ANALYSIS - Chances for US-Iran talks dim, but not snuffed out

By Arshad Mohammed

WASHINGTON (Reuters) - Iran's political turmoil has dimmed immediate prospects for U.S. dialogue with Tehran but U.S. President Barack Obama's hopes for engagement have by no means been snuffed out, U.S. officials and analysts said.

Officials acknowledge that the Iranian authorities bloody crackdown on street protests sparked by Iran's disputed June 12 election have made it less likely that Tehran will wish to engage and harder for the Obama administration to do so.

However, Obama has deliberately not withdrawn his open-hand policy toward Iran even as the authorities displayed an iron fist to intimidate demonstrators in the biggest anti-government protests since the 1979 Islamic revolution.

"The president's policy of engagement is obviously delayed, but we are going to have to deal with the government of Iran," Senator John Kerry, chairman of the influential Senate Foreign Relations Committee, told Reuters.

"The dust will have to settle but ultimately we are going to deal with a government of Iran because we have to, because the nuclear issue is so compelling, urgent, dangerous and important to us," he added.

Since taking office, Obama has made a series of overtures to Iran -- including inviting its diplomats to July 4th parties at U.S. embassies around the world -- as a way of trying to rebuild ties severed after the 1979 Islamic revolution.

The U.S. hope is to coax Iran into a negotiation over its nuclear program -- which Washington suspects is designed to produce atomic bombs but which Tehran says is to generate electricity -- as well as other issues.