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October 1997

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    Iran Names new Revolutionary Guards air force head
    TEHRAN,(Reuters) - Iran's supreme leader Ayatollah Ali Khamenei appointed a new air force commander for the Revolutionary Guards on Thursday, state-run Tehran radio said.

    Khamenei, who is also commander-in-chief of the country's armed forces, appointed Brigadier-General Mohammad Baqer Qalibaf to the post.

    He replaces Brigadier-General Mohammad Hossein Jalali who held the post since 1992.

    Jalali, who had served as defence minister in the late 1980s, was appointed by Khamenei as deputy chief of staff of the armed forces for logistics, research and industry, the radio said.

    The appointments are the latest in a major reshuffle of armed forces commanders since the election in May of President Mohammad Khatami.

    The Revolutionary Guards, formed after the 1979 Islamic revolution from Islamist militias, comprise ground, naval and air force units. Western military experts estimate their strength at about 120,000.

    The Guards also control hundreds of thousands of paramilitary volunteers known as Basij.

    Tehran slams U.S. for pressing China on Iran ties
    TEHRAN, Iran (Reuters) - Iran Wednesday blasted the United States over U.S. efforts to block Sino-Iranian nuclear ties, saying Washington was trying to impose its policies on other countries.

    The statement coincided with the start of a Washington summit between Chinese President Jiang Zemin and President Clinton.

    "U.S. efforts to block Iran's peaceful nuclear cooperation with China and Russia...are aimed at dictating its policies to other countries," the official IRNA news agency quoted Iranian Foreign Ministry spokesman Mahmoud Mohammadi as saying.

    "He (Mohammadi) said that on the one hand, the U.S. incites public opinion in the region by raising unfounded accusations against Iran and on the other it helps Israel tighten its grip on the lands of Muslim and Arab nations in the region and keeps mum on Israel's proliferation of weapons of mass destruction," IRNA said.

    At the summit, Clinton is expected to formally announce his approval for the sale of U.S. nuclear reactors to China as part of a deal in which China provides assurances it is not providing nuclear technology and missiles to Iran.

    Mohammadi reiterated that Iran's nuclear programs were peaceful and under the supervision of the International Atomic Energy Agency, IRNA said.

    State-run Tehran Radio said China would lose credibility if it gave in to U.S. pressures regarding its nuclear and military ties with Iran.

    "Most analysts believe any flexibility by Beijing could jeopardize China's credibility as an important international power," the radio said in a commentary about the summit.

    "This would also raise doubts among China's partners around the world about the stability of their cooperation with China," it said.

    Iran said last week it did not plan to buy missiles from China.

    U.S. officials say Iran, which has restored its capability to fire anti-ship missiles at sea, has in the past two years tripled the number of missiles deployed on its Persian Gulf coast and is fitting Chinese-built cruise missiles on some naval boats.

    Iran says its arms deployments are strictly defensive. The United States has pressed China not to proceed with a deal to help Iran build nuclear power plants. Washington considers Iran a sponsor of "state terrorism" and argues Tehran might use the Chinese technology to develop nuclear weapons.

    Iran denies the terrorism charge and says its nuclear program is for peaceful purposes.

    Russia accused Israel and the United States Tuesday of teaming up to pressure Moscow to reduce its trade with Iran, and again dismissed charges that it was helping Iran acquire ballistic missiles.

    Senator says U.S. may need tighter Iran-Libya act
    WASHINGTON,(Reuters) - U.S. Senate Banking Committee Chairman Alfonse D'Amato said on Thursday the Iran-Libya Sanctions Act he authored may need tightening.

    He also said the United States should consider adding the leverage of halting commercial bank financing to countries hit by sanctions because of dealings with Iran, in addition to the current potential cut-off of governent-backed financing.

    U.S.Lawmakers question putting Iranian resistance group on terrorist list
    WASHINGTON (AP) House members are asking for a review of the State Department's decision to include the main Iranian resistance group on its list of terrorist organizations.

    The review was requested by Reps. Gary Ackerman, D-N.Y., and Ileana Ros-Lehtinen, R-Fla., in a letter sent to President Clinton on Tuesday questioning the recent listing of the People's Mujahedeen.

    Accompanying the letter was a "Statement on Iran" signed by 224 House members a majority of the 435-member body.

    The statement opposes any softening of U.S. opposition to Iran and proposes support for opponents of the current regime, including Iranian resistance leader Maryam Rajavi, who has been declared president-elect by the Mujahedeen.

    Ackerman and Ros-Lehtinen, in their letter, said the listing of the Mujahedeen was "ill-advised at best" and "compromises the effectiveness of our containment policy."

    The two lawmakers called the Mujahedeen "a legitimate resistance against one of the most brutal dictatorships in modern history, striking only military and state targets, not civilians."

    The State Department has long been critical of the organization's tactics.

    Ackerman and Ros-Lehtinen said the Mujahedeen has strong support among women and youth in Iran and among Iranian-Americans. They said declaring it a terrorist group "sends the wrong message to Tehran and runs counter to U.S. foreign policy."

    House Committee Moves to Sanction Russians Over Missiles for Iran
    WASHINGTON (AP) Growing concern over development of ballistic missiles by Iran prompted a House committee Friday to pass a sanctions bill aimed primarily against Russia's help for the Iranians.

    Passage came on a unanimous voice vote of the House International Relations Committee despite Clinton administration objections that the tough action might not help prevent such transactions and could result in sanctions based on flimsy evidence.

    Several Democrats opposed parts of the bill, including language requiring only "credible information" for imposition of sanction. But no one voted against it after committee chairman Rep. Ben Gilman promised to work on further amendments before it goes to the House floor.

    "It is clear that Russia has already provided Iran with critical know-how and technological support," said Gilman, R-N.Y., adding that action is needed right away "to prevent Iran from achieving a significant advance in its missile program."

    The bill requires the president to submit within 30 days of passage a list of persons, corporations or government entities believed to have transferred or attempted to transfer missile goods or technology to Iran since mid-1995. Sanctions would include denial of arms export licenses and a cutoff of all U.S. assistance to the entity for two years.

    The bill allows the president to waive imposition of the sanctions if he deems it essential to national security.

    Russia's Federal Security Service has acknowledged that Iran has tried to obtain missile technology from Russian companies, but it insists all attempts have failed.

    Israel accuses a number of Russian companies of helping Iran develop missiles capable of hitting Israel, and pro-Israeli lobbyists have been active in pushing for U.S. sanctions. Iran denies it is trying to build long-range missiles or nuclear weapons.

    Deputy Assistant Secretary of State Robert Einhorn, who objected to several of the bill's provisions, said after passage it was a "work in progress" and declined to say whether President Clinton would veto it if changes weren't made.

    During debate, Einhorn objected to a provision that would impose sanctions retroactively against entities that had already sold materials to Iran. He argued it could undermine current efforts by the Russian government to stop such transactions.

    He added that U.S. concerns over transfers of Russian missile technology to Iran had been raised by Clinton with Russian President Boris Yeltsin as early as March and prior to that at lower levels.

    Young Iranians Help Elect Moderate
    By Scheherezade Faramarzi
    Associated Press Writer TEHRAN, Iran (AP) -- Iran's youth poured into the streets 18 years ago and with clenched fists shouted: ``Death to the Shah!'' -- joining with Islamic revolutionaries to topple the 2,500-year-old monarchy.

    During the 1980-88 war with Iraq, they dashed into battle for the sake of Islam, throwing themselves into mine fields with plastic ``keys to Paradise'' tied to their necks.

    Now, in the latest message to that revolution, a new generation of young Iranians has helped elect the relatively moderate Mohammad Khatami as president of the Islamic Republic. It is a vote and verdict that have been playing themselves out in Iran since Khatami was elected five months ago.

    Today's young Iranians are waiting to see whether their president will deliver on his campaign promise to ease suffocating social restrictions and give the young the freedom they crave.

    Government officials, meanwhile, are asking whether they failed to produce a generation of youth committed to the revolution, despite nearly two decades of intense indoctrination.

    ``We've made mistakes and we don't want to repeat them,'' said Morteza Mirbaqeri, head of the government's Supreme Youth Council and Khatami's adviser on youth affairs. ``We don't deny that our youth want freedom, and they should.''

    The election was an ``opportunity for the young, who had been sitting in waiting, to demonstrate their presence,'' he said.

    Now, Mirbaqeri said, it is the duty of the government, and Khatami, to win them over.

