"More than two decades after the November 4, 1979 seizure of the U.S. embassy in Tehran, and even before Iran's tacit cooperation with post-September 11 U.S. efforts to defeat Afghanistan's Taliban regime, signs of moderation in Iran had stimulated the United States to try to engage Iran in official talks. Iran, still split between conservatives and reformers loyal to President Mohammad Khatemi, who was elected in May 1997 and overwhelmingly reelected on June 8, 2001, has not accepted to date. Even though open to engagement with Iran, the Bush Administration and many in Congress want to continue vigorous efforts to counter Iran's support for terrorist groups and its efforts to acquire weapons of mass destruction (WMD) programs. […] Current U.S. policy toward Iran marks an apparent shift from the almost exclusive focus on containment that characterized U.S. policy during 1980 - 1997. During the first term of the Clinton Administration, as part of a policy of 'dual containment' of Iran and Iraq, President Clinton imposed a ban on U.S. trade and investment in Iran in 1995, and a 1996 law imposed sanctions on foreign investment in Iran's energy sector (Iran-Libya Sanctions Act, ILSA). The sanctions were intended to deny Iran the material resources to threaten U.S. interests. In keeping with the 1997 policy shift toward engagement, in 1999 and 2000 the Clinton Administration and Congress eased sanctions somewhat to allow U.S. exports to Iran of food and medical supplies and importation from Iran of luxury consumer goods, such as carpets. However, the United States continues to work with its allies to prevent arms and advanced technology sales to Iran and to limit Iran's influence over regional energy flows."
CRS Issue Brief for Congress, IB93033
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