U.S. officials say the Bush administration remains ready to hold talks with Iran, if Tehran stops sponsoring terrorism and ends its efforts to acquire weapons of mass destruction.

State Department spokesman Richard Boucher said events in Tehran have not changed Washington's readiness to engage Iran -- provided the government addresses issues of concern to the United States. The spokesman said President Bush listed Iran along with Iraq and North Korea as an "axis of evil" because of Tehran's links to terrorism and its weapons activities. But he said the United States has also noted what he described as positive developments, including the ongoing movement in Iran towards more openness and democracy.

Hundreds of thousands of Iranians protested Mr. Bush's "axis of evil" remarks Monday, as Iran celebrated the 23rd anniversary of its Islamic revolution.

Speaking at the rally, Iranian President Mohammad Khatami urged U.S. leaders to "wake up, and change their policies," which he said are making the United States an object of hatred in many nations.

Mr. Khatami also strongly denied a U.S. charge that Iran is trying to destabilize Afghanistan's interim government, calling the allegation "baseless, erroneous and insulting."

Some information for this report provided by AP.

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