However, Obama was cautious in his approach with the new Iranian leadership noting that the real power still rests with the supreme leader and Tehran needs to show the international community on abiding by its commitment.
"We are open to discussions - both through the P5+1 and through potential bilateral channels. We recognise that you're not going to solve problems all upfront, as a precondition for talks," Obama told the popular 'Charlie Rose' in an interview.
"But there has to be a serious recognition that the sanctions we put in place, for example, the most powerful economic sanctions that have ever been applied against Iran, that those will not be lifted in the absence of significant steps in showing the international community that Iran is not pursuing a nuclear weapon. As long as there's an understanding about the basis of the conversation, then I think there's no reason why we shouldn't proceed," he said.
Iran's President-elect Hassan Rowhani, a moderate cleric, yesterday raised hopes of an easing of strained ties with West, saying "the idea is to engage in more active negotiations with the 5+1, as the nuclear issue cannot be resolved without negotiations."
Referring to the recently held elections, Obama said the Iranian people want to move in a different direction.
"If you contrast this with the violence and suppression that happened in the last presidential election, obviously you have a much more positive atmosphere this time. The Iranian people rebuffed the hardliners and the clerics in the election who were counseling no compromise on anything any time anywhere," he said.
"Clearly you have a hunger within Iran to engage with the international community in a more positive way. Now, Mr Rowhani, who won the election, I think indicated his interest in shifting how Iran approaches many of these international questions, but I think we understand that under their system the supreme leader will be making a lot of decisions."
Iran has been engaged since 2006 with the P5+1 - Britain, China, France, Russia and the US, plus Germany - over its nuclear work. The West accuses Iran of covertly developing nuclear weapons, a charge denied by Tehran.
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