'The Saudis' worst nightmare would be the administration striking a grand bargain with Iran. " Robert Gordon, US ambassador to Riyadh in 2001-2003, so highlights the potential significance of this week's constructive talks in Geneva between Iran and six world powers, chaired by the European Union.
They are to reconvene in three weeks, encouraging speculation that a larger geopolitical shift might be possible if agreement is reached on Iran's nuclear programme and economic sanctions are lifted. Relations between the US and Iran, frozen since the 1979 revolution, could be transformed – putting in question fundamental US policies and alignments in the Middle East. Saudi Arabia and Israel would be the main losers in any such realignment, or rather their existing leaderships would be.
Since they take US hostility to Iran so much for granted, it is not surprising that they and their allies in the US Congress are so hostile. These, up to now, highly influential actors have run into a qualitatively new element at play – the strong force of public opinion in Iran and the US in favour of diplomatic rather than military solutions to the conflict.
The Geneva talks recall Iran's previous offer of just such a grand bargain made to the Bush administration in 2003-2004. They dismissed it in the euphoria of the Iraq invasion and neoconservative enthusiasm for regime change in the "axis of evil" including Iran.
After that the hardline Mahmoud Ahmadinejad was elected president in 2005 and the nuclear programme was accelerated. Iran is entitled to nuclear energy, is a member of the nuclear non-proliferation treaty and there is no proof it intends to build a nuclear weapon; but threatened with regime change does that option not make sense in a realist calculus of power politics?
The 2003-2004 offer came from Hassan Rouhani, then its chief nuclear negotiator and now president of Iran – having defeated hardline candidates decisively in the first round of June's election on a 73 per cent turnout.
It included a nuclear deal, enhanced security, mutual respect and access to technology in return for Iranian recognition of Israel and a two-state settlement, help in stabilising Iraq, halting aid to Hamas in Gaza and a changed Iranian relationship with Hizbullah in Lebanon.
There is no indication as yet that any similar offer is now in prospect. Events since then cannot simply be rolled back, there is a different balance of power in both states and great scepticism in Washington about Iranian intentions from a commentariat still steeped in neoconservative nostrums about Iran's dangerous regional role.
Nonetheless the intensity, candour and speed of this week’s talks deeply impressed US officials. All are mindful of how perilous the Middle East now is, and how open the region might be for change. The moment seems right for a realignment and it is not fanciful to sketch out scenarios.
The elements of what was on offer 10 years ago are still in fact highly relevant in Syria, for Israel, for Iran's proxy force in Hizbullah and for the wider Arab region undergoing uprisings, deflected revolutions, frustrated reforms and a growing cleavage between Sunni and Shia Islam.
That should not be obscured by disbelief in Israel and Saudi Arabia, the two states whose leaders have a deep interest in spoiling change. Their disconbobulation recalls the remark Gorbachev’s advisor Georgi Arbatov made in 1989 to the West: “We are going to do a terrible thing to you: we are going to deprive you of your enemy”.
A US-Iranian grand bargain along these lines would force Israel to deal seriously with the Palestinian question and abandon creeping annexation of their land. It would leave the Saudis stranded with the Sunni opposition they have stoked up in Syria, having to rethink their support for the army in Egypt for fear of the Muslim Brotherhood.
They would have to confront a likely future when fracking in the US makes them a less indispensable source of oil, no longer the main arms purchasers and base hosts for the Americans and having, like other Gulf monarchies, to prepare their own societies for political change.
Above all such a bargain could de-escalate the sectarian cleavage in the Muslim world which Iranian-Saudi rivalry has brutally instrumentalised, reinforcing anti-Islamic stereotypes in Europe and elsewhere.
Obama needs a legacy and responded shrewdly by delaying military intervention in Syria, recognising the strong tide of US public opinion against it. Having failed to deliver on his pivot to Asia he will, one hopes, be tempted to pursue this bargain.