Reuters International

President Hassan Rouhani of Iran addresses the 71st United Nations General Assembly in Manhattan, New York, U.S. September 22, 2016. REUTERS/Carlo Allegri

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By Parisa Hafezi and Michelle Nichols

UNITED NATIONS (Reuters) - Iranian President Hassan Rouhani on Thursday called on Iran's regional rival Saudi Arabia to "cease and desist" from division if Riyadh was serious about regional peace and security.

"If the Saudi government is serious about its vision for development and regional security, it must cease and desist from divisive policies, spread of hate ideology and trampling upon the rights of neighbours," Rouhani told the United Nations General Assembly.

The leading Shi'ite Muslim power, Iran and Sunni-led Saudi Arabia are both fighting Sunni militants of Islamic State, which controls parts of Syria and Iraq and has supporters and sympathizers worldwide who have carried out bombings and shootings of civilians.

A Sunni Muslim monarchy, Saudi Arabia sees revolutionary Iran as the paramount threat to the Middle East's stability, because of its support for Shi'ite militias that Riyadh says have inflamed sectarian violence.

Iran has sent thousands of troops and advisors to Syria to back President Bashar al-Assad's forces in their fight against rebels supported by Saudi Arabia and other Sunni powers.

Riyadh also accuses Iran of backing Yemen's armed Houthi movement, which drove the internationally-recognised government into exile, triggering a Gulf intervention in March.

Tehran views the Houthis as the legitimate authority in Yemen but denies providing any material support to them.

Saudi Arabia cut diplomatic relations with Iran in January after Iranian protesters attacked Saudi diplomatic missions in Tehran and Mashhad following Riyadh's execution of a prominent Shi'ite cleric.

In his speech, Rouhani criticized the United States for Washington's "lack of compliance" with a landmark nuclear deal reached with six major powers and Iran in 2015 aimed at curbing Tehran's nuclear programme in exchange for lifting sanctions.

Tehran has called on the United States to do more to remove obstacles to the banking sector so that businesses feel comfortable investing in Iran without fear of penalties.

Major foreign banks are reluctant to get involved because of concerns that they could be caught up in restrictions applying to U.S. banks, which are still banned from doing business with Iran because of core U.S. sanctions that remain in force.

"The lack of compliance with the deal on the part of the United States in the past several months represents a flawed approach that should be rectified forthwith," Rouhani said.

Iranian leaders have repeatedly denounced as "theft" a U.S. Supreme Court ruling in April that almost $2 billion in frozen Iranian assets must be paid to American families of those killed in attacks blamed on the Islamic Republic.

"Any failure on the part of the United States in implementing it (the deal) would constitute an international wrongful act and would be objected to by the international community," Rouhani said.

Iran's top authority, Supreme Leader Ayatollah Ali Khamenei, has ruled out any detente with Iran's arch foe the United States even after the lifting of economic sanctions in January.

Washington severed relations with Tehran shortly after Iran’s 1979 Islamic revolution when hardline Iranian students seized the U.S. embassy in Tehran and took hostage 52 Americans for 444 days.

(Reporting by Parisa Hafezi and Michelle Nichols; Editing by Grant McCool)

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