US to meet Iran in Iraq talks

Zebari said the discussions would be at ambassador level and would focus on the situation in Iraq, not US-Iran tensions.

Iraq's fragile government has been pressing for another meeting between the two nations with the greatest influence over its future, and Iran has repeatedly signalled its willingness to sit down.

State Department spokesman Sean McCormack said last week that Washington was also ready to hold new talks with Iran on the security situation in Iraq.

The last such meeting, on May 28, marked a break in a 27-year diplomatic freeze between the US and Iran and was expected to have been followed within a month by a second encounter.

But following that meeting, US Secretary of State Condoleezza Rice and other American officials said Iran had not scaled back what the United States claims is a concerted effort to arm militants and harm US troops.

Tensions have also risen over Tehran's detention of four Iranian-American scholars and activists charged with endangering national security.

The US has demanded their release, saying the charges against them are false.

At the same time, Iran has called for the release of five Iranians detained in Iraq, who the United States has said are members of Iran's elite Quds Force - accused of arming and training Iraqi militants.

Iran says the five are diplomats in Iraq with permission of the government.

As recently as yesterday, US troops detained two suspected weapons smugglers who may be linked to the Quds force, the military said.

The suspects and a number of weapons were seized during a raid on a rural farm compound in eastern Iraq near the Iranian border, according to a statement.

McCormack said the US wanted to use the meeting to warn Iran against continuing its support for militants in Iraq. He offered no explanation for Washington's apparent change of heart about meeting with Tehran.

Iraq had hoped to arrange a higher-level meeting between Rice and Iranian Foreign Minister Manouchehr Mottaki, but the two exchanged only stiff pleasantries during a recent international conference on Iraq's security in Egypt.

The US is pursuing a two-track strategy with Iran that reflects the high stakes in any engagement with a nation US President George Bush accuses of funding terrorism and building a nuclear bomb.

Washington is reaching out tentatively with the talks on Iraq, but also keeping a check on Iran with the Navy conducting exercises in the Persian Gulf this spring and the US pushing for new UN sanctions against Tehran over its disputed nuclear programme.

The United States broke off diplomatic ties with Iran following the 1979 storming of the US Embassy in Tehran and the holding of American hostages for 444 days.

Any direct talks between the two nations are rare, and even fleeting encounters at larger gatherings or diplomatic dinners are scrutinised for clues to their future relations.

Iran denies the US allegations about its activities in neighbouring Iraq, which like Iran has a majority Shiite Muslim population.

In Baghdad, meanwhile, two powerful legislators said yesterday that prospects were dim for passage of a US-backed oil bill before parliament's August vacation, casting a new cloud over a pivotal September progress report that could weigh heavily on the future of the US presence in Iraq.

American officials have pressed Prime Minister Nouri Maliki and parliament to pass laws the US deems essential to restoring stability in Iraq, and the oil bill is at the top of the list.

American commander General David Petraeus must report to Congress on progress in Iraq by September 15, and the absence of legislative progress will make it difficult to issue a positive assessment at a time when there is flagging support in Congress for keeping American troops in the country.

Mahmoud Othman, a Kurdish lawmaker, and Abbas al-Bayati, a Shiite Turkman parliamentarian, said the oil legislation was not likely to be debated before September because political leaders have been unable to agree on a final draft of the legislation.

"There must first be political consensus between the major blocs on the law but there is not enough time for this to be done before the August break," said al-Bayati, a member of the United Iraqi Alliance, the largest Shiite bloc in the 275-seat house.

The draft oil legislation, approved by Maliki's Cabinet but not sent to parliament because of widespread opposition, calls for a fair distribution among Shiites, Kurds and Sunnis of the income from Iraq's massive petroleum resources.

Sunnis, who make up the bulk of the insurgency, have virtually no known oil reserves in their territories yet still oppose the current draft legislation.

Kurds, who control large reserves in northern Iraq, oppose the measure because it could loosen their control over a key asset.