President Clinton has made fresh overtures towards Iran in response to President Khatami's call for a dialogue with the American people.

Mr Clinton, speaking at a news conference in Washington, said the United States would like to have an honest dialogue with Iran to reverse what he called the tragic separation of the two nations.

He said that while he did not necessarily expect an Islamic state to give up its objections to the Middle East peace process, it should be asked to stop supporting, training and financing terrorism.

President Khatami: regarded as moderate

Mr Clinton added that by electing Mr Khatami as president, the Iranian people had sent a clear message that they wanted a more open society.

Correspondents say President Khatami, who is regarded as a moderate, has taken a political risk in calling for closer American ties.

Much of Iran's conservative clerical establishment, including the supreme leader Ayatollah Khamenei, is thought to remain hostile to the idea.

From the newsroom of the BBC World Service
 

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