The World Bank has approved two infrastructure loans to Iran totalling $230m, despite strong opposition from the United States.

US officials said that loans to Iran should be suspended until there was greater transparency in the trial of 13 Jews and eight Muslims accused of spying for Israel.

American law generally requires the government to vote against loans for countries like Iran, who are on the State Department's list of sponsors of state terrorism.

But there have been signs in recent months that the administration is looking for ways to open up relations with Iran.

Ban lifted

Two months ago, it lifted trade bans on carpets, pistachios and caviar.

However on this occasion, the State Department made clear that its direct concerns are over the trial now going on in the Iranian city of Shiraz, which is being conducted in secrecy.

At least eight of the accused Jews are said to have confessed.

The conduct of the trial has been criticised by human rights groups and Western diplomats, who say it does not reach proper international standards.

Political pressure

The decision to approve the loans to Iran, which are for a sewerage project and for primary health care, had twice been postponed under American pressure.

During the voting on Thursday, the United States was backed by Canada and France.

Reporting the approval of the loans, the World Bank stressed that its charter says that only economic considerations should be taken into account in lending decisions.

There have been fears among senior officials in both the bank and the International Monetary Fund that the United States in particular has been trying increasingly to invoke political criteria in decision-making.