LONDON - Iran has benefitted most from the US-led war in Iraq and would make further gains if the daily bloodshed ended up dividing the country, former US secretary of state Madeleine Albright said Sunday.

As for the Iranian nuclear row, a "high level" member of the administration should respond to a letter from Iran's President Mahmoud Ahmadinejad to US President George W. Bush and also engage in direct dialogue with Tehran, Albright told the BBC in an interview while on a visit to London.

The former top US diplomat welcomed the formation on Saturday of Iraq's first permanent government since the ousting of Saddam Hussein, but reiterated her concerns about the situation.

"The main problems that I see are the unintended consequences of this war, the biggest one frankly being at the moment is that the country that gained the most out of this war is Iran so I am very worried about it," she said.

Albright, who served under former president Bill Clinton from 1997 to 2001, highlighted the dangers of an internal conflict between Iraq's Shiite Muslim majority and the Sunni minority.

Asked what she thought about the risk of the country being divided into three parts -- the Kurdish north, the Sunni-dominated centre and the Shiite south -- Albright said this would be a dangerous development.

"It would have deep implications obviously on Turkey and the Kurdish issue. It would give additional power to Iran in the south with the Shia. Then the centre, which is primarily Sunni, is not homogeneous either, and one is unclear as to what role the Saudis might play or Jordanians," she said.

"I think it is better to keep it (Iraq) together, with some understanding that there needs to be local autonomy with some central control and distribution of oil revenues."

Albright, 69, has written a book about religion and politics called "The Mighty and the Almighty" in which she says the March 2003 Iraq invasion may turn out to be the greatest disaster in US foreign policy.

In the BBC interview, she also spoke about the US position in the nuclear row with Iran, advising the administration to interact bilaterally with Tehran rather than purely take the multilateral route through the United Nations.

"I think that you can't get much done if you don't have face-to-face talks that is not appeasement and it is not negotiating," she said.

Albright touched on Ahmadinejad's letter to Bush earlier this month, which called for "new ways" to settle long-running tensions between the two nations.

"The letter... needs to be responded to. Not by President Bush as a pen pal, but in a larger context in a speech given by a high-level administration person," she said.

"I believe we, with the British, need to be talking about what we are for in this battle of ideas not what we are against."

Looking to the future, Albright hoped the Democrats would return to power at the next presidential election -- possibly under the country's first female leader in the form of Hillary Clinton.

"She hasn't said she is going to run and even her husband (Bill Clinton) has said he doesn't know so how would I, and she is running very strongly for the Senate," said Albright. "But I think she is a remarkable person and the United States is ready for a woman president."

05/21/2006 12:08 GMT

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