June 5, 2006

Solana to hand Iran incentives offer

By Edmund Blair

TEHRAN (Reuters) - European Union foreign policy chief
Javier Solana arrives in Iran late on Monday to deliver an
offer of incentives aimed at persuading the Islamic Republic to
abandon its plans to make nuclear fuel.

The incentive package, which he will hand over on Tuesday,
is an initiative put together by the three biggest EU states --
Britain, France and Germany -- and approved by a forum that
also included the United States, China and Russia.

Washington on Monday said Iran would need time to consider
it, suggesting there would be no sudden breakthrough.

The aim of the offer is to defuse a nuclear standoff with
the West that has helped push oil prices to near record highs
on fears that supplies from the world's fourth largest oil
exporter and the Gulf region could be disrupted if the dispute

"Solana will have a full morning of meetings in Tehran
tomorrow (Tuesday) in order to present and explain the offer of
the six powers and the EU," Solana's spokeswoman Cristina
Gallach said, without naming those he would meet.

An EU diplomat in Tehran, who asked not to be identified,
said Solana would hand the package to chief nuclear negotiator
Ali Larijani on Tuesday after arriving in Tehran late on

Details have not been announced, but diplomats have been
working on themes ranging from offering nuclear reactor
technology to giving security guarantees.

Western nations fear Iran is enriching uranium to make an
atomic bomb, but Iran insists its aims are entirely peaceful
and that it wants to make fuel only to generate electricity.

President Mahmoud Ahmadinejad said on Saturday Iran would
consider incentives but insisted the crux of the package --
that Iran must give up uranium enrichment -- was still

The United States has said Iran is probably staking out a
negotiating position with its tough talk rather than rejecting
the offer. Washington has said it wants a diplomatic solution
to the dispute but has refused to rule out a military option.


Supreme Leader Ayatollah Ali Khamenei, who has the final
say in all matters of state under Iran's system of clerical
rule, said on Sunday energy flows in the region would be
disrupted if the United States made a "wrong move."

Iranian officials have in the past ruled out using oil as a
weapon in the nuclear standoff, but Khamenei's comments
suggested Iran could disrupt supplies if pushed.

The White House spokesman said the threat was "theoretical"
and urged patience to allow Tehran to consider the package.

"Let's give it time, let the Iranians take a look at what
the offers are, the incentives and disincentives. One can
probably expect there to be a couple of quick rejoinders. We
counsel patience," spokesman Tony Snow said.

Oil prices climbed more than $1 to above $73 a barrel on
Monday because of worries about the safety of supplies from the
Gulf, a region that pumps nearly a quarter of the world's

Two months ago, Iran staged naval wargames in the Gulf and
test fired missiles, moves military analysts interpreted as a
thinly veiled message that Iran could wreak havoc on vital
shipping routes if it came under international pressure.

Diplomats in Washington said an arms embargo against Iran
was among the possible sanctions if it rejected the offer.

But they said the six powers had pledged to keep details
secret until the package was shown to Iran. This was so Iran
did not feel compelled to reject any or all of the elements as
a face-saving gesture if they were made public first, they

Solana arrived in Israel late on Sunday as part of a
previously planned trip.

(Additional reporting by Parisa Hafezi in Tehran, Emma
Davis in Brussels, Mark Heinrich in Vienna and Carol Giacomo
and Tabassum Zakaria in Washington)