The UN must decide the next move on Iraq, the Iranian foreign minister has told Britain.

After talks in Westminster with Jack Straw, Kamal Kharrazi said it was vital that the UN was allowed to exhaust all efforts before going to war.

"The security council has the authority to take care of the Iraqi issue. It seems imminent to have another resolution and to use diplomatic channels to ask Iraq to comply with resolutions of the UN," he said.

Kharrazi said his government feared the humanitarian implications that would be a part of a war with Saddam Hussein.

"We have our own concerns, as a neighbouring country because the outbreak of war would have repercussions on all neighbouring countries in the region including Iran. The simplest one would be the influx of refugees," he told reporters.

He also slammed America's continuing refusal to see Iran as a developing country and dismissed president Bush's axis of evil speech as a "strategic mistake".

Iran was a democracy with good relations with the rest of the world and was developing fast, he claimed.

"We are ready to engage in dialogue with friendly countries and exchange views on all different matters.

"The problem with the Americans is that they are not ready to establish a dialogue with us based on mutual respect. They are talking about power and domination. That is something that is against our dignity."

Jack Straw has come under fire from human rights campaigners for his links with Iran and efforts by Britain to rebuild relations which have included several low-key visits by ministers.

Straw put aside concerns and the pair announced that several trade deals had been agreed.

The prime minister also held a brief meeting with Kharrazi as the UK mounted another push to secure broad support for war in the Gulf.

As Kharrazi arrived in London, protestors gathered in Parliament Square to register their complaints against Iranian abuses of human rights.

A spokesman for the National Council of Resistance of Iran claimed the country's regime is a "religious, terrorist dictatorship" which Britain should condemn not condone.

Campaigner Saeid Esmaeilzadeh, an Iranian refugee, said it was an "insult" that Kharrazi had been invited for talks.

"Kharrazi's visit comes at a time when human rights violations in Iran have risen dramatically," he said.