Government spokesman Abdullah Ramezanzadeh said Iran over the past years has been one of the most stable countries in the Middle East in terms of economy, adding that the Iranian people rely on their own intellect to determine the future of their country.

Colin Powell and his Israeli counterpart Silvan Shalom, addressing the American-Israel Public Affairs Committee's (AIPAC) policy conference on Sunday, accused Iran and Syria of supporting terrorism.

Iranian analysts dismissed the importance of Powell’s declaration, observing that made at the AIPAC’s conference, the "old, cliché" accusations had a "domestic" purpose to please the powerful Jewish lobby.

Israeli Foreign Minister followed Powell's speech with his own condemnation of Iran as a sponsor of terrorism, reiterating that Iran was behind the attacks in 1992 on the Israeli Embassy in Buenos Aires and in 1994 on a Jewish centre in capital of Argentina.

"Syria ... now faces a critical choice", Mr Powell said, adding that Syria can continue direct support for terrorist groups and the dying regime of Saddam Hussein, or it can embark on a different and more hopeful course.

"Either way, Syria has the responsibility for its choices and for the consequences."

"The anti-Iran overture of the US officials emanated from Washington's failure in its military scenario in Iraq", Mr. Ramezanzadeh told IRNA, adding that the US officials have embarked on propaganda campaign against Iran to mislead the public opinion and overshadow the bizarre situation Washington has faced.

"Iran is neutral in the current hostility and only seeks an immediate end to the conflict", he said, calling on the belligerents, mostly on the Americans and the British to avoid destructions in holy (Shi’ite) cities in Iraq, warning that this has prompted the concern of Muslims, the Shi’as in particular throughout the world.

Foreign Affairs Ministry senior sopokesman rejected American’s accusations as "baseless statements that cannot have any impact on the world public opinion".

"The US unwavering support of Israel's state terrorism is a clear proof of US's double standards on defining, identifying and combating terrorism", the Iraqi-born Hamid Reza Asefi said, adding that the US is persisting with its erroneous policies in the Middle East".

He defended Iran's "transparent polices in the peaceful use of nuclear energy", repeating that Iran itself has been a victim of weapons of mass destruction and is categorically against production and use of such armaments in the world.

Powell's statements in AIPAC, as a venue where most acrimonious views are uttered against Muslims and freedom seeking nations, has adversely influenced the conduct of US foreign policy, Asefi noted.

Iran said on Sunday that would not support a regime installed in Baghdad "as ", but would "welcome" a future government there "elected by the people under the supervision of the United Nations". "Iran would welcome a government in Iraq which would observe good neighbourly relations as well as laws and agreements existing between the two countries", Iran’s Foreign Affairs Minister Kamal Kharrazi said at a press conference in Tehran.

"Such a government would be different from the one desired and imposed by the United States", he said, adding that Iran's opposition to the American-led war in Iraq should not be interpreted as support for the present Iraqi regime.

Kharrazi said that the "best solution" to the crisis is that the United Nations undertake the matter and defend its "damaged prestige" with "marathon diplomatic drive" to stop the war.

"We have warned the belligerent forces in this respect", he added, referring to a conversation he had earlier on the day with his British counterpart, Jack Straw.

Asked by journalists why, in his view, the operations "Shock and Awe" have so far not gone according to Washington’s original plans, Mr. Kharrazi said the coalition forces anticipated that the Iraqi people would welcome them on the gateway of the cities, but, they have faced with suicide operations to repulse the invasion. "It is accounted for a great defeat", he predicted.

"Prior anticipation of immediate success for Iraq war could not come true, indicating that to what extent both Washington and London are away from the realities in the Middle East", the Minister pointed out, adding: "it goes without saying that the US is pursuing Israeli agenda in the Middle East and that Israel dictates Washington what to do in the region".

Mr. Kharrazi dashed to answer directly a question on whether Iran may become the next target of the US attacks, saying that the United States has a "general plan" for the entire region based on helping Israel to "forge military and economic dominance over the Middle East".

"The US practices are in a way making it clear that Washington focuses on certain interests so that the American companies, on the other hand, have also certain demands from the US administration for financial considerations", Kharrazi said. IRAN IRAQ 31303