By Marcus George and Paul Taylor
DUBAI/PARIS, July 29 (Reuters) - If Iranian President-elect Hassan Rouhani wanted to signal his determination to rebuild relations with the United States and strike a "grand bargain," he could hardly do better than pick Mohammad Javad Zarif as his foreign minister.
Iranian news agencies reported on Monday that Zarif, a former ambassador to the United Nations and Tehran's leading connoisseur of the U.S. political elite, is set to be in the cabinet Rouhani will announce after taking office on Sunday. A source close to Rouhani confirmed Zarif will be nominated as foreign minister.
A fluent English speaker who earned his doctorate at the University of Denver, Zarif has been at the centre of several secret negotiations to try to overcome 35 years of estrangement between Washington and Tehran, diplomats said.
Those talks failed because of deep mistrust on a range of disputes from Iran's secretive nuclear programme and support for anti-Israeli militants to U.S. sanctions and hopes of engineering "regime change" in Tehran.
Zarif's elevation, however, suggests the moderate new president is keen to make another try at breaking the deadlock.
"He was always trying to do what was possible to improve relations in a very intelligent, open and clear way," said a senior Western diplomat who had repeated dealings with Zarif.
"This is someone who knows the United States very well and with all the frustrations of the past is still someone they know in Washington," he said.
The usual caveats about Iran apply: under the Islamic Republic's complex institutional set-up, Supreme Leader Ayatollah Ali Khamenei calls the shots in foreign and security policy and controls the nuclear programme, which Western powers say is aimed at developing atomic weapons.
The foreign minister ranks roughly fourth in the foreign policy pecking order, after Khamenei, the head of the National Security Council, who also serves as Iran's chief nuclear negotiator, and the president.
Nevertheless, assuming he is confirmed by Iran's prickly, conservative-dominated parliament, Zarif's appointment would be a strong gesture of positive intent towards the United States.
The two countries have had no official ties since 1980 after Iranian students occupied the U.S. embassy in Tehran, taking 52 diplomats hostage in protest against Washington's admission of the former Shah after he was toppled by the Islamic revolution.
Zarif's Washington contact book includes Vice President Joe Biden, Secretary of Defence Chuck Hagel and a who's who of U.S. national security officials on both sides of the aisle.
The soft-spoken career diplomat resigned from the nuclear negotiating team after hardline President Mahmoud Ahmadinejad was elected in 2005.
In 2007, he returned from New York after five years as Iran's permanent representative to the United Nations and found himself out of favour as his country turned its back on the notion of seeking better ties with the West and Ahmadinejad sidelined English-speaking diplomats.
Since then, Zarif has been in a holding pattern, nominally senior adviser to the foreign minister from 2007 to 2010, then from 2011 international director of Islamic Azad University, a network of educational institutions established by ex-president Akbar Hashemi Rafsanjani, his political patron.
Rafsanjani, who is also Rouhani's mentor, has long favoured a pragmatic rapprochement with the United States, but Khamenei has stamped on all such efforts since he succeeded the founder of the Islamic Republic, Ayatollah Ruhollah Khomeini, in 1989.
Dennis Ross, a veteran U.S. diplomat who served as President Barack Obama's top Middle East adviser until 2011, said Zarif had shown a willingness to negotiate in good faith and his appointment would be seen in Washington and Europe as an indication that Rouhani wants to "do business" with the West.
But he cautioned that the question remained whether this would translate into an easing of Tehran's resistance to curbing its nuclear drive. "Zarif is not someone who does favours for the United States," Ross said. "He fits the category of a sign or signal until you see Iran actually doing something."
Brent Scowcroft, national security adviser to President George H.W. Bush, described Zarif as "reasonable" but said much would depend on how much leeway he is given.
Western diplomats said Zarif was a central negotiator in the last major effort to negotiate a "grand bargain" between Tehran and Washington that began after the Sept. 11, 2001, attacks on the United States and foundered in mid-2003.
U.S. newspapers published in 2007 the bare text of a draft agreement, put together in secret talks in Paris, Geneva and New York, that would have established negotiations between the two countries on all outstanding issues.
While the draft fell short of an agreement on substance, it noted both sides' expectations on issues such as assurances that Iran's nuclear programme has no military capability, and assurances that the United States would act against anti-government People's Mujahideen activists based in Iraq.
"The texts are authentic," said a Western diplomat who was involved in the back-channel talks, confirming that Khamenei had given the green light for negotiations to go ahead.
Years earlier, as a junior diplomat Zarif was involved in negotiations to win the release of U.S. hostages held by pro-Iranian gunmen in Lebanon, according to the memoirs of former U.N. envoy Giandomenico Picco. Even though the United States did not make a promised reciprocal goodwill gesture at the time, Zarif remained committed to improving ties.
In Washington, Trita Parsi, president of the pro-dialogue National Iranian American Council, said Zarif has been involved in multiple U.S.-Iranian negotiations, including talks on Afghanistan after the U.S.-led 2001 invasion, and Tehran's 2003 proposal for a "grand bargain" with the United States.
"Based on my interviews with him, (Zarif) was involved in the drafting of it," Parsi said of that offer of a comprehensive new start, which then President George W. Bush's administration spurned.
Veteran U.S. diplomat James Dobbins, the U.S. point man at a 2001 Bonn conference that formed a new Afghan government after the overthrow of the Taliban, credited Zarif with a pivotal, positive role in the diplomacy - and with a sense of humour.
Dobbins - now the State Department's special envoy for Afghanistan and Pakistan - recalled in 2007 testimony to the U.S. Congress how Zarif, then a deputy foreign minister, persuaded the anti-Taliban Northern Alliance to drop its demand for control of an outsize proportion of Afghan ministries.
The Northern Alliance delegate "remained obdurate. Finally, Zarif took him aside and whispered to him for a few moments, following which the Northern Alliance envoy returned to the table and said: 'Okay, I agree. The other factions can have two more ministries. And we can create three more, which they can also have.' We had a deal," Dobbins recalled.
"Zarif had achieved the final breakthrough without which the (Hamid) Karzai government might never have been formed." (Additional reporting by Jon Hemming in Dubai and Warren Strobel and Matt Spetalnick in Washington; Editing by Robin Pomeroy and Mohammad argham)