ARAB-US RELATIONS - Aug 6 - US And Iran In 'Frank And Serious' Talks.

US and Iranian officials hold talks in Baghdad as a security sub-committee set up two weeks ago met for the first time. The talks, which lasted several hours, and were described by both sides as "frank and serious", dealt with security issues in Iraq, a US embassy official said. Hossein Amir-Abdollahian, who led the Iranian delegation, said the sides had discussed "the way the wrong policies of the [US] occupiers in Iraq have led to the strengthening of terrorism". In Tehran, regime insiders told the Financial Times that Iran's leadership believed some progress was possible. One official said Iran's calculation in talking to Washington was that the US was close to accepting the reality of a Shi'ite-led government in Iraq, even though that was resisted by the Sunni Arab establishment, including Saudi Arabia. "This has been the logic since 2003, even if the Americans haven't transferred powers to the government and haven't built up the Iraqi army", one official said. "But progress [in talks with Iran] is slow, because of the opposition to any agreement with Iran from the Arabs and especially the Saudis, who do not want a Shi'ite-led government". He added that the talks might focus on practical issues: Maybe the US is asking Iran not to supply a certain kind of explosive [armour-piercing] to Shi'ite insurgents". Tehran in turn is keen that the US take steps to curb the growth of Al-Qaeda and other extreme Sunni groups, which have flourished in Iraq since the 2003 invasion. Iranian leaders are worried about the spread of militant Wahabbi Islam, which is promoted by some Saudi theologians who show oppose Shi'ite Muslims. The US and Iran, which have had limited contacts since the 1979 Iranian revolution, agreed to set up the committee last month during a meeting of their respective ambassadors in an effort to stabilise Iraq. The formation of the committee was seen as a key step to enabling dialogue between the two countries and officials said the talks would continue at a future date. The US accuses Iran of providing support to Shi'ite militia networks in Iraq, including a deadly variant of roadside bomb. Iran denies the allegations. Jalal Talabani, the Iraqi president, hosted the talks, which included Marcie Ries, the US embassy's counsellor for political and military affairs, and Abdollahian. Hours before the meetings, a truck bomb exploded in a residential area in the northern Iraqi city of Tal Afar, killing 30 people. Meanwhile, five government ministers loyal to the Iraqi National List of the former PM Iyad Allawi, began a boycott of the Iraqi cabinet. Members of parliament from the party, which classes itself as non-sectarian, said the ministers were carrying out the boycott because Nouri al-Maliki, Iraq's Shi'ite PM, had failed to meet the party's demands on political reform. The move is another blow to Maliki's weak administration and comes after last week's resignation of six ministers who are members of the main Sunni Arab political coalition.