    ``They believed him. He made everyone believe in the youth. He spoke a new language to the youth, he spoke about art, culture and freedom. He didn't speak about prohibitions,'' Mirbaqeri said. Fourteen million young Iranians voted for Khatami, 85 percent of voters between the ages of 15 and 29.

    In interview after interview, young Iranians said they wanted Khatami to provide them with more entertainment and sports facilities, relax restrictions on Western music and allow music and dance classes. Those from more secular families wanted the government to ease constraints on socializing with the opposite sex.

    Almost everyone interviewed complained about the harsh treatment they received at the hands of the vice squads, which still roam the streets keeping a check on behavior and appearance.

    ``We want to be clear about our future, we need security and assurance,'' said Shahrzad Nasri, 19, a resident of south Tehran, the poorer part of the Iranian capital.

    Those same sentiments, though, were heard in north Tehran as well, where more privileged youth chafe under restrictions.

    ``We are hoping that Khatami will make life easier for us,'' said Ali, a 22-year-old university student walking with his girlfriend at the upscale Golestan shopping mall.

    ``We'd like to have discos, places to go and have a good time,'' he said, laughing. ``But we know these will never happen.''

    Only a small, conservative minority of young people seems unsettled by the idea of changes, fearing that Khatami may give women too much freedom or preside over a weakening of morals by allowing Western music and movies or satellite dishes to flourish.

    The frustration among many with the lack of change so far has become more apparent as the euphoria over Khatami's victory fades.

    A sense of aimlessness seems to reign over Iranian youths who still complain of joblessness and a lack of things to do. They hang out in amusement parks, fast food restaurants and parks.

    Today's young, said Golnaz Sajadi, a 19-year-old university student, are ``a bunch of people wondering aimlessly around not knowing where they are going and what they are doing.''

    Young men in north Tehran, she said, ``cruise the streets in their fancy cars, playing deafening Western music on their car stereos and girls wear excessive makeup so they can be picked up.''

    Mirbaqeri insisted that Khatami will still deliver.

    The president already has a project in the works to create more jobs for the young and to encourage them to engage in group activities and civic, volunteer work, he said.

    As well, he said Khatami will eventually curb the vice squads.

    Young men and women walking alone in a ``decent environment'' should not be harassed for no reason, Mirbaqeri said.

    ``I believe that in the future there should be no reason for concern if girls and boys spent time together, as long as it is not in a vulgar manner,'' he said. By vulgar, he meant boys and girls putting their arms around each other, kissing or dancing.

    Even if Khatami fails to deliver, many of the young -- half of the country's 60 million people are under 19 -- have learned to live with what they have. They have sought their own ways of working around some of the restrictions, forcing them to become innovative.

    ``My attitude is to get along with them and use the restrictions to become creative,'' said Ramin, 19, wearing a navy blue knitted skull cap over his marine-cut hair.

    ``We take a Western fashion and add something Iranian to it to make it conform with the revolution,'' he said.

    Or as Farzan Sajadi, 19, put it, ``The regime is not what's important. It's ourselves. We have to test our strengths to see if we can live and survive in a society that has so many faults.''

    U.S. Opposes any Pipeline through Iran
    WASHINGTON (AP) The United States opposes any new pipelines through Iran carrying oil and gas to Western markets, a senior Clinton administration official said Thursday.

    Stuart Eizenstat, undersecretary of state for business and economic affairs, said the government would continue to encourage Turkey and countries on the energy-rich Caspian Sea in central Asia to explore alternative routes.

    The administration wants to isolate Iran and deny it funds to support international terrorism and develop weapons of mass destruction. But this policy is coming under pressure because energy companies want to exploit the oil and gas reserves of the Caspian.

    These reserves could rival those of the Persian Gulf and meet a growing demand for energy resources in Turkey, south Asia and the Far East.

    Eizenstat said a U.S. decision last July that Turkey's purchase of natural gas from Turkmenistan via Iran did not constitute a violation of a trade law had been widely misinterpreted as U.S. approval for a pipeline through Iran.

    The law, the Iran-Libyan Sanctions Act, mandates penalties against companies investing more than $20 million a year in those two countries' energy sector.

    Testifying before a Senate Foreign Relations subcommittee, Eizenstat said if the United States "finds evidence of investment activity which could enhance Iran's ability to develop its own petroleum resources, we will take appropriate action" under the act.

    He said the administration favors "development of pipeline routes that do not depend on Iran, specifically a cross Caspian line" from Turkmenistan to Azerbaijan and on to Turkey.

    "Let me be clear. We do not support any pipelines through Iran, carrying either Iranian oil and gas to Western markets or that of any other country," he said.

    The British-Dutch energy conglomerate Shell is negotiating to build a $2.5 billion gas pipeline from Turkmenistan, a former Soviet republic, across northern Iran to Turkey.

    Also, the French company Total announced Sept. 28 it planned to invest $2 billion in Iran's offshore gas fields in a deal that also involves Russian and Malaysian companies.

    The United States criticized the agreement but is seeking to avoid a confrontation with its European allies over the sanctions act.

    Iran Stands Firm on EU Envoys' Issue-Minister
    TEHRAN,(Reuters) - Iran's Foreign Minister Kamal Kharrazi said on Wednesday his country had no new proposals to make for the return of European Union ambassadors recalled from Tehran.

    ``Iran has done its utmost for the return of European ambassadors to Tehran and has no new proposal in that regard,'' the official IRNA news agency quoted Kharrazi as saying.

    It said Kharrazi was responding to recent statements by German Foreign Minister Klaus Kinkel who it said had told a German magazine that Germany would be ready to hold talks with Iranian officials only when differences on the ambassadors' return to Tehran are resolved.

    Kharrazi held Germany responsible for the failure of efforts to solve the problem and said ``time was not in Germany's favour.''

    EU ambassadors were withdrawn from Tehran after a German court ruled in April that Iranian leaders ordered the 1992 killing of four dissidents in Berlin.

    Iran, which denies involvement, has said the ambassadors could return but the German envoy should be the last to go back.

    Germany backed by its EU partners, has rejected the proposal as an unacceptable ``divide and rule tactic.''

    ``Iran is an independent country and its decisions regarding relations with other countries are dictated by its national interest,'' Kharrazi said.

    U.S.: Iran Navy Has a Lot to Learn
    By Adnan Malik
    Associated Press Writer
    ABOARD THE USS NIMITZ (AP) -- The Iranian navy still has a lot to learn about sea warfare and how to use advanced weapons purchased from Russia and China, the commander of a U.S. naval force says.

    Rear Adm. John Nathman, commander of a seven-ship battle group in the Persian Gulf, spoke to reporters on the USS Nimitz aircraft carrier as it sailed some 40 miles from the Iranian coast.

    ``They need to work at being at sea and understanding tactical operations of being at sea,'' Natham said Sunday of the Iranians after monitoring about 100 Iranian vessels that carried out 10 days of exercises in the Persian Gulf earlier this month.

    In recent years, Iran has purchased attack boats from China and submarines from Russia, but the Iranian navy is not yet fully proficient at using the advanced weapons, Nathman said.

    Capt. I.E. Richardson, commanding officer of the USS Nimitz, said that Iranian and U.S. warships were ``professional and courteous'' to each other during the maneuvers.

    The Nimitz, which carries 75 aircraft, is leading the battle group, which was rushed to the region two weeks ahead of schedule to enforce the no-fly zone over southern Iraq.

    The zone, created by the United States and its allies to protect Iraq's minority Shiite population from Saddam Hussein's forces, was violated on Sept. 29 when Iranian air force planes attacked Iranian opposition bases in southern Iraq. Iraq sent up two fighters in pursuit, further violating the zone.

    Iran Highway Crash Kills 14, Injures 48
    TEHRAN, (Reuters) - Fourteen people were killed and 48 injured when a bus and a mini-bus collided on a highway linking Tehran to the Caspian Sea, Iran's official news agency IRNA said on Sunday.

    Police blamed the mini-bus driver for the crash near the city of Amol, saying he had tried to pass a car illegally, IRNA said.

    Iran Claims U.S. Behind European Ban on Its Pistachios
    TEHRAN, Iran (AP)- The United States must be behind a ban that's keeping Iranian pistachios out of European markets, Iran's agriculture minister charges.

    The European Union has suspended imports of Iranian pistachios at least until Dec. 15, saying the nuts have tested positive for a cancer-causing toxin.

