Khamenei visits expo held at high-security compound at his residence

"We've got to stop some wars there are some stupid things going on," Trump told thousands of supporters at an indoor gathering in Washington DC.

"Israel would've never been hit on October 7," Trump said, "Iran was broke. Anyone that bought oil from Iran ... China passed, everybody passed."

The newly-minted head of state whose sanctions piled pressure on Iran's oil revenue in his first term and hit Tehran's spending on armed allies in the region, also ordered a deadly drone strike on a top Iranian commander, Qassem Soleimani.

Since that 2020 attack, Iranian officials have blasted Trump in strong terms, but since his November re-election, some quarters have softened their tone and mooted talks.

"They were broke; they didn't have money for Hamas, and they didn't have money for Hezbollah," Trump continued, then addressing the families: "Your sons would be alive, and they certainly wouldn't be incarcerated where they are. It's such a shame."

Later in the evening Trump inked a raft of executive orders at the White House, telling reporters that Israel had weakened Iran badly over a 15-month conflict in the region.

"They're weakened in a different way, the one attack by Israel really set them back - the pagers," Trump said, referring to an attack on Hezbollah leaders' communication devices last year which maimed many and injured Iran's envoy to Lebanon.

"And others," Trump added. "The attack on air defense was a bad attack for Iran."

Israel appears to have knocked out much of Iran's anti-air capability with an Oct. 26 series of air raids in retaliation for an Islamic Republic missile attack on Israel.

Speaking before Trump at the rally, his Mideast envoy Steve Witkoff, who was instrumental in talks which led to a Gaza-Israel ceasefire last week, told rally-goers Trump could solve the region's deepest problems.

"President Trump's leadership has redefined what is possible in the pursuit of progress and stability in the Middle East. his decisive pragmatic approach ensures that even the most entrenched conflicts are met with fresh perspectives and innovative strategies."

Trump counted the so-called Abraham Accords between several Arab countries and Israel as one of the top accomplishments of his first term.

Witkoff said with Trump's leadership he "would be engaging with leaders across the region to find pathways toward sustainable peace and stability."

"Every nation deserves the right to determine its own destiny free from the interference of foreign powers," he added, in a possible reference to regional states in Iran's orbit.

“I am confident that we will complete the defeat of Iran’s terror axis and usher in a new era of peace and prosperity for our region,” Netanyahu said addressing Trump in a video released on Monday.

“You withdrew from the dangerous Iran nuclear deal, you recognized Jerusalem as Israel’s capital … and you recognized Israel's sovereignty over the Golan Heights,” Netanyahu said, reflecting on Trump’s first term and his pro-Israel, anti-Iran policies.

With Trump’s return to the White House, significant shifts in US foreign policy are anticipated, particularly in the Middle East.

Israel's former defense minister Yoav Gallant also mentioned Iran in his congratulation note on Trump's inauguration day.

"Our ties are critical to Israel’s security and prosperity - to the return of the hostages, to the removal of the Iranian threat, to achieving our common goal of dismantling the ‘axis of evil’," he wrote in a post on X.

The Trump administration is expected to take a hard stance against Tehran. Both the president and senior members of his team have promised a return of the so-called maximum pressure campaign on Iran.

During his 2024 campaign, Trump said he wished prosperity for Iran but stressed the long-standing Washington red line that the theocracy must not be allowed to acquire nuclear weapons.

Anticipating potential pressures, some in Iran including senior aides to Iran’s president Masoud Pezeshkian have openly called for talks with the Trump administration, suggesting even that the country’s markets can be opened to American companies.

This has not gone down well with the more hardline factions of the Islamic Republic, who inspired and encouraged by the supreme leader Ali Khamenei, warn against any advance by Tehran toward Washington.

The comments by the hawkish South Carolina senator who is a longtime Trump confidant are among the most direct yet by a senior decision-maker supporting a US military intervention on Iran.

"The next question for the world is what do we do about the Iran nuclear program," Graham told CBS Face the Nation on Sunday.

"With diplomacy, there's a one in a trillion chance you'll degrade the Iranian nuclear program. There's a 90% chance you'll degrade it through military action by Israel supported by the United States.

