The decision to free Iranian-American journalist Roxana Saberi Monday after more than three months behind bars in Iran removes one of many obstacles to a new US-Iran dialogue pursued by President Barack Obama, while also clearing away the episode in the runup to Iran's hotly contested presidential election next month.

Ms. Saberi was released and reunited with her parents after an appeals court reduced a previous eight-year sentence for espionage.

Analysts suggest the arrest and heavy original sentence were part of an internal political struggle in Iran, in which hard-liners used the case of the US-born Saberi to complicate any bid to reciprocate recent positive overtures from Washington.

Saberi walked out of Evin Prison on Monday, her release greeted with joy and relief by her waiting father, Reza, and mother, Akiko, who have been in Iran since March to push for their daughter's freedom. Ms. Saberi ended a two-week hunger strike after being briefly hospitalized last week.

"So practically, she is free as of now," Mr. Saberi told journalists outside Evin prison. "She is in good condition, and we are very happy that they gave us such a break for her."

The court reduced Saberi's sentence to a two-year suspended term, in keeping with recent signals from Tehran that her case would be treated with "compassion." Saberi denied charges of spying for the United States. Washington said those charges were "baseless," and Mr. Obama and other senior officials said they were concerned about Saberi's fate.

"Whenever there are moments of potential confidence-building between the US and Iran, you have a hard-line faction in Tehran – the spoilers – who have a long history, dating back to the 1979 hostage crisis, of provoking an international crisis in order to forward their domestic political agenda," says Karim Sadjadpour, an Iran specialist at the Carnegie Endowment for International Peace in Washington.

"These hard-line factions very openly say that enmity toward the United States is one of the pillars of the revolution, and central to the identity of the Islamic Republic," says Mr. Sadjadpour. The arrest of Saberi fit that context, though the increasing international pressure – from the media, and even upon Iranian diplomats confronted abroad by questions about Saberi's plight – meant the "costs began to outweigh any benefit."

Iranian President Mahmoud Ahmadinejad had made a rare intervention, warning Iran's judiciary to ensure that Saberi and an imprisoned Iranian-Canadian blogger had "all freedoms and legal rights" to defend themselves.

The new verdict came after a five-hour hearing Sunday, during which Iranian officials emphasized legal procedure, allowing Saberi to defend herself and two lawyers to speak on her behalf. That appeal was in sharp contrast to the original lightning trial of April 13, held in secret and without lawyers, in which sentencing took place in less than an hour.

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