    Agriculture Minister Issa Kalantari defended the purity of Iranian pistachios in a news conference following announcement of the ban, and said without explanation that the United States was responsible for the EU's action.

    "It makes sense that the Americans would want to get Iranian pistachios out of the European market," Kalantari said.

    Iran produces 130,000 tons of pistachios a year nearly 60 percent of the world's total and says it provides 96 percent of Europe's supply.

    The United States, Turkey and Syria are among its competitors. The EU suspended Iran's pistachio imports in September after tests of shipments found up to 200 times the permitted level of aflatoxin B1, a substance found in food mold that's blamed for cancer of the liver and other organs.

    Kalantari denied that any shipment of pistachios exported directly from Iran was contaminated but acknowledged there could have been problems if they were sent via a third country or improperly stored.

    The United States has long had Iran under a unilateral trade embargo, calling the country a sponsor of terrorism.

    Iran's Navy Getting Better, U.S. Admiral Says
    By Barry May
    ABOARD USS NIMITZ, (Reuters) - Iran's naval forces are getting better at using some of the new equipment purchased in the last two years but still have a lot to learn, a U.S. admiral in the Gulf said on Sunday.

    Rear-Admiral John Nathman, speaking to reporters aboard his flagship, the aircraft carrier Nimitz, 40 miles off the Iranian port of Bushehr, said after observing Iranian naval manoeuvres:

    ``They have a lot to learn, we always have a lot to learn, but I think that what we're seeing is that they need to work at being at sea and understanding the tactical implications of being at sea.

    ``I think that they are on the leading edge of regaining some of those skills and they're going to have to work at it.''

    Among the new vessels added to the Iranian fleet in the past few years are three Russian Kilo-class diesel submarines, two of which were deployed in war-games in the Gulf over the past week.

    ``The Iranians have spent a great deal of money in the past two years purchasing missiles, missile systems and ships from different countries and I think they are anxious to gain an operational capability with those systems, and the way to do it is to go to sea with them and to exercise them,'' Nathman said.

    As he spoke, some of the 65 sorties flown on Sunday from the nuclear-powered carrier touched down on deck.

    Characterising Iranian naval operations, Nathman said: ``Obviously in some areas they do quite well and in some areas they are still trying to understand how to get better...

    ``What they are good at right now is they are getting used to the equipment that they have purchased, and that is what they are interested in.

    ``They have exercised the Kilos...and ships they have bought from overseas, and so they are interested in exercising and understanding their equipment.''

    Iran accused the United States of spying on its war-games, a charge dismissed in Washington.

    ``We know where they are and we work hard at knowing where they are,'' Nathman said. ``That's not spying, that's just maintaining an understanding of sea space and air space around your particular force. Any navy will make sure they have some kind of understanding.''

    The admiral, who commands a carrier battle group of seven warships, said the area was now very quiet.

    ``The Iranians have gone home from their exercise. We knew they were here and they knew we were here. Both forces were postured to be professional.

    ``We were careful to watch what they were doing and I think also they watched us sometimes. But I want to emphasise to you it was not confrontational.

    ``Typical of the relationship we have had with the Iranians, particularly their individual captains, for the most part has been professional and courteous.''

    The Pentagon ordered the Nimitz, one of the world's largest warships at 95,000 tonnes fully loaded with 77 aircraft and nearly 6,000 crew, urgently to the Gulf following Iranian air raids on bases in Iraq of the rebel Iranian opposition group Mujahideen Khalq.

    The battle group passed through the Strait of Hormuz and into the Gulf last weekend after a dash ``at best speed'' from the South China Sea.

    ``Our primary mission is to support Operation Southern Watch,'' Nathman said, referring to the international embargo on Iraqi flights over its southern sector.

    Captain Isaac Richardson said activity had been very quiet and although Iraqi aircraft flew every day none violated the ``no-fly zone.''

    On the flight deck, 20-year-old Stuart Demica of Gaffnem, South Carolina, one of 500 women among the crew, loaded cluster bombs aboard a fighter before take off.

    ``In the Gulf everything is live and we really have to keep our heads on,'' she said.

    Russia Denies U.S. Claim on Helping Iran Produce Missiles
    MOSCOW, XINHUA - A Russian foreign ministry spokesman today again dismissed a U.S. report alleging that Russia has provided Iran with technology to produce ballistic missiles, the Interfax news service said.

    Gennady Tarasov said that Russia has strictly abided by the treaty it signed on the non-proliferation of missile technology and its cooperation with Iran falls within the scope of the treaty.

    A recent report in The Washington Times alleged that Russia is assisting Iran in developing missiles with ranges up to 1,200 miles (1, 900 kilometers).

    Tarasov said Russian departments concerned have made careful inspections, but found no violations of the principle of non-proliferation.

    Russian Prime Minister Viktor Chernomyrdin also angrily dismissed the U.S. report Friday, saying that he had "no intention of commenting on stupid statements."

    Tarasov said the repeated allegations on this issue by the U.S media are groundless and carry certain political motives.

    Iranian Supreme Leader Condemns US Presence
    TEHRAN ,XINHUA - Iranian Supreme leader Ali Khamenei today condemned the presence of U.S. military forces in the Persian Gulf.

    Khamenei, also commander-in-chief of the Iranian armed forces, said "by their presence in the region, the Americans have engendered insecurity in the region" and created threats of war.

    The Iranian leader made the strong-worded statement while addressing 50, 000 members of the Islamic Revolution Guards Corps (IRGC) and volunteer forces at a military camp in Karaj, about 50 kilometers east of Tehran.

    Thereby, he added, the presence of the U.S. forces made the nations of the region suspicious of each other.

    He said that Americans "must get out of the region and return to their own territorial waters."

    The statement by Khamenei is clearly referring to the deployment of the U.S. nuclear-powered aircraft carrier Nimitz in the Gulf last week. Iran condemned the arrival of Nimitz aircraft carrier and termed it as "major source of tension" in the region.

    On October 12, the Nimitz aircraft carrier moved into the Persian Gulf with its battle group of six warships for operations near Iraq's volatile border with Iran, thus making the situation alarming in the region.

    Khamenei urged the littoral states in the Persian Gulf to have a logical and reasonable defense force of their own.

    The best model is the defense forces of Iran which aims to stress the people's responsibility to defend their nation and the self-sufficient military industries, he added.

    iran Stands by Position on Return of EU Envoys
    TEHRAN, (Reuters) - Iran has reiterated that European states must meet its demands on the return of EU envoys to Tehran, recalled over a diplomatic row with Germany, the official Iranian news agency IRNA reported on Thursday.

    IRNA said Foreign Ministry spokesman Mahmoud Mohammadi made his comments in reaction to recent remarks by EU officials.

    ``...Mohammadi...commenting on the return of the European ambassadors to Tehran, said that demands of the Islamic Republic of Iran must be taken into consideration,'' IRNA said.

    It said the spokesman ``made the remark in response to statements of officials of a number of European countries in the past few days on return of their ambassadors to Tehran.''

    ``Mohammadi further told IRNA that stands and views of the Islamic Republic of Iran have been clearly raised in talks and contacts between the Iranian and EU officials.''

    German Foreign Minister Klaus Kinkel said on Tuesday that Germany would only be prepared to resume a dialogue with Iran once a row over the return of ambassadors had been settled.

    EU ambassadors were withdrawn from Tehran after a German court ruled in April that Iranian leaders ordered the 1992 killing of four dissidents in Berlin.

    Iran, which denies involvement, has said the ambassadors could return but the German envoy must be the last to go back.

    Iranian officials have criticised Germany for rebuffing Iran's offer of bilateral talks to sort out the ambassadors issue. Germany, backed by its EU partners, has rejected the proposal as an unacceptable ``divide and rule'' tactic.

    Iran Says Inflation Cut by More than Half Last Yr
    TEHRAN,(Reuters) - Iran's economic policies have helped lower inflation by more than half in the last Iranian year ending in March, Central Bank Governor Mohsen Nourbakhsh was on Wednesday quoted as saying.

    Iran News daily said Nourbakhsh told the Central Bank's general assembly on Tuesday that inflation was cut to 23.2 percent in the last Iranian year from 49.4 the year before.

    He said gross domestic product (GDP) grew to 5.2 percent in real terms in the same year from 4.5 percent the year before and the balance of trade gained a surplus of $7.5 billion.

