Events and decisions that could be critical to the future of U.S.-Iranian relations will occur over the coming months. Presidential elections in Iran are scheduled in June. The current reformist president, Mohammad Khatami, has announced that he will run for reelection. The Iran-Libya Sanctions Act, which prohibits foreign oil and gas investment in Iran in excess of $20 million, expires in August.

What is at stake for the United States in these developments? Dominant political power in Iran is held by a conservative group of Muslim clerics who are repressive at home and support terrorism abroad, who are hostile to the United States and oppose the Israeli- Palestinian peace process, and who seek a nuclear weapon and ballistic missile capability. Khatami, who espouses liberalizing the regime, at least domestically, has little authority to make real change, eyen though his supporters dominate the parliament.

But what has changed in Iran is the attitude of the people themselves. Over the past four years, the Iranian electorate has three times (in presidential, parliamentary and local elections) voted, by majorities of as much as 2 to 1 in favor of liberal change. Sixty percent of the Iranian people are younger than 25, having no direct knowledge of the Iranian revolution and the difficulties with the United States that followed. What is at stake for the United States is no less than the outcome of the struggle between the people of Iran and their harsh masters.

The U.S. challenge is how to assist the Iranian people in having their yearnings reflected in the makeup and policies of their government. Given the complicated internal situation, this is a difficult thing to do. But a signal from the United States showing the desire for a better bilateral relationship might provide encouragement and impetus to reformers and the people who so eagerly seek change. The Clinton administration made a small gesture in this direction last year, lifting a ban on the import of caviar, pistachio nuts and rugs. That gesture was made less effective because of a simultaneous announcement that any contact had to be at the official level. It ended up being not much of a signal.

The United States has placed a variety of sanctions against Iran. Some have been imposed by executive order, some mandated as a result of Iran support of terrorism, and some imposed by the Iran-Libya Sanctions Act. A soon-to-be-released study by the Atlantic Council of the United States recommends that the Iran-Libya Sanctions Act not be renewed. That is wise counsel. The law has been almost completely ineffective, and the Clinton administration issued a waiver allowing some European investment in the Iranian energy industry. At a minimum, perhaps adjustments could be made that would amount to similar waivers for American firms, providing the basis for treatment equal to that enjoyed by foreign enterprises and reaching out to Iran in a useful but moderate way.

Some will argue that such a unilateral move would be a sign of weakness in light of continued predications by an obnoxious and repressive regime. Such charges miss the central point, which is that an active struggle is underway to determine the future course of Iran. The key is to speak to the people of Iran, not to their oppressors. The next step in that popular struggle is the presidential election in which Khatami is a candidate. While he may in fact be a weak reed in this struggle for liberalization, he is the symbol of reform and the only such symbol available.

A strong win by Khatami would be a significant step in the long struggle to bring Iran out of the shadows. An unrequited gesture by the United States might encourage the forces of moderation at this key moment. It inflicts no cost on the United States, though relaxing sanctions oh U.S. firms would result in some economic benefit to Iran. In any event, this is an important moment of opportunity with respect to Iran, and the United States should not fail to take a chance on freedom for Iran.