Quoting the Tuesday issue of the pro-conservative moderate paper "Entekhab", the website that publishes news and views about Iran that appears both in the local and international media, said the resignation had been handed to Mr. Mohammad Khatami, but it was not clear if the embattled President had accepted.

"Mr. Akbar A’lami, a Majles deputy said the news about Mr. Kharrazi’s resignation had been debated at the Majles National Security and Foreign Affairs Committee and despite some lawmakers efforts, the Foreign Ministry would not confirm it", "Iran va Jahan" said, quoting "Entekhab".

The dramatic resignation, the most important so far in Hojjatoleslam Khatami’s five years-old presidency comes at a time that the issue of opening open dialogue with the United States has heated up to the point that on order from the regime’s lamed leader, Ayatollah Ali Khameneh'i, the press was banned last week from publishing anything favourable to talks with Washington.

The measure, announced by Tehran’s Justice Department, was sharply attacked by both reformist lawmakers and the press as "illegal" and "unconstitutional", observing that no one has the right to deprive lawmakers and the press from debating issues related to the nation’s vital interests.

In a statement, the Judiciary said since deciding on foreign policy is a prerogative and monopoly of the leader, and since he has ruled out against dialoguing with America, therefore any article, debate or speech in favour of talk with the United States is against Constitution and amounts to crime.

In one of his most harsh and vulgar tongue address last week, Mr. Khameneh'i, who is staunchly against any normalisation with the United States, denounced those who defend the idea of talking to the Americans as "traitors and idiots who do not understand anything about politics".

Even though both the Foreign Affairs Ministry and the presidency have denied that officials from the government had met American envoys, but the press insisted that negotiations were held in Cyprus, conducted by Mr. Sadeq Kharrazi, the Foreign Affairs Deputy for Research and Educational Affairs and a nephew of the minister, dispatched by Mr. Hashemi-Rafsanjani.

The younger Kharrazi resigned immediately after the press revealed of his meetings with the Americans in the divided Island of Cyprus.

Analysts in Tehran told Iran Press Service that the prohibition of talks defending improvement of relations with Washington itself is a confirmation that the conservatives are effectively engaged in secret negotiations with the United States.

Though it is not clear what prompted Mr. Kharrazi to resign, but the un-impressive, un-charismatic and austere looking Foreign Minister was under increasing criticism and attacks from the reformists, both at the Majles and the press, for his weak handling of the nation’s foreign policy, particularly the set backs Iran suffered in Afghanistan, Central Asia and the Caspian Sea.

A former Head of the official news agency IRNA and an Envoy to the United Nations in New York, Mr. Kharrazi was named as Foreign Minister by Mr. Khatami in 1997 in a compromise with Mr. Khameneh'i, who, as the leader of the Islamic Republic, has the upper hand in formulating deciding the regime’s foreign policy. ENDS KHARRAZI RESIGN 2 LEAD 27502