    ``The balance of foreign debts by March 20, 1997 was $16.8 billion, adding $2.3 billion to the nation's foreign exchange reserves,'' he was quoted as saying.

    Iran's Minister of Economic Affairs and Finance Hossein Namazi said last month Iran's new government, which took office in August, would pursue policies to attain further economic growth and sustainable development.

    Economists say the government's estimate of inflation is based on official prices of a basket of commodities and goods.

    OPEC-member Iran earns close to an annual $18 billion in oil exports.

    Iran Says U.S., Britain Spying on War Games
    TEHRAN, Iran (Reuters) - Iran Wednesday accused U.S. forces of stepping up their spying on Iranian war games in the Persian Gulf.

    It said it had warned off the British destroyer Nottingham after it came ``within shooting range'' of Iranian warships.

    ``Iran's stealth planes are watching the U.S. Air Force and Navy in the Persian Gulf, which...have intensified their espionage operations since the start of Iran's war games,'' said Revolutionary Guards Navy Commander Rear Adm. Akbar Ahmadian, quoted by the official Iranian news agency IRNA.

    War games spokesman Rear Adm. Ashkbous Danehkar, quoted by the daily Kayhan, said: ``It (Nottingham) came within shooting range of the powerful forces of the Islamic Republic of Iran. It immediately sailed away from our warships after being warned.''

    ``American and British forces continue their unsuccessful efforts to gather information on how the war games are carried out.'' Danehkar was quoted as saying by the evening newspaper.

    He did not give the date of the incident but said the Nottingham had on several occasions in the past few days come within one nautical mile of the Iranian fleet.

    The U.S. Navy destroyer Harry W. Hill and the U.S. frigate Gary were among other ships that had approached the area of the exercises in the northern Gulf, Danehkar added.

    British and U.S. Navy spokesmen were not immediately available for comment.

    The remarks came a day after a report from Tehran that said Iran had warned the U.S. Navy destroyer Kinkaid and a reconnaissance aircraft after they moved into an area of the naval war games.

    A U.S. Navy spokesman in the Gulf said Tuesday he had no indication of the incident between Iranian and U.S. forces.

    Iran said Tuesday it successfully tested a locally built pilotless stealth aircraft during the exercises in the Gulf.

    Iran Monday for the first time accused the United States of spying on the maneuveres and vowed its forces would ``react decisively'' to any aggressive acts by the U.S. fleet.

    Tehran said Wednesday the aircraft carrier USS Nimitz, which entered the Gulf Sunday with a group of warships in a U.S. battle group, had not approached the area of the maneuveres, which began Saturday.

    Iran's war games continued Wednesday with exercises including planes, destroyers and other vessels escorting oil-carrying ships from Kharg Island in the northern Gulf to Lavan Island about 230 miles to the southeast, Iranian television said.

    The yearly maneuveres, code-named ``Pirouzi (Victory)-8,'' are staged by Iran's regular and Revolutionary Guards navies.

    U.S. Sees No Military Confrontation in Gulf
    By Charles Aldinger
    WASHINGTON,(Reuters) - Responding to recent increased tension in the Gulf, the United States said on Tuesday that neither Iranian nor Iraqi forces were attempting to challenge U.S. warships and aircraft in the region.

    The comments to reporters by Defense Department spokesman Ken Bacon came as Iran continued annual military exercises in the Gulf. They also followed U.S. charges that Iraqi military aircraft recently violated two ``no-fly'' zones over Iraq.

    Bacon said, in fact, that the Pentagon had returned two B-1 bombers from Bahrain, where they were recently sent, to their domestic base over the weekend because of apparent easing tension in the area.

    ``We have seen no suggestion that they (Iranians) want to confront us in any way, no suggestion that they want to cause any problems with our regular deployments throughout the Gulf,'' he said when asked about the Iranian exercises and the recent movement of a U.S. aircraft carrier into the Gulf.

    Bacon also added that there had been no violations by Iraqi aircraft in a no-fly zone over southern Iraq in recent days.

    The aircraft carrier Nimitz arrived in the Gulf last weekend five days ahead of schedule in response to Iraq's violations of the no-fly zones and Iranian air raids on Iraqi bases of an armed Iranian exile group opposed to Iran's Islamic revolutionary government.

    ``There have been some intermittent (Iraqi) violations in the north (no-fly zone), but let me just say about both the north and the south - we don't see any signs now that Iraq is trying to take particularly provocative action or is trying to confront us in any way,'' Bacon said.

    But both the Defense and State Departments said Washington had made clear that it would continue to police the no-fly zones and that ``rhetoric'' from Tehran or Baghdad would not stop U.S. military deployments in the region.

    ``We'll continue to deploy our ships in the Gulf pursuant to our desire to enforce the no-fly zone, and I don't believe any of the events that are more about press releases than military events are going to change that,'' said State Department spokesman James Rubin.

    The Iran News daily said in Tehran on Monday that the deployment of the Nimitz had heightened tension in the volatile region and increased the risk of a military collision.

    The English-language newspaper, which often reflects the view of Iran's foreign ministry, said the arrival of the Nimitz which coincided with Iranian naval wargames ``made the situation alarming in the economically vital waterway.''

    ``Iranian naval exercises are covering a wide area in the Persian Gulf where the U.S. spy ships are crowding the waterway and increasing the risk of collisions,'' it said.

    Iran had said the exercises were aimed at displaying the Islamic republic's ability to defend itself. It said it saw no reason for a clash with U.S. forces.

    Iranian Forces in Show of Strength'' near Nimitz
    By :Barry May
    DUBAI, United Arab Emirates (Reuters) - Iranian forces staged ``a show of strength'' in the Persian Gulf Monday with fighter-bombers and helicopters flying over a marine parade of 120 ships engaged in war games.

    Over the horizon, the U.S. aircraft carrier Nimitz, which passed through the Strait of Hormuz into the gulf Sunday with its battle group of six warships, conducted normal flight operations, a U.S. Navy spokesman said.

    The carrier battle group was ordered to hurry to the gulf from the South China Sea ahead of schedule in response to an escalation of tension in the region.

    Two of Iran's three Russian-built diesel submarines joined cruisers, destroyers and other navy and Revolutionary Guard ships in the parade before Defense Minister Rear-Admiral Ali Shamkhani aboard his command ship.

    ``The American warships are the sole source of threats to the region,'' Shamkhani said. He repeated an Iranian call for regional countries to cooperate toward a new security arrangement in the gulf.

    The parade of 120 vessels was named ``A Show of Strength'' and was accompanied by a flypast of about 40 fighter-bombers of the air force and army aviation corps helicopters, Iran's official news agency IRNA said.

    Rear-Adm. Ashkbous Danehkar told an IRNA reporter aboard the command warship, the Tunb, that the parade was to demonstrate Iran's naval power and supremacy.

    The six oil monarchies on the Arab side of the gulf -- Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates, Qatar and Oman -- rely on the West for their defense.

    They recently rejected an Iranian offer of joint exercises and said they would continue to depend on the United States, Britain and France for the foreseeable future.

    Ships of all six gulf Arab states are engaged in their own naval maneuvers named Solidarity off the coast of Bahrain.

    Shamkhani said: ``The Islamic Republic's defense doctrine is geared toward elimination of the sources of tension external to the region. We never consider our Muslim brothers in the Arab states as a threat to the Islamic Iran.''

    In Baghdad, Iraq laughed off the U.S. military build-up in the gulf and said it had better things to worry about than ``acrobatic movements'' by the United States.

    ``This show of force is silly. It arouses laughter...,'' the ruling Baath party newspaper al-Thawra said in an editorial.

    The increase in tension followed Iranian air raids on two Iraqi bases of the Mujahideen Khalq, an armed group of exiles opposed to Iran's Islamic revolutionary government.

    Washington has said the build-up was aimed at preventing Iraqi aircraft from violating a U.S.-enforced ``no-fly zone'' over southern Iraq.

    The spokesman at the U.S. Navy's Fifth Fleet headquarters in Bahrain had no comment on a charge By Iran that U.S. ships were spying on the Iranian war games.

    Iran News, an English-language daily which often reflects the view of the Iranian foreign ministry, said the deployment of the Nimitz in the gulf had heightened tension in the region and increased the risk of a collision.

    ``Iranian naval exercises are covering a wide area in the Persian Gulf where the U.S. spy ships are crowding the waterway and increasing the risk of collisions,'' it said.

