July 25 (Bloomberg) -- An Iranian court acquitted an intelligence agent who was charged in the 2003 death of Canadian- Iranian photojournalist Zahra Kazemi, the Globe and Mail reported on its Web page, citing the Associated Press and Canadian Press news agencies.

Shirin Ebadi, an Iranian Nobel Peace Prize laureate who led the four-member legal team, said the court was not competent and the legal proceedings were flawed, the Globe said. Ebadi threatened to take the matter to international organizations if the Iranian judiciary fails to carry out justice in Kazemi's death, the newspaper said.

Kazemi died in an Iranian hospital last July from a brain hemorrhage after being arrested for taking pictures outside Tehran's Evin prison. Iranian intelligence agent Mohammad Reza Aghdam Ahmadi, the only person implicated in the matter, pleaded not guilty during trial, the Globe said.

The inquiry into Kazemi's death has strained diplomatic ties between the two countries. Last week, Canada recalled its ambassador to Iran to protest a decision to bar foreign observers from the trial.

The Iranian court said it would pay the Kazemi family compensation for her death, the Globe reported. The average payment for the families of male Muslim victims is about $18,750, and half that for women, Jews and Christians, the report said. John Terry, a lawyer for Kazemi's son, called the funds ``blood money,'' an insult that the family would reject, the newspaper said.

To contact the reporter for this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net.

Last Updated: July 25, 2004 09:43 EDT