The United States is openly attempting to promote democracy in Iran for the first time since the 1979 Islamic revolution (search), budgeting $3 million for groups there that are willing to work toward that goal.
State Department spokesman Richard Boucher said non-governmental educational and other groups inside Iran (search) are eligible to compete for the funds. Humanitarian groups also may compete, he said.
Iran's ambassador to the United Nations, Mohammad Javad Zarif, called the plan "a clear violation" of a 1981 U.S-Iranian agreement, according to USA Today, which first reported the story.
That agreement, signed in Algiers, freed the 52 U.S. Embassy employees who were held hostage in Tehran for 444 days.
Boucher denied that the funding violates of the agreement.
Under the accord, the United States pledged "not to intervene directly or indirectly, politically or militarily in Iran's internal affairs."
It is not clear whether approval of the funding was linked to Iran's presidential election in June. Iranian President Mohammad Khatami (search) will step down after two terms in office.
The United States does not consider Iran's elections a fair test of public sentiment because only devout Islamists are allowed to run for office. It also has maintained consistently that U.S. pro-democracy activities abroad are nonpartisan and do not constitute intervention.
These activities normally include voter education and workshops on electoral rights.
Some governments have contended that such activities have the effect of supporting the opposition. These include Venezuela and the government that ruled Kyrgyzstan until last month when it was deposed.
Hostility between the United States and Iran has not abated since the hostage crisis of 1979. U.S. suspicion that Iran is developing nuclear weapons is just one of many sources of friction.
Aside from Cuba, Iran is the only country with which the United States does not maintain a political dialogue.
Iran has not been a U.S. aid recipient, although the Islamic government did accept U.S. assistance following a major earthquake in 2002.