* The Iraq neighbors’ conference in Baghdad. Although U.S. and Iranian officials exchanged sharp words at one point, both seemed open afterward to continued interaction. President Bush called the talks constructive and U.S. envoy David Satterfield said he expected more. One Arab diplomat who was briefed by participants, speaking anonymously Tuesday because he was not authorized to talk publicly, said the talks among Iran, Syria and the U.S. were substantive and addressed several Iraq-related issues.

* Russia’s new stance. Russia, a key ally of the Tehran regime, criticized Iran in unusually strong language this week for failing to meet U.N. deadlines for curbing its controversial nuclear program, and also announced it would delay assistance to an Iranian nuclear plant. That angered Iran, but is also likely to give it pause, and perhaps moderate its position.

* Iran’s own internal changes. Hardline President Mahmoud Ahmadinejad has softened his attacks on the West after internal criticism that he was jeopardizing the country. His main political rival, former President Akbar Hashemi Rafsanjani, supports a more conciliatory stance toward the Arab world and the West, in particular spearheading recent talks with U.S.-allied Saudi Arabia aimed at defusing Mideast tensions.

* The U.S. approach. Three months after Bush brushed aside suggestions he engage Iran in efforts to stabilize Iraq, his administration is doing essentially that — apparently because it believes it now holds a better diplomatic hand than in December.