So Iranian President Hassan Rouhani has officially declared the end of the reckless round of adventurous rhetoric and foreign policy pursued by his country's Islamist regime in recent years.

Citing a mandate to "create a new era of relations between the people of Iran and the rest of the world," Rouhani revealed that the conservative religious leadership had given him "complete authority" to do a deal with the United States.

That country's President Barack Obama's rapprochement with Rouhani was in stark contrast to the rhetoric of his 2012 election campaign, when he competed with his Republican rival to threaten Iran with attack.

Both Rouhani and Obama represent a departure from the aggressive approach of their predecessors, Mahmoud Ahmadinejad and George W Bush.

Analysts have rushed to celebrate the dawn of a "new era" in Iran.

But they ignore the fact that the main driver for change is located elsewhere. The fact is that for almost two years the Islamic Republic has found itself in a dangerously tight corner - courtesy of eight years of disastrous policy-making by Ahmadinejad.

This has isolated the country internationally, devastated the economy and brought Iran to the brink of a catastrophic conflict with the US and its Nato allies.

The theocratic regime has had to endure intense economic and diplomatic pressure exerted by the US and EU.

This proved a poisoned chalice, in particular for Supreme Leader Ayatollah Ali Khamenei. In the face of the real possibility of a ruinous conflict with the US and its allies the regime was forced to change tack.

Easing international tension is a welcome change for the Iranian people, especially if last week's events bring about a lifting of economic sanctions.

And the communist Tudeh Party of Iran also sees it as providing space for the left and progressive forces to further expand the campaign for peace and human and democratic rights in the country.

Iran has a dollar-based "import-led" economy relying on the export of crude oil. This makes it an easy target for the US as far as sanctions are concerned.

Structural distortions in the economy make it hostage to parasitical speculators in finance and property. Their destructive, non-productive activities are powered by the export of crude in return for the import of vast quantities of consumer and agricultural goods.

An unholy alliance between the powerful bureaucratic bourgeoisie and the merchant capitalists has ensured the continuation of this system.

And - with the support and encouragement of the IMF - Iran has undergone two decades of neoliberal economic restructuring.

Mass privatisation and the removal of energy subsidies under Ahmadinejad have put enormous downward pressure on working people's living standards.

Over the last two years this sick economy has created huge resentment and prepared the ground for mass uprisings.

In the past 24 months there have been hundreds of strikes and industrial protests in the country.

But because of the shackles placed by the regime on trade unions these have remained isolated and are easily brought under control.

The main contradiction in Iran is between the people and the interests of the political elite and economic oligarchy - custodians of a lucrative, unjust and corrupt economic system.

It's a contradiction that cannot be resolved and poses a growing threat to the survival of the regime.

The power structure in Iran is complex, accommodating various competing factions which are interdependent. The key factions frequently confront each other - but they quickly close rank under the cloak of the Supreme Leader when faced by any serious challenge.

They know that the danger of "regime change" does not come from the West. It comes from the Iranian people seeking fundamental socioeconomic change and democratisation.

That's why the regime attributes all its problems to forces beyond its borders and is now looking to the West as a potential ally, seeking a deal to shore up its position.

Far from being a breath of fresh air at home, Rouhani's economic plans are a continuation of a 25-year neoliberal trend.

Economic "restructuring" has already created a large and powerful private finance sector.

Rouhani's cabinet is composed of neoliberal right-wing reformers. And a book co-written by him and his advisers advocates the "free market" as the solution to Iran's difficulties.

The new president prioritised meeting the head of the IMF during the UN general assembly in New York - a strong pointer as to where Iran is heading as it "comes in from the cold."

His government is working on a strict monetarist programme with plans to extend the "flexible labour market" by diluting and removing workers' rights.

Attacks on workers will build on the systematic suppression of independent trade union activity in Iran during recent years.

These measures are in line with the Washington Consensus and will be seen as positive signals by US and global corporations.

Any rapprochement between Iran and the US will rest on economic interests - and Rouhani will have a hard time satisfying Iran's oligarchs that their own interests will be safe.

The senior commanders of the Revolutionary Guards in particular have built up a huge role in the economy and now comprise a "bureaucratic bourgeoisie" whose fears had to be managed by Khamenei himself in the run-up to Rouhani's speech.

The ayatollah called for "heroic flexibility" - that is, compromise.

But no compromise between the US and Iran's corrupt elite is likely to prioritise working people's living standards.

Nor does Rouhani's cabinet offer much hope of democratisation. His Justice Minister Pour Mohamadi was a key figure in organising the execution of thousands of political prisoners in the 1980s.

Fundamental reform in Iran is barred since the ruling clergy will see any major democratic, social or economic change as a threat. The character of the regime remains anti-people despite the election of Rouhani.

The Tudeh Party of Iran supports any lowering of tension between the US and Iran. It has called for years for all disputes to be resolved by negotiation in accordance with international law.

But all negotiations must be transparent and in the interests of Iran's people.

The theocratic regime has placed our country in a weak position. It has turned to the West to save itself.

The US and its allies must be prevented from exploiting this opportunity to push forward their plans for a "new Middle East."

Navid Shomali is secretary of the Tudeh Party's international department.