NEW YORK (Reuters) - Iranian President Hassan Rouhani said on Friday that ties with the United States had improved, although there was "still a long road to travel" before the two estranged nations could have normal relations.

"The situation has certainly changed," Rouhani, in New York for the United Nations General Assembly, told a group of senior editors from media organizations at a nearby hotel. "We can point to the tangibles, the many steps forward, but there is still a long road to travel."

He described the historic nuclear deal between Iran and the United States, Britain, France, Germany, Russia and China as a "big test" for U.S.-Iranian relations and said that it was important to create an atmosphere of trust.

"If we continue on the path, the road will be paved to further cooperation and collaboration," he said, adding that "we have seen good faith between the two sides."

The White House has said there was no meeting planned between Rouhani and U.S. President Barack Obama while they are at U.N. headquarters in the coming days. Rouhani suggested it would be premature to discuss encounters between the two men.

"Before talking about meetings or handshakes," Rouhani said, the two countries should focus on resolving issues.

Still, Rouhani's first public remarks since arriving in New York were more upbeat than what Iran's Supreme Leader Ayatollah Ali Khamenei said earlier this month. Khamenei said Tehran would not negotiate with the United States on any issue after the landmark nuclear deal with the six world powers in July.

The United States and Iran have been at odds since Iran's 1979 Islamic revolution and the U.S. hostage crisis that followed. Deep differences remain over Middle East conflicts, as well as what Washington sees as Iran's support for terrorism and poor human rights record.


U.S. and Western officials in Washington said that U.S. Secretary of State John Kerry will try to launch a new initiative for a political solution in Syria during meetings in New York in the next week, starting with talks with his Iranian counterpart on Saturday.

Rouhani said he was pleased the United States was willing to now allow Iran to participate in discussions on Syria. "Iran is a powerful and effective country within the region," he said.

Speaking through an interpreter, Rouhani also responded to media reports that Iran andRussia would form part of a coalition that would take on Islamic State and other militant groups.

"I do not see a coalition between Iran and Russia on fighting terrorism in Syria," Rouhani said.

However, he said Russian President Vladimir Putin told him personally that Moscow wants to play a more active role in combating militant groups in the Middle East.

Russia and Iran both support Syrian President Bashar al-Assad, unlike Western powers, which back what they describe as moderate rebels seeking to oust Assad. The Western-backed rebels have enjoyed limited battlefield success, while Assad's forces control less than half the country's territory.

As a result, Russia has recently stepped up its military support for Assad.

Rouhani said Damascus would ultimately have to accept some measure of political reform. Still, fighting terrorism and addressing the humanitarian crisis were more urgent, he added.

"Stability can be imagined with democracy, but democracy cannot be imagined without stability," he said. "You cannot put a ballot box in a battlefield."

Implementation of the July 14 nuclear agreement, which will eventually see the lifting of crippling economic sanctions on Iran in exchange for limits on Tehran's nuclear program, could begin by November or December of this year.

"Conditions are ripe for that," the Iranian president said.

Western officials have suggested that implementation of the deal was more likely next year.

Rouhani also referred to the detention of Americans in Iran and Iranians in the United States. Iran is holding several Americans, including Washington Post reporter Jason Rezaian, who has dual U.S. and Iranian citizenship.

Rouhani said both countries should do what they could to move forward to freeing prisoners held by each other. He added that the issue was "personally important to me," though he said his constitutional powers were limited on the matter.

"Both governments have to help to move these legal files forward," he said.

Iranian officials have said they want freedom for Iranians held in the United States, some of whom have been jailed on charges of circumventing U.S. sanctions on Tehran.

Rouhani complained about some of the statements made by U.S. lawmakers critical of the nuclear deal, saying they contained "extremely bitter extremist judgments" and were met with astonishment in Iran.

"It was as if they were on another planet," he said. "They did not seem to know where Iran was."

Rouhani also touched on the tragedy in Saudi Arabia, echoing other Iranian officials' comments that Saudi authorities bore some blame for a crush that killed over 700 people at the haj pilgrimage in the annual event's worst disaster in 25 years.

He said the tragedy may be a result of the Saudis transferring experienced troops toYemen to fight against Iranian-backed Houthi fighters, a military campaign that Tehranhas repeatedly criticized.

(Reporting by Dayan Candappa, writing by Louis Charbonneau; Editing by Grant McCool, Jonathan Oatis and Raju Gopalakrishnan)