Iranian Foreign Ministry spokesman, Hamid Reza Asefi, said any claim about Iran's direct or indirect links to the September 11th terrorist attacks on the United States was "fabrication and fantasy."

He told the Iranian press agency, it is not strange that some people manage to slip through a country's borders illegally, what is funny is the fact that the country which has given them visas, residency permits, pilot training, and sabotage training is making such claims.

There were other, mixed reactions in Iran to President Bush's announcement that Washington is investigating whether Tehran played a role in the al-Qaida attacks on the United States. The head of the London-based Center for Arab and Iranian Studies, Ali Nouri Zadeh, says some politicians he spoke to in Iran saw in Mr. Bush's statements a call to dialogue.

"The response from Tehran was not that much bad, I think," he said. "When I read some newspapers today, some of them, they took this as a sign of an American readiness for diplomacy, while some hardliners, you know, they translate it as a sign of war and invasion or attack. But as a whole, I should say that the main stream politicians in Iran, they responded, you know, balanced, quite well and they thought the door is still open to them."

In his statement Monday, President Bush said that if Iran wanted better relations with Washington there are some things they must do. He said those things included ending what Washington claims is Iran's nuclear-weapons program and its support for terrorism.

Mr. Asefi, the Iranian foreign ministry spokesman, referring to Mr. Bush's statement, said the time is over for carrot and stick policy. He said the Iranian nation has proved it accepts relations with other countries based on mutual respect.

Mr. Asefi said Iran had clearly stated its opposition to al-Qaida, and called the inference it was involved in 9/11 part of a campaign by Washington ahead of U.S. presidential elections.

Iran says it has arrested and deported about 500 suspected al-Qaida members since the September 11th attacks, but also acknowledges holding on to some. Mr. Zadeh, of the Arab-Iranian Studies Center, says those alleged al-Qaida members still in Iranian custody are senior in the terrorist network's ranks.

"There were people from al-Qaida coming to Iran prior to 9/11 and after 9/11, almost 350 of them," he said. "They went to Iran and some were not important people so they were interrogated and later on they were extradited to, I mean, they were give to Saudis, to Jordanians, to Egyptians, but the main, the big fishes, they are still in Iran."

An Iran expert at Cairo University's political science department, Amal Hamada, says she suspects Iran is holding on to some of the wanted al-Qaida members to use in future bargaining with the United States, or other countries.

"Sometimes they say we do have, and sometimes they say we do not have any member of al-Qaida in our presence, but if they have them, I think they are using them as a card to play with, to compromise with the international community in general, or with a specific state in particular, if they need it, they are using them as cards," said Ms. Hamada.