Agence France Presse, June 2, Baghdad - Iraqi Deputy Prime Minister Tariq Aziz doubts Iran's willingness to normalize relations with Iran following a recent visit by Iranian delegation which Tehran evaluated positively.

Speaking to the Arab Congress in Solidarity with Iraq, now in session in Baghdad, he said that the Iranians' latest efforts of rapprochement with Iraq were in a business framework bearing no signs of willingness to normalize mutual relations. Aziz expl ained that Baghdad recently turned down an Iranian request to hand over Massoud Rajavi, leader of the People's Mojahedin, the main armed movement of opposition to the Tehran regime.

He continued, "We told them that the Iraqi leadership cannot hand over Rajavi who is in Iraq as a guest," and that Tehran must "find another solution."

Mr. Aziz also declared that Tehran recently urged Iraq "to release 64 Iranian officers arrested in Iraq during the 1991 aggression (the Shiite riots in southern Iraq) in return for the freedom of 1,200 Iraqi prisoners of war" by Tehran.

He emphasized that "more than 20,000 Iraqis have been imprisoned by Iran and their release rejected. "While adding that the Iraqi leadership is willing to normalize relations, he concluded, "We are still not convinced of Iran's willingness to normalize relations with Iraq."

Reuters, Baghdad, May 30 - Iraqi Deputy Prime Minister Tariq Aziz met Massoud Rajavi, leader of the exiled Iranian opposition Mujahideen Khalq, a Mujahideen statement said on Tuesday.

The statement said Aziz offered his condolences to Rajavi over the killing of two senior Mujahideen women members in Baghdad two weeks ago. It said the two officials exchanged views "on a number of issues" in the three-hour meeting on Monday. No detail s were given. On May 17, gunmen fired at a Mujahideen vehicle in Baghdad, killing two senior members and wounding a third.

The Mujahideen, which opposes the Tehran government, blamed what it called "terrorist diplomats" in the Iranian embassy in Baghdad. It urged the Iraqi government to shut down the embassy and bring the attackers to justice.

Aziz's meeting with Rajavi -- who is based in Iraq -- came just days after a visit by an Iranian official to Baghdad which Tehran said could lead to solving of outstanding issues between the two former war foes.

Iran has made settlement of their differences conditional on Baghdad's curbing of Mujahideen activities in Iraq.

The Mujahideen have military camps close to the Iranian border and their military arm, the National Liberation Army of Iran, is equipped with tanks, armored personnel carriers and helicopter gunships.

The Mujahideen statement said Rajavi outlined to Aziz "the terrorist plots on Iraqi territory by the Mullah's regime against the Iranian resistance."

Iranian warplanes have raided Mujahideen camps in Iraq. There have also been several attacks on their headquarters in the heart of the Iraqi capital.

Agence France Presse, May 26 - Iraq has kept its distance with Tehran and on Friday it has refused to comment on the news from Tehran on the progress in the latest round of talks for normalizing relations between two opposing countries in the eight-yea r war.

Observers say Baghdad's concealing show that Iran, under a trade embargo by the United States since April 30, is the only customer in this normalization effort. This is the latest in a series of measures in this line since the end of the Iran-Iraq war. In the previous undertakings, the Iraqi press reflected the views of the Baghdad officials.

After the news of the Iranian delegation's three-day-visit to Iraq was kept in complete silence, the state-run press reflected Friday a dispatch by IRNA to announce Ali Akbar Velayati's visit to Iraq, without specifying any dates.

The Iraqi Al-Thawra and Al-Iraq, however, did not state anything on the progresses made to resolve the problem of prisoners of war.

Statement of the People's Mojahedin of Iran, Baghdad, June 2 - The mullahs' regime has mobilized its military and intelligence organs to "abduct or eliminate" an Iranian pilot officer of the regime's Army Air Corps, who fled to Iraqi Kurdistan with his helicopter on Wednesday, May 31, and sought asylum from United Nations officials in the city of Sulaymaniyah, according to sources inside the clerical regime.

The regime's supreme leader, Ali Khamenei, has put Guards Corps Commander in Chief Mohsen Rezai directly in charge of the regime's operations. Ahmad Kazemi, Commander of GC Hamzeh Garrison has been given the assignment to return the pilot and the helic opter to Iran as soon as possible. His orders are to kill the pilot at any cost if it is not possible to arrest him alive.

The reports add that the helicopter had an accident and crashed while the pilot was trying to land it near the UN headquarters. The pilot who is from the west Iranian city of Islam-Abad, has applied for asylum at the UN headquarters.

Iraqi Kurds in Sulaymaniyah on Thursday handed over the crashed helicopter to the mullahs' Guards Corps headquarters in Sulaymaniyah. GC officer Bayat, commander of the GC headquarters in Sulaymaniyah, has prepared a strike force to attack the UN faci lities or to assail the pilot while he is being transferred to another location. Bayat is waiting for final instructions from Tehran. The clerical regime's intelligence operatives and agents in Sulaymaniyah have been mobilized to hunt down the pilot.

In a radio message this morning, GC officer Hormati, commander of Guards Corps Ramadhan Garrison in the west Iranian town of Naghadeh, ordered Bayat to "finish off" the pilot. The message read: "Have your men on standby and fully ready. Once the order s are given, carry them out and finish him off."

