Rouhani preaches moderation

Rouhani told the Davos forum that "constructive engagement with the world" was one of the pillars of his tenure as president, and that "moderation and prudence" were central to his worldview.

He said it was his hope that Iran could become one of the world's top ten economies within three decades.

"We intend to reopen trade, industrial and economic relations with all of our neighbors including Turkey, Iraq, Russia, Pakistan and Afghanistan," Rouhani said.

'False,' says Israeli leader

Netanyahu, addressing the forum on innovation in the Israeli economy, said the West should not to take the media-friendly Iranian's offer at face value.

"Hassan Rouhani can say something but it doesn't make it real," he said. "It's false," said Netanyahu and insisted there was no concrete evidence of any fundamental change in the nature of Iran's Islamic regime.

Netanyahu also appeal to Europe for "fairness" in Middle East policy after a diplomatic row over Israel's expansion of settlements on the West Bank.

Rouhani pitches to global executives

Rouhani made it clear before the forum opened that his goal in Davos is to attract Western investors to Iran and to meet chief executives of global oil and gas companies.

The Iranian leader however also warned that economic factors alone should not determine policies, saying the "culture, spirtuality and ethics" were also necessary elements of human existence.

He called for development to be used as a means of combating terrorism, saying violence often emanated from unemployed and poor sections of society.

'New phase'

Referring to the recent deal on resolving issues surrounding Iran's nuclear program, Rouhani said the relationship between his country and the USA had "entered a new phase," with US politicians being able for the first time to negotiate and resolve differences.

In a television interview on Wednesday, the president said it was even not impossible that an American embassy could be reopened in Tehran.

Washington and many other Western countries fear that Iran's nuclear program may cover the development of atomic weapons, something Tehran has always denied.

Under the recent agreement, Iran has started scaling back its sensitive nuclear activities, while the US and the European Union have eased sanctions on the country in response.

Iran and six world powers are aiming to conclude a final agreement in the next six months under which sanctions would be scrapped for good, in return for additional nuclear concessions.

'Free and fair Syrian elections'

Turning to the civil war in Syria, in which armed rebels are seeking to oust President Bashar al-Assad, Rouhani said "the best solution is to organize a free and fair election" and that "everyone should accept the outcome."

After originally receiving an invitation from UN Secretary General Ban Ki-moon, Iran was barred from participating in current peace talks in Switzerland aimed at resolving the Syrian crisis.

Iran refused to back calls for a transitional government to put an end to the bloodshed.

tj/hc (dpa, Reuters)