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My Profile Top News Reuters top ten news stories delivered to your inbox each day. 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Obama said on Monday that he saw the possibility of diplomatic openings with Iran in the months ahead, marking a break with his predecessor George W. Bush. The United States and its Western allies accuse Iran of seeking nuclear weapons, a charge Tehran denies. Despite a new approach, Obama's administration has also warned Iran of tougher sanctions if it does not halt its disputed nuclear work. "The new U.S. administration has announced that they want to produce change and pursue the course of dialogue," President Mahmoud Ahmadinejad told a rally to mark the 30th anniversary of the Islamic revolution that ousted the U.S.-backed shah. "It is quite clear that real change must be fundamental and not tactical. It is clear the Iranian nation welcomes real changes," he said, adding: "The Iranian nation is ready to hold talks but talks in a fair atmosphere with mutual respect." Ahmadinejad did not refer to the tough conditions he mentioned on previous occasions, a more measured approach that analysts said was likely to be welcomed by Obama and his team. "On the face of it, it seems to be a significant signal, an opening that will encourage the Obama administration that they (Iranians) are actually willing to sit down," said Paul Salem, director of the Carnegie Middle East Center in Beirut. An Iranian political analyst said: "Obama's tone was soft, his tone couldn't be harsh." Ultimately, policy will not be decided by the president but by Supreme Leader Ayatollah Ali Khamenei, who has the final say in all matters of state in the Islamic Republic. He tends to look for a consensus in the political elite, analysts say. Khamenei has, so far, kept silent on Obama and his overture. Obama said in January America was prepared to extend a hand of peace if Iran "unclenched its fist." Ahmadinejad responded by demanding Washington withdraw troops from Iraq and Afghanistan, and apologize for what he said were U.S. "crimes" against Iran. Ahmadinejad has a presidential election to contest in June, which will pit him against former President Mohammad Khatami, who pushed for detente with the West during his 1997-2005 term. 'WINNING CARD' Ties with Washington have already become a hot topic of political debate as the election race takes shape. Some listening to Ahmadinejad, detected a hint of campaigning. "Ahmadinejad can play a helpful role in the improvement of Iran-America ties. He can also use this issue as a winning card in the upcoming presidential election," said 24-year-old student Mostafa Jabbari. Continued... 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