The veteran senator is one of the biggest advocates of a more muscular policy abroad and is a vocal supporter of Israel and its Prime Minister Benjamin Netanyahu, whom he credited with delivering heavy blows to Iran-backed groups Hezbollah and Hamas.

Trump said in November that Iran "can't have nuclear weapons" but "I’d like them to be a very successful country."

Sworn in on Monday, Trump has repeatedly suggested he is disinclined to pursue regime change in Iran and has not publicly mentioned any military option on Iran.

Graham said he would engage Trump "to take this moment in time to decimate the Iranian nuclear program, to help Israel deliver the knock-out blow."

"(The Islamic Republic) is a religious nazi regime," Graham continued. "They want to destroy the Jewish State, they want to purify Islam and drive us out of the Mideast, it would be like negotiating with Hitler.

"No American President has yet had the courage to put an end to this tyranny", Pahlavi said in the letter he published on X as Trump was sworn in at the US Capitol.

"You can," he said. "Not through war, but by maintaining maximum pressure on the regime and providing maximum support to the brave Iranian people."

Trump has in his previous interviews and speeches appeared to rule out seeking regime change in Iran. In an October interview with Iranian-American podcaster Patrick Bet-David, Trump was asked if he would like to see Iran change its ruling system. He replied, “We can't get totally involved in all that. We can't run ourselves, let's face it.”

He has promised to restore his tough sanctions against the Islamic Republic, as he did during his first term in office. However, the maximum pressure policy was never aimed at ending Iran's theocracy but at making a deal, his last special envoy for Iran Elliott Abrams told Iran International in December.

Abrams told the Eye for Iran podcast that most people remember maximum pressure but do not properly comprehend what the goal was. “For better or worse, it was not the overthrow of the regime,” said Abrams. “His criticism of the Obama deal was that it was time bound, and it was not comprehensive. It didn't deal with Iran's missile program or Iran's support for terrorism.”

'Don't trust the Islamic Republic'

In his letter, Reza Pahlavi warned the US president against trusting the clerical establishment in Tehran.

"Now weaker than ever, it will attempt to preserve itself through deception, offering hollow promises and pursuing subterfuge in the guise of a new deal as it has done for forty-five years. But this regime cannot be trusted," Pahlavi said.

Trump’s pick for state secretary Senator Marco Rubio said on Wednesday the United States should not rule out any arrangement with Iran that leads to peace and security in the Middle East.

"My view of it (Iran) is that we should be open to any arrangement that allows us to have safety and stability in the region, but one in which we're clear-eyed," Rubio said during his confirmation hearing.

The administration of Iran's president Masoud Pezeshkian has also hinted at willingness to engage with US under Trump and open Iranian markets to US firms.

In a recent interview with NBC, President Pezeshkian stressed Tehran's readiness for dialogue with the US, while also saying that Iran had no intention of assassinating Donald Trump over the 2020 killing of the IRGC's Qassem Soleimani in Baghdad.

In a recent interview with NBC, President Pezeshkian stressed Tehran's readiness for dialogue with the US, while also stating that the Islamic Republic had no intentions of assassinating Donald Trump over the 2020 killing of the IRGC's Qasem Soleimani in Baghdad.

A senior aide to Pezeshkian, Ali Abdolalizadeh, claimed on Saturday that an agreement with the Trump administration could be reached within two or three months.

Recently, the Pezeshkian administration also undertook what some described as goodwill gestures, such as the offer to assist in controlling the wildfires in Los Angeles.

Ensaf News, a reformist outlet highly supportive of Pezeshkian, reported last week that the US and Israeli flags, which were painted on the ground for people to step on as they entered the presidential compound, were removed “several weeks ago.”

Khamenei repeats opposition to 'hostile' US

In his speech on December 30, Supreme Leader Ali Khamenei reiterated that the US remains “hostile” to Iran and urged the nation to remain “a thousand times more vigilant”.

Khamenei advised against surrendering to American demands but did not explicitly address the prospect of negotiations with the US or the European parties to the nuclear deal.

