Is the wife considered to have returned to her husband merely by each of them imagining the other during the waiting period (iddah), and is she now considered his wife?

If the divorce is revocable and the husband takes you back verbally, either explicitly or through an insinuation with the intention [of reconciliation], or through sexual intercourse, then the return is valid. However, if the husband does not vocalize the return, and the matter is limited to talk about enjoyment over the phone without intercourse, then the return is not effected by that.