CAIRO, JUNE 6 -- Iranian President Ali Akbar Hashemi Rafsanjani indicated today that Iran is prepared to respond positively to proposals from Iraqi President Saddam Hussein to transform their 1988 cease-fire into a formal peace treaty.

The Iraqi leader suggested in a May 1 letter to Rafsanjani that they meet for direct talks.

"We have not answered negatively" to the peace feelers, Rafsanjani said in a news conference. But before such a meeting, he added, "issues must be sorted out in preliminary negotiations at expert levels," in consultation with the United Nations, "to guarantee the success" of a presidential meeting.

Rafsanjani spoke also about Western hostages in Lebanon, saying that Washington should press Israel and Kuwait to release Shiite Moslem prisoners they hold if it wants to gain the freedom of six Americans still held by kidnappers.

It was Rafsanjani's first reference to the Kuwaiti-held prisoners since Iran began pressing Washington for reciprocal gestures following the release of American educators Frank Herbert Reed and Robert Polhill last month. The 15 Shiite prisoners are serving prison terms for bombing the U.S. and French embassies in 1983.

Up to now, Iran has focused its demands on freedom for about 350 Lebanese Shiites imprisoned by Israel and its Lebanese ally, the South Lebanon Army, as the key to the release of other Western hostages.

"An appropriate response was expected after the Lebanese unconditionally set free the {two U.S.} hostages: release of hostages in Kuwait and Israel," the Associated Press quoted Rafsanjani as telling about 150 foreign and local journalists.

"Why don't you help increase the necessary public pressure on those governments to release these hostages, so that the Western hostages can be freed in return?" the Iranian leader asked.

The Iranian leader also said his government had information contradicting recent U.S. assertions, officially conveyed to Tehran, that four Iranians kidnapped in Lebanon are dead. "In recent weeks a special envoy of a certain government officially has informed us that, according to reliable sources in east Beirut, the Iranian hostages are alive," he said.

Rafsanjani had repeatedly said that Washington could show its good intentions toward Iran by locating the missing Iranians or, if dead, their remains, and identifying their killers.

"We will continue with our policy of helping the release of hostages," Rafsanjani said today. "But the irresponsible attitude of countries such as the United States, I think, has made it difficult."

Special correspondent Sharif Imam-Jomeh in Tehran contributed to this report.