Middle East Online: Iran offered to cut off Hezbollah and Hamas

If this proves true, then the US's failure to accept the overture would rank among the worst decisions of this administration.

LONDON - Iran offered to cut off aid and support for the Lebanese Shiite militia Hezbollah and the Palestinian group Hamas, and promised full transparency on its nuclear programme, in a secret letter to the United States soon after the 2003 invasion of Iraq, the BBC reported on Wednesday.

According to the BBC, the letter, which it obtained, was unsigned, but the US State Department understood that it came with the approval of the highest Iranian authorities.

The Islamic republic also offered to use its influence to support stabilisation in Iraq, and in return asked for a halt in hostile American behaviour, an abolition of all sanctions, and the pursuit and repatriation of members of the Mujahedeen Khalq (People's Mujahedeen MKO).

UPDATE: The BBC broke this story. Their article is here.

Offers, including making its nuclear programme more transparent, were conditional on the US ending hostility.

But Vice-President Dick Cheney's office rejected the plan, the official said. ...

One of the then Secretary of State Colin Powell's top aides told the BBC the state department was keen on the plan - but was over-ruled.

"We thought it was a very propitious moment to do that," Lawrence Wilkerson told Newsnight.

"But as soon as it got to the White House, and as soon as it got to the Vice-President's office, the old mantra of 'We don't talk to evil'... reasserted itself."

I can't even articulate how frustrated I am right now. This had the the potential to be a Nixon-China moment, and Cheney blew it to hell.