The United States has agreed to go a long way toward meeting Iran's conditions for release of the American hostages, including the immediate transfer of $2.5 billion in blocked Iranian funds, binding arbitration of legal claims against Iran and a freeze on U.S. assets of the late shah and his family, according to State Department documents made public yesterday.
As part of the proposal settlement, the United States also agreed to stop any American claims against Iran arising from the hostage taking, and to withdraw all U.S. claims pending against Iran in the International Court of Justice.
To meet Iranian conditions, the State Department disclosed, the United States has supplied Iran with seven presidential directives to be issued at the time of the hostages' release, plus a "formal declaration" that the United States will not interfee, directly or indirectly, in Iran's internal affairs. sThe text of these presidential orders was not made public.
The details of the U.S. position in two months of diplomatic maneuvering with Iran were reluctantly released here following the publication of large parts by the material late Saturday by Iran's Pars news agency.
Together with earlier disclosures from Tehran and Washington, the new documentation provides the outline and many details of the recent history of the indirect negotiations to free the 52 captive Americans.
While they provided previous American proposals, however, State Department officials refused t disclose the next U.S. positions that are being prepared for presentation to Iran through the Algerian intermediaries, who met with President Carter and top administration officials at Camp David yesterday. The officials expressed hope that future discussions will be kept confidential.
A State Department official deeply involved in the negotiations strongly suggested that the next U.S. positions will not change fundamentally, saying that "the heart of our position remains the same" and that "it is inherent in the situation that our [next] response will be an extrapolation" of the previous stands.
The official, in a briefing for reporters, raised the possibility of proposing "new practical solutions" within the framework of the basic U.S. stand. He said the United States is continuing the exchanges with Iran, despite the setbacks of the recent "unreasonable" Iranian demands and the violation of confidentiality, because "we believe it is in our interest that the talks continue."
By all odds, the administration of Ronald Reagan, who will be inaugurated as president three weeks from Tuesday, will be faced with Americans still in captivity and the discussions with Iran still unresolved. In Los Angeles yesterday, the president-elect called the Iranian captors "barbarians" and reiterated his opposition to paying "ransom" for the hostages' release.
It was the second time in four days that Reagan spoke in very harsh language about the Iranians. On Christmas Eve he referred to the captors as "nothing better than criminals and kidnapers who have violated international law totally."
A senior Reagan aide, transition director Edwin Meese III, said Reagan's earlier statement had been intended to signal the Iranians "that they should not keep the hostages with the idea that somehow they'll get a better deal or a different situation" from the new administration. Meese, speaking yesterday on "Face the Nation" (Cbs, WDVM), refused to give any hint of what strategy Reagan will follow to obtain the hostages' release.
Reagan told reporters yesterday that he had not intended any message. "I was just telling how I felt. But if they [the Iranians] got a message out of it that they shouldn't be waiting for me, I'd be very happy," he said.
State Department talks with the Algerian emissaries, which lasted for nine hours on Saturday, continued for 90 minutes yesterday morning. At that point, Secretary of State Edmund S. Muskie, Deputy Secretary of State Warren Christopher and three Algerian diplomats drove to the presidential retreat at Camp David for a two-hour meeting with Carter.
The session was described as primarily an opportunity for Carter to hear first-hand about the condition of the 52 Americans, all of whom were seen in Tehran Thursday and Friday by some of the Algerians. Later, Muskie, Christopher and Algerian diplomats met with members of some of the hostages' families here.
The documents released yesterday had their roots in a speech by Ayatollah Ruhollah Khomeini on Sept. 12, in which he set our four conditions for release of the Americans: a pledge of noninterference in Iran's affairs, cancellation of all claims against Iran, return of blocked Iranian assets in the United States and the return to Iran of the late shah's fortune.
A group of high-level officials headed by Christopher and including senior financial and legal experts -- the same group that has participated in all the Iran-related exchanges -- flew to Bonn within a week to make known through secret contacts the U.S. willingness to negotiate along these lines. But Iraq's attack on Iran Sept. 22, starting a war that still continues, delayed further action on the hostages front in Tehran.
On Nov. 2, after weeks of increasingly public argument, the Iranian parliament, of Majlis, formally adopted Khomeini's four conditions as the basis for the hostage settlement. To the dismay of American officials, however, the conditions were set forth not as general principles but as requirements in profuse and legalistic detail. The timing of the action, two days before the U.S. presidential election, suggested that Iranian politicians believed Carter would have no choice but to comply.
