Iran says U.S. biggest loser from Mideast upheaval

TEHRAN (Reuters) - Iran called the United States the biggest loser from the upheaval in the Middle East on Friday, a day after President Barack Obama made a speech reaching out to Arab people seeking greater democracy.

The Islamic Republic, which crushed opposition protests following the disputed re-election of President Mahmoud Ahmadinejad in 2009, has welcomed uprisings in its Arab neighbors as an "Islamic awakening" against Western backed dictators.

In its first reaction to Obama's speech, the secretary general of Iran's National Security Council said U.S. Middle East policy, particularly its support for Israel and certain autocratic Arab states, had proven a failure.

"The Islamic awakening has pushed America to desperation and dead end," Saeed Jalili told state television.

"America is the principal loser of the developments in the region and is sinking in the quagmire of (its) support for the Zionist regime as well as for tyrannical governments such as those of (Tunisia's Zine al-Abidine) Ben Ali and (Egypt's Hosni) Mubarak and Obama cannot disentangle himself by engaging in contradiction and deception."

In his speech, Obama did not renew an offer of engagement he made early in his presidency to Iran, a country with which Washington has had no diplomatic relations since the 1979 Islamic Revolution.

"Our opposition to Iran's intolerance - as well as its illicit nuclear program, and its sponsorship of terror - is well known," he said.

The speech comes as Iran faces tighter economic sanctions from the European Union over its nuclear work, which Tehran says is entirely peaceful and legal.

The EU has dismissed a letter from Jalili, who represents Tehran at talks about its nuclear program, about the possibility of restarting negotiations that stalled in January. (Reporting by Hashem Kalantari; Writing by Robin Pomeroy)