The meeting between U.S. ambassador Ryan Crocker and his counterpart Hassan Kazemi-Qomi marks a reversal by Washington, which broke ties with Iran in 1980 and has largely sought to isolate the Islamic Republic in recent years.
Iran’s nuclear programme, which Washington believes to be a bid for developing atomic weapons under cover of generating electricity, will not be discussed.
Iraq, which says it does not want to become a battleground for the two old foes, welcomed Monday’s meeting.
"I think it is a positive development. We should encourage it and build on it. This is just the beginning of the process," Iraqi Foreign Minister Hoshiyar Zebari told Reuters.
Iraqi officials will also attend the meeting, the location of which has not been disclosed.
The talks come two days after Tehran said it had uncovered Western spy networks on its territory and as a flotilla of U.S. Navy warships holds war games on Iran’s doorstep in the Gulf.
Anthony Cordesman, a Middle East expert at Washington’s Center for Strategic and International Studies, cautioned against expecting too much from the talks. "One needs to be very careful about confusing progress with dialogue," he said.
"The U.S. knows what it wants from Iran … but it is far from clear that it can get it. The U.S. wants Iran to stop support for Shi’ite militias and providing arms. At the same time the administration cannot offer much in return," he said.
ROADSIDE BOMBS
Crocker has said he does not expect "any stunning, startling breakthroughs" from the meeting. U.S. officials say he will press Iran to take steps to reduce violence in Iraq.
In the past few months, the U.S. military has displayed explosively formed penetrators (EFPs) — a particularly deadly roadside bomb — and other weapons it says are being supplied by Iran to Iraqi militants to target American soldiers.
Iran denies it is fomenting violence and has called on U.S. forces to get out of Iraq, saying their presence is fuelling sectarian violence between Sunnis and majority Shi’ites.
The U.S. military also says Shi’ite militias are receiving funding and training in Iran. In February, U.S. troops detained five Iranians accused of ties to Iran’s Revolutionary Guards, angering Iran, which insists they are diplomats.
The fate of the five could be one bargaining chip that the Americans bring to the table, although Iarn’s Foreign Minister Manouchehr Mottaki said last week he had been assured by Zebari they could be released by June 21.
A report on Iran by the influential Chatham House think-tank says the Islamic state, which has close ties to fellow Shi’ites in Baghdad’s government, has superseded the United States as the most influential power in Iraq.
Many experts, including a bipartisan U.S. panel on Iraq, have urged U.S. President George W. Bush’s administration to talk to Iraq’s neighbours Iran and Syria. Bush, who initially rejected talks with Iran, is coming under mounting domestic pressure to end the war and pull out some 150,000 U.S. troops.
Despite the 27-year freeze in formal ties, mid-ranking officials from the two countries have met occasionally, most recently to discuss Afghanistan prior to and following the U.S.-led war to overthrow the Taliban.