The United States and Iran have signed a lump-sum agreement to settle thousands of small US financial claims against Tehran arising out of Iran's 1979 revolution, a diplomatic source said yesterday. Under the agreement, Iran will pay $105 million to cover some 2,750 US claims, most of them for less than $250,000, filed at the Iran-US Claims Tribunal in The Hague, said the source, who declined to be identified. The source said the accord was signed over the weekend.

The US and Iran broke off ties following the revolution, but have contact through the tribunal set up in 1981 to settle financial disputes. Both Iran and the US have denied the agreement is in any way linked to Iranian help in the recent release of two US hostages in Lebanon.

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