Iranian President Mohammad Khatami, closing a provincial tour on which he vigorously defended his reform progamme, said Washington is facing growing pressure to lift sanctions on Tehran.
Khatami's remarks came after a coalition of US businesses sent an open letter calling on President Bill Clinton to end the sanctions, which notably have kept the United States out of Iran's lucrative oil sector.
"Today, US policies are under strong pressure by foreign companies to invest in Iran and to lift the sanctions," he said in West Azerbaijan province, the state IRNA news agency reported late Tuesday.
"Attracting investment does not happen on its own. We must prepare our own leadership for the task," he said.
France, Italy, Russia and other nations have already ignored US legislation penalising foreign firms making heavy investments in the oil and gas sectors of Iran and Libya -- a law only half-heartedly enforced.
But with a red-hot oil market pushing prices near 10-year highs, the absence of US firms -- mandated by a 1996 executive order from Clinton establishing the sanctions -- is growing harder to overlook.
US oil giant Conoco this week denied rumours it was circumventing the sanctions and already doing business in Iran, but confirmed it had reviewed documents from Tehran about the technical conditions of some oil fields.
A spokesman for the company, which was actively engaged in the Iranian oil industry before the sanctions were put in place, said a return of US firms "would be in the best interests of the United States."
On Monday the USA-ENGAGE coalition of businesses, agriculture groups and trade associations said the sanctions should be ended, citing surging oil prices and potential petrol shortages in the United States.
President Khatami took the shrewd decision to base his current budget on low oil prices, leaving the coffers with an estimated 10 billion dollar surplus by the end of this Iranian year in March.
Yet as Khatami prepares to run for re-election next year, the lack of substantial progress on the economy has already left him vulnerable to charges he has not made good on a pledge of economic reform.
The new pro-reform parliament has passed legislation that for the first time since the 1950s will guarantee the safety of foreign investments and allow foreign firms to hold a majority stake in operations inside Iran.
But analysts say US firms have the advanced technology needed to maximise production and minimise costs -- a matter of growing concern as the surging market jangles nerves worldwide.
A Western oil analyst who asked not to be named said there was "real concern" that disturbances like that which rocked the provincial capital of Khoramabad last month could scare away US companies no matter what decision is taken on the sanctions.
The unrest, which left one dead and dozens wounded, erupted after a mob stormed Khoramabad airport to block two leading critics of Iran's clerical regime from addressing a pro-reform student group.
Khatami used his four-day tour of the provinces to defend his reforms, calling for greater political freedom and saying that people ruling over their own destiny was "the foundation of democracy."
Even some conservatives, who in the past have attacked Khatami's reforms as anti-Islamic and vowed there can be no reopening of ties with Washington, say they want to see US sanctions brought to an end.
The United States is "required by common sense to revise its hostile attitude toward Iran," the conservative Tehran Times said Wednesday.
"If it does so, ground will be prepared for the resumption of ties, and the people as well as businesses of the two countries may enjoy sound and friendly relations." —AFP.
©--Agence France Presse 2000.
© 2000 Mena Report (www.menareport.com)
