The plan backfired as hard-liners in the Iranian Government leaked the secret dealings. Now remember this is 1989. The story is from a 1989 report from The Guardian reporting the death of Ayatollah Khomeini.
At first incredulous at the report of a flight to Tehran by Mr McFarlane and Oliver North bearing a Bible and a chocolate cake, the public was engulfed in yet another major presidential scandal.
The controversy not only tarnished President Reagan, but has raised questions about Mr Bush himself, and the extent of his involvement in the contra facet of the affair.
While officials in Washington will be hoping for an improvement in relations with a post-Khomeini Iran, they will be aware of the weight of history, which militates against such a course.
The US is arguably still paying for its actions in 1953 when the CIA and British intelligence restored the Shah to power at the expense of the nationalist Mohammed Mossadegh. For historians such as Mr James Bill, the US later reaped the whirlwind in the shape of Ayatollah Khomeini.
In his book The Eagle and The Lion, Mr Bill argues that the coup was 'a momentous event in the history of Iranian-American relations', as Americans aborted moderate Iranian nationalism.
Twenty-five years later it would face a much more radical version. Instead of the secularist, Western-educated Mossadegh, Iranian nationalism would be incarnated in the Ayatollah Ruhollah Khomeini.
The American intervention in 1953, writes Mr Bill, 'left a running wound that bled for 25 years and contaminated America's relations with the Islamic Republic of Iran following the revolution of 1978-79'.
Iranian suspicion of the US will not be lessened by the appearance of Mr Reza Pahlavi, the son of the deposed Shah currently living in exile in the US, on American television chat shows. The heir to the Peacock Throne said he was more confident than ever of the success of the 'liberation of his compatriots from the yoke of dictatorship'.
Now here we are in 2006, seventeen years later. The US is immersed in a civil war in Iraq. Tomorrow, President Bush will meet with Iraqi Prime Minister Maliki in Jordan as Iraq is too dangerous. The US still has no dealings with Iran, yet some still expect Iran and additionally Syria to help. Today the Iraqi president meets Khamenei in Iran , after receiving full honors yesterday from President Mahmoud Ahmadinejad.
We should not expect anything helpful from Iran. Nothing. There will be those that will defend the visit saying The Administration has nothing to do with it. I do not believe that is true and if The Bush Administration has no part in this, it is worse. That indicates we have no control over a government we are supporting, fighting for and dying to protect.
In your wildest dreams did you, as I, when we reluctantly or eagerly supported the decision to invade Iraq, believe that after over three years of war it would be necessary to look to Iran and Syria for a solution to an Iraqi civil war involving the best of the US Army and Marines and US National Guardsmen? That is what is going on.
Iraqi president to meet Khamenei BBC
Mr Talabani was received with full honours by his Iranian counterpart
Iraqi President Jalal Talabani is due to meet Iran's supreme leader Ayatollah Ali Khamenei in Tehran on the second day of a key visit for Iraq's future.
Mr Talabani is hoping to secure Iranian help to improve the security situation in Iraq, which is on the verge of civil war according to UN chief Kofi Annan.
On Monday, Mr Talabani held talks with President Mahmoud Ahmadinejad, who said Iran was ready to do whatever it could.
The US has repeatedly accused Iran of impeding efforts to stabilise Iraq.
We are in dire need of Iran's help in establishing security and stability in Iraq
Iran: Who holds power?
But Mr Ahmadinejad said a secure, progressive and powerful Iraq was in the interests of Iran and the whole region.
Mr Talabani, a Farsi speaker, is the first Iraqi head of state to visit Tehran in almost four decades.
"The issue of establishing security in Iraq is the most important part of our talks. We are in dire need of Iran's help in establishing security and stability in Iraq," Mr Talabani was quoted as saying on Iran's state-run TV.
The past week has been one of the bloodiest since the American-led invasion in 2003.
On Monday, UN Secretary-General Kofi Annan told reporters in New York that drastic action was needed to prevent a civil war.
However, US President George W Bush played down such talk, saying the latest bombings were part of a pattern of attacks sparked by al-Qaeda militants seeking a sectarian break-down.
Speaking at a news conference in Estonia, Mr Bush said in order for the US to open a dialogue with Iran, the Iranians would have to "verifiably suspend" its nuclear fuel enrichment programme, which could be used in weapons production.
The BBC's Frances Harrison in Tehran says Iran seems increasingly concerned about the uncontrollable level of violence in Iraq.
Last week's multiple car bomb attacks in Baghdad's Sadr City - in which more than 200 people were killed - were the deadliest in Iraq since the US-led invasion of 2003.
The UN says violent deaths among civilians hit a record high in October, with more than 3,700 people losing their lives - the majority in sectarian attacks.