After several years of warming and rapidly advancing relations, Japan and Iran may be at a crossroads once again.

Time is running out for Tokyo to make a politically difficult decision on an issue that Tehran sees as a litmus test of whether the major economic power will carry relations forward -- or bring them back to the past.

At stake is Iran's request for 25 billion yen in official Japanese yen loans for a major railroad project linking the northeastern city of Mashhad to the southeastern port city of Bandar Abbas through Kerman. Tehran wants the Japanese aid by this summer to ensure that the project -- still in its initial stages -- will proceed smoothly.