June 16 (Bloomberg) -- President Barack Obama said the U.S. will continue a “tough, direct dialogue” with Iran amid the eruption of demonstrations in the country following its disputed presidential election.

“We will continue to pursue a tough, direct dialogue between our two countries and see where it takes us,” Obama told reporters at the White House yesterday after a meeting with Italian Prime Minister Silvio Berlusconi. “But even as we do so, it would be wrong for me to be silent about what we’ve seen on the television over the last few days.”

Obama also thanked the Italian government for agreeing to accept three prisoners from the U.S. detention center at Guantanamo Bay, Cuba. He also praised a speech by Israeli Prime Minister Benjamin Netanyahu, who for the first time said Israel would accept a Palestinian state.

The Iranian capital, Tehran, has been gripped by protests since President Mahmoud Ahmadinejad claimed victory over former premier Mir Hossein Mousavi in the June 12 ballot. The Associated Press reported that at least one demonstrator was killed when a pro-government militia fired at a crowd.

Mousavi has called for the election results to be scrapped. Supreme Leader Ayatollah Ali Khamenei told the election’s supervisory body, the Guardian Council, to carefully consider Mousavi’s allegations of voting irregularities, state-run television reported.

Obama said he understands that the Iranian government is going to look into “irregularities” in the election results.

No Observers

“We did not have observers there,” Obama said. “I can’t state definitively one way or another what happened.”

Mousavi, 67, said there were “obvious violations” and called for the election result to be thrown out after the official tally gave the 52-year-old Ahmadinejad almost 63 percent of the vote.

Obama said of the Iranian demonstrators that “the world is watching and inspired by their participation, regardless of what the ultimate outcome of the election was.”

“We do believe the Iranian people and their voices should be heard,” Obama said.

Obama pledged during his presidential campaign to use diplomacy with Iran to attempt to persuade the country not to pursue a nuclear weapons program.

Guantanamo Facility

Obama said he appreciated Italy’s move to help him fulfill his promise to close the Guantanamo detention facility by agreeing to accept three detainees. The administration has been under pressure from lawmakers in Congress to send the detainees to other countries instead of bringing them into the U.S.

“This is not just talk,” Obama said. “Italy has agreed to accept three specific detainees and has also been part of the leadership in Europe that today announced a framework in which European nations can accept detainees. That was something that I was very appreciative of.”

The European Union formally agreed to help resettle detainees from Guantanamo in a joint statement issued with the U.S. yesterday. Certain EU members are willing to receive detainees, and the U.S. has agreed to help with costs on a case- by-case basis and with intelligence information, according to the statement.

Obama praised Netanyahu for saying in a June 14 speech that he would accept a demilitarized Palestinian state provided it recognizes Israel as a Jewish homeland. Netanyahu had previously refrained from explicitly endorsing a Palestinian state, and his remarks came after Obama earlier this month said the creation of a Palestinian state was the “only resolution” for the Arab- Israeli conflict.

Obama said Netanyahu’s speech shows “positive movement” and “at least the possibility that we can restart serious talks.”

To contact the reporter on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net

Last Updated: June 15, 2009 22:35 EDT