U.S. officials said from the first that, if taken literally, the Iranian conditions would be difficult or impossible to meet. Instead, the United States decided to propose alternate means, within American legal and political constraints, for meeting the general objectives of the Iranian demands.
The first U.S. response, a five-page document released yesterday, was taken by the Christopher group Nov. 10-11 to Algeria, which had been designated by Iran as its official intermediary in dealings with the United States. Algerian diplomats took the document to Iran the following day, Nov. 12.
The U.S. document began by accepting "in principle" the four points of the Iranians parliament "as the basis for ending the crisis." Having said that, the U.S. document set forth the basic American positions, without reference to the highly detailed Iranian requirements.
The crucial concept in complying with Iran's demand for a cancellation of all pending U.S. financial claims was to propose to turn them over for decision to a joint "claims settlement procedure" -- in effect, an international claims settlement commission of some sort. State Department officials said yesterday that, while there is no exact U.S. precedent for such action, the government determined that this procedure would be fair to American claimants, while at the same time expediting the hostages' release.
Iran subsequently accepted the principle of arbitration of these claims. American officials have described this as an important step toward a settlement.
Another type of claim to be dealt with was those which had arisen or might rise against Iran because of the occupation of the U.S. Embassy in Tehran and keeping of the Americans as hostages. The International Court of Justice, in its ruling last May 24 in a case brought by the United States, said Iran is liable to pay reparations for these acts.
The U.S. answer to this was to promise to withdraw the pending claims against from Iran in the international court and to "refrain from pursuing" any other claims for damages arising out of the hostage taking. State Department officials said yesterday that the government is prepared to "consider steps" to compensate hostages and their family members for their ordeal.
A third major problem, and one that has continued to bedevil the negotiations, was the return to Iran of billions of dollars in assets in the United States and U.S. banks that were frozen by presidential order following the taking of the hostages in November 1979.
The U.S. plan, as set forth to Iran in the Nov. 12, 1980, document was to release to Iran at the time of the hostages' release approximately $2.5 billion that is held by the Federal Reserve Bank of New York. U.S. legal restrictions on another sum of about $3 billion, on deposit with U.S. banks abroad, would be lifted, which probably would mean its release to Iran within a short time given Iranian willingness to settle outstanding accounts.
Iran's total assets here have been variously estimated at $11 billion (U.S. sources) to $14 billion (by Iran). The return of the rest of the money, under the U.S. plan, would depend on the decisions of the proposed claims settlement commission.
A final basic problem involved the assets of the late shah, Mohammad Reza Pahlavi, and members of his close family, Iran insisted that the shah's fortune, which it considers to have been amassed illegitimately, be returned. The U.S. executive branch lacks the legal power to do this. Moreover, Washington officials believe, as they said yesterday, that the shah's wealth in this country is "minimal."
The American plan presented last November was to agree that all Iranian decrees regarding the shah's wealth could be enforced in U.S. courts, and to expedite Iranian lawsuits by compiling for delivery to Iran information on all shah-related property in U.S. reach. As soon as the hostages are released, Carter would freeze all such properties where they are, Iran was told.
The Iranian authorities were dissatisfied with the Nov. 12 proposals and sent back nine detailed questions about it, delivered here by the Algerian intermediaries Nov. 26-27.
In return, the United States reworked the description of its basic positions, with only a few modifications. Two new U.S. documents, described as "answers" to Iran and "comments" on those answers, related each of the American proposals to a specific requirement of the Iranian Majlis. And the "answers" were stated in flat terms likely to win applause in Tehran, though they were modified by the accompanying "comments."
The two new documents were taken to Algeria by the Christopher team on Dec. 2-3 and transmitted by the intermediaries on Dec. 4. Iran found these much better than the earlier responses, and there were hopes in Washington that they would be accepted as the basis for releasing the hostages.
The Carter administration was to be gravely disappointed. On Dec. 19, after deliberations that are still the subject of speculation, Iran sent back its "final answer" through the Algerians. This required that before the hostages are released, the United States transfer $14 billion to the Algerian Central Bank as a "guarantee" that all Iranian governmental assets will be paid, along with $10 billion "guarantee" representing Iran's estimate of the shah's wealth.
Iran declared that, from its viewpoint, "written undertakings carrying the signature of the U.S. president alone are not sufficient." But the United States said it cannot supply the $24 billion fund under its laws and policies, and that Iran's demand for this huge sum, before the hostages' release, is "unreasonable."
There the matter stands until the forthcoming U.S. message, which is intended to probe for flexibility in Iran's hardline position and to continue the dialogue.