It is my understanding that when a country attacks an Embassy, because the Embassy is de jure considered to be the soil of the country the embassy represents, it is an act of war. So as far as i can see the attack on the embasssy and the holding of Hostages was an Act of War, and as far as i can determine relations between teh US and iran have been almost non-existent since the event. Iran has several times tried to open relations but has had no more luck than Cuba. The article below shows why countries have trouble trusting the US.
"Americans will never make concessions to terrorists- to do so would only invite more terrorism- once we head down that path there would be no end to it, no end to the suffering of innocent people, no end to the bloody ransom all civilised people must pay."
Ronald Reagan, June 18 1985 (p189 Out of Control)
The 1980s saw Iran and Iraq go to war. America and Iraq were allies, sharing intelligence and American resources supported the Iraqis. During this, seven American citizens are captured and held hostage in Lebanon by extremist Islamic terrorists who have connections with Iran. The Israelis, understanding the political significance of hostages for the American government, suggested selling weapons to Iran in order to free the hostages. Thus, covertly, the Reagan Administration commenced selling weapons, in doing so breaking its own regulations and declared stance against Iran, a state that they had declared a terrorist nation, an enemy of the American State and all the while, they maintained their alliances with Iraq.
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On January 16 1979 the overthrowing of the Shah and instalment of the Khomeini government ended twenty years of good Iranian-American relations. When the American Embassy in Tehran was seized on November 4 1979, hostility and tensions intensified. The hostage crisis paralysed the Carter Administration. President Carter's inability to rescue the hostages led to his end of office and subsequently, the appointment of Ronald Reagan. Thus Reagan took subsequent hostage crises very seriously, personally even. His main concern was not trying to repair relations with Iran, or the breaking of world embargoes that the American Administration had marshalled against Iran, it was about the hostages. As he wrote in his autobiography, 'I felt a heavy weight on my shoulders to get the hostages home.' This weight came partially from the significance and difficulty that hostage situations had, and continued to cause other Administrations and world leaders. Hostage crises became a very personal issues for leaders around the world at this time. It was this weight which created a policy contradiction within the Reagan Administration, which morphed into an embarrassment of riches regarding the divergence from publicly proclaimed policy to covert activities and finally to the scandalous funnelling of illegal wealth to the Nicaraguan Guerillas.
Hostage-taking by political terrorists became a very clear strategy in the 1980s, thus it also became a very significant issue in the foreign policies of Western Governments who were subject to these threats. The United States, Britain and France, all publicly claimed a policy of 'no concessions', while in fact, engaging in covert operations and agreements in order to ensure the release of their citizens. The act of hostage-taking is essentially a direct assault on common values and principles held by citizens within liberal democracies. Citizens of a state have the right to assume that their government will take responsibility to ensure order and protect against violence to its citizens. Thus, a government has the responsibility to be "doing all in 'its power to defend the life and limb of its citizens', not only within its own boarders but also abroad." Hence, the dilemma in the hostage-taking which creates a foreign policy crisis, by its very nature, the act has political, personal and moral dimensions. The publicly declared stance of 'no concessions' drastically reduces the Governments' flexibility and does nothing to ensure the safety and release of the hostages. The pressures, and threat of lost credibility, that comes from the public and media as no-response cause disapproval and outrage, while concessions demonstrate that the government is weak heighten this unrealistic situation. Hostage-takings caused both a foreign policy and domestic crisis as many Western Governments lost elections in the 1980s over their dealings with hostage situations. President Reagan was keenly aware of these factors when he faced this hostage scenario.
In the summer of 1985 the Israeli Government suggested to the Reagan administration that weapons be sold to Iran in exchange for the release of seven American hostages held in Lebanon. The motion was opposed by both the Secretaries of State and Defence, who declared that such an arms-for-hostages deal was against the U.S. public policy of not dealing with governments which supported international terrorism. They also argued that this would breach both the Arms Export Control Act and the U.S. arms embargo that had been placed against Iran after the attack on the U.S. embassy in Tehran 1979. The opposition to this motion had little effect and in the summer of 1985 the President authorised Israel to advance with the salessales. Although the agreement stated that Iran would ensure the release of all the hostages, only Reverend Benjamin Weir returned, despite the 504 TOW anti-tank missiles supplied in August and September 1985. The President signed a Finding to authorize this action. Congress was not notified about this action, although it must be said that by law, the President was not obliged to inform the immediately, except that he was contradicting his own Administration's publicly declared stance. Only those who needed to know within the NSC were informed.
Under Oliver North and John Pointdexter's direction 'The Enterprise' (as they had named their organisation) continued with the supplies and shortly started to divert funds to accounts used for the Contra operation. According to North, CIA Director Casey saw the "diversion" as part of a more grandiose plan to use the Enterprise as a "stand alone", "off-the-shelf", covert capacity that would act throughout the world while evading Congressional Review. The second hostage release occurred after 11 months of weapons sales on July 26 1986.
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