Two fascinating stories emerged from Iran and Saudi Arabia in recent days that relate to U.S. policy in Iraq and the wider Middle East.
Story One: Iran's President Mahmoud Ahmadinejad suffered a major political rebuff when his allies lost big in city council elections across his country.
Story Two: Saudi Arabia's ambassador to the United States, Prince Turki al-Faisal, resigned suddenly and left Washington. Newspaper reports say he departed over a split within the Saudi ruling family about how to deal with Iran.
Both stories serve as important reminders that any revised American policy toward Iraq must be linked to a coherent approach to the entire region. Otherwise, any new policy is bound to fail.
Let's start with the Iran story. Ahmadinejad hoped these local elections would consolidate his political power. The voting was held days after the Iranian president held a bizarre international conference of Holocaust deniers, which included former Ku Klux Klan leader David Duke and a bevy of discredited European pseudo-scholars.
The Iranian public was clearly more impressed by Ahmadinejad's failure to deliver on his populist promises. Iran's economy is sagging despite high oil prices.
More unhappiness with Ahmadinejad was revealed by a highly unusual student demonstration that took place when he visited Amir Kabir University during the week of the Holocaust conference. Iran's student movement has been in disarray, but the president's purge of reform-minded students and professors has infuriated young people.
Students chanted "Death to the dictator" and "Forget the Holocaust - do something for us." Amazingly, some conservative Iranian media gave this demo full coverage, running photos of banners denouncing the president.
That Ahmadinejad's opponents were given such publicity, says Iran expert Vali Nasr, indicates "serious rethinking by the Iranian elite about this guy." Nasr, author of "The Shia Revival," believes key Iranian power brokers are worried that Ahmadinejad's antics will have adverse consequences for Iran.
How does this relate to a new U.S. policy on Iraq?
Iran's regime has great influence inside Iraq; it will be hard to stabilize that country without cooperation from Tehran. So far, the White House has rejected proposals to engage with Iran, unless Iran first freezes its nuclear program. Part of the resistance to negotiations with Iran may stem from distaste at dealing with the inflammatory Ahmadinejad.
But these elections remind us that Ahmadinejad is not the key political figure in Tehran, despite his international bluster. Iran's system gives paramount power to its supreme leader, Ayatollah Khamenei, who controls foreign policy and the nuclear issue. Many in the circle around Khamenei disdain the Iranian president.
Even without Ahmadinejad, engagement with Iran would not be easy. But the need for such engagement should not be obscured by his rhetoric. Only if we engage Iraq's neighbors - including Iran - in an effort to stabilize that country is there a chance of holding it together.
Now to the Saudi story - which makes one wonder whether the White House grasps the links between Iraq and the region. News reports say Saudi ambassador Turki resigned over deep differences with Prince Bandar bin Sultan, Saudi national security adviser and longtime envoy to Washington who is close to Vice President Cheney and the Bush family.
Saudi Arabia is fearful of the rising influence of Shiite Iran in the region, and its support for Iraqi Shiite militias that kill Sunnis. While sharing those concerns, Turki favored dialogue with Tehran.
Just two weeks ago, Turki told me he thought a regional conference of Iraq and its neighbors would be beneficial. He believed it might "guarantee the territorial integrity of Iraq ... and not permit a breakup." He also hoped it might create momentum to disband militias and create the "psychological dynamic for a political solution."
Turki told the World Affairs Council of Philadelphia that "talking with them (Iran) is better than not talking with them." In other words, his position was not dissimilar to that of James Baker's Iraq Study Group.
Bandar, on the other hand, is said to favor the Bush approach of confronting Tehran. Some reports say he supports U.S. military action against Iran.
The Bush administration has been encouraging Saudi Arabia and other Sunni Arab countries to form a Mideast front against Tehran. This is a dangerous strategy, no matter how disruptive Iran's behavior. Prodding Iraq's neighbors toward confrontation could lead them to fight over Iraq.
The worst-case scenario for Iraq is that civil war inside that country could draw in the entire region, with Shiite Iran and Sunni Saudi Arabia, Jordan and Egypt fighting a proxy war over Iraq's corpse.
The wiser strategy would be to convince Iraq's neighbors that they share a common interest in Iraqi stability. The Iranian pragmatists who won last week's election might be receptive. The Saudis should be encouraged to take part in such diplomacy, not discouraged.
What should be discouraged is a wider sectarian war in the Middle East.