WASHINGTON -- The Bush administration refused to negotiate for the release of hostages but made a series of overtures to Iran that helped produce the same result.
The approach flowed from President Bush's 1989 inaugural promise that "goodwill begets goodwill," and it set in motion a gradual rapprochement with Iran that helped conclude America's hostage ordeal.
Reversing a Reagan administration position, Mr. Bush instructed the State Department to move in earnest on settling claims before a tribunal in The Hague, the Netherlands, stemming from the Iranian revolution and the seizure of the U.S. Embassy in Tehran in 1979.
In March, the United States partially lifted an embargo on importing Iranian oil. At the same time, analysts say, there has been an easing of pressure on U.S. allies not to trade with Iran.
The economic moves have been accompanied by a sharp reduction of anti-Iran rhetoric from the U.S. government and periodic statements designed to lure the Islamic republic back into the Western fold. When two Libyans were indicted in the bombing of Pan Am Flight 103, U.S. officials were quick to note that there was "no evidence" of Iranian or Syrian involvement.
How all the U.S. hostages came to be freed is a complex story whose full scope may not emerge for some time.
Among the political factors were Iran's need for Western trade to continue rebuilding from economic catastrophe following its eight-year war with Iraq, Syria's improved relations with the United States, an Arab-brokered end to the Lebanese civil war, the sudden freeing of 17 Shiite Muslim terrorists in Kuwait following the Iraqi invasion and a sense among Lebanese radicals that the hostages had lost their value.
One unknown is whether anything was said or done to assuage hostage-holders' fear of eventual capture and prosecution.
"There have been absolutely no deals made," State Department spokeswoman Margaret Tutwiler said yesterday.
But the United States' financial and economic gestures certainly helped improve the atmosphere with Iran, which has strong influence over Lebanese Shiites, analysts say.
The most recent was a high-level decision to pay Iran directly most of the $278 million owed to it for undelivered military equipment, instead of putting it into escrow at The Hague.
No public evidence exists that the Bush administration actually negotiated for the hostages' release, with Lebanese captors, Iran or Syria.
In fact, the consistent, publicly stated refusal to negotiate is seen as a reason for the hostages' diminished value to the various but closely linked Hezbollah factions holding them.
President Bush's national security adviser, Brent Scowcroft, kept in regular telephone contact with U.N. Secretary-General Javier Perez de Cuellar, whose special envoy shuttled throughout the Middle East in the last several weeks to win the hostages' freedom.
Mr. Scowcroft, having investigated the Reagan administration's ill-fated arms-for-hostages adventure, was keenly aware of the political pitfalls of direct U.S. involvement.
But that didn't prevent the Bush administration from moving on other fronts to build Iranian confidence in the post-Khomeini era.
Soon after taking office, the president directed State Department legal adviser Abraham D. Sofaer to move ahead in an effort to settle billions of dollars worth of U.S. and Iranian claims stemming from the Iranian revolution and embassy seizure.
Mr. Sofaer said in an interview from Switzerland yesterday that he had previously developed a relationship with his counterpart in the Iranian government, whom he refused to identify by name.
During the Reagan administration, "he and I tried on two or three occasions to begin in earnest the process of clearing the decks," said Mr. Sofaer, who left office last year.
But the U.S. diplomat's authority to negotiate was withdrawn twice because of "an atmosphere of fear of public criticism," Mr. Sofaer said: first amid the furor over Oliver L. North's arms-for-hostages deals, and later when Iran, toward the end of its bloody conflict with Iraq, mined Persian Gulf waters, prompting the United States to reflag Kuwaiti oil tankers.
The second suspension lasted until Mr. Bush, soon after his inaugural address, instructed Mr. Sofaer to "clear the underbrush" in the claims process.
The United States helped persuade Iran's leaders of its less hostile attitude when it refrained from freezing money Iran won here in civil litigation, Mr. Sofaer recalled.
Cementing their professional relationship in 1989, Mr. Sofaer and his counterpart tackled ever-bigger settlements, eventually dealing with hundreds of small claims at once.Mr. Sofaer's final effort before resigning was to negotiate the settlement on military equipment and set up groups to deal with billions of dollars worth of foreign military sales claims, he said.
In another gesture, Mr. Bush allowed U.S. lawyers to appear at the International Court of Justice at The Hague to answer Iran's suit over the accidental 1988 downing of one of its passenger planes by a U.S. ship patrolling the Persian Gulf.
In contrast to the later Reagan years, "instead of letting negative things knock us off the track, Bush, Baker and Scowcroft kept sending me back," Mr. Sofaer said. "It broke the logjam in the relationship."
The United States consistently denied any connection between the negotiations at The Hague and the hostages. Iranians, however, "repeatedly and openly" made the connection, Mr. Sofaer said.
But he said, "It's one thing to negotiate for their release and do things we shouldn't be doing. It's another thing entirely to negotiate real disputes . . . and have an atmosphere develop that would lead them to act with good will."
"Although these negotiations were not in the public sphere, it's clear they [Iranians] see the settlement as a token of American good will," said Shaul Bakhash, an Iranian specialist at George Mason University.
In March, the United States started easing its trade embargo. New regulations allowed U.S. firms to import Iranian oil directly, provided they get a license and proceeds go toward settlement of claims at The Hague. If oil is resold outside the United States, Iran gets the payments directly.
More important to Iran than U.S. oil sales has been the expansion of trade and investment with Western Europe and Japan, analysts say.
Whereas the Reagan administration had actively sought to prevent U.S. allies from trading with Iran, the Bush administration treated the issue with "benign neglect," as Peter Tarnoff, president of the Council on Foreign Relations, put it.
"There's been a quiet relaxation of pressure," said James Bill, director of the Reeves Center of International Studies at the College of William and Mary.
Iran impressed Western allies by adhering to the U.N. trade embargo with Iraq and staying neutral in the gulf crisis and war. "They could have been a real spoiler," Mr. Bill said.
In recognition, Secretary of State James A. Baker III early this year indicated that Iran might be welcome in helping to shape a post-gulf war security structure.
"Frankly, we haven't given them very much," said Robert Hunter, a Middle East specialist at the Center for Strategic and International Studies. "The Iranians did everything we wanted in the war."
With Mr. Anderson's release, Mr. Hunter said, the stage is set for a slow improvement in U.S.-Iranian relations, though he doesn't expect Iran's quick removal from the State Department's list of nations supporting terrorism.
"It's been in our strategic interest, as long as they live by civilized behavior, to have constructive relations with them," he said.
The hostage releases demonstrate the increasing domestic political strength of Iranian leader Hashemi Rafsanjani's brand of pragmatism, as opposed to factions seeking to export the Iranian revolution.
But a number of analysts see a dark side of Iranian policy that should make the United States tread carefully: nuclear ambitions, dreams of Persian Gulf domination that worry U.S. allies there and fierce anti-Zionism and rejection of the Middle East peace process.
Mr. Tarnoff believes that it was no coincidence that the final hostages were released as Israel was boycotting resumption of bilateral negotiations with Arabs in Washington.