The Obama administration, in a sign of thawing ties with Iran, is likely soon to relax restrictions on contacts between U.S. diplomats and Iranian officials, said a source close to the matter.

But the source, who asked not to be named because a review of U.S. policy on Iran is not complete, said the Bush administration''s idea to open a low-level diplomatic outpost in Tehran was for now "off the table."

The plan is to make small but significant gestures to Tehran, including an invitation to a conference on Afghanistan this month, and to allow U.S. diplomats to see Iranian officials without first seeking approval, as has been the case for nearly 30 years.

"These contacts could be across the board," said the source, adding that the review was not final and that President Barack Obama still had to sign off on it.

Diplomatic sources and analysts said the idea of low to mid-level contacts without first being authorized had been discussed for a while and that this was broadly seen as a first step toward higher-level engagement.

The United States cut off diplomatic ties with Tehran during the 1979-1981 hostage crisis, in which a group of militant Iranian students held 52 U.S. diplomats hostage at the American Embassy for 444 days.