Did Bush fear it would have undermined McCain? Some Iranians read it as indicative of no interest from America in anything but regime change or attack.
Bush's final Iran blunder?
By announcing that the United States is no longer interested in opening a consular office in Iran, the George W Bush administration has forfeited a golden opportunity for a timely diplomatic breakthrough with Iran
Iranian Foreign Minister Manouchehr Mottaki
also stated clearly and unambiguously Iran's willingness to consider a "freeze-for-freeze" option on its nuclear program
Iran's new signs of compromise have fallen on deaf ears in the US
Had Bush given a green light to a diplomatic presence in Iran, it would have undermined McCain's foreign policy objectives, benefiting Obama.
Bush's decision is yet another blunder that ranks with the negative reaction of the White House to an Iranian peace initiative in 2003.
The message that is being read
regime change or
outright attack on Iran