The EU's drive distances it from Washington, which has branded Iran part of an "axis of evil" along with Iraq and the Democratic People's Republic of Korea (DPRK). Still, it is insisting that the trade negotiations must proceed in parallel with talks on human rights and terrorism.

Iran had resisted tying human rights talks to negotiations for a Trade and Cooperation Agreement with the EU. But its reservations have been muted because the pact is a key element in Iranian President Mohammad Khatami's policy of trying to break Iran's diplomatic and economic isolation and undermine tight trade sanctions imposed by the United States.

Washington's sanctions have blocked US oil firms from investingin Iran since 1996 and allowed their European rivals to snap up development deals in a country which has 9 percent of the world's oil reserves and 13 percent of its gas reserves.

The EU hopes that by engaging Iran it will bolster Khatami's reform efforts. Washington sees the president as too weak to overcome conservative opponents, despite his landslide re-election last year.

(Xinhua News Agency December 12, 2002)