U.S. meets Iranian official to discuss "terror" funds

WASHINGTON (Reuters) - In a departure from usual practice, a U.S. Treasury official met Iranian representatives in Paris last month as part of a multinational gathering to discuss "terror financing," said a U.S. official on Friday.

Senior Treasury Department official Daniel Glaser was given permission by the Bush administration to attend the meeting, as required by U.S. policy because contacts with Iran are usually forbidden, said the senior official, who spoke on condition he not be named.

Glaser, who is the Treasury Department's Deputy Assistant Secretary for Terrorist Financing and Financial Crimes, was attending a Financial Action Task Force meeting to discuss money laundering and how to crack down on the financing of terrorism.

"To my knowledge, they did not have one-on-one meetings (with the Iranians)," said the senior U.S. official. "It was something agreed within the U.S. government that Glaser could attend," he added.

Other nations also attended the Paris meeting, which was co-hosted by Italy.

The United States, which is at loggerheads with Tehran over its nuclear program and other issues, does not have diplomatic ties with Iran and such meetings are rare.

Last week, U.S. Secretary of State Condoleezza Rice chastised her ambassador to the United Nations, Zalmay Khalilzad, for joining a panel discussion with Iran's foreign minister in Davos, Switzerland, last month.

One exception has been discussions with Iran over Iraq, where Washington accuses Tehran of stoking up violence. The U.S. ambassador to Iraq, Ryan Crocker, has held several rounds of discussions in recent months with his Iranian counterpart to discuss Iraq.

The United States is pushing for a third round of U.N. Security Council sanctions against Iran over its nuclear program, which the West believes is aimed at building an atomic bomb and Tehran says is for peaceful power generation.

(Reporting by Sue Pleming, editing by Jackie Frank)