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An Iranian military plane crashed in southeastern Iran yesterday, killing 302 soldiers and aircrew, the official state news agency IRNA reported.

Iran rejected U.S. suggestions that Tehran was interfering in Iraq and said on Thursday it was not seeking to promote the political role of fellow Shi'ite Muslims in its western neighbour.

A group of Iranian students staged a sit-in and reformist deputies spoke out in parliament yesterday to protest against a wave of arrests of dissidents two months ahead of presidential elections.

Some 300 Iranian students gathered in a central Tehran campus yesterday to protest against the publication of a cartoon depicting universities as havens for bandits, cut-throats and drug addicts.

Iran's reformist parliament passed a bill yesterday giving crime suspects access to a lawyer during all phases of investigation and interrogation.

Reformist members of Iran's parliament said yesterday two dissident leaders were being tortured in prison and that one did not even recognise visiting members of his family.

Iranian President Mohammed Khatami has declared war on goods smuggling which is costing the country billion of dollars each year, the official IRNA news agency reported yesterday.

Iran's powerful intelligence chief said the 1998 killings of dissidents by rogue agents were "insignificant mistakes" that had been forgiven by the public.

The change of president in Iran will not halt the process of reforms initiated eight years ago in the Islamic state, Nobel Peace Prize laureate Shirin Ebadi said.

Akbar Hashemi Rafsanjani, front-runner in Friday's presidential election, has said Iran must pursue confidence-building measures to reassure the West it has no military nuclear ambitions.

More than $1 billion-worth of gasoline and other oil products is smuggled out of Iran each year, the government spokesman said yesterday, criticising parliament for maintaining heavy fuel subsidies.

Iran's leading academic dissident Hashem Aghajari was freed on bail yesterday after two years in jail facing the death penalty for telling Iranians not to follow their clerical leaders like "monkeys".