June 8, 2006

Iran on fresh atom fuel drive despite UN powers’ offer

By Mark Heinrich

VIENNA (Reuters) - Iran launched a fresh round of uranium
enrichment this week just as world powers offered it incentives
to halt nuclear fuel work with the potential to produce atomic
bombs, a U.N. watchdog said on Thursday.

Iran has said it will seriously consider Tuesday's overture
but the watchdog report made clear Tehran was thrusting ahead
anyway with efforts to expand a fledgling enrichment program
and increase its bargaining clout in any future negotiations.

President Mahmoud Ahmadinejad said threats, an allusion to
possible sanctions if Iran spurns the sweeteners, would not
work in talks to settle the dispute, but Tehran was ready to
clear up misunderstandings with the rest of the world.

He said Iran was not willing to abandon its nuclear rights
-- Iran's usual euphemism for uranium enrichment. But some
analysts said his speech reflected a greater readiness in
Tehran for talks on the Islamic Republic's atomic ambitions.

A U.S. official said Washington did not deem Ahmadinejad's
comments a formal response to the package.

"They have a couple of times now talked about an interest
in negotiations but still have not made a commitment to the
conditions for negotiations," the official said.

The new International Atomic Energy Agency (IAEA) report
said Iran resumed feeding UF6 gas, feedstock for nuclear fuel,
into a pilot cascade of 164 centrifuge enrichment machines on
Tuesday after a five-week pause of test runs without UF6.

That was the day European Union foreign policy chief Javier
Solana visited Tehran to hand over the batch of trade,
technological and security incentives for Iran to mothball
nuclear fuel production.

The report, emailed to the 35 states on the IAEA's
governing board before a meeting next week, also said Iran
continued to install two more 164-centrifuge networks begun in
April despite a U.N. Security Council resolution calling on
Tehran to stop.

Iran says it wants only to produce low-enriched uranium to
generate electricity. The West suspects Iran, the world's No. 4
oil producer, of seeking to enrich uranium to the high level
needed for atomic bomb cores.

Iran aims to have 3,000 centrifuges on line by early 2007,
which would provide enough capacity to produce high-grade fuel
for one bomb if the cascades ran nonstop for some months.


In April, Iran appeared to defeat a Western bid to deny it
enrichment technology when, for the first time, it purified a
small amount of uranium at Natanz for use as power plant fuel.

A Western intelligence official told Reuters hours before
the IAEA report that Iran stopped feeding gas into its pilot
cascade later in April because of technical glitches, but then
resolved them, allowing enrichment work to resume.

"This underlines the fact that the temporary halt was
technical in nature. It's a continuation of Iranian policy to
profit from all worlds, dialogue to buy time while continuing
to strive for an atomic bomb," the official said.

After Solana's visit, Iranian chief nuclear negotiator Ali
Larijani said the package contained some positive points but
also "ambiguities" that should be excised via negotiations.

Solana said on Thursday he was now "more optimistic than
pessimistic" about reaching an agreement with Iran.

"I think they understood the content of the proposal well
and I hope they will react soon," he said in Paris.

Although Iran has said it will not give up enrichment,
Iranian officials recently hinted Tehran might be willing to
negotiate over plans for "industrial-scale" fuel production.

The United States says all enrichment must stop. But
Western diplomats said the package would allow Iran to
eventually resume such work after a verifiable moratorium,
likely to take years.

In Washington, State Department spokesman Sean McCormack
said the United States still hoped for a positive Iranian
response to the offer. He would not be drawn on the IAEA
finding that Tehran had swung into a new phase of enrichment.

Iran has said it will not reply "hastily" to the package.

(Additional reporting by Carol Giacomo in Washington,
Edmund Blair in Tehran, Ingrid Melander in Brussels, Elizabeth
Pineau in Paris and Madeline Chambers in London)