09 January 2004	Friday	16 Ziqa'ad 1424

TEHRAN, Jan 8: Iran's supreme leader, Ayatollah Ali Khamenei, said on Thursday that US humanitarian aid for the victims of last month's massive earthquake had not improved relations, saying Washington continued to show "basic hostility" toward his country.

However, if the United States "were to change its attitude, we are not people who are obstinate toward anyone", he said in his first remarks on the matter since the Dec 26 quake and subsequent US overtures toward rapprochement.

In a speech broadcast on television, Ayatollah Khamenei said Iran's leaders "had to accept (the US aid) because it was destined for the people.

"But what does that have to do with political questions and the profound, constant and fundamental hostility of the American policy of oppression of the Iranian people, our country and the interests of a well-loved regime," he asked.

The supreme leader's defiant tone conflicted with a milder one from Foreign Minister Kamal Kharazi, who said Tehran was willing to resume dialogue with Washington, provided the talks were based on mutual respect.

Mr Kharazi added that Iran's recent negotiations with European countries over its nuclear programme, which culminated in Tehran agreeing to snap inspections of nuclear facilities, was an example to Washington of how outstanding problems can be solved.

Speculation has mounted in recent days that the two countries may be edging towards some kind of rapprochement, after US officials spoke of a willingness to resume a limited dialogue on specific issues and Washington sent humanitarian aid to victims of the devastating earthquake in Bam.

"Iran is ready to negotiate with all countries and America is no exception," Mr Kharazi told state television. "If it (Washington) adopts a new approach to Iran and is ready to interact with us based on mutual respect and the principle of equality, the atmosphere will change remarkably."

Unlike the European Union, which has held a policy of "critical engagement" with Iran for the last few years, Washington has largely shunned Iranian officials.

But Mr Kharazi said Iran's negotiations with Britain, France and Germany, which led to Tehran's agreement last October to cooperate fully with U.N. inspectors, was a better approach. "Our recent experience with Europe on the nuclear issue proved that problems can be solved by negotiation," he said.

While adopting a softer tone in recent days both Tehran and Washington have set pre-conditions for improving relations. Washington wants Tehran to hand over detained Al Qaeda suspects, abandon its nuclear programme and stop backing Palestinian militant groups that attack Israel.

Iran has called on the US to lift economic sanctions imposed in 1995, which among other things prevent US companies from investing in OPEC's second largest oil producer or trading in Iranian oil. Tehran also wants Washington to hand over members of the armed Iranian opposition group, the People's Mujahideen, being held by US forces in Iraq and to abandon efforts to weaken Iran's conservative leadership. -Reuters