Egypt and Iran presidents talk directly for first time

CAIRO (Reuters) - Egyptian President Hosni Mubarak and his Iranian counterpart Mahmoud Ahmadinejad have discussed regional issues by telephone, the first direct talks between the two leaders.

Discussions focused on the Palestinian and Lebanese issues, the MENA news agency said in a one-sentence report.

The Islamic Republic of Iran broke diplomatic ties with Egypt in 1979 after Egyptian President Anwar Sadat let in the deposed shah of Iran.

Mubarak, in power since 1981, has not had any public direct talks with Ahmadinejad, who was elected president in 2005.

"The phone call is a sign of improved relations between the two countries but should not be interpreted as if full diplomatic ties will be resumed next week or next month," said Mustafa El-Labbad, an Egyptian expert on Iran.

Both countries are represented diplomatically via interest sections rather than their own embassies and senior officials occasionally exchange visits.

Former Iranian nuclear negotiator Ali Larijani said during a visit to Cairo in December that Tehran was ready to cooperate with Cairo on all issues.

The two countries came close to restoring ties in 2003, but Iran failed to meet an Egyptian demand that it remove a commemorative mural in Tehran of Khaled al-Islambouli, the Islamist militant who assassinated Sadat in 1981, and rename a Tehran street named after the militant.

(Reporting by Alaa Shahine; editing by Keith Weir)