    ``It is but natural that any collision may spark developments with dire consequences putting the entire waterway at risk.

    ``If it happens, none but the U.S. will be responsible for the consequences. It is better all round if the U.S. stops this risky game in the Persian Gulf.''

    The annual war games, code-named ``Pirouzi (Victory)-8,'' were scheduled before the Nimitz move.

    Among tactics performed during Monday's maneuvers were jumps by two teams of frogmen from helicopters, launching air-to-surface missiles and firing at hypothetical targets by gunboats and remote controlled aircraft.

    Meanwhile the U.S. decision branding Mujahideen Khalq ``terrorists'' was seen in Iran as the first positive sign of U.S. goodwill toward the new government of moderate President Mohammad Khatami.

    Diplomats, analysts and Iranian newspapers said Monday the move was important because it satisfied one of Iran's basic demands. But the process of rebuilding ties after two decades of enmity and distrust could be a long one.

    ``This is a good signal from the United States toward Iran in this confused state of affairs,'' a foreign diplomat said.

    Independent Iranian journalist Masoud Behnoud said: ``I think the U.S. decision means Washington will not support armed opposition groups and this is a step toward stopping what Iran sees as aggressive U.S. behavior.

    ``But this is only a start and Tehran would also want sanctions dropped and the U.S. propaganda campaign ended,'' Behnoud told Reuters from Tehran.

    The United States broke diplomatic ties with Iran in 1980. The newspaper Iran Daily, published by Iran's official news agency, welcomed the move.

    ``It is not every day the Islamic Republic can welcome a decision taken in Washington, but just for a change it should, in response to the U.S. State Department move,'' it said.

    USS Nimitz and Six More Warships Arrive in Persian Gulf
    WASHINGTON,(Itar-Tass) - The USS Nimitz accompanied by six warships arrived in the Persian Gulf on Sunday, a day after Iran launched large-scale naval maneuvers in the strategic Gulf waters, a Pentagon spokesman said here on Monday.

    The Nimitz, which carries 75 warplanes, arrived in the Gulf two weeks ahead of schedule. This move is taken as a warning to Iran and Iraq, whose warplanes violated the no-fly zone over southern Iraq, the spokesman said. He noted that the United States did not plan to interfere with Iran's naval exercise.

    On September 29, two Iranian warplanes bombed Iranian insurgent bases in southern Iraq. Iraq sent up two fighters in pursuit, further violating the restricted area, which was created by Western allies after the 1991 Gulf War to prevent Iraqi government forces from attacking rebel Shiite Muslims in the southern marsh areas.

    Aircraft aboard the Nimitz conducted several flight operations as part of the mission to enforce the no-fly zone.

    Meanwhile, Iraq on Monday dismissed the arrival of the Nimitz as nothing more than "noisy American propaganda."

    Iranian Men Outnumber Women by One Million-Census
    TEHRAN, (Reuters) - Iranian men outnumber women by one million in a population of more than 60 million, according to census figures published on Monday.

    The census taken last October counted 30.5 million men and 29.5 million women, with 61.3 percent of the population living in cities, the daily Iran newspaper said.

    Some 39.5 percent of the population were below the age of 15 and 4.3 percent were 65 or older, the survey showed.

    The total population was 60.055 million, 99.6 percent of whom were Moslems.

    The population figures do not include about two million refugees, 1.4 million from Afghanistan and 600,000 from Iraq.

    Initial results of the census, announced in January, had put the population at 59.5 million, much lower than an earlier official estimate of 65 million, including refugees.

    Officials defended the census results, saying people had over-reported the number of family members in earlier surveys in order to get larger food rations at subsidised prices.

    The 1986 census, the fourth since Iran began conducting surveys in 1956, counted 49.5 million Iranians.

    Officials have said the country's family planning programme had succeeded in cutting the annual population growth rate by half since 1988 to 1.6 percent.

    Iran Welcomes US Stance on Iranian Outlawed Group
    TEHRAN-XINHUA - Iran today welcomed the latest stance by the United States to designate the anti-government Mujahedeen Khalq Organization of Iran (MKO) as a terrorist group.

    Foreign Ministry spokesman Mahmoud Mohammadi said that the U.S. stance on the MKO, which is based inside the Iraqi territory, is based on fact, Iranian news agency IRNA reported.

    However, the spokesman urged the United States to "take legal action against the terrorist group and not to pay lip services to this end."

    "We should wait and see whether the U.S. will take legal action to deal with the group and in general, what is their reaction to the state-sponsored terrorism of the Zionist regime," he was quoted as saying.

    Mohammadi voiced Iran's readiness to cooperate with the world community to combat terrorism.

    The Mujahedeen Khalq Organization was founded in 1965. Its forces are estimated at 20,000 to 50,000. Iran's Air Force bombed two MKO bases late last month.

    The United States Wednesday designated 30 groups as foreign terrorist organizations, making it illegal to provide funds for them and denying their representatives U.S. visas.

    According to the report, those targeted include the anti-Iran Mujahedeen Khalq Organization.

    Argentine Jewish Leader Hails Iran Probe in Bombing
    BUENOS AIRES, (Reuter) - The leader of Argentina's Jewish community said on Friday the Supreme Court had finally agreed to probe possible Iranian involvement in the 1992 bombing of the Israeli embassy.

    Ruben Beraja told local radio he had met Supreme Court secretary Esteban Canevari on Thursday and discussed the decision to begin investigating a possible Iranian link.

    He said he and Canevari also discussed possible investigations into a letter in a Lebanese newspaper shortly after the embassy bombing claiming responsibility for the extremist group Islamic Jihad.

    The court was not available for comment. Beraja said he was ``pleasantly surprised by the intensity of the work and the direction the investigation has taken.''

    A car bomb destroyed the embassy in Buenos Aires on March 17, 1992, killing 29 people and wounding hundreds more. Two years later another bomb destroyed Buenos Aires' main Jewish community center, killing 86 people in one of the worst peacetime attacks against Jews in half a century.

    Argentine Jews and Israel have accused Iran of having a hand in both attacks.

    But the Supreme Court, which has investigated the embassy bombing for five years without finding any of the perpetrators, has until now denied there was any evidence that foreign guerrillas were involved.

    The Israeli embassy responded furiously earlier this year when one Supreme Court judge suggested that Jewish extremists might have bombed their building.

    The decision to take up the Iranian lead comes just a week before the arrival of U.S. President Bill Clinton on an official visit, in which he will meet local Jewish leaders.

    ``There isn't any doubt that the visit by Clinton and his decision to grant an audience shows the political importance he is giving the issue,'' said Beraja.

    Israeli Embassy staff were not working on Friday due to Yom Kippur, the day of Atonement, and were not immediately available for comment.

    Like the embassy bombing, the community center bombing is unsolved, although a gang of Buenos Aires police have been arrested on allegations of having provided a van used in the attack.

    Iran Government Newspaper Criticises Rising Prices
    TEHRAN, (Reuter) - A government-owned newspaper in Iran on Wednesday sharply criticised rising prices and called on President Mohammad Khatami's administration to start building the foundation for a decent standard of living.

    The existing system of goods distribution was obsolete, Iran Daily said in an editorial circulated by its owner, the official Islamic Republic News Agency.

    The newspaper described profiteering, price gouging, hoarding and poor distribution systems as nuisances long tolerated by authorities and policymakers.

    It cited statements by officials who said production was at the desired level but the distribution system was useless.

    ``Food prices are slowly but steadily rising, some tags have become prohibitive, especially for the millions who make do with fixed incomes. And add to this the dangerous doctrine of sacrifice,'' it said.

    Iran Daily proposed strict accountability and the criminalisation of corruption in all its forms.

    ``The Khatami administration must open a high-profile debate to identify and implement correct consumer patterns, enforce a judicious distribution of essential commodities, encourage production, discourage profligacy and in a capsule: start building the foundations of what is called a decent standard of living,'' it said.

    Steep prices are a common complaint in Iran. Large grain imports and a decision to buy chickens abroad to deal with shortages at home have drawn sharp criticism.

    Consumer inflation in Iranian cities ran at an annualised rate of 17.6 percent in the first five months of the Iranian year which began in March, according to Central Bank statistics.

    Paris and Washington Learn to Live Together
    PARIS, (Reuter) - France, long touchy and insecure about being overshadowed by the United States, appears finally to be coming to terms with its role in the world in a way which is letting Paris and Washington live more easily together.

