Though it has still has major worries about Iran's nuclear capability, the administration of George W. Bush knows it cannot afford new international tensions less than one year from a presidential election, experts said.
The UN nuclear watchdog, the International Atomic Energy Agency (IAEA) is expected Wednesday to approve a compromise motion hammered out by the United States and key European allies to condemn Iran's nuclear programme.
But it will not call for Iran to be discussed at the UN Security Council for possible sanctions.
US Secretary of State Colin Powell said: "We are very satisfied with that resolution."
Washington, which accuses Iran of seeking nuclear weapons, wanted the Iranian government condemned for almost two decades of covert nuclear activities. Britain, France and Germany's demanded however that Iran be rewarded for recent cooperation with the IAEA.
"The resolution notes all that Iran has been doing over the years with respect to its nuclear programmes," Powell said. "It notes that Iran has been in breach of obligations."
The United States insists the resolution leaves the door open to sanctions if Iran strays from its duties under the accord.
The foreign ministers of Britain, France and Germany went to Tehran to secure an agreement from the Islamic government to open up sensitive sites for inspection.
And French President Jacques Chirac said the Vienna agreement "goes in the direction of efforts made by the international community to convince the Iranians to take effective and durable measures necessary to restore confidence."
Jon Wolfsthal, a disarmament specialist at the Carnegie Endowment for International Peace think tank in Washington, said the United States had compromised "a great deal" in a bid to keep the European initiative alive.
"It is not that it softened, but is now at least willing to allow the European process to play out."
Wolfsthal said many people in the US administration "believe Iran has not come totally clean, that they are stil hiding elements of their programme, and that if the European process moves forward, there is at least a chance that they will reveal what is left of their programme."
But Washington wants to make sure that if Iran is found to be hiding elements of its nuclear programme "there is a mechanism to getting tougher," he added.
Wolfsthal said the United States did not have the "military capabilites at this point" for a new conflict while it struggles in Iraq and that Bush "has no political incentive to try and ratchet pressure on the Iranians" with an election so close.
Brenda Shaffer, an Iran expert at Harvard Univerity, said the Iran nuclear crisis has come at "quite an inopportune time for washington, on the verge of a presidential election year and already burdened with Iraq, Afghanistan, the war on terrorism, North Korea an potentially recurrent Middle Eastern crises."
In an article for the Arms Control Today review she said the Bush administration is sceptical about the European agreement with Iran but wants "to avoid a showdown with its European allies and with Iran at a time that its agenda is so overloaded."
The European accord has led to Iran filing a comprehensive report on its nuclear programme, pledge to allow wider inspections and suspend the enrichment of uranium.
In return, Iran was promised the issue would not go to the Security Council.