August 7, 2006

Iran still plans reply to atomic incentives deal

TEHRAN (Reuters) - Iran still plans to reply by August 22
to a big power offer of incentives to stop making nuclear fuel,
an official said on Monday, but more senior politicians have
already rejected the terms of the package.

The United States, Britain, France, Germany, China and
Russia proposed two months ago to give Iran trade and technical
concessions if it shelves an uranium enrichment program first.

But Iran was deemed to take too long to respond and was
referred to the U.N. Security Council. The world body promptly
passed a resolution ordering Tehran to halt atomic work or face
the possible threat of sanctions.

Tehran's Foreign Ministry said this resolution would
automatically kill off the package of incentives. But
government spokesman Gholamhossein Elham said Tehran would
still respond.

"We are still ready to answer the proposed package in the
time frame we gave, and we will answer," he was quoted as
saying by the official IRNA news agency.

There are no signs, however, that Iran would engage the
offer and allay Western suspicions it seeks to build atom
bombs. Iran says it needs atomic fuel solely to run power

President Mahmoud Ahmadinejad and chief nuclear negotiator
Ali Larijani have said Iran will continue to produce nuclear
fuel regardless of international calls for it to stop. Larijani
even says Iran will expand uranium enrichment.

A Western intelligence official in Europe said Iran was
delaying a definitive reply to the offer while it sought to
master the technology of running several cascades of
interconnected centrifuge enrichment machines at the same time.

Tehran's aim was to put new "facts on the ground" that
would strengthen its bargaining power with the West, said the
official, who spoke on condition he was not further identified.

"Iran has assessed their goal will not be reached before
late August and may even go into September. So its choice of
late August for responding to the incentives is not
accidental," the official said.

Iran enriched uranium to the minimum 3.5 percent level
required for power plant fuel for the first time in April,
using a pilot cascade of 164 centrifuges at its Natanz plant.

Tehran later told the watchdog International Atomic Energy
Agency it had launched a new round of enrichment on June 6.

But diplomats familiar with IAEA monitoring said Iran
appears to have focused on test-spinning of centrifuges since
then and done little feeding of uranium into the machines.

"There has been no acceleration of the program contrary to
announcements. They are testing centrifuge durability to build
confidence that they can run these things over a longer period
without crashes like they had before," a senior diplomat said.