Iranian Nobel Peace Prize laureate and human rights activist Shirin Ebadi underlined Wednesday that there is no contradiction between Islam and democracy and urged the EU to continue dialogue and engagement with Iran, IRNA reported from Brussels.

"Islam accepts democracy. There is no conflict between human rights and Islam,`` Ebadi told a sitting of the European Parliament`s committee of foreign relations in Brussels Wednesday noon.

She said that some in the Muslim world misuse the name of Islam for their own interests and called on Muslims to give a true picture of Islam to the world.

Responding to questions by MEPs, Ebadi noted that human rights in Iran `` have made a good progress`` to what it was 23 years ago.

``It does not mean that there are no problems. Yes, there are problems which have to be resovled,`` she said.

Ebadi urged the EU to continue the process of engagement and dialogue with the Islamic Republic.

``Boycott and sanction do not resolve anything,`` she said adding that dialogue should not be mere talks, but have aims and produce positive results for democracy.

Ebadi said the fight against terrorism must be within the framework of UN resolutions and with respect to human rights and should not lead to restrictions of individual liberties.

Commenting on elections in Iran, she said the lower turnout of 50% in Friday`s elections as compared to 80% four years ago means the gap between the people and the government was increasing.

She expressed regret about the disqualification of a large number of candidates and called on the elected deputies to work to close this gap.

Later, Ebadi met EP President Pat Cox who told reporters that she advised him to continue the process of dialogue with Iran.

``I take note of that (advise) very carefully,`` said the EP President.

The EP`s women`s rights committee hosted a lunch in honour of Ebadi, who has been invited to Belgium by the International Federation of Human Rights.

She is expected to meet the European Commissioner for external relations, Chris Patten, on Thursday.