Former Iranian President Mohammed Khatami –who in the late 1990s many thought could restore sanity to his Islamic nation’s foreign policy – just bowed out of his country’s June Presidential elections, Reuters news service reported today.

Mr. Khatami served in his country’s top elected position from 1997 to 2005, a period which saw a thawing in relations with the West. But since the election of his successor, Mahmoud Ahmadinejad, those ties have sharply deteriorated. Mr. Ahmadinejad, a populist who never missed an opportunity to inflame, clearly wants to keep his job for a second five-year term.

It’s hard to read the tea leaves from Tehran as to what Mr. Khatami’s move means. In my view there are two likely scenarios: First, it could signal that Iran’s true leader, whose title says it all – Supreme Leader Ayatollah Ali Khameini—is uninterested in reform. Had he been of such inclination, Mr. Khatami would be a candidate. After all, in Iran only approved candidates are allowed to run for elected office, which is why many of Mr. Khatami’s reformist allies were disqualified in recent elections.

Alternatively, Mr. Khatami might be helping the cause of unseating the current president. That’s because he has announced his support for former Prime Minister Mirhossein Mousavi, who is seen as more moderate – moderation, of course, being relative when discussing Iranian politics. There is, then, the possibility that Mr. Khatami is solidifying opposition forces by helping Mr. Mousavi.

This is important because many analysts are saying this will be a year of decision for the West and Israel when it comes to a potential military strike on Iranian’s numerous nuclear installations, part of a network that surely is building nuclear weapons for the nation’s radical Islamic leaders.

Iran’s political maze is far from simple. Any alternative force to Mr. Khatami – which could express to Ayatollah Khamani popular resistance to Iran’s international position, would be welcome. Americans and Jews in particular should keep a close eye on the Iranian elections.