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U.S. proposes a direct line of communication with Iran 
A  a conservative Iranian lawmaker, Ali Motahari, claims that the U.S. has sent a letter to Iran’s Supreme Leader proposing direct talks. The Obama administration has denied the claim. Iran’s Foreign Ministry spokesman Ramin Mehmanparast claims that the proposal for direct talks was embedded in the U.S. letter warning Iran against closing the Strait of Hormuz (ABC 01/18).  
CNN reports that the United States has suggested creating a direct line of communication with Iran in order to prevent any escalating miscalculations between the two countries (CNN 01/18).
Turkey’s foreign minister Ahmet Davutoglu, at a joint news conference with Iran’s Foreign Minister Ali Akbar Salehi, said that Turkey is prepared to host nuclear talks between Iran and Western countries. He urged for negotiations to begin immediately (Washington Post 01/19).
U.S. crafting new “confidence building measure” with Iran
The U.S. is crafting a new diplomatic proposal that would require Iran to stop enriching uranium to 20% and to give up its existing stockpile of 20% uranium  (Yahoo News 01/18).
EU set to approve central bank and oil sanctions
EU foreign ministers are expected to agree on an oil embargo against Iran and a freeze on the assets of its central bank at a meeting scheduled for Monday, according to French Foreign Minister Alain Juppe (Reuters 01/19). 
The director general of the IAEA, Yukiya Amano, said that the U.N. would press for full Iranian cooperation in meetings with Iranian officials. An IAEA delegation is set to seek explanations about allegations regarding Iran’s nuclear program (Reuters 01/19).
Meanwhile, Deputy House Whip Rep. Peter Welch (D-VT), returning from a trip to the U.S.’s Gulf allies, said there is widespread concern about Iran’s nuclear ambitions and support for sanctions, but great reservation and worry about a possible military attack against Iran (Think Progress 01/18).
Japan, China statements on Iran oil
China’s premier Wen Jiabao, at a press conference in Qatar, defended their oil trade with Iran while warning against Iran developing and acquiring a nuclear weapon (The Guardian 01/19). Meanwhile, Japan has said that it is likely to reduce Iranian crude purchases over the next three months (Reuters 01/19).
Former Revolutionary Guard commander criticizes Iranian government
A high-ranking former Iranian commander, Retired Rear Adm. Hossein Alaei, has sparked protest and anger in Iran for publishing a letter perceived to be critical of the Supreme Leader, Ali Khamenei. In the letter, Alaei implicitly compared the recent government crackdowns on the opposition to the repression during the time of the shah. Alaei publicly expressed regret for having written the letter after angry mobs, supporters of Khamenei, attacked his home (Washington Post 01/18).
Notable opinion: 
In a Politico op-ed, author and journalist Hooman Majd discusses the 5 main U.S. misconceptions about Iran:

Top five, 10 or 100 lists are standard at the end of the year. Though the Iranian year doesn’t end for roughly two months, given the escalating tensions between Washington and Tehran, with threats and counter threats over the Strait of Hormuz — to say nothing of most GOP presidential candidates’ views on what to do about Iran — it might be useful to compile one on the growing Iran crisis, early 2012 here and late 1390 there.

To read the full piece click here.
Additional Notable News:
Three prominent journalists have been arrested in Iran ahead of the country’s parliamentary elections.
The New York Times reports that Iran’s currency fell to its lowest level ever against the dollar on Wednesday.
Nato’s secretary-general, Anders Fogh Rasmussen, has urged Iran to keep the Strait of Hormuz open.
Iranian Foreign Minister Ali Akbar, during a trip to Turkey, warned Arab states against aligning themselves too closely with the United States.

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