Iran's Khatami says out of presidential race

Iran's former president Mohammad Khatami confirmed he was pulling out of the June presidential election to avoid splitting the votes of the reformist front, in a statement published on Tuesday.

Khatami said he would back moderate candidate Mirhossein Mousavi.

"I announce my withdrawal from candidacy ... to preserve unity among the reformist front and to avoid a split of votes," Khatami said, confirming comments to Reuters by his allies on Monday.

Analysts say the move may boost hardline President Mahmoud Ahmadinejad's chances of re-election. Khatami was considered his main pro-reform challenger.

Khatami, who served from 1997 to 2005, oversaw a thaw in Iran's ties with the West. Those relations have since sharply deteriorated under Ahmadinejad, who is expected to seek a second four-year term in the June 12 vote.

Mousavi, prime minister during the 1980-88 Iran-Iraq war, and reformer and former parliament speaker Mehdi Karoubi, have both announced they will run. Ahmadinejad is so far the only leading conservative to let it be known that he will stand.

"I believe ... Mousavi has the necessary competence to change the current situation," said Khatami.

"Despite differences in our opinions and actions, the important thing is that (Mousavi) ... seriously defends and will defend the fundamental rights and freedoms (of people) and ... the country's international reputation."

Some political analysts say many Iranians do not regard Mousavi as a reformist.

"Those who wanted to vote for a reformist candidate will not vote for Mousavi," Saeed Laylaz, editor of the Sarmayeh business daily, told Reuters.

"Khatami's decision will boost Ahmadinejad who has his loyal voters."

The outcome of the June election could influence Iran's approach in its standoff with the West over its nuclear programme, even though Supreme Leader Ayatollah Ali Khamenei has the final say on such issues.

Khamenei has publicly praised Ahmadinejad and analysts say the fate of the race could depend on whether Ahmadinejad retains the support of Khamenei, whose words could influence millions of loyalists.

Ahmadinejad's critics say his fiery speeches against the West have isolated the Islamic state, which Washington and its European allies fear is seeking nuclear weapons covertly. Tehran denies the charge.

They also accuse him of poor economic policies blamed for fuelling inflation and squandering windfall oil earnings.