On March 20, Iranians celebrated the start of the new year, yet Supreme Leader Ayatollah Ali Khamenei’s new year address bore no spirit of jubilation. He acknowledged that the Iranian populace had endured considerable economic duress over the past year, with further adversities likely in the year ahead. He also attempted to cast the near collapse of Iran’s “Axis of Resistance” in Lebanon and Syria in a favorable light by emphasizing, in his word “widespread” participation in funeral processions domestically and abroad as manifestations of regime legitimacy and popular mobilization.

At the core of these challenges lies Iran’s intricate and adversarial relationship with the United States, which has become further strained under President Donald J. Trump’s second administration. This evolving dynamic has increased the potential for armed conflict while simultaneously opening discrete pathways for diplomatic engagement, particularly regarding the impasse over Iran’s nuclear program. Khamenei, however, remains ambivalent, having previously suffered reputational costs following acquiescence on the Joint Comprehensive Plan of Action in 2015, later unilaterally abrogated by the first Trump administration in 2018. While this experience reduces Khamenei’s incentive to engage in negotiations with Trump’s second administration, the Iranian leader cannot afford to ignore elite and popular demand in Iran for a negotiated solution to the crisis over Iran’s nuclear program while the economy continues to decline under sanctions. Khamenei is also cognizant of the weakened state of Iran’s proxies and the increased risk of U.S. or Israeli military action against Iran. These competing considerations regarding negotiating with the United States are contributing to Khamenei’s oscillating policy messaging.

Following Trump’s November 5, 2024 electoral victory, Iran’s ruling elite fragmented into three distinct policy camps regarding engagement with the new U.S. administration:

• Technocrats and reformists, invigorated by Trump’s rhetorical rejection of “forever wars,” and the absence or dismissal of prominent Iran hawks, warned the regime against making a “prejudiced assessment” of the U.S. president and argued it was “time to end hostilities” with the United States.
• Ideological opportunists, operating under the guise of revolutionary orthodoxy but with the instrumental aim of denying their political rivals a diplomatic victory, revived anti-American rhetoric, insisting that “America is the great Satan, regardless of who is the president.”
• The Islamic Revolutionary Guard Corps and its political affiliates condemned the reformist position as defeatist and tantamount to capitulation. Gradually, the IRGC leadership called for demonstration of Iranian power in an attempt to change the perception of Iran’s weakened state.

Khamenei initially refrained from publicly commenting on Trump’s election but likely authorized a covert diplomatic engagement on November 11, 2024 between Iran’s permanent representative to the United Nations, Amir Saeid Iravani, and Elon Musk, presumably acting as a conduit to Trump’s inner circle. Iravani reportedly urged Musk to secure sanctions exemptions from the U.S. Treasury and consider setting up commercial ventures in Iran. This overture reflected Tehran’s awareness of cleavages on Iran policy within the incoming U.S. administration that it sought to exploit. Once this initiative was exposed, the reformist camp proclaimed that “the era of backchannel diplomacy has reached its limit” and called for formal direct talks with the United States. Conversely, the hard-line Kayhan daily castigated the engagement, rhetorically asking whether it was “naivete or treason,” while the IRGC-aligned Javan newspaper counseled readers to “wait and see what Trump intends.”

On January 28, cognizant of the severely weakened state of Lebanese Hezbollah, which had previously served as a deterrent against Israeli attacks, and disappointed in the IRGC leadership in the wake of the rapid collapse of the regime of Bashar al-Assad in Syria, Khamenei sided with the reformists and technocrats and implicitly endorsed diplomatic dialogue with the United States, prompting mixed reactions from Washington. On February 4, Trump issued a presidential memorandum designating Iran’s nuclear and ballistic missile programs, along with its support for regional nonstate actors, threats to U.S. national security. The document also reinstated the “maximum pressure” campaign from his first term, which, among other objectives, seeks to reduce Iran’s oil exports to zero. Nonetheless, Trump’s accompanying remarks were unexpectedly conciliatory, expressing hope the United States would never have to use coercive measures against Iran. Furthermore, on February 5 on Truth Social he expressed his aspiration for Iran to be “a great and successful country, but one that cannot have a Nuclear Weapon.” He added: “Reports that the United States, working in conjunction with Israel, is going to blow Iran into smithereens, ARE GREATLY EXAGGERATED.”