    A new tone in Franco-American relations has emerged in the handling of a dispute over French oil company Total's decision to defy U.S. sanctions and sign a $2 billion gas contract with Iran.

    Some years ago, mutual recriminations would have been flying across the Atlantic.

    This time, a very real difference of opinion over how to handle Tehran is being smoothed over by proclamations of goodwill, with Washington seeking a way round its law imposing sanctions on companies which invest in Iran.

    ``There is a very relaxed relationship now compared with previous times,'' Foreign Minister Hubert Vedrine told a gathering of English-speaking journalists this week.

    ``When we agree, it is all the better. When we do not agree, it is not a crisis,'' he said.

    His comments echoed those made earlier this week by the U.S. ambassador to Paris, Felix Rohatyn, commenting on a dispute between France and the United States over the terms of a French return to the NATO military alliance.

    ``Sooner or later we always resolve our problems,'' he said. ``We know when things get very difficult, we always find ourselves side by side against a common enemy.''

    Vedrine likened France's relationship with the United States to its sometimes tense dealings with Germany over how to set up a single European currency.

    Every time the Franco-German tandem hits a bump, as it does regularly over the two sides' different visions of a single currency, people panic unnecessarily about monetary union.

    ``These are countries which are profoundly different, but which are also two countries which have made the intelligent and historic choice to bring their positions into line,'' Vedrine said.

    The proof of this was their willingness to press ahead with the euro despite the obstacles, he said.

    Behind the drive to live with the United States as friends who squabble rather than enemies who compete, is what French media is dubbing the ``new realism'' of the Socialist-led government brought to power in June.

    Vedrine last month become one of the first French politicians to break a postwar taboo on acknowledging Paris's declining influence in the world.

    France, he said then, was only one of the seven or eight world powers. It must respond to the U.S. role as sole superpower while also defending its own interests.

    The tone was far from that of post-war president Charles de Gaulle who defined decades of French policy by trying to make up for France's humiliating World War Two occupation by the Nazis by insisting on its importance in the world.

    France, said Vedrine, had to ditch its sometimes ``hysterical'' baggage and avoid artificial polemics.

    ``France is a country which has difficulty placing itself in relation to world reality,'' he said.

    It suffered pretension and then ``terrible depression'' when it realised it was not at the centre of the world.

    ``We have to end this nostalgia which poisons all discussions,'' he added.

    None of that means that Franco-American relations will be silky smooth from now on.

    Apart from Iran, Paris and Washington disagree on NATO, and both fight regularly to get their appointees into top international jobs.

    French officials were also clearly riled at a Group of Seven summit in Denver in June by what they saw as U.S. triumphalism in trumpeting the success of its own economy against those of unemployment-scarred Europe.

    And over the Total dispute French Prime Minister Lionel Jospin could not resist a traditional dig.

    ``...nobody accepts the idea that the United States can now impose their own laws on the rest of the world, otherwise the earth would be a different place and we would not be the old, independent country that we are,'' he said on French television late last month.

    But the new realism should mean that whatever the rhetoric, France may be more willing to work behind the scenes with the United States on international issues from the Middle East to Africa.

    ``We have no desire to replace France in Africa,'' Rohatyn said. I think over time you'll see cooperation growing between France and the United States on Africa.''

    Iran Says War-Games to Show Power to Aggressors
    TEHRAN, (Reuter) - Iran said on Wednesday its upcoming naval exercises in the Gulf, to be held as the U.S. aircraft carrier Nimitz rushes to the waterway, would demonstrate the country's ability to stand up to ``aggressive powers.''

    The official Iranian news agency IRNA said the war-games in the northern Gulf would start on Saturday, two days later than the start date earlier announced.

    ``With these manoeuvres we will demonstrate out readiness to stand up to aggressive and bullying powers,'' said Navy Commander Rear-Admiral Abbas Mohtaj, quoted by the evening daily Kayhan.

    The war-games, code-named ``Pirouzi (Victory)-8,'' had been planned before Washington last week ordered the Nimitz to skip a port call at Singapore and hurry to the Gulf.

    Mohtaj said Iran's naval forces were ``prepared to cooperate with forces of other Persian Gulf states to bring sustainable security, peace and stability to the region,'' IRNA said.

    ``War-mongering, creating tensions and ravaging economic resources of the regional states are among consequences of the foreign powers' illegitimate presence in the region, specially that of the U.S.,'' Mohtaj said.

    Iran has said it does not expect a confrontation with the United States in the Gulf.

    The United States last week ordered the Nimitz to skip a port call in Singapore and rush to the Gulf. U.S. Defence Secretary William Cohen said on Monday that the sending of Nimitz to the Gulf was a warning directed at Iraq, not Iran.

    Iran Accuses Israel in Foiled Hijacking
    TEHRAN, Iran (Reuter) - Iranian state radio Tuesday accused Israel of involvement in a foiled attempt to hijack an Iranian passenger plane.

    Tehran radio said a man who was shot and arrested by security guards Monday after trying to hijack the Iran Air plane was ``affiliated with the espionage apparatus of the Zionist regime (Israel).'' It did not give his identity.

    Security guards overpowered the armed man after he tried to force the plane, on a flight from Tehran to the Persian Gulf port city of Bandar Abbas, to fly to Iraq or Israel, the radio said.

    The lone hijacker, a man of about 30, had shot and wounded a guard before being himself shot and arrested.

    An association representing Iranian cabin crew members issued a statement condemning ``the Zionist regime for sponsoring the inhuman action,'' the official Iranian news agency IRNA said.

    In September 1995, an Iranian steward hijacked a Iranian plane bound for the Gulf island of Kish to an Israeli military base where he surrendered and freed all 177 passengers and crew unharmed. An Israeli court jailed the 30-year-old hijacker for eight years in 1996.

    Iran formed a special anti-hijacking unit of the Revolutionary Guards after a rash of hijackings -- most diverted to Iraq -- hit state-owned carrier Iran Air in the early years of the 1980-88 war with Iraq.

    Iran has often accused the Iraq-based opposition Mujahideen Khalq organization of involvement in the hijackings. The Mujahideen have denied that.

    Iran has said the unit thwarted about 70 hijacking attempts, including 11 in the sky, in the decade to 1994.

    In 1993 an Iranian man hijacked an airliner on a domestic flight to Iraq where he surrendered to authorities there with his wife and five children. It was the first successful hijack of an Iranian airliner in about 10 years.

    Pak President Calls for Normalization of Iran-US Ties
    ISLAMABAD,XINHUA - Pakistani President Farooq Leghari said here today that his country is opposed to economic sanctions against Iran and it is looking forward to the normalization of Iran-US relations.

    "Pakistan will advise its American friends to normalize its relations towards Iran, by removing sanctions against it," Leghari said when meeting a press delegation from the member states of the Economic Cooperation Organization here today. The delegates were representing the news agencies of Iran, Turkey, Turkmenistan, Kirgizstan and Tajikistan while Azerbaijian and Kazakhstan were represented by their embassies in Islamabad.

    Replying to a question from the representative of IRNA News Agency, Mohammad Khodaddi, Leghari said " No country, howsoever, powerful has authority to impose sanctions against any independent country."

    Southern Iran Quakes Injure Six, Damage Houses
    TEHRAN, (Reuter) - Two earthquakes measuring 5.2 and 4.6 on the Richter scale jolted southern Iran on Friday, injuring six people and damaging a number of houses, the official Iranian news agency IRNA said on Saturday.

    The epicentre of the earthquakes was 320 km (200 miles) southeast of the southern provincial capital of Shiraz, the agency said. It said the tremors injured six people and damaged a number of houses.

    Iran has been hit by three major earthquakes in the past year as well as hundreds of tremors and aftershocks. In 1960, an earthquake in the same region killed 3,500 people.

    Cohen Tells Nimitz to Speed to Gulf
    By Robert Burns
    Associated Press Writer
    WASHINGTON (AP) -- Defense Secretary William Cohen on Friday ordered the aircraft carrier USS Nimitz and its escorting warships to skip a planned port call at Singapore to get to the Persian Gulf as quickly as possible, officials said.

    The hurry-up is linked to U.S. warnings to Iran earlier this week not to repeat its cross-border air attacks into southern Iraq. The Clinton administration told Iran that its raids Monday -- and a belated Iraqi air force response -- violated a U.S.-enforced ``no-fly'' zone and could trigger U.S. retaliation.

