Washington gives $3m to 'boost democracy in Iran'

In a striking departure, the US has earmarked $3m (£1.6m) to promote democracy in Iran - a small sum but one that has been denounced by Tehran as impermissible meddling by Washington in its affairs.

In a striking departure, the US has earmarked $3m (£1.6m) to promote democracy in Iran - a small sum but one that has been denounced by Tehran as impermissible meddling by Washington in its affairs.

The money has been appropriated by Congress, and the State Department announced last week that it was inviting educational and humanitarian groups, as well as NGOs and individuals inside Iran, to submit proposals "to support the advancement of democracy and human rights".

Iran and the US have had no diplomatic relations since 1979, when Iranian students took over the US embassy in Tehran. The announcement, however, is a natural follow-up to last year's Greater Middle East initiative that seeks to further free speech and democracy across the region, and President Bush's promise to Iranians in his second inaugural address that "as you stand for your liberty, America stands with you".

Nevertheless, it breaks with a US undertaking, given as part of the 1981 Algiers accord that secured the release of 52 American hostages, that Washington would not intervene, directly or indirectly, in Iran's internal affairs.

To an extent, that pledge has already been circumvented, by the $15m the US spends on Persian language radio and television broadcasts into Iran. But the $3m would go further, by financing efforts mounted inside the country - and, as such, was angrily denounced by Iran's envoy to the United Nations.

The plan was "a clear violation" of the Algiers agreement," Mohammad Javad Zarif said, hinting his government might take the matter to an international court. More likely, perhaps, the clerical regime in Tehran will simply bar Iranians from receiving money.

The offer from Washington comes at a delicate moment in Iranian politics, barely two months before the election on 17 June of a new president to replace Mohammed Khatami, who has disappointed reformers by failing to stand up to religious conservatives. The plan will exacerbate tensions between Washington and Tehran, over the latter's support for militant anti-Israel groups such as Hizbollah.