Mohammed Kheirkhah, UPI Photo / Landov As a former prisoner in Iran, Haleh Esfandiari can relate to recently imprisoned journalist Roxana Saberi. In a Daily Beast exclusive, she explains what the saga means for U.S.-Iranian relations.

The saga of Roxana Saberi, the Iranian-American journalist who was arrested in Iran, tried on trumped-up charges of espionage, sentenced to eight years in prison, and then unexpectedly freed last week, tells us a great deal about the inner workings of the Islamic Republic.

Her case is a reminder of the power the Intelligence Ministry continues to exercise in Iran. It remains intensely suspicious of American intentions and is hostile to a U.S.-Iranian rapprochement. It continues to victimize Iranian-Americans and Iranian intellectuals to prove that the U.S. is plotting a “Velvet Revolution” to change the government of the Islamic Republic. Saberi’s ordeal also sheds light on a conflict inside the leadership between hardliners and more moderate elements over domestic politics, foreign policy, and the response Iran should make to President Obama’s recent overtures.

The release of Saberi removes an obstacle to engagement, but it does not mean that negotiations, let alone a rapprochement, between Iran and the U.S. are imminent.

Saberi is not the first Iranian-American or the first Iranian working with American organizations to be targeted by the Intelligence Ministry. Two years ago, I was arrested in Iran, accused of acting against state security, kept in Evin Prison for several months, and repeatedly interrogated before being released. Silva Haratounian, an Iranian of Armenian descent, is serving a three-year prison term simply for having worked with an American NGO to organize a health-exchange program. In these cases too, the Intelligence Ministry sought to “prove” that the U.S. was plotting revolution against the Islamic Republic.

However, as it has done in the past, the Intelligence Ministry underestimated the international outcry that its treatment of Saberi would generate. President Obama, Secretary of State Hillary Clinton, and legislators from Saberi’s home state of North Dakota called for her release. Thousands signed petitions on a “Free Roxana” Web site. Letters and petitions addressed to Iran’s supreme leader and president were sent to the Iranian mission in New York. Weblogs on Saberi mushroomed on the Internet. Demonstrators kept a vigil in front of the Iranian embassy in Paris. When Roxana went on a hunger strike, the pressure on the Iranian government to release her mounted.

If the Bush administration’s allocation of funds for “democracy promotion” and its loose talk of regime change in Iran fed the Intelligence Ministry’s paranoia and strengthened the hand of the hardliners, President Obama’s reaching out to the Iranians has strengthened the hand of the moderates. The negative publicity resonated in Tehran and clearly convinced some in the leadership that a change of course was needed. President Ahmadinejad and the chief of Iran’s judiciary issued statements urging that Saberi receive a fair hearing and a chance to defend herself at an appeals trial. Ahmadinejad is facing serious opposition in his bid for a second term in presidential elections in June. His rivals have been criticizing him for a foreign policy they say has isolated and damaged Iran. These factors help explain the government’s about-face on Saberi.

An appeals court convened last week. Even though the hearing remained closed to the public, this time a representative of the Iranian Bar Association was allowed to attend. The trial lasted a full five hours. Defense lawyers and Saberi herself were given ample time to make their case. The court reduced Saberi’s eight-year prison term to a two-year suspended sentence and freed her. Her lawyer and family say she is now free to leave Iran.

The release of Saberi removes an obstacle to diplomatic engagement, but it does not mean that negotiations, let alone a rapprochement, between Iran and the U.S. are imminent. Hostility has characterized relations for nearly 30 years. The Obama administration is clearly interested in a rapprochement with Iran, but has also made clear it will not tolerate a nuclear Iran or continued Iranian support for groups in the Middle East that use violence to pursue their ends. The Iranian leadership is still divided over its response to President Obama. At the very least, Iran’s leaders seem to expect some concrete steps by the U.S.—for example, an easing of sanctions—before they agree to talks. Iranians go to the polls June 12 to elect their new president, and any significant engagement must await the results of that election.

But with the release of Saberi, the moderate camp in Iran has scored a small victory. That improves the environment for any future talks.

Haleh Esfandiari is director of the Middle East Program at the Woodrow Wilson International Center for Scholars in Washington, D.C. She recently completed a memoir, My Prison, My Home, based on her eight months under arrest in Iran in 2007, of which she spent 105 days in solitary confinement in Tehran's Evin Prison. The book will be published in October.