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UPDATE 1-U.S. should honor nuclear deal if it wants talks -Iran formin

(Adds comments, background)

KUALA LUMPUR, Aug 29 (Reuters) - Iran's Foreign Minister Mohammad Javad Zarif said on Thursday the United States must observe the 2015 nuclear deal and stop engaging in "economic terrorism" against the Iranian people if Washington wants to meet for talks.

Tensions between Tehran and Washington have risen since U.S. President Donald Trump's administration last year quit an international deal to curb Iran's nuclear ambitions and began to ratchet up sanctions.

Iran, which has slowly been breaching the nuclear deal in retaliation for U.S. sanctions, has threatened further violations in early September unless it receives sanctions relief.

"The United States is engaged in an economic war against the Iranian people and it won't be possible for us to engage with the United States unless they stop imposing a war and engaging in economic terrorism against the Iranian people," Zarif told reporters in Kuala Lumpur after addressing a forum on security in the Islamic world.

"So if they want to come back into the room there is a ticket that they need to purchase and that ticket is to observe the agreement," he said, referring to the 2015 nuclear deal.

Zarif said Iran does not want to meet for the sake of meeting. "We need to meet if there is a result," he said.

Trump said this week he would meet Iranian President Hassan Rouhani under the right circumstances to end the confrontation over the 2015 nuclear deal and that talks were underway to see how countries could open credit lines to keep Iran's economy afloat.

Rouhani has said Iran would not talk to the United States until all sanctions were lifted.

Zarif paid an unexpected visit to the Group of Seven summit in France at the weekend, holding talks on the sidelines of the meeting with French officials.

He is scheduled to meet Malaysian Prime Minister Mahathir Mohamad later on Thursday. (Reporting by Rozanna Latiff; writing by A. Ananthalakshmi; editing by Darren Schuettler)