Iran did not issue visas for a US women's badminton team to compete in the country this month, a move the Obama administration called "unfortunate" as it seeks to engage Tehran and its people.

Iran's Foreign Ministry blamed a "time-consuming process" in handling such visa applications but US State Department spokesman Robert Wood said the badminton team had submitted the paperwork in good time.

"It's not a good sign. You know, as the secretary (of State Hillary Clinton) and others have said, when the Iranians unclench that fist, there will be a hand waiting to greet them," Wood told reporters in Washington.

"And so it's unfortunate," added Wood of the Iranian decision not to process the visas.

On Monday, the State Department said eight players along with four coaches and managers would visit Iran on Feb 3-9 to take part in a competition.

The team, which had applied for the visas in Dubai, would return to the United States, Wood said.

He said the US Badminton Federation had been in contact with its counterpart in Tehran which had expressed "disappointment" the visas were not processed in time to take part in the contest.

"The process of issuing visas is usually a time consuming process ... this work process, because of the timing, did not allow for the visas to be issued," said Iranian Foreign Ministry spokesman Hassan Qashqavi

The United States cut diplomatic ties with Tehran during the 1979-1981 hostage crisis in which a group of radical Iranian students held 52 Americans hostage for 444 days after storming the US embassy in Tehran.

The nations remain at odds over many issues, including US accusations that Iran is seeking to develop nuclear weapons, but they have held sports exchanges in recent years. Iran says its nuclear program is peaceful.

Since the United States resumed people-to-people exchanges with Iran in 2006, it has sent 20 wrestlers and coaches to Iran and brought 75 Iranians to the United States, including table tennis, basketball and water polo players.

Wood said the new US administration was very interested in boosting people-to-people exchanges as a way of improving relations with Iran and its population.

"This is not a good step forward, in terms of trying to promote people-to-people exchanges," said Wood of the US badminton team's experience in trying to get visas. - Reuters