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Blair's office said late on Tuesday that the prime minister was "committed to resolving this by diplomatic means" and believed "that both sides share a desire for an early resolution of this issue through direct talks."

Iran's parliament speaker Gholamali Haddadadel, who wields political influence and is related by marriage to the Supreme Leader Ayatollah Ali Khamenei, welcomed Britain's commitment to diplomacy.

"The British are trying to solve the issue of their arrested soldiers with negotiations and this is appropriate action," he was quoted as saying on the state broadcaster's Web site.

Later he told reporters in Pakistan, where he was on a visit to Islamabad: "Negotiations can begin when the approach and conduct of the British will be in accordance to the rules of international law. If they behave according to these standards, then there is a good chance of negotiations."

Under the Islamic Republic's system of clerical rule, Iranian policy is ultimately decided by Khamenei. But analysts say he tends to take decisions by consensus so rival factions have the chance to influence the direction of policy.

Hardliners, such as the Revolutionary Guards, have relished the chance to flex their muscles against the West, especially as five Iranians, who Iran says are diplomats but Washington says are linked to the Guards, are detained in Iraq, analysts say.

An Iranian representative is due to meet the five Iranians, Iran's official IRNA news agency said on Wednesday. It did not say when any meeting would take place.

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