Diplomacy: Clinton and Khatami Find Relations Balmy?

Close encounters, yes, but not by chance. Last week, when Iranian President MOHAMMED KHATAMI found himself in the same rooms with President BILL CLINTON and Secretary of State MADELEINE ALBRIGHT, it was actually part of unprecedented reciprocal gestures between Tehran and Washington choreographed by U.N. Secretary-General KOFI ANNAN.

Just 72 hours before the Millennium Summit, Annan's office contacted Iranian and U.S. officials to see if the two Presidents would be willing to sit through the other's speech at the General Assembly. Another idea was for Albright to attend Khatami's address a day earlier at a UNESCO gathering. Replies were positive, but Annan and his staff worked intensively with the two sides up to the last minute ironing out political sensitivities and logistics. Under fierce pressure back home from religious hard-liners, Khatami took a risk being party to the arrangements. For their part, Clinton and Albright needed assurances that Khatami would say nothing that would cause them any political embarrassment.

Postponing plans in Washington to release a report on religious freedom, Albright flew to New York earlier than planned--a switch adding to the chaos for airport and traffic officials coping with the arrival of 149 world leaders. Clinton delayed talks with Vietnamese President TRAN DUC LUONG to remain for Khatami's address. As for Khatami, he agreed to show up at the U.N. six hours earlier than scheduled to hear Clinton's speech and--with Annan's help--to jump from 39th to 4th in the speaking order, so that Clinton would not have to wait long to reciprocate. A true thaw in relations frozen since AYATULLAH RUHOLLAH KHOMEINI's 1979 Islamic Revolution may have to wait until after Khatami's re-election battle next May--if then. Nonetheless, Iranian and U.S. officials told TIME that last week's exchanges signaled improved mutual understanding. "We hold no fundamental animosity," explained a senior U.S. official. Commented Annan aide GIANDOMENICO PICCO: "What both sides are saying is, 'We are able to listen.'"

--By Scott MacLeod, Azadeh Moaveni and Douglas Waller/U.N.