America ends half a century of hostility to Iran

The United States took a major step towards normalising relations with Iran yesterday, announcing the easing of economic sanctions and coming close to apologising for past interventions in Iranian affairs.

The policy shift, which entailed a comprehensive revision of the US approach to Iran over the past half-century, was set out by the US Secretary of State, Madeleine Albright.

In a speech laced with calls for "a new beginning" to coincide with the Iranian New Year next week, Ms Albright announced an end to the ban on imports of Iranian luxury goods into the US, including carpets, pistachio nuts, dried fruit and caviar - of limited significance in US economic terms but key to the Iranian economy. Thegesture could open the way for Iran to import US wheat.

Ms Albright, speaking in Washington at a conference arranged by a pro-business group, the Iranian-American Council, also said the US was ready to negotiate "a global settlement" of Iran's outstanding legal claims against the US, to include the return of Iranian assets frozen since 1979.

The tone of Ms Albright's speech was conciliatory towards Iran as an Islamic state. "We recognise that Islam is central to Iran's cultural heritage," she said. She spoke of "a growing number of areas of common interest", including stability in the Persian Gulf region.

In a clear overture to Iran's intellectual community, Ms Albright offered a critical survey of US policy towards Iran over 50 years, which includedreferences to US involvement in the coup against Mohammad Mossadegh in 1953, and support for Iraq in the 1980s Gulf conflict. While US backing for Iraq was "shortsighted", she said the anti-Mossadegh coup "was clearly a setback for Iran's political development and it is easy to see now why many Iranians resent US intervention in their affairs".

The US broke off relations with Iran in 1979 after the overthrow of the Shah and the seizure of its embassy in Tehran by Revolutionary Guards. The election of Mohammad Khatami as President in 1997 led to a very cautiousrapprochement. In 1998, Washington announced it would ease travel for academics and sports teams and would lift sanctions on some exports of food and medicine to Iran.

Ms Albright conceded yesterday that "after the election of President Khatami we had to adjust the lens through which we viewed Iran". The landslide election of reformers to parliament last monthsealed the change of mood in Washington.

But Washington is still holding the biggest prize. Earlier this week, President Clinton renewed the ban on US investment in Iranian oil for another year. It will be lifted, according to US officials, when Washington is satisfied that Iran is committed to nuclear non-proliferation and will not obstruct the Middle East peace process.