The fate of an American journalist sentenced to eight years in prison for spying against Iran has put fresh strain on Washington's relationship with Tehran, damaging hopes for Barack Obama’s reconciliation bid with the Islamic regime.

Roxana Saberi, 31, a dual American-Iranian national who had lived in Tehran for the past six years, was found guilty of espionage in a secret court hearing and told she would serve the lengthy sentence in the notorious Evin prison in the Iranian capital.

Her father, Reza Saberi, described the court proceedings as a mock trial and said that the entire hearing lasted only a few minutes.

Western diplomats in Tehran and Iranian reformers were sceptical about the case, suggesting that it was politically motivated. There are suspicions that hardliners in the regime want to use the prosecution to end the peace initiative announced by President Obama last month in a broadcast to Iranians who were celebrating their new year.

Another interpretation is that Iran wants a bargaining chip to use with the Americans.

President Obama said yesterday: “I have complete confidence that she was not engaging in any sort of espionage. She is an Iranian-American who was interested in the country which her family came from, and it is appropriate for her to be treated as such and to be released.

“We are going to be in contact through our Swiss intermediaries with the Iranian Government and want to ensure that we end up seeing a proper disposition of this case.”

“I am very unhappy with this ruling,” Mehdi Karubi, a reformist candidate who is running against President Ahmadinejad in the elections in June, told The Times. “The timing is very unfortunate. I hope the case will be thoroughly reviewed on appeal.”

His views seemed to be shared at the highest level of the Iranian regime. The office of President Ahmadinejad made public a letter written to Saeed Mortazavi, the state prosecutor, requesting that Miss Saberi’s case and that of a detained Iranian blogger, Hossein Derakhshan, be dealt with in strict accordance with the law.

“Based on the President’s insistence, please make sure that all the legal stages about the mentioned people be based on justice,” said the letter, which was written by Abdolreza Sheikholeslami, the Chief of Staff. “You personally make sure that the accused people will enjoy all freedoms and legal rights to defend themselves and their rights will not be violated.”

Abdolsamad Khorramshahi, the lawyer for Miss Saberi, welcomed the letter. He said that Shirin Ebadi, a Nobel Peace Prize laureate and human rights lawyer, would be joining his defence team.

While the former beauty queen from North Dakota remains in custody the case is bound to make it harder for Mr Obama to pursue his initiative to patch up relations with Iran. Ties were ruptured 30 years ago, during the Iranian revolution, when student activists seized the US Embassy in Tehran and held American diplomats hostage for more than a year.

Miss Saberi, who worked as a freelance journalist for the BBC and National Public Radio, was arrested in January for buying a bottle of wine. The authorities then said that she had been working illegally as a journalist without accreditation since 2006.

Last week the authorities accused her of espionage, a crime punishable by death.

Her father said that she had been coerced into making a confession. “She is quite depressed about this matter and she wants to go on a hunger strike. And if she does, she is so frail it can be very dangerous for her health,” Mr Saberi said.

Iranians remained divided over the case. Some insisted that if she had been spying Miss Saberi should go to prison. Others were suspicious about the circumstances of the trial and the timing.

“If someone had committed the crimes that she \ has been accused of and they had the evidence, they would not hesitate to make it public,” said one Iranian reformist politician. “If it is not public, then I am doubtful. This is a political game.”

Relations between the US and Iran are likely to be tested further this week in Geneva, where President Ahmadinejad is attending a United Nations conference on racism. He is due to give the main speech today.

The Iranian Government has made it clear that the President wants the conference to focus on Israel’s treatment of Palestinians. America and some other Western countries are boycotting the event because they fear it will turn into an anti-Israel forum.

A spokesman for the Israeli Foreign Ministry denounced the conference as a farce. “Officially it is aimed at denouncing racism but it has invited a Holocaust denier \ who has called for the destruction of Israel,” he said.

Mr Ahmadinejad told Iranian journalists: “The Zionist ideology and regime are the flag-bearers of racism. “They \ plunder nations’ wealth by dominating the world power centres and have created a condition that nothing can be said about this evil phenomenon whose effects loom over nations’ lives.”

He said that the conference was being held while “global Zionism employs all in its power to stifle innocent voices and cries against tyranny”.

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