The new Iranian President, Mohammad Khatami (right), is confirmed in office

New Iranian President Brings Hope of Change

In a short speech, Mr Khatami said Iran wanted peace and security with the rest of the world -- but he said the main obstacle to this was the high-handedness of certain great powers. This was understood as a reference to the United States, which accuses Iran of terrorism and has imposed economic sanctions.

The ceremony, at the Imam Khomeni mosque in central Tehran, began with the national anthem, as the outgoing President, Akbar Rafsanjani, his successsor, Mohammad Khatami, and the country's Supreme Leader, took up position in front of hundreds of assembled ministers, government officials and clergymen.

President Rafsanjani then read a statement from the supreme leader, Ayatollah Khamenei, officially confirming the start of Mohammad Khatami's Presidency.

Mr Khatami, a moderate former minister of culture, won an overwhelming victory against his conservative opponent in May, after campaigning on a platform of greater freedom. It was a major upset for Iran's conservative clerical establishment that has ruled the country since the Islamic revolution of 1979.

The hardline religious leader Ayatollah Ali Khamenei will be keeping a close eye on the new president

But President Akbar Rafsanjani appeared keen to play down the scale of their defeat. Mr Khatami was, he noted, a distinguished cleric whose victory, he said, proved that the Iranian people had confidence in the clerical establishment.

The supreme leader, hardliner Ali Khamenei, appeared to rule out the possibility of an opening to the West under the new president, whose election has been described as "intriguing" and "interesting" by the White House.

"Many countries and especially the media are engaging in false speculation and expressing their desires," Ayatollah Khamenei said. "We must try to better understand our country and our people as well as their needs and desires," he added.

Many Iranians want change

Mr Khatami took the microphone to speak of the heavy responsibility he felt in assuming office. The people of Iran, he said, deserved respect and a better life. He made special reference to the women and young people whose thirst for change had put him in office. And he said Iran wanted peaceful co-existence with the rest of the world.

Mr Khatami must now push ahead with his promise of reforms in the face of strong opposition from conservatives who continue to dominate the Iranian political scene.