U.S. clears U.S.-based NGO to set up shop in Iran

By JoAnne Allen

WASHINGTON (Reuters) - The United States has granted permission for a U.S. non-govermental organization to open an office in Iran, the U.S. State Department said on Thursday, but said Washington's Tehran policy remained unchanged.

In a rare move, the U.S. Treasury Department's Office of Foreign Asset Control (OFAC) granted a license to the Princeton, New Jersey-based American-Iranian Council (AIC) to operate in Iran.

A U.S. official said the decision to allow the NGO to go to Iran was "carefully reviewed" within the U.S. government.

"We want to encourage this kind of cultural exchange and mutual understanding" between the U.S. and Iranian people "while trying to isolate the regime," said the official, speaking on condition of anonymity.

The United States is at loggerheads with Tehran on a range of issues, including Iran's nuclear program, which the West suspects is aimed at building an atomic bomb. Tehran argues it is for peaceful power purposes.

The two nations have been antagonists since the Islamic Revolution in Iran in 1979 and the seizure of the U.S. embassy in Tehran. Switzerland handles U.S. interests in Iran as Washington has no diplomatic ties with Tehran.

The New York Times reported this summer that Secretary of State Condoleezza Rice was seeking the approval of President George W. Bush to establish a U.S. Interests Section in the Iranian capital.

Proponents argue this would give American diplomats an opportunity to observe the country's complex politics firsthand.

"This AIC office is a first step on the path to the institutionalization of a normalized relationship," executive director Brent Lollis said in a statement. "Of special importance is our role in helping to discourage inaccurate portrayals of either nation's government, culture or population."

In the past year Iran charged three visiting Iranian-American scholars with espionage and detained another.

Iran has accused the United States of using intellectuals and others inside the country to undermine the Islamic Republic through what it calls "velvet revolution," a reference to the nonviolent overthrow of Communism in Czechoslovakia in 1989.

The United States has dismissed the accusation and denied that the scholars were spies.

(Editing by Eric Walsh)