PAULA ZAHN, CNN ANCHOR: Good evening, everybody. Glad to have you with us tonight.

Here are some of the stories we are bringing out in the open.

Tonight: talking with the enemy. What do the U.S. and Iran have to say one another? And will it help one war and avoid another?..

The first story we're brining out in the open, whether the U.S. should be engaging in direct talks with Iran. For the last five years, the White House has said Iran is part of an axis of evil, desperate to get nuclear weapons. And we don't negotiate with terrorists, they said.

And both sides have just announced they will indeed send ambassadors to Baghdad for face-to-face meetings about the disastrous security situation in Iraq.

So, what led to this drastic shift in U.S. foreign policy?

State Department correspondent Zain Verjee found out.

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT (voice-over): American diplomats agreed to meet with their Iranian counterparts in Baghdad -- at issue, how to stop the bloodshed in Iraq and move the political process forward, with Iran's help.

TOM CASEY, SPOKESMAN, U.S. STATE DEPARTMENT: They continue to say that they wish to be a positive force.

VERJEE: Direct talks on Iraq, a major turnaround for the Bush administration, which labeled Iran part of an axis of evil.

Washington accuses Iran of fueling sectarian warfare, supporting militias, and supplying insurgents with explosives that kill U.S. troops. The two sides have been flirting with the idea of a face-to- face sit-down. It was nailed down earlier this month in Egypt, where the two sides had a quick chat at Iraq's neighbors conference...

VERJEE: In spite of tensions, it's Iraqi leaders who are pushing both sides to the table, hoping it could ease sectarian tensions.

AFSHIN MOLAVI, FELLOW, NEW AMERICA FOUNDATION: This could potentially be an important channel of dialogue. I don't see it as a channel that leads to a breakthrough that may lead to widespread -- you know, wide-ranging Iran-U.S. rapprochement...

For the complete transcript, please visit the CNN website.