They didn't shake hands or sit next to one another, but a small meeting attended by Secretary of State Madeleine Albright and Iran's deputy foreign minister was the highest level contact between the two nations since the 1979 hostage crisis.

The diplomatic thaw is a slow one, though. Iran's top foreign affairs official skipped the Monday session on Afghanistan's troubles at the last minute. And Iranian President Mohammad Khatami had just delivered a speech to the U.N. General Assembly, sending a mixed message on how far Iran would reach out to the West.The moderate cleric said his country wanted good relations with the outside world, but he suggested Iran would not accept domination by the United States.

"The fantasy of a unipolar world ruled by a single superpower is but an illusion," said Khatami in the first address to the forum by an Iranian leader in 12 years.

Khatami, elected in May 1997, may have been playing to his audience back home, including hard-line religious fundamentalists who control much of the government and who still see the United States as the "great Satan."

Encouraged by Khatami's leadership, Albright extended an olive branch to Iran in June, suggesting the United States was ready to resume a bilateral dialogue - something Tehran's leaders have so far rejected.

Monday's U.N.-sponsored meeting on the civil war in Afghanistan and tensions with neighboring Iran also was to give Albright a chance for a face-to-face meeting with Iranian Foreign Minister Kamal Kharazi. But, with no warning, he didn't show up at the eight-nation forum.

State Department spokesman James P. Rubin said Albright didn't feel snubbed because the emergency meeting wasn't about the U.S.-Iran relationship.

"In our minds, it was not a U.S.-Iran meeting," Rubin said. He acknowledged, however, that had Kharazi attended, there might have been a chance for Albright to talk with him. That did not occur with the deputy foreign minister, Mohammad Javad Zarif, who sat between officials from China and Pakistan while the secretary of state was between Turkmenistan and Uzbekistan.

The seating around a square table was in alphabetical order. Other nations were Russia and Tajikistan.

Rubin said the U.S. motivation for the meeting was "in getting the neighbors to work together on Afghanistan and not as part of the efforts we've made - quite clearly - about our willingness to have a dialogue."

The State Department is anxiously awaiting a speech Kharazi is scheduled to deliver next Monday to the Asia Society in New York - the same place where Albright spoke in June when she suggested renewing diplomatic dialogue.

"We are ready to explore further ways to build mutual confidence and avoid misunderstanding," Albright said at the time, calling for Iran to halt its support of terrorism and support international security instead. "The Islamic Republic should consider parallel steps."

In the past year, the United States and Iran have promoted cultural and academic exchanges, steps aimed at repairing the dramatic diplomatic rift that began in 1979 when Iranian students held 52 Americans hostage at the U.S. Embassy for 444 days.

But Iranian hard-liners haven't been happy. And in the United States, several members of Congress last week urged the Clinton administration to refrain from any goodwill gestures toward Khatami or his government.