The disconnects and dissonance between the formal memorandum and Trump’s statements and social media messaging created confusion and frustration in Tehran. “One speaks, another elaborates, a third contradicts, and a fourth reinforces,” Khamenei later lamented, underscoring perceived incoherence in U.S. foreign policy. Even U.S.-educated former Foreign Minister Mohammad Javad Zarif admitted uncertainty as to whether the memorandum or the oral remarks reflected the administration’s true intentions. Other technocrats and reformists found solace in the absence of regime-change rhetoric. IRGC outlet Javan warned instead that, “The United States desires more than Iran’s surrender; it seeks its disintegration.”

Amid the uncertainty, Khamenei reversed course February 7, asserting that negotiations with Trump’s administration were “neither rational, nor dignified.” He advocated instead for strategic resistance and retaliatory deterrence in response to U.S. coercive signaling. In a March 12 address, referring to the United States and Israel, Khamenei said, “They are wrong in their assessment of Iran as weak.” This strategic realignment was welcomed by the IRGC, which around the same time likely influenced the decision by the Yemeni Houthis to escalate hostilities in the Red Sea – an effort to project strategic resilience despite Tehran’s significant military setbacks in Lebanon and Syria and potentially also provide Iran leverage in negotiations with the United States.

However, Khamenei’s recalibration met internal resistance. Reformists interpreted his rhetoric as still leaving space for engagement, while some technocrats questioned the strategic prudence of abandoning diplomatic avenues. Foreign Minister Abbas Araghchi, a consistent advocate of U.S.-Iranian engagement, asserted that negotiations were infeasible “as long as the maximum pressure campaign continues,” thereby implicitly keeping the door open. In a rare and dramatic move, President Masoud Pezeshkian reportedly offered his resignation, protesting Khamenei’s universally understood prohibition against negotiations with the United States. While regime-aligned media outlets dismissed the reports, Pezeshkian addressed the Parliament March 3, stating: “I believe dialogue with the United States would resolve our problems, but the leader said ‘we must not negotiate with America,’ and we said ‘Yes Sir, we shall not talk.’” His statement implied that Khamenei’s intransigence was the principal obstacle to sanctions relief and economic recovery, making the supreme leader, rather than the Iranian president, the target of public anger.

Trump opened the next chapter in preparations for negotiations. In a March 7 Fox Business interview, he disclosed that he had sent a letter to Khamenei. This triggered competing responses from within the Iranian regime. While Khamenei, unaware of the letter’s content, reiterated the need to “resist bullying,” Iran’s Permanent Mission to the United Nations stated on X: “If the objective of negotiations is to address concerns regarding any potential militarization of Iran’s nuclear program, such discussions may be subject to consideration.”

By March 13, the Iranian Foreign Ministry confirmed receipt of Trump’s letter. According to a well-informed Emirati source, the communication outlined five key demands. While notably omitting the human rights conditions emphasized during Trump’s first term, these demands reportedly included dismantling Iran’s nuclear infrastructure, halting uranium enrichment, ceasing arms transfers to the Houthis, ending financial support for Hezbollah, and disbanding the Popular Mobilization Forces in Iraq. Trump also imposed a two-month compliance deadline, threatening a “massive military operation” for noncompliance while promising sanctions relief and diplomatic normalization upon adherence.

