Mohammad Khatami, Iran's former president, says Iran would accept a Palestinian state "ready to live alongside Israel" if the elected Hamas government freely adopted such an outcome.

In an interview with the Financial Times, Mr Khatami, a reformist, distanced himself from the hardline statements expressed by Mahmoud Ahmadi-Nejad, his fundamentalist successor, who has called the Holocaust a myth and said Israel should be removed from the map by the Palestinians.