By Marcus George
DUBAI (Reuters) - Thousands of Iranians chanted "Death to America" on the anniversary on Monday of the 1979 seizure of the U.S. Embassy in a jab at moderate President Hassan Rouhani as he tries to ease tension with Washington and resolve the nuclear dispute.
The rally outside the former embassy complex is an annual rite in Iran but took on extra resonance this year as a barometer of hardline conservative opposition to Rouhani's diplomatic opening to the West after eight years of increasing confrontation under predecessor Mahmoud Ahmadinejad.
Iran has launched substantive talks with world powers on a peaceful resolution to the standoff over its nuclear program, and Rouhani has won critical support from clerical Supreme Leader Ayatollah Ali Khamenei for his conciliatory approach.
But this did not prevent large crowds from gathering around the embassy building dubbed the "nest of spies" in the local press, holding up anti-U.S. placards and shouting "Death to America", a standard refrain since the 1979 Islamic Revolution.
Footage broadcast live on state television showed what appeared to be a crowd of several thousand and the walls of the embassy compound plastered with large posters intent on showing supposed deceptions of the United States.
The 1979 siege began when, ten months after the fall of the U.S.-allied shah, radical students stormed the embassy, taking hostage 52 staff for an eventual 444 days. There have been no U.S.-Iranian diplomatic relations since.
After 34 years of frozen mutual hostility, many Iranians applauded a short telephone conversation between Rouhani and U.S. President Barack Obama after the U.N. General Assembly in September, but it was met with suspicion by conservatives.
"Thirty-four years ago, our nation showed the realities to the world, that American embassies are a place of espionage and hatching plots," hardline war veteran and former chief nuclear negotiator Saeed Jalili said in an address to the crowds.
"The capture of the nest of spies showed that the revolution was on the right path," he said, in remarks carried by the official news agency IRNA.
SUPREME LEADER BACKS NEW DIPLOMACY
But on Sunday, Khamenei, the Islamic Republic's most powerful figure, delivered a strong public endorsement to current nuclear negotiators, an apparent warning to hardliners not to paint Rouhani as a pushover towards Tehran's old enemy.
"No one should consider our negotiators as compromisers," Khamenei said in a speech. "They have a difficult mission and no one must weaken an official who is busy with work.
Rouhani is pursuing a nuclear agreement with big powers to secure relief from increasingly crushing sanctions imposed over suspicions that Iran is using its nuclear energy program to develop the means to produce atomic bombs. Tehran denies this.
But Kayhan, a major media mouthpiece of hardliners, warned on Saturday against trusting the United States and cited signs that "the Americans are aiming to trick the Islamic Republic" in the next round of nuclear negotiations in Geneva this week.
The new mood of Iranian diplomacy has also brought into question the use of the slogan "Death to America". While moderate figures have suggested it is time to drop the phrase, conservatives say it is more important than ever.
Jalili told the throngs that the chant was not directed against the American nation but against its statesmen, according to a translation of his speech on English-language state television channel, Press TV.
"Death to America means death to arrogance, death to violence. Death to America is a symbol," he said. "The Iranian people turned it into a symbol for seeking freedom and seeking independence."
(Editing by Mark Heinrich)