WASHINGTON - Whatever the outcome of Iran's June 12 presidential election, the Obama administration hopes Tehran will then end months of stalling and respond to Washington's overtures for better relations.

Whether the winner is firebrand anti-American incumbent Mahmoud Ahmadinejad or his more moderate key rival, former Prime Minister Mirhossein Mousavi, the prevailing view is that Supreme Leader Ayatollah Ali Khamenei calls the shots.

Ultimately, the most important decisions on where this goes will be made by the Ayatollah and not the new (Iranian) president, said a senior U.S. official, who asked not to be named as Washington does not want to be seen as interfering in the election, which could result in a run-off on June 19.

But experts say a win by Mousavi could improve the climate for either bilateral talks or those between major powers and Tehran to settle disputes over its nuclear program, which the West suspects is aimed at building a bomb. Tehran says the program is for peaceful purposes to produce much-needed power.

It would be much better if we were dealing with an Iranian president who lowered the rhetorical tension level rather than one who seems to constantly look for ways to increase it, said Bruce Riedel with the Brookings Institution.

Whoever is in that position can help to set a tone that makes the process of engagement more likely to happen than less, added Riedel, a former CIA analyst.

During a feisty televised debate with Ahmadinejad on Wednesday, Mousavi accused the incumbent of humiliating the nation by adopting extremist foreign policies, a view the Supreme Leader mildly criticized later.

PROBLEMS WITH AHMADINEJAD

Mousavi pledged to continue nuclear talks with major powers if he is elected president, in contrast to Ahmadinejad, who has ruled out such negotiations with the United States, Russia, China, France, Germany and Britain.

If Ahmadinejad is reelected, it will be very difficult to have a rational discussion with the Iranians, said former U.S. ambassador to Egypt and Israel, Ned Walker.

Iran expert Karim Sadjadpour said Ahmadinejad also played into the hands of U.S. domestic politics, fueling the argument of those who opposed dealing with Iran.

His diatribes toward Israel and his Holocaust denial make it far more difficult for any U.S. administration to acquiesce on Iran's enrichment of uranium, said Sadjadpour of the Carnegie Endowment for International Peace.

Some experts with experience dealing with Iran say Washington has no choice but to continue on its engagement path, kicked off by President Barack Obama in his inauguration speech in January and followed through with small steps since.

Nicholas Burns, who handled the Iranian nuclear dossier for the Bush administration, said Obama had set the post-election scene well and was also laying the groundwork for more sanctions if needed.

If the U.S. tries negotiations and if they get someplace then the U.S. will obviously be better off, said Burns, now at Harvard University.

If they do not succeed then the U.S. will still better off because the U.S. will be much stronger and have much more credibility with China and Russia to argue for very tough sanctions.

POSITIVE SIGNS

Russia and China have frequently balked at more sanctions against Iran, saying diplomatic options must be exhausted.

While cautious over whether Washington's overtures will lead anywhere, U.S. officials say one positive sign in recent weeks was the release by Iran of Iranian-American reporter Roxana Saberi.

What was interesting is that it happened and they did not allow it to be an impediment. They seemed to clear the decks, said the senior official of Saberi's release.

The official said while there might not be progress on the Iran nuclear issue, Washington would be searching for cooperation in other areas such as helping with Afghanistan or Iraq.

There are also likely to be more lower-level contacts, including planned invitations to Iranian diplomats to U.S. Independence Day barbecues and celebrations on July 4.

But one unpredictable factor after the election is how Israel will respond despite a clear marker put down by the Obama administration that the United States could not support any attacks on Iran by the Jewish state, said Riedel.

The third person in this bed is Israel, he said.

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