DATE=6/22/2000 TYPE=BACKGROUND REPORT TITLE=IRAN / FOREIGN RELATIONS NUMBER=5-46550 BYLINE=LAURIE KASSMAN DATELINE=CAIRO CONTENT= VOICED AT= INTRO: Iran this week gained entry into a group of developing nations -- known as the G-15 -- bolstering its links to other markets. Iranian President Mohammad Khatami is in China to forge closer ties with an ally, and he travels to Berlin next month in an effort to improve ties with Germany. V-O-A Correspondent Laurie Kassman in Cairo takes a closer look at Iran's push to solidify its foothold in the world's political arena. TEXT: Egyptian President Hosni Mubarak phoned Iran's president after the Cairo summit of the group of developing nations voted to expand and add Iran to its membership. That brief phone conversation marked the first direct high-level contact between the two nations in 21 years. Iran's Islamic leadership severed relations in 1979 after Egypt signed a peace treaty with Israel. Relations were further strained when Egypt gave final refuge to the Shah of Iran after he was ousted in the Islamic Revolution. Professor Bahman Baktiari of the American University in Cairo says the G-15's gesture toward Iran has provided a diplomatic opening for efforts to normalize bilateral relations. A steady increase in trade and investment between the two countries has also helped. /// BAKTIARI ACT ONE /// Iran's admission in the G-15 probably is part of this whole interdependence in economic relations between Egypt and Iran that has been moving along. And, they probably felt more comfortable in allowing Iran through this window rather than any kind of political dialogue. /// END ACT // The prospect of better ties with Egypt follows President Mohamad Khatami's moves to repair relations with other Arab neighbors. Ali Reza Nourizadeh of the London-based Center for Iran and Arab Studies also points out that Egypt's peace with Israel provokes a less angry response among a new generation of Iranian political activists. /// NOURIZADEH ACT ONE /// The idea of peace is getting accepted in Iran one way or the other. And, Khatami always insisted that Iran accept the peace although they have their own reservations toward the Oslo treaty. /// END ACT /// President Khatami's moves to end Iran's image as a pariah state in the world arena coincides with his reform efforts at home. Those efforts have met with opposition from conservative factions still opposed to liberalizing Iran's social and political policies. But analysts like Mr. Nourizadeh say Mr. Khatami's position has been strengthened by the reformist victory in recent parliamentary elections. /// NOURIZADEH ACT TWO /// In the past, especially when Iran decided to normalize relations with Britain, with France, and even when Khatami was in France, there was criticism in the parliament. But now Khatami can pursue his policy without being worried that at home there would be voices against his policy /// END ACT /// President Khatami's visit next month to Germany also aims to solidify relations with European Union trade partners. Relations had soured after Germany accused the Islamic leadership of organizing terrorist attacks against Iranian dissidents on German soil. Analysts also see better Iranian ties with Germany as another step along the delicate path toward normalizing relations with the United States too. But Professor Baktiari in Cairo says that will take much longer to accomplish. /// BAKTIARI ACT TWO /// It is a very sensitive issue inside Iran and the conservatives will not back down. /// END ACT /// Mr. Baktiari does not see a diplomatic breakthrough with the United States coming any time soon but does expect that increasing unofficial contacts with Washington will help smooth the way. (Signed) NEB/LMK/JWH/KL 23-Jun-2000 07:29 AM EDT (23-Jun-2000 1129 UTC) NNNN Source: Voice of America .