The Post page 16 last Sunday:
“Just after the lightning takeover of Baghdad by U.S. forces three years ago, an unusual two-page document spewed out of a fax machine at the Near East bureau of the State Department. It was a proposal from Iran for a broad dialogue with the United States, and the fax suggested everything was on the table — including full cooperation on nuclear programs, acceptance of Israel and the termination of Iranian support for Palestinian militant groups.
But top Bush administration officials, convinced the Iranian government was on the verge of collapse, belittled the initiative. Instead, they formally complained to the Swiss ambassador who had sent the fax with a cover letter certifying it as a genuine proposal supported by key power centers in Iran, former administration officials said. …
Parsi said that based on his conversations with the Iranian officials, he believes the failure of the United States to even respond to the offer had an impact on the government. Parsi, who is writing a book on Iran-Israeli relations, said he believes the Iranians were ready to dramatically soften their stance on Israel, essentially taking the position of other Islamic countries such as Malaysia. Instead, Iranian officials decided that the United States cared not about Iranian policies but about Iranian power.
The incident “strengthened the hands of those in Iran who believe the only way to compel the United States to talk or deal with Iran is not by sending peace offers but by being a nuisance,” Parsi said.”
Here is Gareth Porter on the matter.