Tehran and Algiers have agreed to re-open diplomatic ties and Iranian officials have expressed hope that relations with Egypt can also be normalised.

The Iran-Algeria agreement was reached during talks in New York in early September between Iranian President Khatami and Algerian President Bouteflika, who were there to attend the Millennium Summit. Algeria broke ties with Iran in the mid-1990s, accusing the Islamic republic of supporting Islamist opponents of the Algerian government.

The Foreign Affairs Ministry in Tehran said on 11 September that the agreement ‘could break the ground for enhancement of ties with other North African states’. The statement is believed to refer to Tehran’s efforts to improve ties with Cairo.

Iran broke ties with Egypt in 1979, but has made efforts to restore them in recent years.

In August, Khatami had a telephone conversation with Egyptian President Mubarak.

However, the Egyptians are believed to be insisting that a Tehran street, called after Khalid Islambouli, one of the assassins of Egyptian President Sadat in 1981, first be renamed.