Iran sets new bail terms for release of U.S.woman

TEHRAN, Iran - After a power struggle within Iran's conservative leadership put her freedom in doubt, an American woman arrested more than a year ago along the Iraq border is on the verge of heading home. Her two companions, however, could be on their way to spy trials.

Sarah Shourd could be released in the "next two or three days" - or even sooner - after $500,000 bail is paid, said Masoud Shafiei, the Iranian lawyer for Shourd and the other detained Americans, Shane Bauer and Josh Fattal.

Swiss diplomats, who represent U.S. interests in Iran because the two countries do not have direct diplomatic relations, were making arrangements to post bail.

White House adviser David Axelrod said Sunday on NBC's "Meet the Press" that the Obama administration is "encouraged" by the news of Shourd's planned release, but noted that "there have been starts and stops in this before, and until that [her release] actually happens . . . we're on a wait-and-see basis."

It was not immediately clear whether such a bail payment would violate U.S. trade sanctions against Iran and whether a special waiver would be required. "We're hopeful that we can get these folks out . . . and we're working really hard to see that that happens," Axelrod said.

But as Iranian authorities paved the way for Shourd's release on health grounds, they also appeared to be moving their espionage accusations into high gear.

Tehran's chief prosecutor, Abbas Jafari Dowlatabadi, said indictments against the three Americans were issued yesterday and the prosecution's case is nearly complete.

That could mean trials for Bauer and Fattal, both 28, and proceedings in absentia for Shourd, 32. Conviction could bring prison sentences of up to 10 years each.