The Treasury and State Departments issued a general license, valid for three months from Saturday, that allows US citizens to make direct contributions of US dollars to Iranian and other organizations for such relief.

"Effective December 27, 2003, United States persons are authorized for a ninety-day period to make donations of funds to non-governmental organizations in direct support of humanitarian relief and reconstruction efforts being undertaken in Iran in response to the earthquake in Bam," the Treasury said.

The move, the latest in series of US outreach efforts to its longtime foe in the aftermath of the earthquake, waives requirements that individual licenses be granted for such payments which are usually illegal without federal approval.

Applying for those permits can be an onerous process, with lengthy waits for approval. Violations are punishable by hefty fines.

The general license announced Wednesday streamlines that process and makes it easier for US citizens, aid groups and others to contribute to Bam relief efforts.

US Secretary of State Colin Powell, who this week hinted that new dialogue between the United States and Iran could emerge from the ruins of the earthquake, actively campaigned for the suspension of the sanctions which have been in place since the 1980s, the officials said.

"There are things happening, and therefore we should keep open the possibility of dialogue at an appropriate point in the future," Powell said in an interview with the Washington Post published on Tuesday.

He referred to Iran's decision earlier in December to submit to reinforced international inspections of its nuclear energy facilities, which Washington alleges are covers for a secret atomic weapons program.

Thus far, however, Iranian officials have, in public at least, snubbed the US overture. Iran's presidency and foreign ministry signaling that Tehran's aversion of what it brands the "Great Satan" remains intact.

But over the weekend, the United States offered -- and Iran accepted -- US humanitarian assistance to the victims of the December 26 Bam earthquake, which is believed to have taken some 40,000 lives.

Earlier Wednesday in Bam, US firefighters joined their Iranian counterparts for the first time to search ruins, where sniffer dogs and listening devices suggested people might have survived.

Powell's remarks came just days after the first US military planes carrying aid arrived in Iran for the first time since Washington and Tehran broke diplomatic relations over a hostage crisis in 1981 after the Islamic revolution.

Since the hostage-taking, the two countries have engaged in sporadic informal discussions, but have not held a formal dialogue.

The situation soured last year when President George W. Bush labelled Iran part of an "axis of evil" bent on acquiring weapons of mass destruction and supporting terrorism.

TERRA.WIRE