The situation was triggered by the mass disqualification of reformist candidates for the 20 February polls.

  

"The limit, for us, is tomorrow afternoon," government spokesman Abd Allah Ramezanzadeh told reporters on Wednesday after a cabinet meeting.

 

But he did not specify what steps the government would take if its demands were not satisfied.

  

Iran's supreme leader Ayat Allah Ali Khamenei held crisis talks on Tuesday with reformists President Muhammad Khatami and parliament speaker Mahdi Karoubi.

 

Hopes high

  

"After the meeting with the guide, we hope for acceptable results by tomorrow that will allow the organisation of the elections," Ramezanzadeh said, without elaborating.

 

Earlier, there were indications the crisis was close to a resolution, acceptable to both the feuding conservatives and reformists.

 

Khatami's government angered
by Guardian Council decision

Some reformist candidates were being considered for reinstatement after being barred by the hardline Guardian Council from standing in this month's parliamentary election.

 

"It seems that they are going to qualify some of the rejected candidates," one of the legislators said. "They are trying to reach a compromise," said another.

   

After the meeting, the reformist MPs also decided to call off their four-week sit-in at Parliament, our correspondent reported.

 

Climax

   

With the dispute over the 20 February election appearing to be nearing a climax, lawmakers had said on Tuesday Khamenei, who has a final say on all state matters, had rejected government calls for the vote to be postponed.

 

Khatami's reformist government was outraged by the move by the Guardian Council - an unelected oversight body dominated by religious hardliners - to bar more than 2000 aspiring candidates from standing in the election. They were accused of lack of respect for Islam and the constitution.

   

Most of those barred are reformist allies of Khatami, including more than 80 current members of the 290-seat parliament.

 

The move plunged the Islamic republic, riven by hostility between reformists and conservatives, into probably its worst crisis since the revolution that overthrew the Shah 25 years ago.

  

About 125 reformist MPs handed in their resignations, threatening to deprive the Majlis of a quorum, along with all of the country's provincial governors. Besides, officials of the pro-reform interior ministry refused to organise polls that were not free, fair and competitive.