The decision prompted the Government to postpone President Mohammad Khatami's planned visit to Turkey as long as the fate of a contract for airport construction and operation and a deal with a Turkish telecommunications company have not been decided.

"The Government decided that, given the Majlis decision today and the importance attached to ties with Turkey, the President's visit to that neighboring country is postponed until construction of more confidence in order to finalize the contracts," Government spokesman Abdollah Ramezanzadeh said.

The parliament passed Sunday a bill, requiring the government to secure parliament's approval for operation of an Iranian airport by a Turkish-led consortium and providing Iran with more mobile phones by Turk Cell company.

The decision followed parliament's approval of general outlines of a bill, giving the legislative body the power to vet all contracts signed with foreign companies.

The Majlis, however, approved for now the requirement to include Turkcell, which has won a contract to set up the first Iranian private mobile phone network, and TAV which has been awarded to construct and operate Imam Khomeini International Airport.

Parliament Speaker Gholamali Haddad Adel stated that the decision did not mean the scrapping of the two contracts.

He also dismissed contentions that the decision would shut the door to foreign investments or ostracize Iran and tie Iran's hands in foreign contracts.

The decision came as several officials announced an imminent breakthrough in the standoff which has dogged the two Turkish firms' operations in Iran.

Deputy Foreign Minister Mohsen Aminzadeh stressed last month that there was no problem with the deal between Iran's Transportation Ministry and Turkish-Austrian consortium Tepe-Akfen-Vie (TAV) to operate Imam Khomeini International Airport (IKIA) in southern Tehran.

Iran's armed forces closed down IKIA on May 8, citing security concerns, just after it was officially inaugurated with the landing of a foreign aircraft.

The forces have stressed that the airport will remain closed as long as 'security requirements' for carrying out flights from the facility are not met.

Aminzadeh said the speculation that 'security considerations' were impeding the project was wrong. He, however, did not say what the real problems were.

"Relevant officials have announced that this company (TAV) has no security problem and has observed all security considerations," he added.

Like TAV, Turkey's leading GSM operator Turkcell has failed to go ahead with a project to set up Iran's first private mobile phone network.

The company was expected to invest about three billion dollars in the project, making it one of the biggest foreign investments in Iran since the 1979 Islamic Revolution.

There were hopes of a breakthrough during Turkish Prime Minister Recep Tayyip Erdogan's visit to Tehran in late July, but that did not come through.

Iranian officials have said that the IKIA will eventually be able to handle 40 million passengers a year, making Tehran a regional transport hub.

The initial operation, however, involves Phase 1 of the facility, which will have a capacity to transit six million passengers per year.

Transportation Minister Ahmad Khorram had said that the implementation of Phase 2 had also been ceded to TAV on a two-year contract.

President Mohammad Khatami inaugurated Terminal 1 on February 1-- the 25th anniversary of the founding of the Islamic Republic marked by the return of Imam Khomeini from exile.