DUBAI, Aug 7 (Reuters) - The leader of an Iranian Sunni Muslim rebel group said on Thursday his faction was willing to talk to the government of the Shi'ite-dominated country and turn itself into a political party.

Abdolmalek Rigi told Al Arabiya television that Jundollah (God's Soldiers), which Tehran has accused of having a link to al Qaeda, was ready to open dialogue with the Iranian government "in the presence of an international institution."

"If we were allowed to practice our rights in full, we are willing to drop weapons and enter political life," he said in an interview with the Saudi-owned station.

Rigi also said Jundollah, which has killed at least four of 16 Iranian policemen it had abducted, was thinking of expanding its operations to defend the rights of Sunni Muslims in Iran, even into Tehran.

The rebels operate mostly in a volatile region near the border with Pakistan. Sistan-Baluchestan, a region near Pakistan, is home to Iran's mostly Sunni Muslim ethnic Baluchis.

Iran, which has often accused the United States and Britain of trying to destabilise the country by supporting rebels, has previously linked Jundollah to al Qaeda and said Rigi was a leader of al Qaeda's network in Iran.

In 2007, Jundollah claimed responsibility for an attack on a bus carrying Iranian Revolutionary Guards that killed 11 people. (Reporting by Inal Ersan; editing by Robert Hart)

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