President George W. Bush's administration previously had rebuffed calls from Congress, regional allies and the independent Iraq Study Group last year for a regional forum and discussions with its two arch foes on stabilising chaotic Iraq.

Secretary of State Condoleezza Rice said a landmark conference, expected in early April, will follow lower-level talks with regional powers plus the five permanent members of the United Nations Security Council in Baghdad in March.

State Department spokesman Sean McCormack insisted there had been no change in US policy towards Iran, but repeatedly refused to rule out direct talks with the Iranians on the sidelines of the regional talks.

A senior State Department official added: "I'm not going to lead you to a foregone conclusion that there's going to be such a discussion; I'm also not going to exclude that there's going to be such a discussion."

Iraqi officials said the first gathering, in March, would focus on ending sectarian violence and foreign support for rival militia and insurgents.

It will involve ambassadors and other envoys from Iran, Jordan, Kuwait, Saudi Arabia, Syria and Turkey as well as Egypt, Bahrain, the Arab League and the Organization of the Islamic Conference plus the five UN Security Council powers -- Britain, China, France, Russia and the United States.

"This initial meeting will be followed, perhaps as early as the first half of April, by a ministerial level meeting with the same invitees, plus the G8," Rice told the Senate Appropriations Committee.

The Group of Eight also includes Japan, Canada, Germany and Italy.

"I would note that the Iraqi government has invited Syria and Iran to attend both of these regional meetings," she said.

"We hope these governments seize this opportunity to improve their relations with Iraq -- and to work for peace and stability in the region," she said.

One of the administration's top critics on Iraq, Democratic Senator Joseph Biden, who heads the influential Senate Foreign Relations Committee, said that the administration was "right to reverse itself and engage Iran and Syria on Iraq."

"Right now, they are a big part of the problem, but they have an interest in becoming part of the solution to prevent chaos in Iraq."

Democratic Senate Majority Leader Harry Reid also supports the talks. "It's so important that we understand the war will be won diplomatically, not militarily," he said, adding: "They should have happened some time ago."

Analysts said that the tone and strategy of the Bush administration's regional diplomacy appeared to be shifting.

"We have not been meeting with the Iranians to discuss regional issues," said Jon Alterman, a Middle East expert with the Center for Strategic and International Studies.

"This is very clearly an effort to bring the Iranians and the Syrians into a regional security discussion."

Justin Logan, of the Cato Institute, a libertarian think tank, said the regional conference proposal was a clear parallel to the Iraq Study Group recommendation.

"It sounds like a lot like the ISG proposal, the sort of regional conference. It certainly is a move in the right direction," he said.

Bush in the past has spelled out a tough line on the idea of even group talks with regional powers on Iraq including Iran and Syria.

"They need to come understanding their responsibilities to not fund terrorists, to help this young democracy survive, to help with the economics of the country," he said in December.

"If Syria and Iran (are) not committed to that concept, then they shouldn't bother to show up."

Washington did authorize US ambassador to Baghdad Zalmay Khalilzad to talk to Iran on Iraq in 2005, but talks have so far not materialized.

The administration has also stressed it is committed to using diplomacy to convince Iran to comply with a UN resolution calling on it to suspend uranium enrichment activities some believe are a precursor to producing atomic weapons.