Time's Tony Karon reports that significant progress was made in the latest round of EU-Iran negotiations. In the process, Karon does an excellent job of describing how Iran's domestic politics affects their negotiating posture:

One problem in reading Iran's intentions is that it's very easy to forget who's in charge in Tehran. The fact that Mahmoud Ahmadinejad is the President doesn't mean that he is, in Bush parlance, "the decider." In fact, Iran's president has little executive authority over national security decisions (including the nuclear program), and his constitutional position makes him, if anything, probably less influential over those decisions than more pragmatic figures such as Larijani, who convenes the key foreign policy decision-making body, the National Security Council. In the end, though, there is a "decider" — the supreme spiritual leader, Ayatollah Ali Khamenei. But Khamenei wields his authority carefully, and in a consultative manner, seeking to maintain the unity of the competing factions of Iran's political class. So, while he is said to pay greater heed to the counsel of more pragmatic advisers such as Larijani and former President Hashemi Rafsanjani, the Supreme Leader is careful to accommodate the popularly elected President Ahmadinejad. For example, while the recent compromise with Britain over the 15 Naval personnel captured at sea may have been brokered in substantial part in talks between Larijani and key British officials, it was Ahmadinejad who got to do the populist grandstanding in the ceremony accompanying their release.

Ahmadinejad recently made another media splash with an announcement that Iran planned to install 3,000 centrifuges at its research facility in Natanz — he claimed this meant it was now capable of "industrial" production of reactor fuel, which was a substantial exaggeration. Iran has installed less than half the number of centrifuges announced by Ahmadinejad, and those are experiencing far more technical difficulties than the president let on; furthermore, Iran would need 54,000 centrifuges running a lot more efficiently than those currently in place to be able to produce industrial-grade enriched uranium. Current estimates from a number of different quarters say Iran is somewhere between four and ten years away from having the capacity to produce nuclear-weapons materiel....

Ahmadinejad needs to talk up the achievements of the nuclear program precisely because he has been unable to keep his chicken-in-every-pot election campaign promises. His posturing may have little to do with Iran's real intentions in the nuclear standoff with the West and much more to do with setting up a popularly acceptable compromise. Claiming, as Ahmadinejad did, that the fuel cycle had been mastered and Iran was now a "nuclear nation" could help persuade a domestic audience that Iran is not backing down on the "rights" it has so forcefully proclaimed if Tehran agrees to suspend its enrichment activities.

If a deal would require Iran to find some way to turn off its centrifuges, the Western powers would have to make some concessions, too. The U.S. had originally insisted that Iran could not be allowed to keep any enrichment facilities on its own soil, but it is now being reported that Solana may offer a deal in which Iran would keep its current small-scale enrichment research facility, although not actually run it, for now. Reports suggest that the U.S. will push for the Natanz facility to revert to "cold standby," i.e. turning off but not dismantling the centrifuges, whereas Iran would counter that they be kept spinning, although empty of uranium.

The very fact that the negotiations are focused on such details of a mutually acceptable formula for defining what is meant by "suspension" of Iran's activities suggests that the current trend in the nuclear talks is towards compromise, rather than confrontation.

UPDATE: In the Financial Times, Najmeh Bozorgmehr decribes Ahmadinejad's five-day trip through the province of Fars. It presets a mixed picture of the president -- though Bozorgmehr concludes:

I can’t help but ponder the recent analyses in political and intellectual circles in Tehran, most of which has argued that Mr Ahmadi-Nejad is finished politically. After the five-day tour, this seems like wishful thinking. His rivals have a tough challenge ahead.