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Sir, With reference to "Iran will be the test for Europe's foreign policy" (June 2): US and Iranian officials have been meeting in European capitals for months to discuss their common interests in Afghanistan and Iraq. But as co-operation gives way to confrontation, these discreet contacts have broken off. To prevent misunderstandings from spiralling into violence, the European Union should seek ways of building confidence between the US and Iran.

In addition to Iran's nuclear programme, the US is concerned about Iran's efforts to remake Iraq in its image. It also accuses Iran of harbouring al-Qaeda personnel. Tehran rebuffs these charges. It denies seeking nuclear weapons, disavows control of Shia Arabs resisting the coalition in Iraq, and insists that suspects detained in Iran were not involved in the recent Riyadh and Casablanca bombings.

While it is difficult to find common ground in the current atmosphere of acrimony, American and Iranian interests do converge in the fight against terrorism. Both countries are antagonistic towards al-Qaeda, and include the People's Mujahadeen (MEK) on their terror list. Most US officials revile the People's Mujahadeen for its 1979 hostage-taking at the US embassy in Tehran. During the Iraq war, MEK militias were bombed by the US for acting as a Praetorian guard to Saddam Hussein. The group is also responsible for numerous terrorist attacks against the Iranian regime.

Europe can reverse the negative trend in US-Iran relations by fostering collaborative efforts to counter terrorism. To this end, Tehran should extradite all al-Qaeda prisoners, including Said al Adel. And, in turn, MEK terrorists would be extradited by the US from territory under its control. Having access to senior al-Qaeda personnel would assist investigators pursuing the group's far-flung network. In addition, disbanding the MEK could help mitigate conditions of insecurity in Iraq.

Given its policy of engagement with Tehran, the EU is positioned to broker this arrangement, catalysing constructive interaction on other thorny issues dividing the US and Iran.

David L. Phillips, Senior and Deputy Director, Center for Preventive Action, Council on Foreign Relations.