KUALA LUMPUR (Reuters) - Malaysia vowed on Friday not to buckle to any pressure from its biggest trading partner, the United States, to break a deal with Iran or risk losing a free trade pact.

U.S. trade officials said on Thursday they were reviewing a lawmaker's request for the United States to cut off free trade talks with Kuala Lumpur in protest over Malaysia's $16-billion energy development deal with Iran.

House of Representatives Foreign Affairs Committee Chairman Tom Lantos (news, bio, voting record), a California Democrat, raised concerns over the deal signed last month between Malaysia's SKS Group and state-owned National Iranian Oil Company to develop Iran's southern Golshan and Ferdos gas fields and build plants to produce liquefied natural gas.

On Friday, Prime Minister Abdullah Ahmad Badawi said Malaysia would not bow to pressure from the United States over the deal in negotiations for the free trade agreement.

"We reject the pressure being inflicted upon us. We are a sovereign country and have our own stand," state news agency Bernama quoted Abdullah as telling reporters.

The United States and Malaysia began talks in June last year and have scheduled a fifth round on the proposed free trade pact this month. U.S. negotiators have been under pressure to reach a deal by the end of March, but difficult issues remain.

Malaysia's trade ministry said in a statement it was prepared to continue with the talks, but wanted the U.S. administration to make its official stand known so that the Southeast Asian country could decide on the future of negotiations. "Malaysia reiterates that the negotiations cannot be held hostage to any political demand, and cannot be conducted under such threats," the ministry said. "Malaysia is also ready to suspend negotiations if the situation warrants it."

Abdullah said Washington had no right to stop Malaysia from forging trade ties with any country, even after it had concluded a free trade agreement with the United States.

"This is a question of business. Do not insert politically-related matters into the talks. For this agreement, no political matter is needed to be brought to the negotiating table," he said. Asked whether Malaysia-U.S. relations would be strained by the latest developments, Abdullah said: "We maintain our stand. Political matters should not be brought into business."

The two countries had two-way trade in 2005 of $44 billion. The United States is Malaysia's biggest trading partner and foreign investor, while the southeast Asian country is the United States' 10th-largest trading partner.