After taking office, Khatami faced fierce opposition from his powerful opponents within the unelected institutions of the state which he had no legal power over, and this led to repeated clashes between his government and these institutions (including the Guardian Council, the state radio, and television, the police, the armed forces, the judiciary, the prisons, etc.). In 1999, new curbs were put on the press. Courts banned more than 60 newspapers. Important allies of President Khatami were arrested, tried and imprisoned on what outside observers considered "trumped up" or ideological grounds. Tehran mayor, Gholamhossein Karbaschi was tried on corruption charges and Interior Minister Abdollah Nouri for "sacrilege" – despite their credentials as activists in the Islamic revolution. In 2002 history professor and reformist activist Hashem Aghajari was sentenced to death for apostasy for calling for "Islamic Protestantism" and reform in Islam. In July 1999 conservatives closed the reformist newspaper, Salam, and attacked a Tehran University student dormitory after students protested the closing. Prodemocracy student demonstrations erupted at Tehran University and other urban campuses. These were followed by a wave of counter-demonstrations by conservative factions. Reformers won a substantial victory in Feb. 2000, parliamentary elections, capturing about two-thirds of the seats, but conservative elements in the government forced the closure of the reformist press. Attempts by parliament to repeal restrictive press laws were forbidden by Supreme Leader Ali Khamenei. Despite these conditions, President Khatami was overwhelming re-elected in June 2001. Tensions between reformers in parliament and conservatives in the judiciary and the Guardian Council, over both social and economic changes, increased after Khatami's reelection. Khatami worked to improve relations with other countries visiting many other countries and holding a dialogue between civilizations and encouraged foreigners to invest in Iran. He announced Iran would accept a two-state solution for Palestine if Palestinians agreed to one, relaxed restrictions on the Bahais, and assured Britain Iran would not implement the fatwa against Salman Rushdie. Several European Union countries began renewing economic ties with Iran in the late 1990s, and trade and investment increased. In 1998, Britain re-established diplomatic relations with Iran, broken since the 1979 revolution. The United States loosened its economic embargo, but it continued to block more normalized relations, arguing that the country had been implicated in international terrorism and was developing a nuclear weapons capacity. In his State of the Union Address, United States President George W. Bush labeled Iran, along with Iraq and North Korea, as an "Axis of evil."