Iran says has new nuclear proposal as IAEA meets

By Louis Charbonneau and Francois Murphy

VIENNA (Reuters) – The U.N. nuclear watchdog held a crisis
meeting on Tuesday to try to stop Iran pursuing a nuclear
program after Tehran resumed work at a uranium plant, stoking
Western fears it was bent on developing atomic weapons.

As the governors of the International Atomic Energy Agency
(IAEA) met in Vienna, Iran’s new President Mahmoud Ahmadinejad
said he had new ideas to resolve the nuclear standoff with the
West and was ready to continue nuclear talks with the EU.

“I have new initiatives and proposals which I will present
after my government takes office,” he said in a telephone
conversation with U.N. Secretary General Kofi Annan, the
semi-official ISNA students news agency reported.

He said Iran — which says it is only seeking nuclear power
– had done nothing unlawful by resuming uranium conversion at
a nuclear facility near the central city of Isfahan on Monday.

Iran’s chief delegate at the IAEA meeting, Sirus Naseri,
was more specific, telling reporters after the IAEA session
adjourned that Iran wanted to continue talks with France,
Britain and Germany but only on terms satisfactory to Tehran.

“We no longer accept being left out in the cold to wait for
the Europeans to come up with a plausible basis for a
solution,” he said, adding an Iranian proposal to settle the
standoff by increasing IAEA inspections was “still on the
table.”

“We can negotiate with the Europeans on the basis of that
proposal,” he said, adding Iran would continue to resume some
of the nuclear activities it had suspended under a November
2004 agreement with the EU.

Ahmadinejad told Annan an EU offer of incentives if Tehran
scrapped its uranium enrichment program was “an insult to the
Iranian nation.” Tehran rejected the offer on Monday.

“They have talked to us … as if the Iranian nation was
suffering from backwardness and the time was 100 years ago and
our country was their colony,” he said.

IRAN TO RESUME MORE FROZEN ACTIVITIES

Another senior Iranian delegate to the Vienna meeting said
U.N. seals were to be removed at Isfahan that could allow it to
take the work a step further.

Mohammad Saeedi, deputy head of Iran’s Atomic Energy
Organization, said IAEA inspectors surveying developments at
the plant would unseal a mothballed section by Wednesday.

“The agency has promised us it will remove the seals by
noon (0730 GMT) on Wednesday because the installation of
cameras has been completed,” he told Reuters.

On Monday Iran resumed work at a less sensitive part of the
plant that had not been sealed, ending an agreed moratorium.

It had mothballed some nuclear activities under the
November deal with the European Union’s three biggest powers.

Restarting the work, Tehran defied EU warnings it could now
be referred to the U.N. Security Council for possible sanctions
for having hidden its nuclear work for years — though the IAEA
looked unlikely to take such a step at the Vienna meeting.

Iran’s secrecy breached the nuclear Non-Proliferation
Treaty (NPT) which it has signed and which aims to thwart the
spread of nuclear arms.

“I would hope that this is simply a hiccup in the process
and not a permanent rupture (in the EU-Iran talks),” IAEA
director general Mohamed ElBaradei told reporters.

He also called on Iran to continue talks with the Europeans
and said it must suspend its nuclear fuel program to build
confidence that its nuclear ambitions were entirely peaceful.

ElBaradei said the board would probably need “one or two
days” to decide how to act.

RUSSIA URGES IRAN TO RESUME SUSPENSION

Iran’s nuclear ally Russia, which is building a nuclear
power plant at Bushehr in Iran, called on Tehran to immediately
resume the suspension.

“It would be a wise decision to immediately stop the
resumed work on uranium conversion and continue close
cooperation with the IAEA to remove all remaining questions
relating to the Iranian nuclear program,” the Foreign Ministry
said.

The West could call for sanctions on the grounds that Iran
illegally hid its uranium enrichment program, including a
massive underground enrichment plant at Natanz, the existence
of which was revealed by exiled dissidents in 2002.

“If Iran doesn’t resume the full suspension of all nuclear
fuel activities, it will face the U.N. Security Council,” an EU
diplomat told Reuters.

“This meeting probably won’t call for a referral to the
council. Iran will be warned, and if it doesn’t comply, then we
will meet again and decide on the Security Council.”

The new U.S. ambassador to the IAEA, Gregory Schulte, told
reporters Washington was consulting the EU and others on the
IAEA board about “next steps” and said Iran “must not be
allowed to develop nuclear weapons.”

An IAEA spokeswoman said the board hoped to resume its
meeting on Wednesday but that depended on EU negotiations on
their draft resolution.

Oil hovered near a record $64 a barrel as traders worried
the nuclear stand-off with Iran and possible militant strikes
in Saudi Arabia could disrupt crucial Middle East exports.

The EU3 hope to persuade all the developing countries on
the IAEA’s 35-member board meeting to back an IAEA resolution
urging Iran to resume the suspension of uranium conversion
activities.

But some developing countries oppose such a resolution and
EU diplomats said it would not be easy to get them to back it.
(Additional reporting by Michael Able in Munich and the Tehran,
Paris, Berlin, Washington, Moscow and London bureaux)