Updated

President Mohammad Khatami (search) said in a speech he would resign if people want him to, amid growing public dissatisfaction over his failure to meet promises of democratic reform, a newspaper reported Saturday.

It was the first time Khatami has publicly offered to resign. Iran's formerly popular president has come under increasing pressure in recent months to stand firm against unelected hard-line clerics and fulfill election promises of freedoms and democratic change in Iran.

"We are not masters of people but servants of this nation. If this nation says we don't want you, we will go," Khatami was quoted as saying by the government-owned daily, Iran.

Khatami made the comments in a speech in Karaj, west of the capital Tehran, on Thursday. State-run television and radio censored the part that discussed a possible resignation.

Khatami's hopes for a compromise with hard-liners have been thwarted in recent weeks after the Guardian Council (search), which vets all parliamentary legislation, rejected two key reform bills presented by the president.

Those bills would have given Khatami greater power to stop constitutional violations by his hard-line opponents and bar the Guardian Council from arbitrarily disqualifying candidates in legislative and presidential elections.

"We have to approve the qualifications of various candidates. If the people feel the program they vote for meets obstacles, then they will not participate in the elections," Iran quoted Khatami as saying.

Vice president Mohammad Ali Abtahi said it appeared the bills had little chance of getting through the council.

"I've lost my hope that the bills will be approved. Although we continue to talk to the Guardian Council, hopes are slim," Abtahi was quoted as saying by the English-language Iran Daily on Thursday.

Khatami also has come under attack from liberals, including prominent philosopher Aldolkarim Soroush, who accused him of failing to push for reforms since he was elected in May 1997.

"The peaceful and democratic uprising of the Iranian people against religious dictatorship in May 1997 was a sweet experience," Soroush said in a letter addressed to Khatami and whose authenticity was confirmed by his relatives.

"But your failure to keep the vote and your wasting of opportunities put an end to it and disappointed the nation. Now, failures have turned into unrest," the letter stated.

Soroush was referring to student-led protests last month against the ruling Islamic establishment and the arrests of student leaders and writers.

On Wednesday, hundreds of riot police and plainclothes agents dispersed more than 2,000 people who had gathered in front of Tehran University on the anniversary of a 1999 police raid on a student dormitory that killed one person and injured at least 20.

Khatami has repeated during recent years that he was powerless to stop hard-liners from violating the constitution and acting against voted reforms.

Among those violations, he has cited the closure of more than 90 pro-democracy publications in the past three years, the arrest of dozens of prominent intellectuals and writers and closed trials without jury.

Khatami has said he was responsible under the constitution to stop such violations, but the hard-line judiciary has ignored his warnings.