Washington, March 7 (Bloomberg) -- If the U.S. Clinton administration lifts economic sanctions on Iranian carpets, caviar and pistachios, it will mainly boost small U.S. businesses and consumers who crave the luxury goods.

And it would begin to improve relations between the 20-year adversaries, paving the way for investments from larger companies such as Conoco Inc. and Boeing Co., that want to work with Iran, but are prevented by the sanctions.

Citing unnamed U.S. officials, the Los Angeles Times reported today that the U.S. would lift those three import restrictions, as a gesture of support for parliamentary elections that replaced conservatives in the Iranian government with reformers.

``It's a great step forward, and I hope we can build on it,'' said Shahriar Afshar, president of the San Diego-based Iranian Trade Association.

Carpets, caviar and pistachios rank behind oil and gas as Iran's major exports, and U.S. officials said revenue from the three exports is insufficient to finance weapons development, the newspaper said.

U.S. officials said today the prohibitions on import of those products haven't been lifted yet.

``We are looking to have a constructive dialogue with Iran, one that encompasses all issues key to us, including terrorism... we'll continue to be looking to Tehran to see if we can again engage in a constructive dialogue,'' National Security Council spokesman Mike Hammer said.

Relations broke off in 1979 when Iranian student militants seized the U.S. embassy in Tehran and held 52 Americans hostage for 444 days.

The U.S. lists Iran as one of the seven countries worldwide that support terrorists. Another sticking point is the U.S. accusation that Iran is developing nuclear weapons.

The two countries began ``citizen exchanges'' two years ago. Iranian wrestlers and the national soccer team have come to the U.S.

``The question is how do you move meaningfully beyond the exchange of wrestlers,'' said Daniel O'Flahrety, vice-president of the U.S. National Foreign Trade Council. The council represents 550 of the largest manufacturing and financial companies in the U.S.

``We're hoping it's going to be more than nuts and rugs,'' O'Flahrety said.

300 Percent Duty

Iran is the world's largest producer of pistachios, and its carpets account for one-third of new Oriental carpet sales worldwide, the Iran government says.

Pistachio imports would compete against the 200 million pounds annually produced in California, said Karen Renecke, president of the California Pistachio Association. The 526 California growers produce better quality nuts, she said.

``Because of their hand labor and government supports, they're able to offer a very low-cost product,'' Renecke said. If the sanctions are dropped, a 300-percent duty levied against Iran pistachios in 1986 would still leave the Iranian nuts too expensive, unless the duty were dropped too, she said.

High-end carpets from Pakistan, India, Afghanistan and China are sold through U.S. shops, many of which are owned by Iranian- Americans, Afshar said. Only Iranian carpets imported before 1979 can be sold in the U.S. Both the proprietors and customers want true Persian carpets, store owners say.

``The best of the Persians are the best of the world,'' said Paul Manouk, owner of Manoukian Carpets in Washington. ``Most other countries try to reach their level.''

The strong U.S. economy boosted the domestic market for high- end carpets, shop owners say. ``If these carpets come in, it will boost all of the prices, all of the sales,'' said Mamahmoud Shalchi, a manager of Parvizian Carpets in Annapolis.

Iran's caviar is the best in the world too, said Mike Avakian, owner of the Los Angeles company, Fancy Foods Inc. The company now sells Russian caviar only. ``If the sanctions go, we'll go right to Tehran and renew our old contacts,'' he said.