WASHINGTON - Despite revealing hope for change and reform in Iranian society, the chaos following Friday's election has deeply complicated the Obama administration's Iran policy and program of engagement on its nuclear program.Not only did it position hardliner Mahmoud Ahmadinejad to serve as president for another term, the backlash of protesters who believe the vote was fraudulent put the US in the position of potentially appearing to manipulate the outcome should it show too much support for the demonstrators, or betraying its own values and closing Iranians' opening to the West by too tepid a response.President Barack Obama himself said "it's not productive, given the history of the US-Iranian relations, to be seen as meddling - the US president meddling in Iranian elections," and he has made carefully calibrated statements condemning the killing of innocents while saying that when it comes to the election outcome itself, "how that plays out is ultimately for the Iranian people to decide."While some critics charge that Obama hasn't done enough to support the protesters, who are risking their lives demanding a fair vote, other observers contend that regardless of what Obama does now his credibility in the eyes of Iran's clerical leaders - who hold more power than the president - is gone.Patrick Clawson of the Washington Institute for Near East Policy said that the supreme leader, Ayatollah Ali Khamenei would see the unrest of recent days as a sign that his warnings about the West and its efforts to overturn the Islamic Revolution have been correct.He would interpret the development "as proof that there is a mortal threat from the West to his regime and that if he compromises that will only feed... the West's efforts to overthrow him," Clawson assessed."This is not going to make it easy to negotiate an agreement with the nuclear issue," he added, arguing that Khamenei would be unlikely to want to make concessions or otherwise satisfy Western aims.And Michael Singh, who served as the senior director for Middle East affairs on the National Security Council in the George W. Bush White House, said that the Khamenei's decision to back Ahmadinejad - which many experts believe included some amount of ballot box tampering - indicated that the regime wasn't keen to engage in the first place."These elections are a signal that the Iran regime doesn't see better relations with the US as a prize. I think that they see it as a threat," Singh said, arguing that Ahmadinejad, known for his anti-West rhetoric and rejectionist stance, wouldn't be the leader to put forward if Khamenei wanted to engage."You have a regime that's jumping at its shadow and going to be hunkered down and not likely to be reaching out to grasp Obama's outstretched hand."He suggested instead that greater pressure would be needed, and that Obama might be in a position to harness international displeasure with the events in Iran to do just that.But while Bush administration officials were wary of engagement in the first place, even proponents of the policy have seen the events of the last few days as hurting that strategy."The election - rather than improving the context with a reform victory or merely perpetuating the status quo with a plausible Ahmadinejad win - has instead poisoned the atmosphere for diplomacy," according to Suzanne Maloney of the Brookings Institution's Saban Center. "Washington now faces an Iranian political elite at war with itself and with its people, under renewed criticism from the world and subject to even greater skepticism about its capacity for compromise and respect for international laws and norms."She said, though, that that didn't make engagement any less of a good path to pursue since the reasons for it - the urgency of the nuclear problem and the lack of good fixes - stayed the same. She also praised Obama for striking the right balance in his public comments."At this stage the administration really can't make any conclusions about engagement, because we don't know what direction this situation is going to take," Maloney said. "The Obama administration needs to watch and wait."