In one of his most decisive foreign policy statements since taking in office in January, Obama said in a video message with Farsi subtitles released by the White House on Friday, March 20, that Washington was committed to pursuing "constructive ties" with the Islamic republic.

"My administration is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran and the international community," Obama said in the surprise message times to mark the start of Nowruz, the Iranian New Year.

With friendship come responsibilities

Although the US president did not specifically mention US allegations of Iran's support of terrorist activities or its nuclear program which Washington has accused Tehran of pursuing for the last several years, Obama stressed that "the United States wants the Islamic Republic of Iran to take its rightful place in the community of nations."

"You have that right -- but it comes with real responsibilities, and that place cannot be reached through terror or arms, but rather through peaceful actions that demonstrate the true greatness of the Iranian people and civilization…..And the measure of that greatness is not the capacity to destroy, it is your demonstrated ability to build and create."

Obama's address clearly signaled his administration's recognition of Iran as a potential negotiating partner, even though the two countries have not had diplomatic relations since 1980.

In fact, Obama has declined to take the military option off the table as a way of preventing Iran from obtaining nuclear weapons.

But by vowing to commit to renewed diplomacy with Tehran, Obama was following up on his campaign promise to engage with Washington's adversaries. It also evoked his January 20 inaugural address in which he promised the Muslim world he would "extend a hand if you are willing to unclench your fist."

Hoping for a sensible response

The offer of direct talks and a new diplomatic start with Iran is a "very good" one and deserves an "intelligent" response, said the EU's top diplomat, Javier Solana in response to Obama's message.

Solana heads international negotiations over Iran's controversial nuclear program and is tasked with negotiating with Tehran on behalf of the United Nations Security Council's permanent members and Germany.

"I hope very much that Iran will react intelligently," Solana told journalists on the fringes of an EU summit in Brussels.

"I hope very much Iran will pay good attention to what has been said by President Obama. I hope this will open a new chapter in the relations with Tehran," he said.

Meanwhile, a top advisor to Iranian President Mahmoud Ahmadinejad welcomed the olive branch to Tehran but urged Obama to back his words with concrete action to repair past mistakes.

"We welcome the wish of the president of the United States to put away past differences," Ahmadinejad's press advisor Ali Akbar Javanfekr told AFP. "But the way to do that is not by Iran forgetting the previous hostile and aggressive attitude of the United States….The American administration has to recognize its past mistakes and repair them as a way to put away the differences."

"He has to go further than words and take action. If Obama shows willingness to take action, the Iranian government will not show its back to him," stressed Javanfekr.

He said the differences referred to by Obama are a result of the "hostile, aggressive and colonialist attitude of the American government….the United States is mainly responsible for these differences and if it does not address them, they will remain," he said.

"By fundamentally changing its behaviour America can offer us a friendly hand," Javanfekr told Reuters."Unlimited sanctions which still continue and have been renewed by the United States are wrong and need to be reviewed," he said.