TEHRAN -- Lebanese President Emile Lahoud brushed aside U.S. calls to rein in Hizbollah Sunday, saying the Shiite Muslim activist group was a legitimate "resistance" movement "not terrorists."

"We have constantly repeated that Hizbollah has no activities outside the Arab-Israeli conflict," said Lahoud, who arrived in Nicosia on Friday for a three-day visit to Cyprus.

"They are not terrorists but facts of resistance," he said of the group, which is widely credited with forcing Israel out of South Lebanon in 2000 after 22 years of occupation. Lahoud dismissed attempts to label the group as terrorists as a "Zionist campaign aimed at distorting facts and turning attention away from what is happening in the Palestinian territories."

He accused Israel, in its operations in the occupied territories, of wanting to "torpedo the Arab peace initiative" adopted by Arab states at their Beirut summit in March, AFP reported. "The region is heading towards more tension and an explosion, especially since Israel is exploiting the events of September 11 to impose its will on its neighbors."

Earlier this month, Lahoud told members of the U.S. Senate Intelligence Committee in Beirut that there were no links between Hizbollah and Osama bin Laden's Al-Qaeda network, a few days after a *** Washington Post *** report charged links between the two groups were expanding.

In mid-June, the U.S. sent diplomatic messages to Iran, Lebanon and Syria urging them to restrain it from attacking Israel, amid U.S. press reports saying the group was preparing for larger attacks by stockpiling weapons.

Hizbollah fighters and Israeli troops entrenched in the Israeli-held Shebaa Farms region intermittently exchange artillery salvoes.

Meanwhile, the Chairman of the British Foreign Office's Department for Arab and Islamic Affairs, Jerar Russel, ruled out on Sunday an attempt by his country to include Hizbollah in Europe's list of terrorists.

Russel told the Lebanese *** An-Nahar *** daily in Paris that that it would be impossible for Britain to try to put Hizbollah in the list of European terrorist when it has not yet been listed in Britain's list.

Asked about allegations that the U.S. is putting pressure on Europe to put Hizbollah in the European list of terrorists with Britain's and Germany's connivance, the British Foreign Office official said he was surprised by such allegations because his government views Hizbollah's domestic and foreign factions differently.

He said they cannot demand from the European Union something which British law cannot confirm just as they cannot also ask for a change in European basic attitudes.

Russel said the British stance about Hizbollah is different from that of the U.S., which considers Hizbollah a terrorist group.

He said Britain started talks with Hizbollah Secretary-General Sayed Hassan Nasrallah late last year. Hizbollah is a political party which represents a group of Lebanese people, he noted.