Iran says to free one American detainee

TEHRAN (Reuters) – Iran will release on Saturday one of three detained American citizens accused of espionage, an official told Reuters on Thursday.

Shane Bauer, Sarah Shourd and Josh Fattal were detained near Iran's border with Iraq at the end of July 2009. Their families say the three were on a mountain hike in northern Iraq at the time. Washington says the spying allegations are unfounded.

"One of the three will be released on Saturday," said the government official who asked not to be named. Journalists have been invited to attend a ceremony on Saturday at the Esteqlal Hotel in Tehran for the release of one of the three.

In Washington, a U.S. State Department spokesman said he had no information "to substantiate or refute" the report of a pending release, and was checking into the matter.

Iran's Intelligence Minister Haidar Moslehi has said Tehran had proof that the three Americans had links to intelligence services. He also said last month that investigations into spying allegations against the three would be completed soon.

Iran had also said the three Americans would be put on trial, without giving a date. They have been formally charged.

Washington, which cut diplomatic ties with Iran shortly after its 1979 Islamic revolution, has said the charges against the hikers are false and they should be released. Under Iran's Islamic law, espionage can be punishable by death.

Their case has further complicated relations between Tehran and Washington already fraught over Iran's nuclear activity.

Western powers suspect Iran is trying to develop nuclear weapons under the cover of a civilian atomic energy program. Tehran denies this, saying it needs nuclear technology to generate electricity.

President Mahmoud Ahmadinejad said in February that the three U.S. citizens might be swapped for the release of Iranians jailed in the United States.

The mothers of the trio, who were allowed to visit their children shortly in Tehran in May, had urged the Iranian authorities to make a gesture of goodwill by releasing them.

Iran's decision to release one of the Americans could be a display of Islamic clemency on the occasion of the Eid Al-Fitr when Muslims celebrate the end of the holy month of Ramadan.

Iran has accused the United States and its European allies of trying to topple the clerical establishment by fomenting unrest that jolted the country after last year's disputed presidential election.

Washington has backed Iran's pro-reform opposition which says the vote was rigged to secure Ahmadinejad's re-election. Iranian authorities have denied the accusation.