Article published on the 2009-03-16 Latest update 2009-03-16 16:01 TU
Khatami indicated that opponents are trying to divide his supporters and those of Mousavi, ahead of the elections slated for 12 June, reports the Mehr news agency.
Expressing confidence in the other candidate, Khatami is reported as saying that "I prefer that Mousavi, who is a popular figure and can better advance plans, stay in the race." An aide to Khatami confirmed the former President's pullout with AFP news agency on Monday .
Khatami was President between 1997 and 2005, when he was seen by some as a reformer.
Mousavi was himself Prime Minister of Iran between 1981 and 1989, the last prime minister of the country before the constitution was revised to scrap the post.
Since then,he has kept a low profile.
A former parliamentary speaker, Mehdi Karroubi, is also planning to run. Ahmadinejad has not yet officially announced his candidacy.
Candidates will register officially with the Interior Ministry over a five-day period starting 5 May.