Washington — Before the fall of the Shah of Iran, the Iranian Embassy in the United States sheltered parties of legendary elegance. But the massive, vaguely Persian building is now the shabbiest resident of Washington's diplomatic row.
Its front door, inset with carvings of rampant animals, is spattered with paint and chained shut. Fallen leaves cover the front steps. A stripped sedan rests on blocks in the parking lot. Last spring, an embassy Mercedes, which had been parked in the driveway for more than a year, disappeared. The Iranians' US lawyer has no idea where the expensive car has gone; he says it may have been stolen.
Today, three years after 62 US citizens (some were quickly released) were taken hostage in Tehran, the relationship between Iran and the United States is as desolate as the Iranian Embassy grounds.
''We are still the Great Satan to them,'' says a State Department official who wishes to remain anonymous.
The cataclysmic event that sundered US-Iranian relations occurred on Nov. 4, 1979, when a band of fundamentalist Iranians forced their way into the US Embassy in Iran and took 62 US diplomats and military personnel hostage. Freed on Jan. 21, 1981, most of the former hostages have now gladly escaped the public spotlight.
''They've gone back to their private lives,'' says Sheldon Krys, executive director of the State Department's Bureau of Near Eastern Affairs and ''godfather'' to the hostages.
All but two or three of the diplomats among the hostages have elected to stay in the Foreign Service (the State Department won't divulge exact figures). Many of the Marine guards have returned to school.
Moorhead Kennedy, one of the few former hostages who left government service, now runs the World Center for the Study of Religion and International Affairs, a peace institute headquartered at the Cathedral of St. John the Divine in New York.
''I'm not trying to get back into the mold I was in before (being taken hostage),'' says Mr. Kennedy. ''I didn't want to go back to the same goals.''
Though the hostages have been free for almost two years, diplomatic relations between the two countries are nonexistent. The Iranians have expressed no interest in ''broadening'' their dealings with the US, says a congressional source, and the Reagan administration is in no mood to make overtures of friendship - especially while the Iran-Iraq war continues. Restrictions on US financial dealings with Iran - which would have expired Nov. 14 - have been extended by President Reagan.
Trade between the US and Iran has slowed to a walk. In 1978, the United States sold $3.7 billion worth of goods to Iran, while buying $2.9 billion of Iranian products in return, according to a Commerce Department official who specializes in Middle Eastern trade. In 1981, US exports to Iran - 80 percent of which were agricultural products - totaled but $300 million, while imports of pistachios, carpets, and other goods were valued at $64 million.
However, six months ago the US government did break down and purchase $53 million worth of Iran's most valuable commodity, oil, to help fill the Strategic Petroleum Reserve. The buy was a bargain. Through a Swiss trading company, Iran offered the oil at $4.50 a barrel less than the OPEC base price. Pressed for cash to finance its war against Iraq, Iran may be whispering similar inducements to private oil firms.
''American companies have been approached with nice discounts, really attractive deals,'' claims Barry Rubin, a Georgetown University fellow and author of a book on the US experience in Iran.
There is one arena where the two governments can't avoid talking to each other: the US-Iran Claims Tribunal established by the hostage release agreement. The tribunal is a panel of nine arbitrators, three from the US, three from Iran, and three from neutral countries. It's charged with settling the approximately 4 ,000 US and Iranian suits stemming from the embassy takeover.
The tribunal is not acting with lightning speed. Proceedings are conducted in both English and Farsi, for one thing, and the Iranians are stalling with such tactics as insisting US litigants prove their nationality to the ''nth degree,'' claims a State Department official.
''This thing might take 10 or 20 years to finish,'' groans a government Middle East specialist.
Twelve large suits filed against Iran by US companies have been settled. B. F. Goodrich Company, for instance, has been paid $178,600 to compensate for the loss of a technical assistance contract with the Kian Tire Company of Iran.
But there are still relatively few cases scheduled for hearings through next spring. And the tribunal has yet to address such tough problems as the thousands of small cases, ranging upwards from the loss of a car or refrigerator, being presented by the respective governments on behalf of their citizens and companies.
The settlement process recently hit a snag. Claims against Iran are paid out of a $1 billion escrow account that is administered by Algeria. At the beginning of October, Algeria decided some crucial points - such as the distribution of interest from the escrow account - hadn't been settled, and refused to pay six claims already awarded by the tribunal.
During the week of Oct. 25, the US was able to persuade Algeria to resume payments. But the glitch ''serves notice the Algerians are very serious in their role as intermediaries,'' says Mike Mealey, editor of the Iranian Assets Litigation Reporter.
The interruption in payments could portend problems in the future, say some US observers.
Iran, for its part, has filed charges with the tribunal claiming that the US has committed 18 specific violations of the agreement that secured the release of the hostages. The charges, says Thomas Shack, a lawyer representing the Iranians, range from ''failure to transfer certain types of assets, to failure to halt litigation worldwide.''
Ironically, a federal appeals court ruled early last month that former hostages can't sue Iran but left undecided the question of whether ex-hostages could sue the US.