U.S. and Iran meet face-to-face for the first time in decades

On the other, the green, white and red flag of Iran.

Their presence in the same room yesterday signalled a dramatic diplomatic sea change.

For representatives of the Great Satan - as Tehran calls the United States - and a member of what President Bush has dubbed the Axis of Evil came face to face in their first official talks in nearly three decades.

Both sides made positive noises after the meeting, held at the official Baghdad residence of Iraqi prime minister Nuri al-Maliki.

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But both sides also used the talks to blame the other for the spiralling chaos in Iraq.

The US delegates lectured Tehran about arming militants in Iraq. Iran in turn offered to train and equip the Iraqi army and police - a thinly-veiled message that US and Britain have failed at the job.

Iran's nuclear ambitions, one of the great crises facing the world, remained off the agenda for fear of enflaming tensions further.

But although there was no sign of substantial progress, both sides hailed the groundbreaking talks as "positive".

Iran and the US are the main power-brokers in Iraq and co-operation between them could pull the chaotic country back from civil war.

Ryan Crocker, the US ambassador to Iraq, described as "positive" and "businesslike" his four hours of talks with his Iranian counterpart, Hassan Kazemi-Qomi. The Iranian envoy agreed the meeting was a "positive step", adding the two sides "agreed to support and strengthen the Iraqi government".

Iran also signalled its desire to ease friction further by proposing to set up three-way talks between the US, Iran and Iraq.

Mr Crocker said he would take the proposal back to Washington. Mr Kazemi- Qomi said the two sides would meet again in a month - although there was no word on this from the Americans.

The meeting marked a shift in the US policy of shunning almost all contact with Iranian officials since Washington severed formal diplomatic ties with Tehran in 1980, 14 months after Iran's Islamic Revolution and five months after Americans were seized in a hostage crisis at the US embassy in Tehran.

What brought them together yesterday-was their shared concern about the bloodshed in Iraq.

The US has lost nearly 3,500 troops there since it led the invasion of Iraq in 2003. And the Iranian regime has no desire to see a failed and destabilising state on its western border.

Mr Crocker said Mr Kazemi-Qomi agreed that "a secure, stable, democratic Iraq at peace with its neighbours' was in the interests of both Iran and the US".

But he repeated American allegations that Iran sends arms and ammunition to militant groups attacking US and British troops in Iraq.

Tehran denies meddling in Iraq and says the presence of American and British forces there is fuelling sectarian bloodshed between Sunni and Shia Iraqis.

Washington has made clear it is only interested in future talks with Iran if Tehran proves on the ground it is committed to help stabilise Iraq.

"The talks proceeded positively. What we need to see is Iranian action on the ground," said Mr Crocker, who speaks Farsi and Arabic.

"Right now their actions are running at crossed purposes to their stated policy."

For domestic consumption in Iran, where many hardliners fiercely oppose any dealings with America, president Mahmoud Ahmadinejad said Washington had been courting Tehran.

He said the US had made 40 requests for talks on Iraq.

Shortly after the talks broke up a truck bomb exploded near an important Sunni Muslim mosque in central Baghdad, killing 24 and wounding 68 others.