BERNARD SHAW, CNN ANCHOR: Voting in presidential elections last May, the people of Iran rejected the candidate favored by the militant clerics, who have guided the country since the Islamic revolution….

… So, the question: Is this a new day in Iran, and if so, what can we expect?…

SHAW: And the question on the minds of many people around the world. Author, Salmon Rushdie; will the death penalty hanging over his head ever be lifted by the Ayatollah?

KHARRAZI: This is a long story. You have [to] understand, why basically this fat fur [fatwa - religious decree] was issued against Salmon Rushdie. I believe that it was a sign of clash of civilizations, and western countries had insulted Muslim, not only Iran, but the whole Islamic civilization. That is something that we have to avoid… And if Imam Khomeni issued this fat fur [fatwa] was a reaction to this insult from westerns, and we consider Salmon Rushdie, although from India, a symbol of western insult toward Islam.

SHAW: So this problem is insoluble?

KHARRAZI: This is an expert opinion issued by one the religious leaders and it's going to remain.…

Mullahs' "Suitable Formula" for Foreign Policy: Blackmail, Reuter, September 25

TEHRAN - Germany made a grave mistake by involving other European countries in its diplomatic row with Tehran, Iran's Foreign Minister Kamal Kharrazi was quoted on Thursday as saying.

Iran's relations with the European Union became strained after a German court concluded in April that Iranian leaders had ordered the 1992 killing of four dissidents in Berlin's Mykonos restaurant….

"Germany can solve its row with Iran through compensating for the damage the Mykonos affair inflicted on the Iranian nation's sentiments," Kharrazi said. IRNA did not elaborate.

But German Foreign Minister Klaus Kinkel said Bonn's position had not changed and it would not accept Tehran's demand.

"Iran bears the responsibility for what happened in the Mykonos affair. The Europeans have declared solidarity with Germany over the envoys' return," he said, according to a text of an interview in the London-based Arab-language paper Al Hayat on Thursday. The text was issued by the Foreign Ministry in Bonn….

Iran Remains A Threat to Its Neighbors, Reuter, September 25

DUBAI - … "More of the GCC (Gulf Cooperation Council) countries are re-equipping their navies," said Captain Chris Clayton aboard British warship HMS Chatham….

Military developments in the region gathered pace with the entry of Iran's three Russian-built Kilo class submarines in the last 18 months.

"Clearly, the military capability of Iran is improving and they now have acquired a capability that, as it develops, will be a deep water capability and will be out in the Gulf of Oman."…

"I see the use of those submarines would be in the Gulf of Oman in the approaches to the Strait of Hormuz," he added.

British Defense Secretary George Robertson said on Monday that Iran remained a threat to its neighbors.

"Iran remains a constant worry in terms of the armament it is acquiring and technology it might well have and what that might mean for both its neighbors and for the wider Middle East," he said aboard the Chatham during a visit to Kuwait….

Kuwait Bans Iranian "Toxic" Pistachios, Reuter, September 25

KUWAIT - Kuwait has banned the import of Iranian pistachio nuts after detecting toxic contamination, a newspaper reported on Thursday. Officials told al-Rai al-Aam daily that pistachio imports from Iran were contaminated by the highly toxic aflatoxin B1, a carcinogen produced by moulds…

Pistachios are Iran's largest non-oil export after carpets. It exported some 130,000 tones worth $600 million last year.

Ukraine Signs Deal to Sell Transport Jets to Iran, Reuter, September 25

KIEV - Ukraine has signed a contract to supply Iran with Antonov-74 transport jets and is waiting for international safety clearance for a new passenger plane it plans to build for Tehran, aviation officials said on Thursday….

Earlier this week Russia's Itar-Tass new agency quoted unnamed Ukrainian aviation experts as saying Iran would buy 10 transport planes, two of which had already been delivered….

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