DATE=9/15/2000 TYPE=CORRESPONDENT REPORT TITLE=U-S/IRAN (L/S) NUMBER=2-266583 BYLINE=NICK SIMEONE DATELINE=NEW YORK CONTENT= INTRO: The United States and Iran have held their highest level encounter since diplomatic relations between both countries were broken 20 years ago. Correspondent Nick Simeone reports it was a meeting involving Secretary of State Madeleine Albright and Iran's Foreign Minister Kamal Kharrazi in New York, Friday. TEXT: The two officials were brought together by an eight nation meeting at the United Nations on Afghanistan. After more than an hour of talks, Secretary Albright called the session useful and encouraging. // ALBRIGHT ACT // We were sitting on opposite sides of the table so we didn't have a conversation but I was very interested in the similarity of our views on the problem of Afghanistan, the problems of fighting terrorism, narco-trafficking and the various issues there. // END ACT // Iranian Foreign Minister Kharrazi did not speak to reporters. This exchange though, marks yet another diplomatic encounter between the United States and Iran which have not had diplomatic relations since Iran's Islamic revolution two decades ago. // REST FOR LONG // Both countries seem to be slowly moving in the direction of increasing contacts. Last week, President Clinton was in the audience for an address here by Iranian President Mohammad Khatami, with U-S officials saying Washington is interested in hearing what Iran has to say. Iran has been advocating increasing people to people contacts with the United States but also wants to see its frozen assets returned before engaging in more direct relations. Iran remains on Washington's list of terrorist sponsoring nations. But in March, the United States announced it would allow imports of some Iranian goods in another sign that the United States wants to improve relations. (SIGNED) NEB/NJS/PT 15-Sep-2000 19:33 PM EDT (15-Sep-2000 2333 UTC) NNNN Source: Voice of America .