"we do not negotiate with terrorist" GW BUSH

The U.S. and Iranian ambassadors to Iraq sat down Tuesday for a second round of groundbreaking of talks on stabilizing Iraq, a session marred by a tense exchange over American allegations that Iran is fueling the violence.

Prime Minister Nouri al-Maliki opened the meeting with an impassioned appeal for help from the two nations to stabilize Iraq and warned that militants from al-Qaida and other terror groups in Iraq were now fleeing and finding refuge elsewhere.

"We are hoping that you support stability in Iraq, an Iraq that doesn't interfere in the affairs of others nor wants anyone to meddle in its own affairs," he said, according to excerpts of al-Maliki's remarks released by his office.

"The world ... must stand together and face this dangerous phenomenon and its evils, which have gone beyond the borders of Iraq after terror and al-Qaida groups received strong blows and are now running away from the fight and moving to other nations," he said.

In Iran, Foreign Ministry spokesman Mohammad Ali Hosseini said Iraqi independence and an end to the U.S. troop presence were central to ending violence in Iraq, state media reported.

"American officials would rather find their own solution to a problem of their own creation than agree to Iran's realistic approach," Hosseini was quoted as saying by the Web site of the state broadcasting company.

Hosseini also rejected American allegations that that Iran was arming and training Iraqi militants.