BAGHDAD--After claiming successes on three key battle fronts, Iranian officials yesterday rejected a U.N. peace bid, saying they will continue to fight until the Iraqis are driven out of Iran.

"As long as Iraqi armed forces are present in Iran, we cannot consider any peace proposal," President Abolhassan Bani-Sadr said yesterday on Tehran radio.

Iran has claimed killing 1550 Iraqis since Saturday, and Iraq has claimed 98 Iranian deaths. Each side has admitted only a small number of their own casualties.

Bani-Sadr met with U.N. Secretary Kurt Waldheim's personal envoy, Olof Palme, who expressed U.N. concern over the consequences of continued warfare. Palme will also visit the war zone today, the Iranian news agency said yesterday.