As the government’s overtures grow, ultra-hardliners continue to highlight Khamenei’s past objections to negotiation with the US in general and with the Trump administration in particular, while also reiterating threats of avenging him for Soleimani's killing.

Is the government acting against Khamenei’s wishes?

The Pezeshkian administration’s moves appear at odds with Khamenei’s repeated declarations that the Islamic Republic would not engage with the Trump administration and his vow to avenge Soleimani’s assassination.

Notably, Khamenei refused to respond to a 2019 message from Trump delivered by then-Japanese Prime Minister Shinzo Abe.

Many Iranian analysts and politicians, however, argue that the Pezeshkian government could not proceed with such overtures without the Supreme Leader’s tacit approval.

For instance, the reformist newspaper Ham-Mihan accused state-run media outlets, such as Kayhan and the state broadcaster (IRIB), of portraying negotiations with the Trump administration as a "thick red line" after the US elections in November 2024.

“But the circumstances and a review of the positions and reactions show that this red line has long been gone and Iran does not rule out negotiations with the future US administration,” Ham-Mihan wrote.

Similarly, Ensaf News interpreted Pezeshkian’s remarks in the NBC interview as evidence that he has already received the green light to proceed with his plans to engage with the new US administration.

Pezeshkian signals the possibility of economic cooperation with the West

During Pezeshkian's interview with NBC, he also referred to the signing of a strategic cooperation agreement with Russia, suggesting that this did not mean the exclusion of the West in Iran's relations.

“We are going to sign a strategic agreement with Russia, the same ways as we did with China, and the same ways as we requested to have [one] with Europe … This does not just apply to Russia, we are prepared to sit down and sign this [type] of agreement with all countries that want to have a close, reasonable, and mutual agreement,” he said.

Foreign Minister Abbas Araghchi has also emphasized that the nature of the agreement with Russia was “primarily economic” and Kazem Jalali, Iran's ambassador to Moscow, has said that Iran “is not interested in joining any [Eastern or Western] blocs.”

Unlike agreements that Moscow has signed with Pyongyang and Minsk, Tehran’s deal with Moscow, very notably, did not include a mutual defense clause.

However, Iran has been supplying thousands of suicide drones and allegedly missiles to Russia that have been extensively used to target civilians and civilian installations in Ukraine since mid-2022.

But in the past few months, Iran's deep economic crisis compounded by sanctions Trump imposed in his first term, has become more serious, with its national currency losing 30% of its value since August. More officials and commentators allowed to speak in public have been calling for negotiations with the US.

Pezeshkian’s aide, Abdolalizadeh, has argued that Iran should not have excluded the US from its economic dealings with the international community after the conclusion of the 2015 nuclear deal known as the JCPOA (Joint Comprehensive Plan of Action).

“After the JCPOA, we allowed all countries to cooperate with Iran, but we blocked the Americans, and this raised the question of why the US was not allowed to be in Iran for economic cooperation?” he said, adding that the Obama team did not make their complaint public, but Trump would not tolerate such exclusion. “He said he would rip the JCPOA and we said we would burn it. Both sides regret it now.”

He added that, if sanctions are lifted, Iran's oil and gas sectors could become attractive opportunities for American and multinational companies.

Former Iranian diplomat and Princeton professor Hossein Mousavian also suggested in a recent opinion piece for The Hill that direct talks with the US, even at the presidential level, are no longer off-limits.

Mousavian, often labeled a "loyal regime insider" by the Iranian diaspora in the West, proposed that a potential agreement could pave the way for significant economic cooperation, with projects valued in the hundreds of billions of dollars across industries such as petrochemicals, aviation, and clean energy.

Navigating between East and West

Pundits in Iran say the Pezeshkian administration’s overtures to the new US administration, along with its efforts to avoid appearing overly eager to align with Moscow or Beijing, should be viewed through the lens of a ‘positive balancing’ foreign policy.

This approach contrasts with the traditional “Neither East nor West” slogan inscribed at the entrance of the foreign ministry building in central Tehran.

“This strategy neither accepts isolationism nor unquestioning submission to the demands of others,” political analyst Reza Raisi said in an article published by the reformist Ham-Mihan newspaper.