Khatami presses U.S. on sanctions
Khatami told a news conference three days before his country's presidential election that he was ready to talk.
But he added: "I hope in future we will witness changes in the attitude of the government in the United States.
"As long as the policy-makers of the United States are under the influence of certain lobbies and continue to overlook the interests of their own nation and companies and economy, it is very clear that they have to change."
Khatami was not specific but appeared to be referring to supporters of Israel pressing for a renewal of sanctions on firms that invest in Iran's oil and gas sector. The current sanctions expire in August.
The U.S. severed diplomatic relations with Iran in 1980 after militants stormed the U.S. embassy and held 52 Americans hostage for 444 days.
Shortly after his 1997 victory, Khatami called for the breakdown of the "wall of mistrust" between the two nations and cultural and sporting exchanges were increased.
But there was no move to restore normal relations and in April President Bush said he had no intention of revoking 1996 sanctions against Iran and Libya.
The theme of Khatami's pre-election news conference -- he is expected to win comfortably on Friday -- was the rejection of extremism and violence and "moderation, moderation, moderation."
Khatami said his greatest achievement so far had been to create an atmosphere in which every government institution was accountable and open to criticism.
Asked about frustrations he had encountered in trying to reform and modernize the Islamic republic, he replied he was happy with the progress so far, but "not 100 percent happy."
He said change has to be based on existing realities and the existing political situation.
CNN's Walter Rodgers said Khatami's reforms centre on improving the Iranian economy, in particular, the growing problem of unemployment, with one million new job seekers coming onto the market each year.
But he said Khatami was careful not to talk evil of his nine election opponents.
"He was scrupulous not to criticise the more conservative members of the Islamic clergy who are reportedly trying to frustrate his reforms.", Rodgers said.
The reformist daily newspaper Tosea meanwhile reported that Khatami said the case of British author Salman Rushdie should now be closed.
Rushdie was condemned to death by Iran's late revolutionary leader, Ayatollah Khomeini, in 1989 and hardliners continue to issue death threats.
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