    Pentagon spokesman Army Col. Richard Bridges said Cohen ordered the Nimitz to skip the Singapore stop in order to arrive on station in the Gulf early. Navy officials said it would get there by mid-October, two weeks earlier than originally planned.

    The prospect of escalating tensions in the Gulf -- a shipping route for much of the world's oil supplies -- triggered a run-up in energy prices Friday. Crude oil futures on the New York Mercantile Exchange hit an eight-month high, gaining 99 cents to $22.76 a barrel. Precious metals prices also rose.

    The Nimitz, a nuclear-powered carrier with dozens of F-18 fighter and other aircraft aboard, is currently in the South China Sea on a round-the-world deployment that began Sept. 1. It is escorted by several warships, including the guided-missile frigate USS Ford, plus the attack submarine USS Olympia.

    The Nimitz is based in Bremerton, Wash., but will shift its home to Norfolk, Va., when it finishes its deployment next March, to undergo repairs and to refuel its nuclear reactors at Newport News Shipyard, where it was built in 1975.

    U.S. Navy 5th Fleet ships already in the Gulf include five destroyers, three guided-missile frigates and two mine countermeasure ships. There is no aircraft carrier in the Gulf now.

    The ``no-fly'' zone over southern Iraq is patrolled by U.S. Air Force planes based in Saudi Arabia and Bahrain. The restricted zone was created after the 1991 Gulf War to stop Iraqi government forces from crushing rebel groups.

    On Monday, Iranian planes bombed bases in southern Iraq held by Iranian rebel groups. The next day the Clinton administration said it had put Iran on notice that, if its pilots again intrude into that air space, they risk getting shot down.

    ``We made it clear to Iran that flights such as the one they made on (Monday) complicate the enforcement of the no-fly zone,'' Pentagon spokesman Kenneth Bacon said Tuesday.

    He said that was communicated to Iran through British diplomatic channels.

    At the White House, a National Security Council official said the United States suspects that Iraqi President Saddam Hussein might use the Iranian attacks as an excuse to challenge the ``no-fly'' zone and to block U.N. weapons inspections. Earlier this week U.N. inspectors were stopped from visiting three sites in Iraq.

    US Sends Aircraft Carrier to Gulf as Warning to Iran
    WASHINGTON,XINHUA - The United States today ordered the aircraft carrier Nimitz to sail at top speed toward the Persian Gulf on the pretext of Iran's violation of the no-fly zone over southern Iraq.

    The Pentagon said the 73,000-ton carrier, which usually carries about 50 F-14 and f/a-18 combat aircraft, has skipped a port call in Singapore and hurry to the Gulf for a show of strength.

    The Pentagon said the carrier, accompanied by guided missile cruisers and destroyers, should reach the Gulf in about 10 days, four or five days earlier than originally scheduled.

    The Pentagon indicated the Nimitz's mission was connected with the recent Iranian raids on bases of the Mujahideen Khalq, the main Iranian opposition group. One of the bases was inside southern Iraq where the United States and its allies self-claimed to be a no-fly zone since 1992.

    A Navy spokesman said, "Is this a warning to Iran? Of course it's a warning."

    The establishment of the no-fly zone over southern Iraq was originally aimed at Iraq's air force, and the United States has not previously taken a strong stand on Iranian attacks on the Mujahideen.

    But Pentagon spokesman Kenneth Bacon Tuesday said the United States had told Iran it could shoot down its planes if they entered the no-fly zone. White House spokesman Mike McCurry today reinforced the warning, saying, "We've made clear we will continue to vigorously enforce the no-fly zones."

    Iran Defends Air Raids on Rebel Bases in Iraq
    TEHRAN,(Reuter) - Iran has defended its air raids on Iranian rebel bases inside Iraq, saying they were defensive measures against ``terrorists,'' the official news agency IRNA said on Friday.

    It quoted Jalal Samadi, a member of Iran's mission to the United Nations, as saying in New York the attacks on Monday were launched to deter ``two armed groups belonging to the terrorist organisation (Mujahideen Khalq) who crossed internationally recognised borders into Iranian territory.''

    Samadi was responding on Thursday to a speech to the General Assembly by Iraq's Foreign Minister Mohammad al Sahaf who accused Iran of taking advantage of no-fly zones imposed on Iraq by the United States and Britain to violate Iraqi airspace.

    ``Samadi remarked that while...Iran abides by its commitment towards the sovereignty and territorial integrity of Iraq, it believes the behaviour of the Baghdad government in supporting the group and permitting them to use Iraqi land for terrorist acts against Iran is unacceptable...,'' IRNA said.

    A spokesman for the Mujahideen Khalq, speaking from Iraq to Reuters in Dubai by telephone, denied the armed opposition group had carried out the cross-border attacks.

    Iraq said eight Iranian planes carried out the raids. The Mujahideen said two of its camps northeast of Baghdad were hit.

    Tehran has blamed the Iraq-based Mujahideen Khalq, Iran's main opposition group, for cross-border attacks and bombings.

    The Mujahideen, who have intensified their attacks in the past year, have denied targeting civilians but have taken responsibility for hitting military, state and economic targets.

    Iran and Iraq, which fought a war from 1980 to 1988, often accuse each other of backing rebels from the other country.

    Turkey's semi-official Anatolian news agency said on Friday that neighbours Syria and Iran had deployed troops and armour near a Kurdish enclave in northern Iraq in an apparent response to a Turkish military raid into Iraq which began on September 23.

    Iran's Rafsanjani Says U.S. Cannot Stop Gas Deal
    TEHRAN, (Reuter) - Former Iranian president Akbar Hashemi Rafsanjani said on Friday the United States would be unable to block a $2 billion gas deal between French oil giant Total's (TOTF.PA) and Tehran.

    ``If America had been able to do anything, it would have done so by now and its recent statements show that France, Russia and Malaysia are serious in their decision,'' Rafsanjani said.

    The United Sates has slammed the deal, which also includes Petronas of Malaysia (PETR.KL)and Russia's Gazprom (GAZP.RTS), and warned it might take punitive action against the firms.

    ``If the Americans try any further, they will just expose their weakness,'' Rafsanjani told Iranian television.

    The deal, announced on Sunday, is the biggest foreign investment in Iran since the 1979 Islamic revolution and defies Washington's threats that it would trigger punitive action under U.S. law.

    The 1996 Iran-Libya Sanctions Act requires U.S. President Bill Clinton to impose sanctions on non-U.S. firms that invest more than $20 million a year in the two states' energy sectors.

    But U.S officials have said they will seek to waive sanctions against the firms involved in the Total deal if their governments join the United States in intensifying pressure on Tehran to change its policies.

    Iran denies U.S. accusations that it is involved in terrorism, trying to acquire nuclear weapons or undermining the Middle East peace process. It says Washington is bent on destroying its Islamic government.

    ``I have been aware of the details of the deal since five, six months ago when the preliminary agreements took place, in which the British company Shell was also supposed to take part,'' said Rafsanjani, who now heads a powerful policy-making body.

    ``This (preliminary agreement) made Americans sensitive, although they did not show it openly. France...evaluated the whole trend, and found out that the deal was to its benefit. Then Russia and Malaysia joined in.''

    Royal/Dutch Shell Group (RD.AS)(SHEL.L)has said it would maintain contacts with Iran in hope of securing a contract to develop a further phase of the huge South Pars gasfield in the Gulf, which the Total-led consortium is to exploit.

    Iran has the world's second largest gas reserves after Russia.

    The United States, reacting to Iranian attacks on targets in Iraq this week, told the aircraft carrier Nimitz to skip a port call in Singapore and hurry to the Gulf to enforce a no-fly zone in southern Iraq, U.S. officials said on Friday.

    Iran said its air raids against bases of the Iraq-based Mujahideen Khalq armed opposition group followed cross-border raids into Iranian territory by the rebels.

    Cohen Orders Navy Carrier to Speed Its Arrival in Persian Gulf
    WASHINGTON (AP) Defense Secretary William Cohen on Friday ordered the aircraft carrier USS Nimitz and its escorting warships to skip a planned port call at Singapore to get to the Persian Gulf as quickly as possible, officials said.

    The hurry-up is linked to U.S. warnings to Iran earlier this week not to repeat its cross-border air attacks into southern Iraq. The Clinton administration told Iran that its raids Monday and a belated Iraqi air force response violated a U.S.-enforced "no-fly" zone and could trigger U.S. retaliation.

