We have no other choice but to establish democracy in our country

President Khatami

Mr Khatami was elected on a platform of political and social reforms in 1997, but his attempts to implement his programme have been thwarted by hardliners who continue to control key state institutions such as the judiciary and security forces.

The president said that he would remain in the service of the people irrespective of whether he remained president, but added that he accepted that reforms could not be achieved "in the blink of an eye".

"As long as the people want me to be, I will be at their service. And if they do not want it, I will be elsewhere," he said.

He vowed to uphold the Islamic regime and the pledges he had made to the people when he came to power.

"I made a promise to the people, I swore it and I will keep steadfast to this promise," he said.

Programme thwarted

"I can step aside from office but I cannot step aside from my promise," he added.

Pressure for change in Iran is growing

Despite the reformists' sweeping victory in last year's parliamentary elections, almost all liberal newspapers have been closed down and several of Mr Khatami's prominent supporters jailed.

His reformist allies are urging him to make sure he has enough power in his second term to prevent similar setbacks in the next four years.

And some supporters say he should step aside in protest against the conservative offensive.

Warning of collapse

Reformists have warned their conservative opponents that Mr Khatami, with his huge popularity, is the last chance for a peaceful transition in Iran.

Khamenei: President Khatami may seek assurances from him

They say if he stands down, the Islamic regime may collapse.

Under such grave circumstances, it is believed that Mr Khatami is facing a genuine dilemma about his next move.

Observers say that he may only seek re-election if the Iranian supreme leader, Ayatollah Ali Khamenei, gives him assurances that he will have a freer hand to fulfil his promises of political reform.