Former Iranian President Mohammed Khatami on Friday condemned the September 11 attacks against the United States as an atrocity and said suicide bombers did Islam an injustice and would not go to heaven.

Three days before the fifth anniversary of the attacks that killed nearly 3,000 people, the Shi'ite cleric urged Muslims to work against "Islamaphobia," which he said had grown since the attacks.

Two crimes were committed on September 11 - first, civilians were killed and second, it was done in the name of Islam, Khatami told the Council on American-Islamic Relations, a human rights group.

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"We Muslims should condemn these atrocities even more strongly," he said.

"[A] terrorist, which means killing of civilians, is a human being that lacks morality ... (and) will not go to heaven" and those who do it in the name of Islam "are lying," he said.

Nearing the end of a five-city U.S. visit in which he largely stressed themes of dialogue and co-existence, Khatami continued to stir controversy.

A U.S.-based pro-Israel group, the Israel Project, complained in a press release that the president from 1997 to 2005 was "working to white-wash Iran's record of nuclear developments, support for terror and human rights violations."

In a Time magazine interview, Khatami regretted the 1979 U.S. hostage crisis and acknowledged the Holocaust of 6 million Jews as "historical fact."

"I believe the Holocaust is the crime of Nazism. But it is possible that the Holocaust, which is an absolute fact, a historical fact, would be misused. The Holocaust should not be, in any way, an excuse for the suppression of Palestinian rights," he said.

Considered a reformist during his presidency, Khatami was largely stymied by powerful conservative clerics. His hard-line successor, Mahmoud Ahmadinejad, has reinstated conservative domestic policies, while threatening to destroy Israel and denying the Holocaust.

As for the 1979 hostage crisis, when student radicals seized the U.S. Embassy in Tehran and held 52 Americans for 444 days, Khatami said, "I regret the hostage crisis ... and I sympathize with the hostages and their families for their loss and their hurt but this was (also) a revolutionary reaction to half a century of the U.S. taking Iran hostage."

Khatami is the most prominent Iranian to visit the United States, outside of the United Nations' New York headquarters, in decades. Ahmadinejad spoke at the UN General Assembly last year and has requested a visa to do so again this year.

Khatami's U.S. visit has been controversial in light of U.S. accusations Iran is pursuing nuclear weapons, sponsors terrorism and arms Hezbollah militants in Lebanon.

At a news conference on Thursday, Khatami warned the United States against threatening Iran. While urging a dialogue among civilizations, he said there was too much mistrust for Washington and Tehran to talk now.

State Department spokesman Sean McCormack told reporters, "The place to start when talking about the discourse of threats is with his own president, President Ahmadinejad, in threatening to wipe the State of Israel off the map."

Khatami told Time he got "really upset" with President George W. Bush's designation of Iran as part of an "axis of evil" and he praised America as a "great and big country."

Russia to stop work on Iran reactor if watchdogs expelled
A high ranking Russian source said on Friday that Russia will halt the construction of the nuclear reactor it has been building for the Bushehr nuclear power plant on Iran's Gulf coast if Tehran expels inspectors from the United Nation's atomic energy watchdog.

"If Iran expels the International Atomic Energy Agency inspectors, we will immediately halt our work," the source said.

"I think the reason Iran has not expelled the inspectors yet is that they do not want us to stop our work," he added.

Iranian officials have often threatened to "review" cooperation with the IAEA if the UN Security Council imposes sanctions on Tehran over its nuclear program.

Iran's parliament is also currently studying a bill which would oblige the government to halt all IAEA inspections if the UN Security Council "decides to deprive the Iranian nation of its legal rights" to a civilian atomic power program.

Iran stopped allowing snap IAEA inspections of its nuclear facilities earlier this year when its case was sent to the Security Council. But routine IAEA inspections are still going ahead in Iran.

Western countries suspect Tehran is trying to develop nuclear weapons but Iran, the world's fourth largest oil exporter, says its enrichment of uranium is a legal and peaceful program to meet civilian energy needs.

The reactor at the atomic power plant is scheduled to start up in September 2007, Sergei Kiriyenko, head of Russia's atomic energy agency, said on Friday.

"A realistic deadline for [transmitting power to the grid] is November 2007. This means a physical start-up [of the reactor] in September and the dispatch of fuel ... six months earlier," he said. "That means March or April."

Russia has consistently postponed the opening date for the plant, citing technical difficulties caused by the need to build it on the foundations of a differently designed station started before the 1979 Iranian revolution.

Washington has long pushed for Russia to stop building the atomic plant for Iran.

The U.S. believes Iran could use Russian atomic know-how to make nuclear weapons, and wants sanctions imposed to force Iran to abandon its nuclear research.

Kiriyenko said the construction at Bushehr was being carried out under the control of the IAEA and should not be seen as a threat to world peace.

"I am not involved in discussing the issue of sanctions against Iran, but from my understanding there are no objective grounds for the building of Bushehr to fall under sanctions," he said.

"As long as the plant does not violate non-proliferation requirements ... there will no obstacles."