    Pentagon spokesman Army Col. Richard Bridges said Cohen ordered the Nimitz to skip the Singapore stop in order to arrive on station in the Gulf early. Navy officials said it would get there by mid-October, two weeks earlier than originally planned.

    The prospect of escalating tensions in the Gulf a shipping route for much of the world's oil supplies triggered a run-up in energy prices Friday. Crude oil futures on the New York Mercantile Exchange hit an eight-month high, gaining 99 cents to $22.76 a barrel. Precious metals prices also rose.

    The Nimitz, a nuclear-powered carrier with dozens of F-18 fighter and other aircraft aboard, is currently in the South China Sea on a round-the-world deployment that began Sept. 1. It is escorted by several warships, including the guided-missile frigate USS Ford, plus the attack submarine USS Olympia.

    The Nimitz is based in Bremerton, Wash., but will shift its home to Norfolk, Va., when it finishes its deployment next March, to undergo repairs and to refuel its nuclear reactors at Newport News Shipyard, where it was built in 1975.

    U.S. Navy 5th Fleet ships already in the Gulf include five destroyers, three guided-missile frigates and two mine countermeasure ships. There is no aircraft carrier in the Gulf now.

    The "no-fly" zone over southern Iraq is patrolled by U.S. Air Force planes based in Saudi Arabia and Bahrain. The restricted zone was created after the 1991 Gulf War to stop Iraqi government forces from crushing rebel groups.

    On Monday, Iranian planes bombed bases in southern Iraq held by Iranian rebel groups. The next day the Clinton administration said it had put Iran on notice that, if its pilots again intrude into that air space, they risk getting shot down.

    "We made it clear to Iran that flights such as the one they made on (Monday) complicate the enforcement of the no-fly zone," Pentagon spokesman Kenneth Bacon said Tuesday.

    He said that was communicated to Iran through British diplomatic channels.

    At the White House, a National Security Council official said the United States suspects that Iraqi President Saddam Hussein might use the Iranian attacks as an excuse to challenge the "no-fly" zone and to block U.N. weapons inspections. Earlier this week U.N. inspectors were stopped from visiting three sites in Iraq.

    New Commander for IRAN'S Ground Forces Appointed
    TEHRAN, XINHUA - Iran's Supreme Leader and Commander-in-Chief of the Armed Forces Ali Khamenei today appointed Brigadier General Abdul-Ali Pourshasb as the commander of the Ground Forces of the Army.

    Khamenei said in his statement that he made the appointment because of Pourshasb's competence, honesty and efficiency during the period he served as the deputy commander of army's ground forces.

    It took five months for Pourshasb to become the commander of the ground forces after he was appointed the acting commander when Brigadier General Ahmad Dadbin was removed on May 6 from the commander of ground forces without giving any reason.

    However, the statement gave no any background about the new commander of the ground forces.

    General Ali Shahbazi, the chief of the Joint Staff Command of the Armed Forces, said earlier that Pourshasb had a bright background in different operational, training and administrative fields especially during the eight-year war between Iran and Iraq (1980-1988).

    "Pourshasb who is a religious and an experienced officer possesses a great capacity and a remarkable commitment in undertaking his duties," Shahbazi said.

    U.S.-Iran: French Oil Deal a Blow to U.S. Policy
    WASHINGTON, IPS - The $2 billion oil deal announced this week between a major French oil company and Iran has dealt a major blow to U.S. efforts to isolate Teheran and to reduce tension over Washington's sanctions against foreign companies operating abroad.

    The contract between Iran and an international consortium led by Total S.A. of France also marks the latest advance in a series of moves by the new government of President Mohamed Khatami toward normalizing relations with the rest of the world.

    U.S. reaction to the deal has ranged from outrage -- especially after Washington presented a formal request to Paris asking it to block the contract -- to tentative conciliation.

    On Sept. 29, the State Department indicated that Total's investment violated the 1996 Iran-Libya Sanctions Act (ILSA), which authorizes President Bill Clinton to impose sanctions on any company which invests more than $40 million in the Iran's energy sector. Companies from Russia and Malaysia are also involved in the deal.

    "Such investment makes more resources available for Iran to use in supporting terrorism and pursuing missiles and nuclear weapons," a spokesman declared.

    Yesterday, however, Washington softened its tone. State Department spokesman James Rubin stressed that Washington had not yet decided whether the deal was sanctionable. He hinted that Undersecretary of State Stuart Eizenstat, Clinton's point man for dealing with touchy trade matters, may travel to Europe soon to try to calm the waters.

    His efforts, however, are unlikely to reverse the steady unravelling of Washington's containment policy against Iran, whose strategic position as a major oil power and the most convenient gateway to oil and gas from the Caspian Sea region has grown more compelling by the month.

    In July, Clinton decided not to oppose construction of a $1.6 billion gas pipeline through Iran that will permit Turkmenistan to sell and deliver natural gas to Turkey. At the time, administration officials insisted that the decision was motivated only by Washington's concern for Turkey and Turkmenistan, and did not signal any change in policy toward Teheran.

    But Washington is under growing pressure to grant more such exceptions, according to most experts. They note that Iran offers by far the cheapest and most efficient outlet for Caspian oil and gas from Kazakhstan, Turkmenistan, and Azerbaijan, all of which have been courted assiduously by Washington.

    "The story is the same in all these countries," says Julia Nanay, president of the Washington-based Petroleum Finance Co. "If they don't get their resources to market, their economies will continue in a downward spiral."

    The biggest future markets for these energy supplies, she and other experts agree, is Asia, and oil companies from that region are quickly becoming a major player in the Caspian area, increasingly at the expense of U.S. companies.

    "The Asian companies prefer the Iranian route because it is the most economically and commercially viable in the near term and it brings the oil closer to the markets where it will be needed in the future," according to Nanay.

    To the extent that Washington wishes these Caspian nations also to reduce their dependence on Russia, says oil consultant Thomas Stauffer, it must reconsider its policy towards Iran. "The U.S. is pushing these countries right into the hands of the Russians," he says. "(It) doesn't make much sense."

    Moreover, success by Teheran's new government in building bridges to Iran's neighbors is putting additional pressure on Washington's containment policy. In the past six weeks, for example, Iran has reached new agreements with Iraq on permitting religious pilgrimages, with Saudi Arabia on resuming air links and upgrading trade links, and with Turkey on restoring top-level diplomatic ties.

    Even Israel, whose powerful lobby has spearheaded the drive to impose sanctions against companies and countries with close ties to Teheran, appears to be having second thoughts.

    Last month, it announced an end to Iranian opposition broadcasts from an Israeli satellite because they contained "incitements to violence." And reports on unofficial contacts to resolve long-standing commercial disputes between the two countries have popped up in the Israeli press.

    These moves "suggest that Congress may now be even more hawkish on the Iran issue than the Israeli government," noted the Journal of Commerce. Indeed, Stauffer argues that the Israeli lobby, led by the U.S.' most powerful Jewish organizations, appears increasingly split on the issue.

    "There's now a debate over whether it makes more sense to back off," he says.

    Washington insists, however, that its policy has not changed and that no formal review is underway. Reiterating U.S. policy this week, Secretary of State Madeleine Albright said Washington had not yet seen any evidence that Khatami had reduced Iran's alleged support for terrorism or pursuit of weapons of mass destruction.

    Total's agreement, coupled with the administration's desire to avoid a damaging new spat with its transatlantic allies, strongly suggests that containment's days are numbered.

    The United States and the European Union (EU) recently intensified their efforts to defuse an angry dispute over the Helms-Burton law, which sanctions foreign companies investing in Cuba. The EU assailed the law as an illegal assertion of U.S. jurisdiction abroad and took the matter to the World Trade Organization (WTO) for a ruling.

    Both sides to the dispute have been trying to work out a compromise by an Oct. 15 deadline, but the EU warned this week that if Washington acts against Total, it will push ahead with the case at the WTO. The EU has voiced the same objections to ILSA as to Helms-Burton.

    Europe wants assurances from Washington that it will not act against European companies under either law, either by amending them or by agreeing to waive sanctions.

    Clinton's political advisers remain concerned that if he fails to act against Total, the ILSA will have been shown to be toothless and he will be vulnerable to attacks from the right. Under ILSA, the president must impose two out of six possible sanctions, including a ban on exports to the United States. COPYRIGHT 1997 IPS/GIN

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