Gambits in the Hostage Game

New hopes, and old frustrations, as negotiations drag on

On the 400th day of captivity for the 52 Americans in Iran, the father of Hostage Kevin Hermening raised the 400th U.S. flag at Hillcrest cemetery in Hermitage, Pa. The flag had once flown over the U.S.S. Arizona, which 39 years ago fell under attack from the Japanese at Pearl Harbor. The 404th day, however, brought new hopes for the hostages' imminent return--hopes that were lowered almost as soon as the 404th flag was raised.

As-Safir, a leftist Beirut newspaper reported to be close to the Tehran regime, quoted an informed Iranian source as saying, "Agreement has been completed between the U.S. and Iran to resolve the hostage issue. They are expected to be freed on the 25th of this month." Within hours, however, it became evident that the report was false. Behzad Nabavi, head of the Iranian committee that is negotiating with the U.S., flatly denied the report. He also asserted that Washington's proposal in response to one of the Iranian demands, that of allowing U.S. courts to decide the fate of the late Shah's fortune, "is absolutely not acceptable."

U.S. officials had hoped that the proposal would be a breakthrough in the negotiations, since they had reportedly already agreed to two other demands, namely a U.S. pledge of noninterference in Iranian affairs and the unfreezing of $13 billion in U.S.-held Iranian assets. In its response to Iran's remaining demand, that all American claims against the Tehran government be canceled, the White House tried to explain that complex legal obstacles might make this difficult.

Both the upbeat As-Safir report and the hasty Iranian denial were received stoically in Washington. Said one senior White House official: "The real problem is that this issue still requires a political decision in Tehran. The political will to end it all simply has not jelled."

Still, there were indications that at least some answer to the U.S. proposals might be forthcoming. In an interview published at week's end in a Tehran newspaper, Nabavi said he is now readying new suggestions on how the U.S. might meet his country's demands. In recent weeks Ayatullah Ruhollah Khomeini has eased his obdurate attitude on the hostage question. Moderate President Abolhassan Banisadr, who is in favor of the hostages' release, seems to be gaining in visibility because of his handling of the war with Iraq. Indeed, as the valiant defense of the refinery city of Abadan went into its ninth week, Banisadr's influence with the military continued to grow.

Despite the frequently contradicted news of the hostages' fate, there were signs of encouragement. A source within the Palestine Liberation Organization, which has been assuming a greater role in the hostage discussions, told TIME: "We can probably look forward to seeing the hostages released as soon as possible. I would not be surprised if they were let go before Reagan became President." In New York, Paul O'Dwyer, the lawyer who represents Iran in its claims against the Shah's wealth, noted that the Iranians have not asked him to arrange for clergymen to visit the hostages this Christmas, as they did last year. Though State Department officials consider such comments overly optimistic, they do not rule out a timely resolution to the hostage problem. Cautioned one Administration aide: "The process isn't stymied, but it's certainly in slow motion."

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