"Iran can insist that we gained our right to enrich and have the knowledge of the [nuclear] fuel cycle, we gained it – we brought it out of the mouths of the enemies, or whatever formulation they want – and we are not making any weapon or secret materials, so let them inspect," says the analyst.

Track II meetings to build trust

The contours of such a deal have taken clearer shape in recent months. A suggested framework published by the Oxford Research Group on Monday spells out the importance of defining the endgame, "seeing the opportunities for positive signaling," and taking "regime change" off the table.

Crucial to success will be creating a "balance of advantage," such that "neither side is forced to undertake commitments dependent on the assurances of the other party's future actions."

The Oxford study suggests Track II meetings to build trust behind closed doors, in parallel with set-piece talks, face-saving mechanisms for both sides, and a review of the "carrot and stick" policy that in Iran's view yields only "weapons in a protracted effort to achieve 'regime change.'"

Some of these measures are likely to emerge at the Baghdad talks. Western officials have said Iran would be presented a "Chinese menu" of options.

Iran's Revolutionary Guard has been "suspiciously quiet" on the nuclear issue in recent weeks, in contrast to earlier this year, says the former European diplomat.

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Still, the Fars News Agency on Monday quoted Iran's armed forces chief of staff Maj. Gen. Hassan Firouzabadi saying that Iran remained committed to "the full annihilation of Israel."

The problem for Iran's leadership, notes the diplomat, is that "inside the regime there will always be – like on the American side or Israeli side – people who are against these negotiations and reaching a compromise as a matter of ideology."