By Arshad Mohammed

WASHINGTON, March 15 (Reuters) - Outgoing U.S. Ambassador to Iraq Zalmay Khalilzad on Thursday advocated a combination of "pressure and engagement" to persuade countries like Iran and Syria to help quell the violence in Iraq.

Khalilzad's comments suggested the U.S. State Department, at least, is intent on continuing a conversation about Iraq with Iran, which it accuses of training and arming Iraqi militants who have attacked U.S. forces.

There has been sharp debate in the Bush administration over whether to engage Iran, with some officials reluctant to deal given their long history of enmity as well as U.S. accusations that Iran sponsors terrorism and is pursuing nuclear weapons.

The United States cut diplomatic ties in 1980 after Iranian students occupied the American Embassy in Tehran. Fifty-two Americans were ultimately held hostage for 444 days.

The United States has accused Iranian elements of providing sophisticated roadside bombs used against the roughly 140,000 U.S. forces in Iraq. It accuses Syria of allowing militants to enter Iraq and harboring Baathists who support the insurgency.

Both countries deny fomenting the violence in Iraq.

Khalilzad had direct contacts with Iranian and Syrian officials in Baghdad on Saturday at a conference designed to win greater support from Iraq's neighbors to help reduce the violence that plagues the country four years after U.S. forces invaded to topple former dictator Saddam Hussein.

At a hearing on his nomination as U.S. ambassador to the United Nations, Khalilzad said "a combination of pressure with regard to issues of concern with an openness to engage with the intent to change behavior ... is the right mix."

"Those two elements of pressure and engagement don't have to be equal in weight. They can vary depending on the circumstances," he added. "In the toolbox of diplomacy, we need to have as many tools as we can ... Engagement is one tool."

For months the United States has refused to have bilateral talks with Iran. It has been open to broad talks with Iran only if Tehran first suspends its uranium enrichment program, which can produce fuel for power plants or nuclear weapons.

Iran says its nuclear program is for power generation.

'GOOD FIRST' STEP

While the United States has diplomatic relations with Syria, it had avoided high-level contact for two years until this week's visit by an assistant secretary of state to Damascus to discuss how to cope with the estimated 2 million Iraqi refugees that have fled to neighboring countries.

U.S., Syrian and Iranian officials may have follow-on contacts in working groups to be set up as a result of the conference and the ministers from the neighboring countries are expected to get together, possibly as early as April.

How seriously the Bush administration will pursue future contacts remains unclear.

Khalilzad said Syria had expressed an interest in bilateral talks with the United States but he declined comment on whether the Bush administration would follow up.

He described his talks with Iranian officials as "a good first" step but said he will be watching events on the ground, including whether Iran stops providing weapons known as "explosively formed penetrators" to Iraqi militants.

"Will they stop supplying EFPs to Iraqis, extremists who use those against our forces? Will they stop supporting militias, training them, providing them with resources? Will they encourage the groups that they have influence over toward reconciliation?" he said. "What we will be looking for is ... the impact on the ground.

AlertNet news is provided by