TEHRAN - Iran's hardline President Mahmoud Ahmadinejad has damaged the country's relations with the international community, a moderate challenger to the president in the June presidential vote said on Tuesday.

Mehdi Karoubi, former parliamentary speaker and a moderate cleric, said Ahmadinejad's questioning of the Nazi Holocaust was not in line with the Islamic state's interests.

Reducing tension with the West surely is my priority, said Karoubi, one of the main moderate contenders, told a news conference, adding: The president's speeches have harmed Iran's interests.

Reformists seeking political and social change have criticized Ahmadinejad, who came to power on a pledge to revive the values of the 1979 Islamic revolution, for isolating Iran with fiery speeches against the West.

U.S.-Iranian tensions have worsened since the 2005 election of Ahmadinejad, who questioned the Holocaust and called for Israel to be wiped off the map.

Holocaust is of no concern to Iran whether it existed or not ... Such remarks provoke other countries to take measures against Iran, said Karoubi.

At a U.N. conference on racism in April, Ahmadinejad denounced Israel as a totally racist government founded on the pretext of Jewish sufferings.

His comments caused European countries not already boycotting the Geneva conference to walk out but drew applause from Islamic delegations. U.S. President Barack Obama condemned his remarks as appalling and objectionable.

While stressing his belief in preserving Iran's national interests, Karoubi said the Islamic state should be ready for talks with its foes, particularly the United States.

Iran should adopt policies in line with the country's interests, he said.

DIFFERENT APPROACH

Obama has offered a new U.S. approach to Iran, which has not had relations with Washington for three decades, saying he would extend a hand of peace if Iran would unclench its fist. Iran demands real U.S. policy change rather than words.

Washington and Tehran are locked in conflict over Iran's nuclear program. Karoubi questioned the president's handling of the nuclear issue, saying his fiery speeches helped to isolate Iran and expose it to three rounds of U.N. sanctions.

If I become president, I will change Iran's approach in its nuclear dispute with the West, he said. Supreme Leader Ayatollah Ali Khamenei has the final say on major issues, including Iran's nuclear standoff with the West.

More diplomacy would have been better. Calling the (U.N.) resolutions a piece of torn paper certainly harms the country, said Karoubi, in a clear reference to Ahmadinejad who called the U.N. resolutions pieces of torn papers.

The West accuses Iran of covertly trying to build nuclear weapons. Iran denies this and has had three rounds of U.N. sanctions imposed on it for not halting its atomic work.

Karoubi switched to the reformist camp during the eight-year presidency of moderate former president Mohammad Khatami but he sometimes buckled to pressure from Iran's hardline religious establishment, which blocked Khatami's reforms.

Another candidate is moderate Mirhossein Mousavi, prime minister during the 1980-88 Iran-Iraq war, who said he wanted to improve ties with the West. Ahmadinejad is so far the only leading conservative to let it be known that he will stand.

Analysts say the fate of the race could depend on whether Ahmadinejad retains the support of Khamenei, whose words could influence millions of loyalists.

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