The Iranian Parliament has begun debating a controversial bill aimed at stripping conservative hardliners of some of their powers.

The move is being seen a showdown between the pro-reformist President, Mohammad Khatami, and his conservative rivals who have blocked his efforts to create a more open society.

If approved, all the infidels, former Marxists and non-Iranians with acquired Iranian nationality can enter parliament

Golam-Hossein Elham, Guardians Council

The bill would remove the 12-member Guardians Council's right to veto election candidates, which has previously kept some reformists out of power.

It comes a day after Iran's Supreme Leader, Ayatollah Khamenei, pardoned the country's top jailed dissident, while another prominent reformist was arrested by the conservative-controlled courts.

The parliament is also preparing to debate a bill which would give the president powers to suspend court rulings viewed as unconstitutional.

The courts have recently clamped down on dozens of liberal newspapers and jailed a number of President Khatami's supporters.

Heated debate

Reformists are determined to see the bill limiting the Guardians Council's powers succeed and have threatened to seek a referendum if it is blocked.

Hardliners and reformists have been locked in a power struggle

But members of the Guardians Council - a constitutional watchdog - are loathe to surrender their power easily.

"This bill is supported by anti-revolutionary elements, and if approved, all the infidels, former Marxists and non-Iranians with acquired Iranian nationality can enter parliament," Golam-Hossein Elham, head of the Guardians Council research centre, was quoted by the Iranian news agency Irna as saying.

Reformist deputies argued that parliament would no longer represent the will of the people if voters were robbed of the chance to select candidates of their choice.

"The legitimacy of the Islamic regime comes from the votes of its electorate, and that legitimacy must not be weakened," said deputy Majid Ansari.

Crisis brewing

Both bills are expected to pass easily through the reformist dominated parliament.

But then they have to be approved by the same Council of Guardians whose powers one of the bills seeks to reduce.

The BBC's Jim Muir in Tehran says that is likely to end in deadlock, with yet another body, the Expediency Council, eventually acting as arbiter.

If that process were to end in the bills being blocked or emasculated, a political crisis would ensue, with some reformists already threatening walk out of office.

If that is to be averted, our correspondent says, it may be up to Ayatollah Khamenei to intervene, since his word is final on matters affecting the fate of the nation and the survival of the Islamic regime.

Reformists under threat

On Monday, former Vice-President Abdullah Nouri - a close ally of President Khatami - was freed two years early from a five-year sentence for political crimes.

Abdi's arrest could provoke a political storm

Mr Nouri's popularity rivals that of the president himself and he is seen as a potential successor to Mr Khatami.

He is, however, banned from standing for election due to his conviction.

Also on Monday another leading figure in the reformist movement, Abbas Abdi, was arrested - a move which observers say is bound to cause a political storm.