* U.S. State Dept voices concern over Saberi's health
* Official urges release, cites lack of transparency
* Iran judge says hunger strike raised as propaganda issue
* Case could derail U.S. effort at reconciliation (Adds State Department official's comments, paragraphs 4-6)
By Fredrik Dahl
TEHRAN, April 28 (Reuters) - Iran's judiciary said on Tuesday a U.S.-born journalist jailed for espionage was in good health and not on a hunger strike, but Roxana Saberi's father said she was "frail and weak" after refusing food for a week.
Reza Saberi said his daughter, who was sentenced on April 18 to eight years in prison on charges of spying for the United States, had not eaten since last Tuesday.
He told Reuters he had failed to persuade her to stop the protest action while visiting her in Tehran's Evin prison.
U.S. State Department spokesman Robert Wood also voiced concern about Saberi's health and urged Iran to free her.
"We're very concerned about her mental state, about her physical being," Wood told reporters in Washington.
"We believe the charges against her are baseless, without foundation. You know, the judicial process surrounding this case has been anything but transparent," he added.
But Iran's ISNA news agency quoted judiciary spokesman Alireza Jamshidi as saying: "Roxana Saberi's condition is good and she is not on hunger strike."
Judge Hassan Haddad, deputy prosecutor for security issues, said the 32-year-old reporter had no physical problems.
"The issue of hunger strike was raised by those who have the intention of exploiting the issue ... for propaganda purposes," he said, according to the same news agency.
Haddad confirmed Saberi's lawyer had appealed the verdict.
"If there is a possibility of adjusting the sentence it will be done," he said, giving no detail on when the higher court would examine the issue.
The case could complicate Washington's efforts towards reconciliation with Iran after three decades of mutual mistrust. U.S. President Barack Obama has offered a new beginning of engagement if Iran "unclenches its fist."
"FRAIL AND WEAK"
A citizen of both the United States and Iran, the freelance journalist was arrested in late January for working in the Middle Eastern country after her press credentials expired.
Obama has expressed deep concern for the safety of Saberi, who has reported for the British Broadcasting Corp. and U.S. National Public Radio.
Tehran, which does not recognize dual nationality, says Washington should respect the independence of Iran's judiciary.
Reza Saberi, who moved to the United States in the early 1970s and returned to Iran with his wife after their daughter's arrest, expressed hope she would be freed.
"She is very frail and weak. She hasn't eaten for the past seven days," he said. "We just have hope that they acquit her."
President Mahmoud Ahmadinejad last week called on the prosecutor to ensure Saberi enjoys full legal rights to defend herself. The judiciary chief has said the appeal must be dealt with in a "quick and fair way."
A pro-reform and moderate politician who is aiming to challenge Ahmadinejad in Iran's June presidential election said he hoped Saberi would be freed.
"I hope that in this stage of the investigation they will reach the conclusion that she is innocent and we hope she can return to her family," cleric Mehdi Karoubi, a former parliamentary speaker, told a news conference.
The United States has also repeatedly raised the case of former FBI agent Robert Levinson who went missing two years ago while on a business trip to Iran.
"His family is, as you can imagine, in a very terrible situation, with no information about Mr. Levinson," said Wood. "We call on Iran to do the right thing and provide information on this case as well." (Additional reporting by Parisa Hafezi, Hashem Kalantari and Hossein Jaseb; Sue Pleming in Washington; Editing by Sophie Hares and Eric Walsh)