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Iran is hurting. Economic and banking sanctions, plus an effective oil embargo led by the European Union, have brought chaos to Iran's economy. The bottom fell out of its currency, the rial, a couple of weeks ago, provoking street protests. Iranians of all social classes are struggling to cope.

These challenges, along with other signals, hint at Iran's willingness to engage in bilateral talks with the U.S. about its nuclear activities. Over the weekend, The New York Times first reported that the U.S. and Iran have agreed to face-to-face talks after the election.

The White House quickly issued a denial, and the Iranian government on Sunday also said no such talks were planned.

'Despite Their Rhetoric'

Publicly, the rhetoric coming out of Iran has been tough and uncompromising, like the comments last week from the spokesman for Iran's foreign ministry, Ramin Mehmanperast.

"These sanctions are illegal, irrational and inhumane," he said, "because they were imposed on our nation under the pretext of our peaceful nuclear program."

Many of Iran's leaders use the same language in public. But Alireza Nader, an analyst at the RAND Corporation, believes there's been something else going on below the surface.

"The Iranian government is indicating that it is serious about negotiations," he says.

The results of the sanctions have come as a shock, Nader believes.

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