Trump also reacted to the Houthi escalation of hostilities in the Red Sea, and on March 15 ordered U.S. Central Command to launch “large-scale operations” against the group in Yemen. In a March 17 Truth Social post, he insisted that Iran was “dictating every move” by the Houthis and warned Iran would be held accountable for “every shot fired,” threatening “dire consequences.” Meanwhile, Defense Secretary Pete Hegseth reportedly ordered the deployment of the USS Carl Vinson to the region and the extension of the USS Truman’s deployment, signaling heightened readiness and military resolve.

By March 20, in his Nowruz address, Khamenei subtly adjusted his tone and once again got closer to the position of the Pezeshkian Cabinet. He reiterated that “American threats will achieve nothing, and they shall receive a resounding slap for their malice.” However, he downplayed Tehran’s operational control over the Houthis, stating: “The struggle of the Yemeni nation … is born of their own volition and cause.” In doing so, Khamenei indicated the Houthis were on their own, and Iran would not come to their aid.

Khamenei’s address was followed by more carefully choreographed strategic messaging to Washington. On March 25, the IRGC unveiled a subterranean missile complex. While previous footage of similar installations featured the U.S. flag on the floor, subject to trampling, this video, however, did not. Iran also responded to Trump’s letter, reportedly rejecting discussion of its defense and missile capabilities but indicating a willingness to deliberate on its nuclear program, albeit strictly within the framework of the JCPOA. Separately, Ali Larijani, a former Supreme National Security Council secretary who has emerged as Khamenei’s special envoy, in an April 1 interview with Islamic Republic of Iran Broadcasting declared Iran’s willingness to engage in indirect negotiations with the United States to assess the Trump administration’s intentions. He insisted Iran was not pursuing nuclear weaponization but warned: “Should external actors miscalculate and intensify coercive measures against Iran’s nuclear program, they will be the ones compelling Iran to reassess its strategic posture” – an indirect threat of nuclear weaponization.

Iran’s calibrated signaling persisted into April, as the Iranian foreign minister explicitly rejected any comparison between Iran’s nuclear posture and the Libya model of unilateral disarmament, framing such parallels as strategically unacceptable. Simultaneously, on April 9, Lebanese Hezbollah conveyed conditional openness to disarmament, a historic shift and notable concession aligned with long-standing U.S. demands, particularly those articulated during the Trump administration, suggesting a possible reconfiguration of Iran’s regional deterrence architecture under evolving geopolitical pressures.

Negotiations between Iran and the United States have yet to begin. But as the year unfolds, Khamenei faces multiple strategic dilemmas: how to craft a policy appeasing the regime’s ruling elites at home; how to pursue diplomacy with the United States while safeguarding the strategic core of Iran’s nuclear program and missile capabilities, the regime’s key remaining source of strategic leverage and deterrence; and how to project strength while preserving off-ramps for de-escalation and avoid a catastrophic war with the United States.

In the wake of his recent policy recalibrations, Khamenei appears to have converged on a pragmatic strategic posture that accommodates the interests of both the reformist-technocratic bloc and the IRGC while sidelining the faction driven by political opportunism. In exchange for partial sanctions relief from the United States, an objective prioritized by the reformist-technocratic coalition, Tehran seems prepared to recalibrate its regional posture, potentially by reducing or even terminating its support for the Houthis in Yemen. Under specific conditions, Iran may also be willing to consider the demilitarization of Hezbollah, especially given the increasing logistical constraints on arms transfers through Syria, a corridor now under the control of an adversarial regime in Damascus.

Furthermore, Tehran might offer to transfer its enriched uranium stockpile to Russian custody, as a confidence-building measure, while firmly preserving its sovereign right to domestic uranium enrichment. Crucially, Iran going into to any negotiations is expected to categorically exclude any negotiations over its ballistic missile program or enrichment capabilities in their entirety – both of which are core strategic assets and pillars of the IRGC’s national security doctrine.

The efficacy of Khamenei’s strategy will hinge not only on Iran’s internal cohesion but also on the coherence – or lack thereof – of U.S. strategic posture toward Tehran.