No Truth to Story of Iran Talks on Hostages: Reagan

CHICAGO —  President Reagan said today there is no truth to a report published in Israel that the United States has succeeded in direct negotiations with Iran to gain the freedom of eight Americans and one Briton held hostage in Lebanon.

“We are not negotiating directly with Iran. We have not talked to the kidnapers,” Reagan said shortly after arriving here on a political trip.

“I think maybe Iran is putting these stories out,” he added.

The report, in the month-old Israeli weekly The Nation, said that in exchange for the releases, beginning in about a week, Washington will provide economic aid, gradually release billions of dollars in Iranian funds frozen in U.S. banks and resume diplomatic relations with Tehran.

The newspaper, quoting unnamed sources, said the United States and Iran had been negotiating directly on the matter since Monday in Geneva. The hostages are believed to be held by pro-Iranian Shia Muslims.