Though relations between the countries have been pockmarked with “Death to America” slogans, trampled U.S. flags, militant proxy battles and nuclear plant centrifuges spinning in defiance, the U.S. occupation of Iraq gave Tehran and Washington many reasons to start talking again. Iran had a golden opportunity to consolidate Shiite influence in the heart of the Arab world, and the United States needed to deal with the Iranians to keep Iraq from tearing itself apart in a full-scale civil war.

Despite the long-standing tensions, the back-channel talks that had been taking place even before the United States invaded Iraq progressed, in the final phase of the Bush presidency, to the point that dialogue was able to break out into the public sphere, allowing the world to warm to the idea of the Great Satan talking to a member of the Axis of Evil. Now, after a year-long campaign filled with Iranian pledges to talk to the United States’ main adversaries, the sporadic and indirect negotiations are about to evolve into direct diplomatic talks. It’s been a rollercoaster relationship, but it is slowly and surely moving toward a more cooperative stance.

Signs of progress can already be seen: There are serious discussions about the U.S. State Department setting up a diplomatic office in Tehran, and hard-line Iranian ayatollahs are practically welcoming the Obama administration with open arms. We do not expect either Iran or the United States to rush the process, however. The Obama administration is still putting together a diplomatic team to develop an Iran strategy, and the Iranians have to get through presidential elections in June. That said, neither side is wasting time in laying the groundwork for a more constructive relationship.

The U.S. military drawdown in Iraq will be a significant confidence-building factor in these talks. With the world’s most powerful military force flanking them in both Iraq and Afghanistan, the Iranians have had more than a few sleepless nights over the past several years. The drawdown in Iraq has been made possible both by the success of the U.S. surge in stabilizing Iraq (which was also quietly facilitated to some extent by the Iranians) and a strategic need for the United States to refocus on Afghanistan, where a victory over al Qaeda and the Taliban is anything but assured.

The Iranians still will be faced with a residual U.S. military presence in Iraq over the longer term and a U.S.-Iraqi strategic partnership designed to counter Iranian influence, but they at least can be assured that within the next year, the United States will no longer be in an immediate offensive posture on their western frontier. In fact, the Pentagon is making contingency plans for the United States to complete the bulk of its withdrawal from Iraq by the end of 2010 — a year ahead of the deadline stipulated by the U.S.-Iraqi Status of Forces Agreement — pending Obama’s approval.

In addition to building confidence for U.S.-Iranian dialogue, moves toward an accelerated U.S. withdrawal also could open new doors for cooperation in Afghanistan. There is no love lost between Tehran and al Qaeda or the Taliban, but Iran has been heavily involved in arming the jihadist insurgency in Afghanistan – hoping to keep the United States too preoccupied to think about regime change in Tehran. The Islamic Revolutionary Guard Corps (IRGC) also has plenty of intelligence that the United States would appreciate concerning the movements of al Qaeda operatives who travel in and out of Iran under the IRGC’s watch. U.S. Central Command chief Gen. David Petraeus indicated recently that Afghanistan is an issue of mutual interest for Washington and Tehran. And with the U.S. military focus shifting from Iraq to Afghanistan, there is strong potential for a meeting of the minds between these two on how to contain the Taliban and eradicate al Qaeda.

Another test of U.S.-Iranian cooperation will concern the Mujahideen e-Khalq (MeK) — a cult-like Marxist-based group whose primary aim is to overthrow Iran’s clerical regime. Approximately 3,000 MeK members have been holed up in Camp Ashraf, in Iraq’s Diyala province, under the watch of the U.S. military throughout out the war. Tehran has worried that the United States and other Western powers could use the group as a tool to undermine the stability of the Iranian regime. Now that the United States is drawing down forces in Iraq, the Iranians want assurances from Washington that the MeK will not be able to reorganize. Mainly out of concern for human rights, the United States cannot simply extradite the MeK members to Iran or release them to authorities in Iraq, where they likely would be tortured and executed. For this reason, many of them are likely to find political asylum in the European Union, which voted Monday to remove the group from its list of terrorist orga nizations. The MeK threat might be a useful card for the United States and Europe to hold onto in their negotiations with Iran, but moving forward, Iran likely would demand some guarantees from the Obama administration that the group will be completely neutralized, in return for any potential cooperation on al Qaeda and the Taliban.

Of course, a number of significant challenges remain on the path toward rapprochement. In addition to the deep-set distrust that the United States and Iran have harbored for three decades, the nuclear issue — despite widely varying estimates on its threat value — remains a key sticking point in any diplomatic arrangement. This is especially true as the United States has to balance Iran against its relationship with Israel and the surrounding Arab states, which who all want to see Iran boxed in from all sides. While a full and imminent rapprochement might be wishful thinking, it is hard to deny these days that Iran and the United States are at least moving toward some sort of mutual understanding.