The incentives would go into effect if Tehran agrees to permanently halt its uranium enrichment, a key step in making nuclear weapons.
On 10 March, Secretary of State Condoleezza Rice said the U.S. and European views on how to deal with Iran's nuclear ambitions are getting closer: "We are continuing to work with our European colleagues on how we might have unity of purpose [regarding Iran's nuclear program] and how we might more actively support [British, French and German] efforts," Rice said. "And I think we are making a lot of progress, and we'll come to a conclusion on that fairly soon."
Iran says its nuclear activities are for peaceful purposes. The U.S. accuses Iran of pursuing a clandestine nuclear weapons program.
The United States had previously rejected any kind of reward to Iran for giving up its nuclear activities. This was in contrast to the European Union's diplomatic approach. France, Germany and Britain -- the three major EU countries negotiating with Tehran -- had offered trade, technological, and security benefits in exchange for guarantees that Iran would not develop nuclear weapons.
But the EU countries had argued that their efforts would be wasted unless Washington put its weight behind their offer.
Senior American officials -- quoted by both "The Washington Post" and "The New York Times" -- say the United States does not plan to directly join the talks with Iran, which resumed on 8 March in Geneva.
Pirouz Mojtahedzadeh is a professor of geopolitics at Tarbiat Modaress University in Tehran. He believes the U.S. incentives will not persuade Iran to permanently halt its enrichment activities. "About a week or two weeks ago, the Iranian negotiator talking about this issue used this sentence: 'The nation will not allow us to do such a thing,' " Mojtahedzadeh said. "When I was in Tehran a few months ago, [similar] comments appeared in the newspapers, saying that accepting a halt to the production of enriched uranium by anybody in Iran would be treachery."
Iran agreed last November to temporarily suspend uranium enrichment. But Iranian officials have repeatedly said it is the country's legitimate right.
The United States has vetoed Iran's membership in the World Trade Organization many times in the past. Iran's commerce minister recently said that allowing Tehran to join the WTO should not be considered an incentive during nuclear negotiations.
Hajir Teymourian, a London-based analyst, says America's new willingness to offer incentives is linked to its desire to gain EU support for sending Iran's nuclear issue before the UN Security Council.
"The Americans themselves are saying that these concessions are going to be modest," Teymourian said. "In other words, they themselves are not very hopeful that, for example, offering negotiations with the World Trade Organization is going to be enough. But nevertheless, they are under pressure from their European allies to show their support for the European stance. In other words, for this little modest support from the Americans, the Europeans have agreed to take the issue to the United Nations Security Council if Iran does not give up its quest to permanently go on refining uranium."
The United States has threatened to push for Iran's referral to the UN Security Council as early as June over what it says is Tehran's lack of transparency about its nuclear activities.
On 11 March, the three EU countries also said they would support referring Iran to the UN for possible sanctions if it does not fully cooperate with the International Atomic Energy Agency or if it resumes its enrichment activities.
In a report to the bloc's presidency on 11 March, the EU trio said that progress is not as fast as they would like in talks with Iran. But they say they hope an accord can be reached.
Iranian officials say they have done enough to provide guarantees about the peaceful nature of Iran's nuclear program.
Teheran has threatened to resume the enrichment process if talks with the EU fail.
Some analysts believe Iran will delay any key decisions about its nuclear program until after the country's presidential elections in June.