U.S. embassies may invite Iranians to July 4 parties

Fireworks illuminate the sky at opening of the U.S. embassy during in Berlin, July 4, 2008.

WASHINGTON (Reuters) - U.S. embassies are allowed to invite Iranian officials to their July Fourth celebrations for the first time in 30 years in a sign of Washington's effort to reach out to Tehran, the State Department said on Tuesday.

However, the United States has not removed its blanket ban on its diplomats having substantive conversations with Iranian officials without prior authorization, it added, suggesting any such contacts will be limited to small talk for now.

Since taking office on January 20, U.S. President Barack Obama has stressed his desire to engage Iran, which the United States and its Western allies suspect of developing nuclear arms.

Iran denies this, saying its atomic program is to generate electricity so it can export more of its valuable oil and gas.

"Our policy here is to reach out and engage Iran," State Department spokesman Robert Wood told reporters. "This is just one way of doing that."

Beyond the party invitations, the United States this year agreed to participate in major powers' talks with Iran on the nuclear issue and has asked Iranian officials to join in talks on stabilizing Afghanistan. In addition, Obama has made a televised address directly to the Iranian people.

The United States severed diplomatic relations with Iran in 1980, after the 1979 Islamic revolution during which Iranian students occupied the U.S. Embassy in Tehran and ultimately held 52 U.S. citizens hostage for 444 days.

July Fourth marks the 1776 signing of the American Declaration of Independence from Britain and is typically celebrated with fireworks, barbecues and parades.

(Editing by Eric Beech)