NEW YORK, United States: Tehran has condemned a Washington plan to fund democracy in the Islamic Republic of Iran as interference in its affairs and a clear violation of a US-Iranian accord.

The United States is openly attempting to promote democracy in Iran for the first time since the 1979 Islamic revolution, budgeting a sum of $3 million for groups there that are willing to work toward that goal, and says the initiative does not violate the Algeria non-interference agreement.

Spokesman for US State Department Richard Boucher said non-governmental educational and other groups inside Iran, which are willing to work towards achieving democracy in Iran, are eligible to compete for the money.

Iran's ambassador to the United Nations Muhammad Jawad Zarif labeled the plan a plain violation of a Washington-Tehran pact which was signed in Algeria in 1981 following the release of 52 US embassy employees held hostage in Tehran for 444 days.

Boucher denied that the initiative violates the agreement, under which the US pledged "not to intervene directly or indirectly, politically or militarily in Iran's internal affairs".

The US has consistently maintained that its pro-democracy activities abroad are non-partisan and do not constitute intervention.

Hostility between the two countries has not abated since the hostage crisis of 1979. Iran, besides Cuba, is the only country with which the US does not maintain a political dialogue.