US withdraws July 4 party invitations to Iranians

* Invitations were first since the 1979 Islamic Revolution

* Iranian diplomats had not replied to invitations

* Officials decline comment on reported letter to Khamenei

By Ross Colvin

WASHINGTON, June 24 (Reuters) - The United States on Wednesday withdrew invitations to Iranian diplomats to attend U.S. Independence Day celebrations on July 4, a symbolic step to protest the Iranian government's crackdown on demonstrators.

The State Department, breaking with long-standing practice, had invited Iranian diplomats to attend parties at U.S. embassies around the world. Washington's outreach to its old foe was part of President Barack Obama's efforts to coax Iran into negotiations over its disputed nuclear program.

The decision to rescind the invitations was also symbolic since no Iranian diplomats had actually responded to them.

"Not surprisingly, based on what we see going on in Tehran, nobody's RSVP'd," White House spokesman Robert Gibbs told reporters. "Given the events of the past many days, those invitations will no longer be extended."

Iranian police and militia have largely succeeded in regaining control of the streets after the biggest anti-government protests since the 1979 Islamic Revolution, touched off by the disputed June 12 presidential election. Up to 20 people have been reported killed in the protests.

The Obama administration has struggled to strike the right note in its response to the crackdown, not wanting to be seen as meddling in Iran's internal affairs and giving its government an excuse to say the protesters are U.S.-backed.

In his strongest response yet to the post-election violence, Obama said on Tuesday he was "appalled and outraged". The tougher language appeared to dampen prospects for any immediate dialogue between Washington and Tehran.

"The president's policy of engagement is obviously delayed, but we are going to have to deal with the government of Iran," Senator John Kerry, chairman of the influential Senate Foreign Relations Committee, told Reuters.

Since taking office, Obama has made a series of overtures to Iran, including a videotaped new year message to the Iranian people.

The July 4 invitations were part of that outreach. It was the first time in three decades that Iranian diplomats had been invited to the embassy parties. Washington cut diplomatic ties with Tehran in 1980.

State Department spokesman Ian Kelly said Secretary of State Hillary Clinton had "sent a telegram to every diplomatic and consular post authorizing chiefs of mission to extend invitations to our July 4 gatherings overseas."

"As far as I know, not a single Iranian accepted one of those invitations. And this may be because our July 4 gatherings (are) ... a celebration of our basic values; our basic values of independence and freedom," Kelly said.

'DEAR SUPREME LEADER'

Despite having issued the July 4 invitations, the United States had not relaxed its ban on U.S. diplomats engaging in "substantive discussions" with Iranian diplomats without prior authorization by the State Department, a U.S. official said.

There have been many such contacts in the past, including in Baghdad to discuss quelling violence in Iraq and among U.S. and Iranian diplomats on stabilizing Afghanistan after the U.S.-led invasion that toppled the Taliban in 2001.

While expressing outrage over the suppression of the street protests, Obama has left the door open to eventual negotiations with Iran over its nuclear program, which Washington fears is a cover to build an atomic bomb but Tehran says is for the peaceful generation of electricity.

Administration officials declined to deny reports that the United States had sent a letter to Iran's supreme leader, Ayatollah Ali Khamenei, before the presidential election.

"As we've said on a number of different occasions, we communicate with Iran in a number of different ways," said the State Department's Kelly. On this occasion, we're not going to get into the details of private diplomatic correspondence." (Additional reporting by Arshad Mohammed, Deborah Charles, Susan Cornwell and Doug Palmer; editing by Mohammad Zargham)