The People's Mojahedin Organization of Iran appeals to the United Nations Secretary General, the UN High Commissioner for Refugees, the UN High Commissioner for Human Rights, and all international human rights organizations to intervene immediately to save the life of the Iranian pilot and neutralize the mullahs' plot to abduct or kill him.

Reuters, Baghdad, June 3 - The United Nations confirmed on Saturday that an Iranian army pilot had fled to northern Iraq in his helicopter.

A U.N. source in Baghdad said the pilot crashed near the U.N. compound as he was trying to land in the rebel Kurdish stronghold of Sulaimaniya, but walked to safety. "He walked into the compound and asked for protection," the source, refusing to be named, said.

The source said the pilot was seeking political asylum. A statement issued by the Baghdad-based Iranian opposition group Mujahideen Khalq said on Saturday identified the pilot as Khalil Farman. It said he carried the rank of colonel in the Kermanshah Group of the Army Air Corps.

"Colonel Farman... flew without any other crew member and sought refuge at the U.N. headquarters in Iraqi Kurdistan," the statement given to Reuters in Baghdad said.

Agence France Presse, Tehran, June 3 - Economic sources in Iran and Europe reported that export of rugs, Iran's primary non-oil export, is practically paralyzed in the wake of the new regulations in foreign exchange rates.

An expert questioned Saturday by an Agence France Presse reporter said, "Practically, no rugs have been brought out of Iran in the past three weeks and many exporters have either canceled or postponed their work. Some have even traveled to the border t o take back their goods."

According to press reports of recent days, carpet exporters have objections to the six-month deadline imposed on them to return 100 percent of the foreign currency they earn from the sale of rugs.

They are also discontented with the 3,000 rials exchange rate.

One rug exporter told the AFP, "Most rug exporters have bought their rugs at the rate of 5 to 6 thousand rials per dollar. They will lose lots of money."

He added, "The only solution is to double the price of rugs, an inconceivable option businesswise. In such circumstances, they prefer to stop all their exports. Everything is blockaded now." He reiterated, "This problem is also true for other goods." New Positions on Rushdie? No One's Deceived

Mojahedin press statement, Paris, June 5 - A Mojahedin press spokesman commented today on the remarks made to the BBC by the regime's foreign minister Velayati, according to whom the mullahs "do not send any commandos to assassinate any one in Europe."

"These statements are made while the number-one assignment of the regime's embassies and diplomat-terrorists in various European countries is organizing, planning and carrying out terrorist operations in these countries," the spokesman said.

"Such remarks on the death decree for Salman Rushdie are aimed at deceiving the world public opinion on the eve of the G-7 meeting," he added. "Leaders of the terrorist regime ruling Iran have always endorsed the need to execute Salman Rushdie's death decree. Their ambiguous statements in recent days before the G-7 session, however, are designed to kill time and prevent the Group's adoption of practical measures against the regime."

These remarks are solely for foreign consumption and the newspapers in Iran continue to preach the need for carrying out Rushdie's death decree, the spokesman stressed. In its latest issue on May 31, the regime's Kayhan Havaii refuted the "claim" by Br itish, American and French media on Iran's change of heart on Rushdie and reiterated that the regime's policy on this subject has not varied at all. The weekly newspaper wrote: "Iranian officials have time and again declared that the decree on the apostas y of Salman Rushdie is irreversible and according to the verdict of Islam, execution of this decree is mandatory for every Moslem..."

Herat, Afghanistan, June 3 (Reuter) - Afghan refugees returning from Iran are now trapped in the western oasis of Herat, with all main roads out of the city blocked by either fighting or bad weather, a U.N. official said on Saturday....

Iran has changed its rules on refugee status, work permits and rights for some foreigners to send their children to school. As a result, about 450,000 Afghan refugees were judged to have overstayed their visas and were therefore illegal immigrants.

The New York Times, May 30 - Nearly a generation after turbaned clerics occupied the palaces of kings, Iran is a country of broken promises, a place of unnerving unpredictability and fitful repression intended to keep the Government in power and the population at bay...

But in periodic visits to Iran since Ayatollah Ruhollah Khomeini overthrew the monarch in 1979, and in dozens of interviews during a recent trip, it became evident that the religious oratory that once drove a nation into the streets no longer has the p ower to inspire. The masses, in whose name the revolution was made, now long for better days...

In the effort to hold on to power, Iran's leaders have moved in contradictory directions. To keep the system strong enough to govern but supple enough to survive, they have simultaneously imposed strict limits and permitted a surprising degree of room to maneuver... The result is a steady degradation of the ideas that brought the revolutionary leaders to power, an inefficiency that has strangled the economy, a cynicism that has fueled corruption and an unpredictability about everyday life...

When independent bus drivers doubled their prices early one morning in April, the commuters rebelled... The rioters moved on the way to Islamshahr, a much larger town on the way to Tehran, smashing windows and setting fire to banks, gas stations and go vernment buildings along the way.

By the morning, the Government rushed in elite-riot police officers, who opened fire in hit-and-run battle... By the time the riots were put down at nightfall, a number of people had died...

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