TEHRAN, Iran (AP) – The leading reformist challenger to Mahmoud Ahmadinejad in the Iranian presidential race said Friday his country’s ties with the U.S. could improve if Washington were to halt economic sanctions against Iran.

A suspension of the U.S. sanctions imposed since 1995 would be a “positive sign” and inspire optimism, Mir Hossein Mousavi said at a press conference in Tehran.

Mousavi has campaigned for the June 12 vote on the promise of a change in Iran’s foreign policy under hardline Ahmadinejad, who he says only isolated Iran further from the international community.

Mousavi’s remarks came as the candidates in the Iranian election are staking out their positions on the Obama administration’s offer of a dialogue with Iran.

Ahmadinejad made a bold gesture on Monday, proposing a face-to-face debate with Obama at the United Nations if he is re-elected next month. But he balanced the proposal with a sharp rebuke to Washington, saying Iran would never abandon its advances in uranium enrichment in exchange for offers of easing sanctions or other economic incentives.

Iran state television on Friday broadcast a 30-minute campaign film produced by Ahmadinejad’s office that showed him inaugurating various nuclear facilities in the country.

It also emphasized his commitment to helping the poor with images of him visiting remote areas of the country.

Conservative candidate Mohsen Rezaei this week offered a step-by-step approach to end the diplomatic estrangement with Washington that has been in effect since shortly after the 1979 Islamic Revolution.

A former head of Iran’s powerful Revolutionary Guard, Rezaei said he was open to talks with the West on Iran’s nuclear program – the only candidate to do so. However, Rezaei is not considered a serious contender, although he could draw votes from Ahmadinejad in the conservative camp and thus aid the reformists.

Mousavi said Friday that Iran-U.S. relations are complicated and need time to be repaired.

He defended the Iranian nuclear program, saying Tehran will remain committed to international nuclear conventions while pursuing its right to nuclear technology, and expects the international community to respect that right.

But he added Iran needs to “build trust” that the program, which Iran claims is meant for energy purposes only, would not be diverted into nuclear arms making.

The issue of U.S. economic sanctions was underlined recently when Defense Secretary Robert Gates said tighter sanctions may be more effective than military threats in the standoff over Iran’s nuclear program.

The administration has encouraged Congress to pass legislation that would empower the president to put in place new economic and financial penalties in addition to U.S. sanctions that already target several state-run Iranian banks and businesses, elements of Iran’s defense ministry and Revolutionary Guards, as well as foreign companies that do business with Iran.

The U.S. economic and financial penalties are separate from three rounds of U.N. sanctions imposed by the Security Council over Iran’s controversial nuclear program.

Mousavi said Iran has been hard hit by the U.S. measures – an unusually frank acknowledgment in Iran.

“For purchasing passenger planes, wherever we go, the U.S. thwarts the deal,” Mousavi said. But if Washington offered “more positive signals,” Mousavi said he would be “more optimistic about the future of the relations” with Washington.

A second reformist candidate, Mahdi Karroubi, also has vowed to improve ties with the U.S. and meet Obama if that would help Iran’s national interests.

AP-ES-05-29-09 1447EDT

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