TEHRAN - Iran's Foreign Minister Kamal Kharrazi on Monday cast doubt on chances of resuming talks with the United States, saying dialogue had to be based on mutual respect, a newspaper said.

"We are only ready for talks if they are based on mutual respect, recognition of realities and Iran's situation and non-interference in Iran's affairs," Kharrazi said in remarks carried by the evening newspaper Ettelaat….

Iran's former foreign minister Ali Akbar Velayati said in an interview published by the daily Resalat on Monday Iran saw no room for the United States in its foreign policy.

Asked whether Iran saw any possibility of resuming ties with the United States in the near future, Velayati said: "Our relations with America are just as they were in the past."

Velayati is now international affairs adviser to Iran's supreme leader Ayatollah Ali Khamenei. Khamenei has supreme power over all state institutions and has ultimate control over the country's foreign policy. Velayati was replaced as foreign minister in August by Kharrazi.

"We have not given up our principles and the Americans have not decreased their hostility. So America has no place in our foreign policy," Velayati was quoted as saying.

Concerns Over Iran's Behavior, Voice Of America, September 14 

Although the Arab-Israeli peace process has dominated secretary of state Albright's Middle East tour, the change of government in Iran also has been discussed…

Many Arab analysts say they expect the gradual rapprochement between Iran and the Arabs to continue. But others say key Arab leaders, especially in the Gulf, remain cautious….

The people of Iran have made clear their desire for change, she said. But what is still not clear, she added, is whether and to what extent changes will actually occur….

Although we hope for positive change in Iran, she said, we cannot count on it. And she reiterated the U.S. commitment to oppose any effort from any source to coerce or intimidate U.S. allies in the gulf or to interfere with the freedom of navigation through its international waterways.

Officials traveling with the secretary say Washington and the Gulf states remain concerned about Iran as a potential long-term threat.

Khatami Concerned about Factional Infighting, Reuter, September 15

TEHRAN - Iran's President Mohammad Khatami Monday urged the country's armed forces to stay out of partisan politics, the official news agency IRNA said. "The armed forces have to abstain from factional politics and do their utmost to serve (the)... pillars of the revolution," IRNA quoted Khatami as saying at a gathering of commanders and officials of the elite Revolutionary Guards.

"Calling the (Revolutionary Guards) 'a national force' which reflects the nation's might, Khatami stated that the military commanders have to stay aloof of the ongoing factionalism in the society," the agency said….

Mullahs' President Admitting Economic Difficulties, Tells Ministries Not to Expect the Planned Budget, Reuter, September 11

TEHRAN - Iran's President Mohammad Khatami has told state bodies to show utmost restraint in drawing up their requirements within the country's next annual budget, a newspaper said on Thursday….

Khatami said the government faced "numerous (economic) imbalances and shortcomings" including the inability of the state to bring in some of its budgeted income despite an annual average rise in tax revenue of 37 percent in the past few years.

He urged ministries not to base their requests on this year's budget but on actual income in the past two years.

… Iran has said its earnings from oil exports in the three months to June reached $4.1 billion, some six percent below budget forecasts. Oil earnings represent 40 percent of state income….

Economy and Finance Minister Hossein Namazi told parliament last month the current state budget had a deficit of 15 trillion rials ($5 billion) on a spending of 188.6 trillion rials….

Alarming Levels of Pollution in Zayandeh-Rud, State-Controlled Tehran Times, September 15

TEHRAN - Some 172,000 cubic meters of various kinds of industrial pollutants from 11 industrial units enter Zayandeh-Rud (river) every day, it was announced in Esfahan Sunday. Mehdi Kahnamouie, Director General of Esfahan Province Environmental Protection Organization, added that some 1.45 billion cubic meters of water flow through Zayandeh-Rud annually, out of which 1.1 billion cubic meters is used for agricultural purposes, 150 million cubic meters for industrial purposes and the remaining is used as potable water, IRNA reported….

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