* Many Jewish groups critical of accord
* They fear it could hurt local court case
* Argentine government says this only way to make progress
* Amnesty International has positive view
BUENOS AIRES, Feb 21 (Reuters) - Argentina's Senate approved on Thursday an agreement with Iran to set up an international "truth commission" to investigate the 1994 bombing of a Jewish center in Buenos Aires that killed 85 people.
The two governments reached the agreement last month on how to deal with the attack in which Argentine court authorities have accused Iranian officials, including the defense minister, of involvement. Iran has denied any link to the bombing.
Many Jewish groups in Argentina and abroad reject the accord, saying it gives credibility to Iran at a time when the United States is leading efforts to isolate the country over its disputed nuclear program.
Critics also say it is unconstitutional for the executive branch to get involved in judicial matters and that the international commission's findings could hurt Argentina's court case.
Senators voted 39-31 to approve the accord, with most of the political opposition voting against it. The bill will now pass to the lower house, which is also controlled by government allies and could vote as early as next week.
In 2007, Argentine authorities secured Interpol arrest warrants for five Iranians, including Defense Minister Ahmad Vahidi, and one Lebanese citizen accused of helping plot the AMIA Jewish community center attack. Tehran has refused to turn the men over.
The suspects cannot be convicted unless they are tried in Argentina, where no one else has been held responsible for the bombing. The government presents the agreement with Iran as the best way to make progress on a paralyzed case.
"We know this is difficult if there are hidden motives on the other side of the signing of this memorandum," ruling-party senator Daniel Filmus said during Thursday's debate. "If there's a lack of collaboration on the other side of the memorandum, the Argentine case ... will be strengthened because it will be even clearer who is guilty."
The agreement stipulates that the commission - made up of five foreign legal experts - will issue a report after evaluating Argentina's investigation into the case. Argentine and Iranian judicial officials will then meet in Tehran to interrogate the people sought by Interpol.
Last week, an Iranian Foreign Ministry spokesman denied that Iranian officials would be questioned over the bombing. The foreign minister later said the memorandum would be fully respected.
Argentina's foreign minister said the Iranians sought in the case could refuse to cooperate, just like any other criminal suspects.
Amnesty International in Argentina praised the agreement on Thursday, saying that "although it does not guarantee in any way the success of the investigation, it creates an opportunity to move forward towards justice and reparations for the victims."
President Cristina Fernandez had originally proposed that a trial be carried out in a neutral country. Fernandez has close ties with other Latin American leaders who are on good terms with Tehran, such as Venezuela's ailing Hugo Chavez.
Argentina is home to Latin America's largest Jewish community.
Opposition senator Maria Eugenia Estenssoro likened passage of the agreement to laws that shielded lower-level officials involved in Argentina's bloody 1976-1983 military regime from prosecution and pardoned convicted human rights abusers.
"Once again (Congress) will be voting a law of impunity," Estenssoro said. (Reporting by Alejandro Lifschitz and Hilary Burke; Editing by Mohammad Zargham)