TEHRAN Iran's cabinet is to present 2500-billion-rial bill on drought in the Parliament for an urgent study as the country is bracing for the third straight year of a crippling dry spell, the Persian daily *** Entekhab *** cited an official at the presidential office, Ahmad Safaeifar as saying Tuesday.

The fund is part of a total 4000 billion-rial package which the Islamic Republic has envisaged in the state budget to spend on alleviating the effects of the worsening drought, IRNA reported.

The cabinet is sending the bill with an extremely urgent clause to the Majlis to be studied in an extraordinary parliamentary session within this week, given widespread effects of the worsening drought, the paper quoted him.

Iran's cabinet has already approved the bill as part of the state budget for the new Iranian year (started March 21, 2001). Once approved by the Parliament, state-owned Agriculture Bank will be authorized to provide funds to public entities in order to ameliorate effects of the deteriorating drought.

The whole budget has been drawn from a reserve fund which Iran set off last year on the back of strong oil prices, Safaeifar said.

"Part of the fund will be paid directly to farmers and cattle raisers who are affected by the drought," he said.

Iranian officials are warning that the nation is headed for a third consecutive year of severe drought as water levels at dams and reservoirs continue to fall.

Press Tuesday quoted President Mohammad Khatami as saying that "the start of a shocking drought spell this year in the country has enforced the government to allocate some 4000 billion rials" in order to scale down its destructive effects.

A UN fact-finding team reported from Iran last July that the nation was on the verge of a full-fledged disaster, as the Islamic Republic accepted international aid for only the second time since 1979.

Hundreds of thousands of head of livestock died as Iran was pounded with a second straight year of drought, and millions of people are thought to have been displaced.

Only three of Iran's 28 provinces had enough drinking water, according to estimates.

The crisis has also exacerbated the region's refugee crisis, as an unknown number of Afghans crossed the border escaping their country's civil war and searching for water.

Some 151 Iranian MPs on Sunday appealed to Khatami to initiate an emergency debate on drought in the cabinet.