Despite official U-S concern, ally Japan has gone ahead with a major deal to develop an oil field in southwest Iran. Negotiations had gone on for three years and stalled for a time after President Bush included Iran in what he called the "axis of evil."
Japan and Iran have agreed to a $2 billion deal to extract oil from a field believed to be one of the largest reserves in the Middle East. It is estimated that the Azadegan field contains up to 26 billion barrels of oil.
The deal gives resource-poor Japan a major new source of petroleum. It is also one of the largest international project agreements Iran has made since the 1979 Islamic Revolution.
The United States says it is "deeply concerned" about Japan's deal with the Islamic Republic, which is under a U.S. economic embargo. The State Department says Washington is disappointed about the agreement going forward despite objections conveyed to Japan from the United States.
Japan's Chief Cabinet Secretary Yasuo Fukuda made no reference to the disagreement with its closest ally in his announcement of the deal Thursday. Mr. Fukuda says negotiations have been underway for a long time and Japan welcomes the deal. He says the government hopes it will lead to a stable energy supply for the country and promote friendly ties with Iran.
The U.S. State Department says it has "fundamental concerns" about nuclear development in Iran, its support for groups that oppose the Middle East peace process and Iran's harboring of terrorists.