Ankur Desai

Before flying to Islamabad, he made the American position clear.

The fact that the two sides will be meeting face to face is significant enough.

But big hurdles remain.

No sooner had Mr Vance taken to the skies than Iran demanded preconditions for the talks in Islamabad.

And of immediate concern for the global economy is whether Iran will allow more oil to pass through the Strait of Hormuz.

From Islamabad, our Pakistan correspondent Caroline Davies sent this report.

Driving around the city is increasingly difficult, particularly the closer you get to the red zone, the area where the embassies and Pakistan's government buildings are based.

Caroline Davies reporting.

Well, our chief international correspondent, Lise Doucette, is also in Islamabad.

After some doubt as to whether the Iranians would show up, their planes touched down here in Islamabad, and it has brought a very senior delegation, including the foreign minister, the secretary of the defence council, central bank governor, some leading MPs,

And most importantly, Iran's parliamentary speaker, a former commander in the Islamic Revolutionary Guard Corps, Mohammad Bagher-Ghalibaf, who's a hardliner who's regarded as a pragmatist.

So he's meant to lead the talks with that U.S.

delegation, which is now on its way.

preconditions that have to be met if the talks are going to happen.

Most of all, there has to be a ceasefire in Lebanon as well.

Israel has to stop attacking the positions of Hezbollah.

And so there's still a little bit of doubt.

But if the talks take place, history will be made.

They will be the talks at the highest level, face-to-face.

Since the 1979 Islamic Revolution ruptured their relations.