The Iranian parliament on Wednesday rejected President Mahmoud Ahmadinejad's third nominee to head the country's crucial Oil Ministry, handing the hard-line executive yet another setback in the domestic political arena he had promised to overhaul.

Lawmakers complained that Mohsen Tasaloti, trained as an architect, lacked the qualifications to run the ministry, which accounts for more than 80 percent of Iran's export revenue and perhaps half of its federal budget. Similar criticisms sank Ahmadinejad's two earlier nominees, who, like Tasaloti, were close to Ahmadinejad but little known in Iranian political circles.

The hard-line daily Jomhouri Eslami reported that Tasaloti's nomination had shocked the oil industry.

Rasoul Montajabnia of the moderate Combative Clerics party told the ISNA news agency, "When there is no meritocracy and people are chosen because of their connections and relations and not because of their qualities, when the president reckons his winning in the election is a coup d'etat and he has got to remove everybody without exception from their positions, one can predict this kind of situation."

Mohammad Khoshchehre, a lawmaker who campaigned for Ahmadinejad in the June presidential election, told the ILNA news agency that parliament seemed "to be more devoted to the promises given to the people during presidential elections than the president himself in using skilled people to fight corruption inside the administration."

The rejection followed a plea from Ahmadinejad in which he painted a dire picture of Iran's fiscal health, despite high oil prices. He cited a budget deficit of $430 million in the first half of the fiscal year, $40 billion in foreign debt and the unemployment of 3 million citizens, "most of whom are university graduates."

Meanwhile, Iran announced that it was resuming talks with European officials over its nuclear program.

French, British and German diplomats have said privately that they would be willing to meet with Iranian and Russian experts on Dec. 6 to discuss the possibility of resuming negotiations to reach a compromise on the Iranian program, which Iran insists is aimed at producing nuclear energy. The European powers and the Bush administration maintain that Iran has ambitions to develop nuclear weapons. Two years of talks between Iran and the Europeans broke down this summer.

Two weeks ago, Russia stepped in to mediate and offered Iran a proposal that would allow the country to retain a key element of its nuclear program if the most sensitive work was done outside Iran. The White House backed the offer.

Iranian officials initially responded tepidly to the Russian proposal, but the announcement Wednesday signaled that the Tehran government was at least willing to consider it.

Iran's response virtually guarantees that it will not be harshly censured when the International Atomic Energy Agency meets Thursday.

Staff writer Dafna Linzer in Washington contributed to this report.